Congress passes a budget: "God knows what's in it.".

• Position: The States' Advocate, Dec 1998

After a year characterized by deadlock and inaction, Congress finally approved a 3,825-page, 16-inch-thick omnibus bill (HR 4328), including more than $500 billion in appropriations, numerous changes in tax policy and myriad substantive legislative measures, large and small. Thirteen days before the Nov. 3 election, members were asked to vote on the massive omnibus bill though few if any had a chance to read it. According to West Virginia Senator Robert C. Byrd, "Nobody but God knows what's in it." The 105th Congress adjourned sine die on Oct. 21, 1998.

NCSL's analysis of the FY 1999 appropriations measures in HR 4328 shows a significant increase, generally, in spending for state and local programs. Mandatory spending for Medicaid increased nearly $2 billion, and states beat back an attempt to reduce the matching rate for Medicaid administration from 50 percent to 47 percent. Discretionary spending for transportation programs went up $4.69 billion. And new appropriations were made, to the tune of $1.2 billion, to reduce class size for public education. At the same time, Title XX, the social services block grant for states, was cut by 17 percent, or $390 million below the FY 1998 level. (Congress earlier this year reduced the outyear authorization level of the block grant by $2.4 billion, beginning in FY 2001, in order to accommodate more transportation spending.)

On the tax front, HR 4328 included the Internet Tax Freedom Act, a three-year moratorium on certain federal, state and local taxes on the Internet, as well as additional authority for states to issue bonds for economic development projects. The Internet tax bill was, all things considered, relatively favorable to states. Existing state taxes on Internet access service are grandfathered, for example.

The omnibus bill also imposes a one-year moratorium on implementation of a particularly onerous unfunded mandate, included in the 1996 Immigration Reform Act, requiring states to place Social Security numbers on driver's licenses and to follow a federal process for issuing the licenses. On the other hand, states are required by HR 4328 to provide Viagra, the anti-impotence drug, to Medicaid beneficiaries.

Despite intense lobbying by NCSL, the omnibus bill did not include a provision to bar the federal government from seizing state money awarded in settlements of tobacco lawsuits. The U.S. Department of Health and Human Services still asserts that current federal law gives it the right to "recoup" a percentage of any state's tobacco settlement award equivalent to the Medicaid match rate for that state. Congress, of course, failed earlier in the year to agree on comprehensive tobacco settlement legislation.

State lobbyists were successful in stopping last-minute attempts in the 105th Congress to preempt state authority in such areas...