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State & Local News Vol. 22, No. 2, Winter 2000 WASHINGTON'S LABYRINTHINE WAYSBy Otto J. HetzelUnfulfilled Legislative Objectives When Budget Battle Ebbed Provide Agenda for Next Year. The government's budget was finally determined on November 29, 1999, just before Congress' end of the year recess. In order to go home, Congress combined many of the major appropriation bills that had not yet been approved into one large omnibus bill, enacted November 19. The $390 billion spending measure includes $1.3 billion to hire 100,000 new school teachers (but giving school districts a greater say in how to spend those funds), increased funds to hire police officers, and extra funds for land preservation, all major White House objectives. The Administration was unable to get Congress to approve a prescription drug benefit for Medicare, a patient's bill of rights to assist them in challenging managed care decisions, an increase in minimum wages, stricter checks on buyers at gun shows, and a more generous earnings limit for those on Social Security. A major omission for Republicans was the lack of any major tax cut, but the legislation did contain a 0.38 percent across-the-board cut in spending, the price of avoiding a stalemate. Moreover, the Administration is authorized to determine how it will be applied, agency by agency, so it is effectively only a deferral until next year. Since the Bush campaign has made a major tax cut one of its principal tenets, that issue was kept alive. The only question is how to pay for it. Along with campaign finance reform, courtesy of Senator John McCain's campaign, all of these issues are likely to fashion the legislative agenda during the election year that is well underway. One certainly can be cynical about what real progress will be made on many of these issues during 2000, aside from perhaps an increase in the minimum wage. Something needs to be in reserve to persuade voters why to prefer one party over another. HUD Budget Another Success for HUD Secretary. One appropriation bill passed before the omnibus measure was the Independent Agencies Appropriation Act that includes HUD funds. Once again, HUD Secretary Cuomo snatched victory from what was at one time an almost tragic reduction in support for housing and economic development by local governments, that had been slavishly justified in order to come under the 1997 spending limits. That rubric was ultimately abandoned, however, and the Secretary achieved most of his budget objectives, basically maintaining funding levels for most programs. There was even an increase in contract renewals for section 8 contracts and modest increases in funds for community development block grants, the major lifeline for local governments. Budget legerdemain was prominent with actual access to some funds delayed until next fiscal year. Both Parties Vow to Safeguard Social Security Funds After Dipping into Them to Fund Expenditures. The Congressional Budget Office released a study showing that the Fiscal Year 2000 budget passed in November exceeded spending caps by $37 billion and dipped into Social Security tax revenues to the tune of $17 billion to cover the additional spending. Republican congressional leaders pledged to rescind some of the spending approved this fall if necessary to avoid dipping into the so-called Social Security surplus. It was not clear, however, how one gets the genie back in the bottle again. What's $4 Billion More or Less. Given the last-minute nature of appropriation acts these days, with agreements inserted in legislation only hours before the vote on the bill, mistakes are bound to happen. Given the need to combine several bills into one right before adjournment this last November, a "miscellaneous appropriation act" enacted along with the last - major spending bill, contained a provision that was intended to allow for additional funds within existing budget restrictions by delaying for two days the last pay date for military personnel. The savings, however, were not realized because they should have been allocated to day-to-day government spending rather than to reduce entitlement programs. The Congressional Budget Office recommended an across the board spending cut to correct the problem, but the White House which has the last word on allocating cuts after the fact decided to ignore the problem. Hopefully, it will be repairable during the next budget process. HUD Reports Growing Shortage of Affordable Housing Units. In September, HUD released "The Widening Gap: New Findings on Housing Affordability in America." The report found that despite a robust economic expansion, the available supply of affordable housing continues to shrink. As the number of affordable housing units declines, the number of renters with incomes below 30 percent of median income has also climbed. Now, there are only thirty-six units both affordable and available for rent for each 100 of these households. Rents are also rising at twice the rate of the general inflation. The issue is whether additional construction subsidy programs will be enacted to meet this growing need. Congress Fortunately Again Fails to Enact New Bankruptcy Provisions. A credit card industry-led assault to make bankruptcy law more strict on debtors, despite no effective opposition, still floundered at the end of the term because of the Senate's inability to agree to unrelated amendments to the basic bill that were tacked on, such as the minimum wage increase. The bill attempts to prevent consumers from avoiding payment of all debts when they might reasonably afford some of them. By not excusing all their debts, debtors would be forced to pay at least part of them. Critics have complained that the bill would not provide sufficient disclosures or place other requirements on credit card companies whose prolifigate distribution of cards has fueled excessive