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Staff Contact: Russ Vought (x68581) March 16, 2007

**Appropriations Policy Brief**

**H.R. XX --- Making Emergency Supplemental Appropriations for**

**FY 2007**

**[Global War on Terror Funding (Title I):]{.underline}**

[]{.mark}

In millions

  ------------------------------------------- ------------- -------------
  **Department of Defense**                   **Request**   **House**

  Military Personnel                          12,145        13,566

  Operations & Maintenance                    50,316        52,499

  *Afghanistan Security Fund*                 5,906         5,906

  *Iraq Security Fund*                        3,842         3,842

  *Iraq Freedom Fund*                         206           156

  *Joint Improvised Explosive Device Defeat   2,433         2,433
  Fund*                                                     

  *Strategic Reserve Readiness Fund*          0             2,500

  Procurement                                 24,900        24,814

  R&D, Test & Evaluation                      1,448         1,035

  Defense Working Capital Fund                1,316         1,316

  Drug Interdiction & Counter Drug Activities 259           259

  Intelligence Community Management Account   67            57

  Defense Health Program                      1,073         2,790

  National Defense Sealift Fund               5             5

  Military Construction                       1,854         4,916

  *DoD Base Closure Account*                  0             3,136
  ------------------------------------------- ------------- -------------

  ------------------------------------------- ------------- -------------
  **Department of Agriculture**               **Request**   **House**

  P.L. 480, Title II Grants                   350           450

  **Department of Homeland Security**                       

  Departmental Management & Operations        0             35

  Customs and Border Protection               0             100

  Air & Marine Interdiction                   0             150

  Transportation Security Administration      0             1,250

  Infrastructure Protection & Information     0             25
  Security                                                  

  FEMA, Salaries & Expenses                   0             25

  FEMA, State and Local Programs              0             415

  FEMA, Emergency Management Performance      0             100

  Domestic Nuclear Detection Office           0             400

  **Department of Energy**                                  

  Defense Nuclear Nonproliferation            63            150

  **Department of Justice**                                 

  General Legal Activities, Salaries &        4             2
  Expenses                                                  

  U.S. Attorneys, Salaries & Expenses         5             5

  U.S. Marshals, Salaries & Expenses          15            3

  National Security Division                  2             2

  FBI, Salaries & Expenses                    118           118

  Drug Enforcement Administration             8             8

  Federal Prison System                       17            17

  **Legislative Branch**                                    

  House of Representatives, Salaries &        0             6
  Expenses                                                  

  **Veterans Affairs**                                      

  Disability Examinations Pilot Program       0             20

  VA Health Administration                    0             1,301

  Departmental Administration                 0             381

  **Department of State**                                   

  Diplomatic and Consular Affairs             913           967

  Inspector General                           35            47

  Education and Cultural Exchange Programs    20            20

  International Peacekeeping Activities       200           288

  International Broadcasting Operations       10            10

  USAID                                       272           310

  Economic Support Fund                       3,025         2,953

  Assistance for Eastern Europe               279           239

  International Narcotics Control             260           335

  Migration and Refugee Assistance            72            112

  U.S. Emergency Refugee & Migration          30            35
  Assistance                                                

  Nonproliferation, Antiterrorism, & Demining 28            88

  **Department of Treasury**                                

  International Affairs Technical Assistance  3             3

  **Funds Appropriated to the President**                   

  Foreign Military Financing Program          220           260

  Peacekeeping Operations                     278           225
  ------------------------------------------- ------------- -------------

[]{.mark}

**[Items of Note:]{.underline}**

**Strategic Reserve Readiness Fund**: Provides \$2.5 billion to
establish a new fund to train and equip non-deployed U.S. military
forces to improve their readiness. According to the Committee, "reported
readiness levels are sufficient for forces at home bases. Training
readiness is significantly diminished for units at home station due to
personnel turnover, equipment shortages, and the short turnaround
between combat turnovers."

**Joint Strike Fighter:** Denies funding for the requested \$389 million
for two Joint Strike Fighters because "these aircraft will not be
delivered until mid 2010 at best...\[and\] these funds can be better
allocated for more urgent requirements which will bring capability to
the fight much quicker."

