WASHINGTON’S LABYRINTHINE WAYS

A Rapid Review of Recent Federal Actions Affecting States and Local Governments

By Otto J. Hetzel

Otto J. Hetzel is a professor of law emeritus at Wayne State University and practices law in Washington, D.C.

• Congress considering Administration proposals to revise long-standing voucher program that would redirect benefits while limiting funding to state and local governments used to support existing units and generate new housing construction. A proposed State and Local Housing Flexibility Act would permit re-direction to higher income households of vouchers needed by extremely low-income households and those who are disabled. Targeting requirements to serve lower income households, at or below 30–40 percent of area median income, would be eliminated. Funding for 2005 housing vouchers has already been reduced 4.1 percent because insufficient funds were available to operate it at 2004 levels.

• While Congress appears to have rejected Administration proposals to transfer federal community development programs from HUD to Commerce Department, significant funding cuts in federal community development programs seem likely. HUD recently released a report on possible changes to the CDBG formula that critics feel inevitably will result in decreases in funding to communities that have relied on and need these funds.

• Congress narrowly agrees to $13 trillion Budget Resolution setting spending targets that bode poorly for funding levels for federal domestic programs. Cuts of $35 billion to hold down budget deficits will be required over the next five years, including some $10 billion from Medicaid and from other entitlements.

• Defense spending will increase from $422 to $439 billion, even aside from the $82 billion emergency measure just approved for Iraq and Afghanistan, while domestic expenditures will be frozen for three years at $404 billion. Federal funding to states and localities will take a major hit to reduce escalating deficits that Congress is expected to produce over the next years.

• The Budget Resolution also protects a number of controversial measures from possible filibusters. Protecting various measures from a filibuster, it calls for renewal of $106 billion in expiring tax cuts, such as the dividend and capital gains rates reduced in 2003, continues the deductibility for federal taxes of sales taxes in lieu of state income taxes, and provides for premium increases for pension insurance for the financially besieged Pension Benefit Guaranty Corp. It also allows for a simple majority vote approval to permit oil drilling in the Alaska Arctic National Wildlife Refuge and recognizes revenues from this source.

• Supreme Court accepts government’s appeal of 2–1 Third Circuit ruling sustaining challenge by thirty-one state and private law schools that their universities may still receive federal funds while limiting assistance to military recruiters on campus over gender discrimination. The constitutionality of the 1995 Solomon Amendment, requiring schools to provide equal access to recruiters as a condition of receipt of federal funds that Congress updated in 2004, is at issue.

• Conference Committee will be needed to resolve differences in House and Senate versions of mammoth federal highway bill authorizing spending over the next six years for various highway, mass transit, and safety programs. The House approved $284 billion, including $12 billion for roughly 4,000 local projects (some only loosely related to transportation) that critics refer to as the “Xmas Tree.” The $11 billion higher Senate version has attracted White House threats of a veto. This bill failed last year because such disagreements over funding levels could not be resolved.

• “Real ID” provision to mandate a federal identification standard for states in issuing drivers’ licenses essentially “buried” in Conference Committee version of “emergency” legislation approved for $82 billion to fund military operations in Afghanistan and Iraq. States will have to verify that applicants are legally in the country before issuing licenses to be used for identification, such as to board airplanes. Some warn federal requirements could later include an electronic strip to track user locations. Another immigration control provision authorizing construction of a border barrier near San Diego overrides otherwise applicable environmental restrictions.

• Full D.C. Circuit rejects First Amendment defense and supports its panel’s ruling upholding jailing of New York Times and Time reporters for contempt. The reporters refused to testify in a probe of Administration sources that leaked name of covert CIA agent, the wife of Ambassador Joseph C. Wilson (an Administration critic of Iraq war), trying to discredit him. The prosecutor has agreed to stay incarceration pending the Supreme Court’s decision on whether to review the case. This has seminal case potential.

• 1997 House Ethics rules rescinded in January to protect House Majority Leader Tom DeLay (R-Tex.) were restored to gain Democratic participation in the ten-member House Ethics Committee. Referral to a functioning committee, given mounting media criticism, was needed to resolve current charges that he knew his foreign travel was improperly paid for by a foreign agent and that related expenses were covered by a lobbyist from ineligible private sources. Last year, the Committee admonished him three times for conduct inappropriate for members. DeLay has claimed that the House seventy-one page guidance, “Gifts and Travel,” is not sufficiently clear. The media focus has also impelled other members to review their own travel compensation arrangements.

• Most of the Patriot Act’s sixteen expiring provisions are likely to be made permanent, but with changes to controversial provisions generating local government condemnations, such as allowing secret warrants to obtain roving wiretaps and financial documents, library data, and credit card and health records of individuals. Such provisions have been used 155 times since 9/11. Proposals would allow “targets” to challenge searches for which, currently, notification can be delayed.

• Tax Code § 527 advocacy groups, such as the “Swift Veterans,” the “Media Fund,” and “POWs for Truth,” that were sources of some $585 million for advertising in the 2004 campaign, may be seriously limited in obtaining funds for political campaign advertising. Seen by critics as favoring Republicans, a bill close to passage in the Senate would place a $32,500 ceiling on individual contributions that previously were unlimited, allowing several individuals to contribute millions. Political Action Committee (PAC) contribution limits would be increased from $5,000 to $7,500, and trade associations and corporations currently prohibited from doing so could solicit their employees to contribute.

• A bipartisan measure under consideration would permit D.C. to elect a full-fledged Member of Congress by pairing it with an added seat for Utah, next in line for increased House representation. After the 2010 census, the number of representatives would revert back again to 435. To come into effect, approval by two-thirds of the states would be required.

• The $21 million, ten-year investigation by the last remaining independent counsel into former HUD Secretary Henry Cisneros (pardoned by President Clinton for lying to the FBI undertaking his background investigation) finally appears imminent. Talk about the trials of holding public office—the remaining issue, which is the IRS handling of a potential tax fraud case concerning whether taxes were paid on $10,000 Cisneros paid to a friend who was to, but did not, stay silent about their relationship, is discussed in a report to be published shortly.

• Current confrontation on whether lifetime judicial appointments should require super-majority approval levels enforceable through filibusters represents a fundamental clash of values. Whether Republican efforts to force only a majority vote to obtain approval of all 213 Bush nominees to federal courts, given that 205 have been confirmed on the basis of obtaining 60 votes, is not yet known nor are the long-term costs to traditional Senate values that may result over this battle. The negative impact on civility in that body can already be observed.
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