consumer use of credit, often resulting in bankruptcy when financial problems arise because jobs are lost, families breakup, and medical expenses escalate. It would appear passage is likely this coming year, however unless greater opposition arises. Congress Permits Satellite Networks to Include Local Stations. The people complained and Congress heard them. The expanding number of satellite dish users supported by their distributors, such as Direct TV, succeeded in persuading Congress to let them receive local programming in their areas. Up to this change, only some distant local programming broadcast nationally was permissible on satellites. This forced viewers to also maintain an old-style television antenna to have access to their local stations. On cable systems, however, local stations were provided. The effect of the change is likely to make satellite systems more competitive with cable, which currently controls 85 percent of the TV viewing market. Cable was freed this last May from most price restrictions Congress earlier imposed. The increase in local programs was justified in part as a potential break on wild increases in cable rates. Satellite companies were given six months to work out retransmission agreements with local broadcasters. By 2002, satellite companies must provide access to all local stations if they carry some of them. Banking Bill Accommodates Competition While Preserving Most CRA Requirements. Landmark legislation revamping the banking, securities, and insurance world was enacted that is likely to trigger mergers and allow these financial institutions to sell everything from checking accounts to securities to life insurance. Whether it will really bring lower costs, greater choice, and better consumer protection seems questionable. Consumers contended that privacy protections were not adequately provided for in the legislation, with the merger of marketing and existing databases that the measure will produce. The 1977 Community Reinvestment Act (CRA) was a major stumbling block for the measure. Senate Banking Committee Chair Phil Gramm is not a fan of the CRA, but the White House threatened to veto the measure without continued CRA requirements that banks lend to low-income and minority areas where they take deposits. The compromise that enabled the legislation to proceed reduced the frequency of CRA reviews for smaller banks but required a satisfactory CRA rating before bank mergers with security or insurer firms. Oversight of the new legislation will be split between the Federal Reserve and Treasury. A role for state agencies supervising securities was retained, but the nationalization of the insurance industry is a much bigger change from state-based supervision than many may realize. State law was still given preference over federal law if it provides consumers greater privacy rights to control and prevent the sale or sharing of financial data. This may provide an area of legislative activity this coming year at the state level. Complaint Challenging Nonrandom Allocation of Democratic Judges to Prosecutions of Clinton Friends Dismissed. Court of Appeals Judge Stephen Williams dismissed a Judicial Watch challenge to the nonrandom allocation of cases to judges by the Chief Judge of the D.C. District Court. Chief Judge Norma Holloway Johnson assigned judges without using a random allocation by computer for prosecutions of Webster Hubbell and Charlie Trie. Given that only four of the thirteen D.C. District Court judges, however, were appointed by Republicans, Williams noted that it was not surprising that these cases were assigned to Clinton appointees. He termed the challenge frivolous, but also pointed out that the Local Court Rule permitting nonrandom assignments had the potential for abuse. Medicare Revision Shelved. The only result of the earlier rhetoric to revise Medicare and include prescription drugs was to include $11 billion more to providers of Medicare services. The successful lobbying by the health care industry resulted in extra appropriations. For instance, more funds will be available for teaching hospitals and other hospitals that treat a large number of poor patients, for hospital outpatient services (while at the same time limiting charges to patients), for nursing homes to cover costs for especially expensive patient treatments, for drug companies by excluding certain prescription drugs from tight limits on reimbursement to patients, and by payment add-ons for specific drugs, and for physical therapists who will benefit when tight limits on the availability of physical therapy are limited in two years. The health care industry has now clearly become a federally manipulated segment of the economy and Congress fine-tuned some of it. Miranda Ruling to be Revisited. On December 7, 1999, the Supreme Court announced that it would hear the Fourth Circuit's 2-1 decision in Dickerson v. United States, (en banc reconsideration was later rejected 8-5). That court held that the provision in the Omnibus Crime Control Act of 1968, enacted as 18 U.S.C. § 3501, overruled the thirty-three year old Miranda v. Arizona warning requirements necessary if a confession was to be used as evidence at trial. The ultimate Supreme Court decision could have significant effects on all state and local government prosecutions. The court of appeals upheld the 1968 Act that reinstated the pre-Miranda rule that confessions could be admitted in federal court so long as they were "voluntary" in light of the circumstances. The Supreme Court's decision will likely hinge upon whether Miranda is seen as constitutionally based or more as a protection for the exercise of the Fifth Amendment, assuming such a distinction can be made. From its enactment, the U.S. Department of Justice has refused to enforce the legislation believing a constitutional amendment would be required to change the Miranda doctrine. In extending Miranda