**Defense Health Program/Walter Reed Army Medical**: Provides \$2.8
billion for the Defense Health Program, an increase of \$1.7 billion
above the President's request. The Committee report directs the
additional funding as follows: \$450 million for Post Traumatic Stress
Disorder/counseling, \$450 million for traumatic brain injury, \$730
million for private sector care, \$62 million for amputee care, \$12
million for care givers support programs, and \$15 million for burn
care. In addition to providing \$29 million for amputee care and \$2
million for its care giver support program, the bill includes \$20
million for infrastructure at Walter Reed Army Medical Center,
specifically building 18.

**Counter-Drug Activities in Afghanistan/Pakistan**: Limits the amount
of funding for counter-drug activities for Afghanistan and Pakistan to
\$100 million.

**Commander's Emergency Response Program:** Provides \$456 million for
the Commander's Emergency Response Program to allow military commanders
in Iraq and Afghanistan to respond to urgent humanitarian and
reconstruction needs.

**Military Bases in Iraq**: Prohibits the use of funds to establish any
permanent military installation in Iraq or to exercise control of oil
resources in Iraq.

**Torture Prohibition**: Prohibits the use of funds to negate a series
of laws and regulations promulgated to implement the United Nations
Convention Against Torture and Other Cruel, Inhuman or Degrading
Treatment or Punishment (Section 1313).

**Security Forces Readiness Limitations**: Limits to 50 percent the
amount from the Iraqi and Afghanistan Security Forces Funds until (1)
the Secretary of Defense submits a report that assesses by unit the
transition readiness of the Iraqi and Afghan security forces and (2) the
Office of Management and Budget submits a report on the proposed use of
all the funds on a project-by-project basis.

**Contractor Savings and Reporting Requirements**: Limits to 90 percent
the amount of operation and maintenance funds that can be spent before
the Pentagon reports on the use of contracted services to support U.S.
military and reconstruction activities in Iraq and Afghanistan. In
addition, the bill reduces the amounts of funding for operations and
maintenance otherwise provided in this legislation by \$815 million "to
reflect savings attributable to efficiencies and management improvements
in the funding of contracts in the military departments."

**New House Office Space:** Does NOT provide \$16 million "for the
maintenance, care, and operation of the House office buildings. This
funding---included in the committee mark before it was modified by an
amendment---would have provided for bollards, blast protection, *and
other security improvements required for House office building space*"
(emphasis added). According to press reports, this funding was to
renovate a former FDA facility next to the Ford Office Building to
provide additional House office building space.

**Base Realignment and Closure Funding**: Provides \$3.1 billion for the
Base Realignment and Closure Account to fulfill the Administration's
FY07 request. The omnibus appropriations bill (H.J.Res. 20) provided
\$2.5 billion for such needs. However, some conservatives may be
concerned that all of this funding should have been provided in the
omnibus bill, where it would have been subject to budget constraints.
Instead, the Appropriations Committee delayed this funding to the
supplemental, freeing up dollars within the budget for lesser
priorities.

[]{.mark}

**Walter Reed Army Medical Center:** Prohibits funds in this or any
other Act, regardless of current law, from being used to close the
Walter Reed Army Medical Center.

[]{.mark}

**RSC Staff Contact for This Title**: Russ Vought,
<russ.vought@mail.house.gov>; (202) 226-8581

[]{.mark}

**[Iraq Policy Section:]{.underline}**

**Mission Capable Units in Iraq:**  Prohibits funds from being used to
deploy any unit of the Armed Forces to Iraq unless the chief of the
military department concerned has certified in writing to Congress at
least 15 days in advance of the deployment that the unit is fully
mission capable.

**Deployment Time in Iraq:**  Prohibits funds from being used to
initiate the development of, continue the development of, or execute any
order that has the effect of extending the deployment or redeployment
for Operation Iraqi Freedom in violation of a 356-day maximum (for the
Army, Army Reserve, and the National Guard) or a 210-day maximum (for
the Marines and Marine Reserves).

