   |
|
State & Local News Vol. 21, No. 4, Summer 1998
Washington's Labyrinthine WaysOtto J. Hetzel is a professor of law emeritus at Wayne State University and practices law in Washington, D.C.
By Otto J. HetzelWith Little More Than Thirty "Working Days" Scheduled to Complete Its Business So Members Can Be Free for Fall Elections, Only One Major Bill, HR 2400, Has Been Enacted. In the conflict between achieving their legislative agenda and campaigning for reelection, the latter seems to be winning out. Significant legislation will either evolve from last minute pressures, in a process that will rival sausage-making in its distasteful elements, or not make it at all. Supplemental 1998 Fiscal Year Spending Enacted. Covering Bosnia costs and flood insurance payments, along with other minor items, the bill takes $2.3 billion from existing section 8 housing accounts to cover costs. These funds were to cover contract renewals in 1999. Both houses have pledged to restore the funds before the session ends, but time may run out.
Significant Pending Legislation: Tobacco Legislation. Potentially significant additional revenues are at stake that would have budget implications for current commitments. Also at issue is the degree of government regulation that would apply to smoking and by whom it will be imposed. No clear consensus has emerged. One of the targets driving decisions and opposition to the Senate bill are the amount that trial lawyers would obtain in multi-billion dollar fees. Posturing also seems focused on interdicting teenage smoking and increasing cigarette prices to support payments to afflicted smokers in settlement of pending lawsuits and for payments to federal and state governments. Higher Education Funding and Authorizing Reduced Interest on Student Loans. Neither house has yet passed a bill reducing student loan interest, in large part because no agreement has been reached as to the source of funds to support it. Anxieties of commercial loan providers, concerned with retention of their profits, has contributed to the delays. Health Care Consumer Protections. The President has espoused a politically attractive topic, forcing consumer safeguards on managed health care, that would better balance costs with expansion of available care. Neither house has yet decided whether to join in such a popular measure before the fall elections. Campaign contributions from managed-health companies and businesses that wish to hold down employee health care costs should be liberally available. Restoration of Food Stamps to Needy Immigrants. The President has tried to restore some of the lost benefits as he announced he would do when he signed the welfare reform bill two years ago, just prior to his reelection. Opposition from House Speaker Newt Gingrich has been ineffective to date, but the bill is still on hold for now. Housing Reauthorization and Public Housing Regulatory Reform. Currently in conference committee with only limited prospects for agreement between House and Senate versions, the reform legislation contains a controversial "Home Rule" provision that would allow local governments, not housing authorities, to receive funds for public housing and section 8 rental assistance. Whether funds would be reallocated to current purposes would be up to local governments. The National Association of Housing and Redevelopment Officials (NAHRO) has questioned the provision on Fifth and Tenth Amendment grounds arguing that a "taking" will occur and that a federal override of state statutory delegations to local housing authorities is invalid. Separate legislation would increase state limits on the amount of Low Income Housing Tax Credits that can be issued to allow over 150,000 additional units to be produced over the next five years. The program, the main housing production subsidy, has been credited with generating 60,000 jobs, $650 million in federal taxes, $1.8 billion in wages, and over 900,000 housing units. Inflation, however, has undercut its funding formula. The annual $1.25 per resident current limits for payments in each state would be increased to $1.75. A $200 Billion Public Works/Transportation Bill, HR 2400, Is Enacted, But Its Overruns of Prior Budget Authority May Result in Cuts in Funds for Financing Housing. This bill, passed just before Congress left for Memorial Day recess, provides the largest increase in public works expenditures in history with substantial funds to upgrade highways and bridges, as well as to repair and maintain infrastructure, most coming as dedicated expenditures out of the Highway Trust Fund. Mass transit would also get a large boost. But the bill also authorizes literally hundreds of funded projects specific to individual member's districts. Originally, the Senate complained that this bill was a giant patronage wagon for members of the House, to get projects for their districts just in time for the fall elections. But when the senators got a chance to look at it closely for what it might do for them as well, the objections were dropped. In fact, additional benefits were added on in the Senate, earmarking particular funds for specific state projects. This proves the age-old maxim, where there's a way there's will. The main trouble is that under current budget processes the additional funds needed over budgeted amounts must either come from other appropriations or from newly created sources of revenue. A source that may be tapped, amounting to $4.5 billion over five years, would be essentially transferred from funds to finance housing assistance. To replace housing funds, "user fees" for loans have been suggested, amounts that would ultimately be borne by consumers, not by lenders. "User fees," which are a focused tax in all respects but name, are being considered for loans from the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Association (Freddie Mac). HUD's Federal Housing Administration (FHA) would also be required to charge .55 percent more for higher loan-to-value ratios under the justification of the need to better reflect more risky transactions. Credit Industry Legislation Would Limit Consumer Bankruptcy Protections. Changes to the 1978 Bankruptcy Reform Act are incorporated in legislation being considered in both houses of Congress that is supported by credit card issuers and other lenders and opposed by consumer organizations. As currently drafted, it would severely affect many seeking bankruptcy protection from hopeless indebtedness. The inability to obtain complete relief from outstanding debts would include debt relating to homes, cars, utilities, and medical expenses. The proposed approach would mostly affect the middle class through a means test set at 75 percent of the national median income for household size that has the ability to pay at least 20 percent of unsecured debt within five years. Using 1996 adjusted median income levels, for example, would mean those earning over $31,000 would be subject to creditor intervention in the proceedings and being forced to use Chapter 13 repayment approaches rather than Chapter 7 absolution from debts. Estimates are that over 200,000 households would be affected. Currently 70 percent of bankruptcies use Chapter 7. Since lenders would be somewhat more protected from losses, the provision would appear to encourage the continued undisciplined provision of unrequested credit