to the states and their courts over time, the Supreme Court gave some indication of its perception that the ruling had constitutional dimensions. There should be considerable debate on the issue before its hearing next year, however. Commentators have prognosticated that the ruling is likely to be close given prior positions and statements by various Justices. With no party to defend the statute (the Justice Department in its brief signed by both the Attorney General and the Solicitor urged the Court to take review of the case but argued that section 3501 was unconstitutional), in an unusual procedure, the Court appointed a long-time critic of Miranda, Professor Paul G. Cassell, to argue on behalf of its constitutionality. Like a Phoenix, Resurrection of the Nondelegation Doctrine Still Has Life. An en banc decision of the federal Court of Appeals for the D.C. Circuit has sustained the court's 2-1 panel decision that had struck down Environmental Protection Act (EPA) air quality regulations in April. The court's premise was that Congress in enacting the legislation had exceeded constitutional authority for valid delegations to federal administrative agencies. The decision adopts a doctrine essentially ignored since New Deal days in the 1930s. If it is not reversed by the Supreme Court, the holding could profoundly affect the scope of regulations that any federal agency could promulgate. The effect of the decision could be to require Congress to take on the burden of specifying applicable restrictions rather than delegating such controversial decisions to agencies with at least implied expertise in the particular field.The court found that EPA's regulations were not supported by the record and were arbitrary and capricious, in holding that EPA lacks "any determinate criterion" for drawing the lines in its regulations. The decision also raises significant questions about the continuing viability of the Chevron doctrine that asks courts to defer to agency expertise where legislation is ambiguous. The attack on the congressional delegation was in the context of provisions that were not to take effect for at least four years. They were intended to tighten controls on ground level ozone, a major factor with smog, by limiting particulates (airborne particles) in the air, both byproducts of automobiles and industrial plants. The re-emergence of the nondelegation doctrine is also likely to enliven congressional efforts to limit environmental regulations affecting business and property owners. Curtailing environmental restrictions by agencies to clearly expressed congressional directives will certainly increase the politicalization of such decisions both in Congress and at the agencies. The suit arose out of a challenge to the EPA regulations by a number of states, including Michigan, Ohio, and West Virginia, along with a trucking group and other industries. Amicus briefs were filed as well by Massachusetts, New Jersey, Connecticut, Vermont, New York, and New Hampshire. Welfare Changes Impacting Poorest in Society. Three years ago changes in welfare came into effect that have significantly reduced welfare rolls, by as much as one-half in some cases. The Center for Budget and Policy Priorities has challenged the conventional wisdom that the reduction in caseloads was an unqualified success. Take up of benefits is one problem. Many who leave welfare, however, fail to obtain food stamps that annually exceed $500 for which they continue to be eligible, particularly for poor children. Understanding the welfare system is another problem. Those who are at the bottom of the income spectrum are feeling the brunt of the loss of welfare. The lowest income families are less likely to apply for food stamps, find employment, and earn wages to replace benefits. For others, however, getting off welfare has meant more income and less bureaucracy. State Lead Based Paint Testing Faulted. Most states are failing to test children for lead blood levels in Medicare although lead poisoning more frequently impacts low-income children. They have about three times the risk. Almost 1 million children are at risk according to the Center for Disease Control. Of the 6.3 million children on Medicare, only 1.2 million have been tested, although such testing is mandatory on states, and the costs of tests are paid for by Medicare. Learning difficulties and neurological damage can result from lead poisoning. Devastating Picture Compiled on the State of the Homeless. Despite record levels of prosperity, data developed on the homeless by the Urban Institute in a report released by HUD reflects that most are deeply impoverished and ill, among the poorest in our society. They have less than half of even the poverty level income. Based on Census Bureau surveys in 1995 and 1996 of 12,000 service providers involving some 40,000 programs for the homeless and 4,000 homeless persons, this was the most comprehensive study of homelessness undertaken. Analysis of data from an average night in February 1996 showed that an estimated 470,000 homeless persons documented only reflected 25 percent of the homeless at any one time during the year. The profile of the homeless showed that two-thirds were suffering from chronic or infectious diseases (not counting AIDS), 55 percent lacked health insurance, and 39 percent had signs of mental illness. Early foster care or institutional placement was typical of 27 percent. Secretary Andrew Cuomo noted that punitive ordinances and police crackdowns such as in New York would not work. "You need outreach to get people off the street-not a police officer with handcuffs. You need transitional services as a second step, and then by definition you need the third step, which is permanent housing." Otto J. Hetzel is a Professor of Law Emeritus at Wayne State University and practices law in Washington, D.C.
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