**Presidential Certification on Benchmarks:**  Requires that the
President certify to Congress by October 1, 2007 that the Government of
Iraq has:

> \--"enacted a broadly accepted hydro-carbon law that equitably shares
> oil revenues among all Iraqis;
>
> \--"adopted legislation necessary for the conduct of provincial and
> local elections, taken steps to implement such legislation, and set a
> schedule to conduct provincial and local elections;
>
> \--"reformed current laws governing the de-Baathification process to
> allow for more equitable treatment of individuals affected by such
> laws;
>
> \--"amended the Constitution of Iraq consistent with the principles
> contained in article 137 of such constitution \[regarding the
> protection of existing Kurd laws, regulations, and court judgments\];
> and
>
> \--"allocated and begun expenditure of \$10 billion in Iraqi revenues
> for reconstruction projects, including delivery of essential services,
> on an equitable basis."

**Funds Withheld:**  Withholds 50 percent of the funds appropriated by
this bill for the Iraq Security Forces Fund, the Economic Support Fund
(except for the U.S. Agency for International Development's
pro-democracy funds for Iraq), and International Narcotics Control and
Law Enforcement until the President has made the required certification
above.

**Withdrawal from Iraq:**  If the President is unable to make the above
certification by October 1, 2007, or if the above report indicates that
the required conditions in Iraq have not been met, the Secretary of
Defense would have to commence the withdrawal of the Armed Forces from
Iraq and complete such withdrawal within 180 days.  Even if the
President makes the required certification, the troop withdrawal from
Iraq would have to begin by March 1, 2008, and be completed within 180
days.  Funds in this Act or any other Act would be immediately available
to fund the withdrawal.

**Prohibited Return to Iraq:**  Once the withdrawal from Iraq is
complete, U.S. Forces could not be sent to or retained in Iraq for any
purpose except for certain diplomatic and training missions, or limited,
targeted special actions. 

**Coordinator for Iraq Assistance:**  Directs the President to appoint a
Coordinator for Iraq Assistance (subject to Senate confirmation) to
coordinate and oversee U.S. political, economic, and military assistance
for Iraq.

**Possible Conservative Concerns:** Some conservatives might be
concerned that this legislation would undermine the constitutional
authority of the President as Commander-in-Chief. Furthermore, some
conservatives might be concerned that this bill would give strength to
our enemy by showing American weakness and encouraging our enemy to
either wait until after the deadlines in this legislation to launch more
attacks and/or to focus their current attacks on ensuring that one or
more of the benchmarks required for the presidential certification are
not met.

**RSC Staff Contact for This Section**: Paul S. Teller,
<paul.teller@mail.house.gov>, (202) 226-9718

**[Hurricane Relief (Title II):]{.underline}**

[]{.mark}

In millions

  ------------------------------------------- ------------- -------------
  **Department of Agriculture**               **Request**   **House**

  Livestock Assistance                        0             25

  Irrigated Crops                             0             15

  Citrus                                      0             100

  **Department of Commerce**                                

  NOAA, Operations, Research, & Facilities    0             120

  NASA, Exploration Capabilities              0             35

  **Department of Defense**                                 

  Army Corps of Engineers                     0             1,337

  **Small Business Administration**                         

  Disaster Loan Program Account               0             25

  **Department of Homeland Security**                       

  FEMA, Disaster Relief Fund                  3,400         4,310

  Community Disaster Loan Program             0             320

  **Department of Education**                               

  Innovation and Improvement                  0             30

  Higher Education                            0             30

  **Department of HUD**                                     

  Inspector General                           0             10
  ------------------------------------------- ------------- -------------

[]{.mark}

**[Items of Note:]{.underline}**

**Hurricane Livestock Indemnity Assistance**:  Provides \$25 million to
the Secretary of Agriculture to "resume the 2005 Hurricanes Livestock
Indemnity Program to provide additional compensation to livestock
producers" in the area declared a disaster area related to Hurricanes
Katrina and Rita, to those who suffered losses in excess of the maximum
amount of assistance authorized under the indemnity program.  The total
amount of assistance that an eligible producer may receive for
additional livestock losses may not exceed twice the maximum amount of
assistance authorized under the program.

**Irrigated Crop Assistance: ** Provides \$15 million for assistance in
connection with losses for 2005 and 2006 weather conditions, to
producers with respect to irrigated crops in the area declared a
disaster related to Hurricanes Katrina and Rita. 