cards. Currently alimony and back taxes are excluded from the calculation of the 20 percent. What the bill creates, however, is a much more contentious proceeding where creditors rather than the trustee in bankruptcy would have considerable say on who and how bankruptcy relief would be provided. Costs of proceedings and the need for legal counsel would be significantly increased. The bill's provisions would also apply to small businesses seeking Chapter 11 protections. Proponents of the legislation point to data they developed, that for each bankruptcy, credit responsible debtors must shoulder average losses of $400 per bankruptcy. In 1997, bankruptcies were filed by 1.34 million persons. Election Posturing on Campaign Finance Reform. Only perfunctory consideration of limitations on campaign finance has been allowed in the Senate and the House by the Republican congressional leadership. Concerns of members, however, have forced commitments for further discussions on these issues prior to elections this fall, at least in the House. Seems someone is anxious about how voters will react to inaction on this problem that generated two major investigations, one in each house, this term. While both committee investigations were contentious, the House review under Congressman Burton achieved special notoriety with his selected release and edits of tapes of Webster Hubbell's prison conversations with his attorney and family provided the committee under restricted use by the Justice Department, a blatant disregard of even the limited privacy protections applicable to such communications. What does portend a continued review are the ramifications raised by reported statements of an indicted major Democratic fund-raiser concerning a Chinese government connection as a source of campaign contributions. Added to this were claims that lobbying for release to China of satellite technology by Loral, an American company, influenced Clinton's decision to approve sales of the technology to China. HUD Adopts "SuperNOFA" Approach to Applications for Funds. Following a billion dollar plus public housing Notification of Fund Availability that combined all the prior applications for such funding into one "super" one, HUD announced two more: one for $176 million for community and economic development projects; and, the other for $1.2 billion for homeless assistance as well as $88 million in section 8 funds for the disabled. While somewhat more convenient by consolidating repetitive portions of the various applications, a SuperNOFA clearly will tax proposal writers' capabilities because of the common deadline, and it would appear that the quality of applications are likely to suffer. Problems for Continuance of the Independent Counsel Concept. Charges of leaking sealed documents, this time Judge Norma Holloway Johnson's sealed decisions, have been raised against Independent Counsel Kenneth Starr, and were met with denials and counter-accusations. Somebody obviously is leaking, but the Justice Department investigation does not seem to have been able to identify the culprit. Is anyone surprised? Criticizing attacks on and limiting the scope of Independent Counsel investigations by equally controversial Independent Counsel Don Smaltz were voiced in a TV Frontline broadcast where he complained that his request to expand his probe of former agriculture secretary Mike Espy to include alleged payments by Tyson Foods to then Governor Clinton was improperly refused by Attorney General Janet Reno. The Justice Department refused to respond directly citing its rules that prohibit prosecutors from commenting on pending cases. With a new investigation initiated against Labor Secretary Alexis Herman for accepting payments when serving as White House Public Liaison, that makes seven during Clinton's tenure. Nevertheless, there appears to be little congressional interest in its renewal when it terminates in June 1999, particularly because of the open-ended, unaccountable nature of the investigations currently authorized and the nature of prosecutorial tactics being used. Or it may simply be the hope of Republicans that they will regain the executive branch. If the Ethics in Government Act is amended, there are indications it would require that it be a full-time job, be limited to fewer officials, confined to two years without further congressional approval and funds, apply only to actions taken during the term of office, prevent expansions into unrelated matters, and allow the attorney general more discretion in what matters to refer. Bias in Lending Persists. The U.S. Conference of Mayors has reported that discriminatory lending practices in urban areas have kept many city dwellers from achieving homeownership. Nationwide, HUD points to a record high 65.7 percent homeownership and it hopes to add to that total if Congress approves increases in federal housing loan limits. The authors, Harvard's Joint Center for Housing Studies and the Federal Reserve Board, report the geographical breakdown of home ownership is 71.5 percent in suburbs and 49 percent in cities, stemming largely from redlining by banks and steering by real estate brokers. Finding that 71.3 percent of whites are homeowners, but only 43.6 percent of blacks and 41.7 percent of Hispanics, the Federal Reserve concluded that minority households were more likely to be rejected for mortgage credit than white households with similar incomes. Congress to Impose Largest Penalty on States Failing to Automate Child Support Payment Enforcement. The House voted to sanction fourteen states that failed to establish computerized systems to collect court-ordered child support payments from noncustodial parents. The sanctions, about 1 percent of federal child support payments, will amount to roughly $30 million, although part of the penalty can be reduced by achieving compliance by next October. Twenty-two states have complied and sixteen more are expected to do so shortly. The action came after $2 billion in federal funds had been made available to assist the states to implement their programs. The House voted 414-1 to substitute these sanctions for the more draconian levels originally applicable that had deterred effective federal enforcement efforts against nonconforming states. Supreme Court Gives Absolute Legislative Immunity to State and Local Government Officials. A unanimous decision written by Justice Thomas brought local government officials functioning in their legislative capacity absolute immunity from civil rights lawsuits for actions taken in that capacity. The decision grants Speech and Debate Clause, Article I, immunity as enjoyed by Congress. The Court overturned a liability judgment for $231,000 against the Mayor and Council Vice-President of Fall River, Massachusetts, for enacting legislation, the only purpose of which, the jury found, was to eliminate a department head's job. She sued, alleging retaliation for exercise of her First Amendment rights. A separate appeal to the Supreme Court is still pending over the issue of whether the city, itself, can be found liable for violation of the plaintiff's First Amendment rights and the extent that city council members' actions can create municipal liability. Justice Thomas in his opinion justifies immunity for individual officials, in part, on the basis that cities could be held liable.
Your correspondent
|