**Hurricane Citrus Program: ** Provides \$100 million to provide
assistance to citrus producers in the area declared a disaster related
to Hurricanes Katrina and Rita, who suffered losses in excess of the
maximum amount of assistance authorized under the 2005 Hurricanes Citrus
Program. 

**NASA**:  Provides \$35 million to NASA, under the "exploration
capabilities" account, for "expenses related to the consequences of
Hurricane Katrina."  The bill also provides that of amounts previous
appropriated to NASA, \$48 million may be used to reimburse
hurricane-related costs incurred by NASA in FY 2005.

**Corps of Engineers**:  Provides \$1.3 billion to Corps of Engineers
for continued repairs on the levee system in New Orleans.

**Small Business Administration:** Provides \$25 million to the SBA for
additional funding to carry out the Disaster Loan Program.

**FEMA**:  Provides \$4.3 billion for disaster relief at the Federal
Emergency Management Agency (FEMA), \$4 million of which is to be
transferred to the Office of the Inspector General.  The bill extends
from 12 months to 24, the time frame in which FEMA can provide funds to
pay for utility costs resulting from the provision of temporary housing
unties to Hurricane Katrina evacuees.  In addition, the supplemental
would eliminate the state and local matching requirements for certain
FEMA assistance (in connection with Hurricanes Katrina, Rita, Wilma, and
Dennis) in the states of Louisiana, Mississippi, Texas, and Florida, and
provides that the federal portion of these costs will be 100%.

**Office of Inspector General: ** Provides \$10.2 million for the Office
of Inspector General for "necessary expenses related to the consequences
of Hurricane Katrina and other hurricanes of the 2005 season."

**K-12 Education Funding for Hurricane States: ** Provides \$30 million
to Louisiana, Mississippi, and Alabama for recruiting and compensating
teachers and principals in schools affected by Hurricanes Katrina and
Rita, for the implementation of "high-quality formative assessments,"
and the "establishment of partnerships with nonprofit entities with a
demonstrated track record in recruiting and retaining outstanding
teachers and other school leaders."

**Higher Education Funding for Hurricane States**:  Provides \$30
million in assistance to institutions of higher education located in a
disaster area related to the 2005 Gulf of Mexico Hurricanes.

**HUD Indian Housing:**  Provides \$80 million in tenant-based rental
assistance for public and Indian housing under HUD.

**RSC Staff Contact for This Title**: Joelle Cannon,
<joelle.cannon@mail.house.gov>, (202) 226-0718

**[Agriculture Assistance (Title III):]{.underline}**

[]{.mark}

In millions

  ------------------------------------------- ------------- -------------
                                              **Request**   **House**

  Crop Disaster Assistance                    0             1,808

  Livestock Compensation Program              0             1,480

  Livestock Indemnity Payments                0             31

  Spinach Assistance                          0             25

  Emergency Conservation Program              0             20

  National Dairy Market Loss Payment Program  0             283

  Peanut Storage Program                      0             74

  Aquaculture Assistance                      0             5
  ------------------------------------------- ------------- -------------

[]{.mark}

**[Items of Note:]{.underline}**

**Crop Disaster Assistance**:  Provides such sums as necessary in
agriculture assistance to producers experiencing crop losses in 2005,
2006, or 2007 due to bad weather.  Farmers experiencing losses in more
than one year would be required to choose only one year for which they
wish to receive loss compensation.  A large portion would be provided in
the form of direct payments to agriculture producers who experienced
more than 35% crop loss in expected production.  The payment would be
50% of the market price.  Producers would not be eligible for these
payments if they had failed to purchase available crop insurance.  The
bill ensures that these disaster payments *would not exceed* 95% of a
crop's worth in the absence of hurricane destruction.

**Livestock Assistance: ** Provides such sums as necessary to provide
compensation for livestock losses in 2005, 2006, and 2007, due to a
disaster, including wildfire in the state of Texas and other states and
blizzards in the states of Colorado, Kansas, Nebraska, New Mexico, and
Oklahoma.  Cattlemen experiencing losses in more than one year would be
required to choose only one year for which they wish to receive loss
compensation.

**Livestock Indemnity Payments**:  Provides such sums as necessary to
make livestock indemnity payments to producers on farms experiencing
livestock losses due to hurricanes, floods, anthrax, and wildfires in
the state of Texas and other states, and blizzards in the states of
Colorado, Kansas, Nebraska, New Mexico, and Oklahoma.  Cattlemen
experiencing losses in more than one year would be required to choose
only one year for which they wish to receive loss compensation. 
Payments would be not less than 30% of the market value of the livestock
on the day before their death. 

**Spinach**:  Provides \$25 million for payments to spinach producers
that were unable to market spinach crops as a result of the FDA Public
Health Advisory issued on September 14, 2006.  The payments would not
exceed 75 percent of the value of the unmarketed spinach crops.

**Emergency Conservation Program:**  Provides \$20 million for the
cleanup and restoration of farmland damaged by freezing temperatures
during a time period beginning on January 1, 2007 through the date of
enactment. 

**Milk Income Loss Contract (MILC) Program: ** Provides \$283 million
for payments under the MILC program, to extend the life from the program
for one year, through September 30, 2008.  MILC provides payments to
dairy farmers when milk prices fall below a certain rate.  Although the
MILC program expired at the end of FY 2005, Congress authorized a
two-year extension in the Deficit Reduction Act of 2005, which is set to
expire at the end of FY 2007 (September 30, 2007).

**Peanut Storage Subsidies:  ** Provides \$74 million for peanut storage
payments, to extend these payments through 2007.  The Peanut Subsidy
Storage program, which is set to expire this year, pays farmers for the
storage, handling, and other costs for peanuts voluntarily placed in the
marketing loan program.  Under the storage program, the Credit Commodity
Corporation pays a storage fee of \$2.71 per ton, per month, plus a
one-time \$35 per ton handling fee for peanuts placed in the marketing
loan program.

**Aquaculture Operations: ** Provides \$5 million for payments to
"aquaculture operations and other persons in the U.S. engaged in the
business of breeding, rearing, or transporting live fish to cover all or
a portion of the economic losses incurred by the operation or person as
a result of the emergency order issued by the Animal and Plant Health
Inspection Service on October 24, 2006, prohibiting the importation of
specified species of live fish from Ontario and Quebec, Canada, and the
interstate movement of these same species of fish from New York,
Pennsylvania, Ohio, Michigan, Indiana, Illinois, Minnesota, or Wisconsin
to outbreaks of viral hemorrhagic septicemia." 

**RSC Staff Contact for This Title**: Joelle Cannon,
<joelle.cannon@mail.house.gov>, (202) 226-0718

**[Other Funding (Title IV):]{.underline}**

[]{.mark}

In millions

  ------------------------------------------- ------------- -------------
                                              **Request**   **House**

  Farm Service Agency, USDA                   0             48

  NOAA, Commerce                              0             60

  Bureau of Land Management, Interior         0             100

  Fish & Wildlife Services, Interior          0             7

  National Park Service, Interior             0             1

  U.S. Geological Survey, Interior            0             5

  Forest Service, USDA                        0             400

  Secure Rural Schools, USDA                  0             400

  LIHEAP                                      0             400

  Public Health & Social Services Fund (Avian 0             970
  Flu)                                                      

  Architect of the Capitol                    0             50
  ------------------------------------------- ------------- -------------

**[Items of Note:]{.underline}**

**FDA Office of Women's Health:**  Provides \$4 million for the Office
of Women's Health at the Food and Drug Administration.

**National Oceanic and Atmospheric Administration (NOAA): ** Provides
\$60.4 million for the National Marine Fisheries Service under NOAA to
be distributed among fishing communities, Indian tribes, individuals,
small businesses, including fishermen, fish processors, and related
businesses for assistance to "mitigate the economic and other social
effects caused by the commercial fishery failure, as determined by the
Secretary on August 10, 2006." According to the Committee Report, this
funding is to be used to provide disaster relief for those along the
California and Oregon coast affected by the "2006 salmon fishery
disaster in the Klamath River."

**Rescinding Homeland Security Funding**:  Rescinds \$89.8 million in
funding that, according to the Committee, "would have lapsed in FY 2006
if it were not for a provision in the 2007 Appropriations Act allowing
it to remain available through FY 2007."

**Wildland Fire Management:**  Provides a combined \$500 million for the
Bureau of Land Management and the U.S. Forest Service "urgent wildland
fire suppression activities." 

**Avian Flu**:  Provides \$969 million for the Department of HHS to
continue to prepare and respond to an avian flu pandemic. Of this
funding, \$870 million is to be used for the development of vaccines.

**Secure Rural Schools Act (Forest County Payments):**  Provides \$400
million to be used for one-time payments to be allocated to states under
the Secure Rural Schools and Community Self-Determination Act of 2000. 
This program provides a funding stream (known as forest county payments)
to counties with large amounts of Bureau of Land Management land, in
order to compensate for the loss of receipt-sharing payments on this
land caused by decreased revenue from timber sales due to environmental
protections for endangered species.  The authorization for these forest
county payments expired at the end of FY 2006, and counties received
their last payment under the Act in December 2006. 

**LIHEAP**:  Provides \$400 million for the Low-Income Home Energy
Assistance Program (LIHEAP).

**H5N1 Vaccine Compensation:**  Provides \$50 million to compensate
individuals for injuries caused by the H5N1 vaccine, which is a flu
vaccine.

**Payment to Widow of Rep. Norwood:**  Provides \$165,200 to Gloria W.
Norwood, the widow of former Rep. Charlie Norwood (R-GA), an RSC Member,
who passed away last month.  In the Emergency Supplemental
Appropriations Act of 2005 (H.R. 1268), Congress provided \$162,100 to
Doris Matsui, the widow of former Rep. Robert Matsui.

**Capitol Power Plant**:  Provides \$50 million to the Capitol Power
Plant for asbestos abatement and safety improvements.  

**Liberia**:  Provides that money appropriated for FY 2007 for the
Bilateral Economic Assistance program at the Department of Treasury may
be used to assist Liberia in retiring its debt arrearages to the
International Monetary Fund, the International Bank for Reconstruction
and Development, and the African Development Bank. 

**NTSB Lease**:  Amends a provision in the continuing resolution, which
provided \$78.9 million for the National Transportation Safety Board,
Salaries and Expenses, to "include amounts necessary to make lease
payments due in FY 2007 on an obligation incurred in 2001 under a
capital lease."

**RSC Staff Contact for This Title**: Joelle Cannon,
<joelle.cannon@mail.house.gov>, (202) 226-0718

**[Contracting Reform (Title V):]{.underline}**

**Minimizing Sole-Source & Cost-Reimbursement Contracts:**  Requires
agencies that spend more than \$1 billion on federal contracts to
develop and implement a plan to minimize the use of noncompetitive
contracts and cost-reimbursement contracts, and submit plans to Congress
and the Comptroller General of the General Services Administration
(GSA). GSA is directed to submit an analysis of each plan to Congress
within 18 months.

**Contract Disclosure and Justification:**  Requires contract
justification and approval documentation (for both civilian and defense
agencies) be posted on the relevant agency's website and through the
Federal Procurement Data System within 14 days of awarding the contract
(except documentation that is exempt from public disclosure).

**Reporting Contractor Overcharges:** Requires that a report be
submitted to Congress on a quarterly basis containing a list of all
contractor costs (in excess of \$1 million) that are unjustified,
unsupported, questioned, or unreasonable under any contract, task, or
subcontract. This provision also requires agencies to provide
un-redacted copies of audit reports within 14 days, upon a request from
a chairman or ranking member of certain House and Senate committees. 

**RSC Staff Contact for This Title**: Derek Baker,
<derek.baker@mail.house.gov>, (202) 226-8585

**[SCHIP Funding (Title VI):]{.underline}**

**SCHIP: ** Provides \$750 million to the Secretary of HHS to provide
assistance to the SCHIP "shortfall states" (see list below), in the form
of an amount "as the Secretary determines will eliminate the estimated
shortfall." This provision is direct spending that is essentially capped
at \$750 million and designated as an emergency to avoid budget
constraints. *By including this spending in the supplemental, the
Majority avoids its own PAYGO rules*. In addition, the use of an
emergency designation for this type of direct spending may be
unprecedented---RSC staff has found no instance where Medicare,
Medicaid, and SCHIP have been designated as an emergency.

The State Children's Health Insurance Program (SCHIP) is a block grant
provided to states for health care coverage for low-income children in
families with income above Medicaid eligibility levels.  States receive
a fixed federal contribution, which is intended to last for three years,
and any unused funds at the end of that time period are redistributed to
states that have used the entire grant.  Some states experience a
"shortfall" in funding, in light of decisions to insure adults, pregnant
mothers, and children from families with significantly more income than
the poverty level (350% in one state).  According to a 2006 CRS report,
the following 14 states will likely have a shortfall in FY 2007: 
Alaska, Georgia, Illinois, Iowa, Maine, Maryland, Massachusetts,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, Rhode Island,
and Wisconsin.

**Planned Parenthood Protection for Nominal Drug Prices: ** Does NOT
amend current law to include additional entities (such as certain
501c3s), including "a health center of an institution of higher
education, the primary purpose of which is to provide health services to
students attending the institution," to a list of entities permitted to
benefit from "nominal prices" for sales by a manufacturer of covered
outpatient drugs under Medicare. This provision was stripped during
mark-up. According to the Committee Report (before it was amended), this
provision would have "clarif\[ied\] current law that **planned
parenthood clinics** and certain university clinics can continue to
receive nominal drug prices" (emphasis added).

**RSC Staff Contact for This Title**: Joelle Cannon,
<joelle.cannon@mail.house.gov>, (202) 226-0718

**[Minimum Wage-Tax Provisions (Title VII):]{.underline}**

**Minimum Wage Increase:**  Increases the federal minimum wage from
\$5.15-per-hour to \$7.25-per-hour over two-plus years---a 41%
increase.  ***Yields \$16.5 billion in private-sector costs over
[five]{.underline} years.***         

**Mariana Islands:**  Applies a federal minimum wage to the Commonwealth
of the Northern Mariana Islands and increases it steadily until it
matches the new \$7.25 mandate for the 50 states.

**Tax Increases and Shifts:**  Implements several tax increases and
shifts, including: denying the lowest maximum capital gains tax rate for
certain minors and adults, extending the suspension of interest payments
due to the IRS, and adjusting the deadlines for corporate estimated tax
payments.  ***Costs taxpayers \$1.380 billion over the FY2007-FY2017
period.***

**Tax Cuts:**  Implements several tax cuts, including: extending and
expanding the Work Opportunity Tax Credit (WOTC), extending section 179
expensing, extending the restaurant tip credit, allowing the WOTC and
the tip credit to be claimed against the Alternative Minimum Tax (AMT),
and adjusting the self-employment taxes of married couples.**  *Saves
taxpayers \$1.792 billion over the FY2007-FY2017 period.***

**Possible Conservative Concerns**: Some conservatives might be
concerned that the federal minimum wage itself is anti-capitalist, since
it prevents an employer and a potential employee from engaging in
free-market labor negotiations. Furthermore, quickly-increased labor
costs unrelated to business conditions will encourage or force employers
to fire employees, reduce working hours for existing employees, and/or
postpone plans to hire additional employees. Conservatives may also be
concerned with the pace of this increase, which would mandate employers
to give certain employees a whopping 41% raise over two-plus years,
yielding \$18 billion (according to CBO) in intergovernmental and
private-sector costs over five years (which is not nearly offset by the
tax relief paired with the minimum wage increase).

Some conservatives may be concerned that this title contains some
*permanent* tax increases on some taxpayers to "pay for" certain
*temporary* tax cuts for other taxpayers. **Additionally, some
conservatives may be concerned that the small business tax-cut
provisions (\$1.8 billion over [eleven]{.underline} years) do not even
come close to offsetting the costs of the minimum wage increase (\$17
billion for small businesses over [five]{.underline} years).**
Furthermore, the bill [chips away at the capital gains and dividends tax
cut]{.underline} (by preventing certain students under age 24 and
certain non-students under age 19 from getting the lowest rate available
under current law), while effectively increasing interest penalties for
certain taxpayers, and accelerating certain quarterly tax payments for
corporations.

**RSC Staff Contact for This Title**: Paul S. Teller,
<paul.teller@mail.house.gov>, (202) 226-9718