District of Columbia: Issues in the 108th Congress

This report provides an overview of District of Columbia-related policy and funding issues of interest to Congress. The United States Constitution gives Congress exclusive legislative authority over the affairs of the District of Columbia. As a result, the 108th Congress may debate a number of funding, governance, and constitutional issues affecting the District of Columbia, including approval of the city’s budget, enactment of a general federal payment, budget autonomy for the city, and voting representation in Congress. In addition, Congress will consider whether to continue to include in the District’s appropriations bills for FY2003 and FY2004, a number of controversial general provisions that District officials claim infringe on the principles of home rule.

Order Code RL31771
Report for Congress
Received through the CRS Web
District of Columbia:
Issues in the 108th Congress
March 10, 2003
Eugene Boyd
Analyst
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

District of Columbia: Issues in the 108th Congress
Summary
The United States Constitution gives Congress exclusive legislative authority
over the affairs of the District of Columbia. As a result, the 108th Congress may
debate a number of funding, governance, and constitutional issues affecting the
District of Columbia, including approval of the city’s budget, enactment of a general
federal payment, budget autonomy for the city, and voting representation in
Congress. In addition, Congress will consider whether to continue to include in the
District’s appropriations bills for FY2003 and FY2004, a number of controversial
general provisions that District officials claim infringe on the principles of home rule.
Given the District’s status as the seat of the national government, what should
Congress do to ensure the long term fiscal health of the nation’s capital? One option
Congress may explore is the reinstatement of a general federal payment, but at what
level? The city’s mayor has suggested an annual federal payment of $400 million.
Alternatively, given the District’s unique status as the nation’s capital, Congress
could shift additional state-like functions to the federal government. The city’s Chief
financial officer estimates that the city currently spends $500 million in local funds
for such activities. Congress could also approve legislation granting the city control
over locally-generated revenues.
Voting representation in Congress for the citizens of the District of Columbia
is a perennial issue. At the heart of the debate is the question of how constitutional
dictates on the political status of the District of Columbia are to be balanced with the
principles of representative democracy (governance with the consent of the
governed). At least one bill has been introduced during the 108th Congress that would
retrocede a portion of District to Maryland as a means of achieving voter
representation in Congress.
District Mayor Anthony Williams insists that the city’s new health care delivery
system for the indigent is a success while critics counter that it is a disaster. Who is
right? What role should Congress play in the delivery of health care services?
Should Congress review the state of the current health care delivery system for the
poor as a part of its oversight responsibilities? District officials contend that
congressional intervention would run counter to the spirit of home rule. The new
system administered by the newly created Health Care Safety Net Administration
provides health care services to District residents whose incomes do not exceed
200% of the poverty level through a contract with the Health Care Alliance, a
coalition of health care providers headed by Greater Southeast Community Hospital.
The effectiveness of the new system has been called into question by two recent
events. First, Greater Southeast Community Hospital faces an ongoing financial
crisis requiring it to curtail services. Second, an October 2, 2002, audit by the city’s
inspector general found significant problems in both the Department of Health’s
oversight of the city’s contract with the Health Care Alliance, and the Alliance’s
administration of the enrollment process.

This report, which provides an overview of District of Columbia-related policy
and funding issues of interest to Congress, will be updated as events warrant.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Voting Representation in Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Current Legislative Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Policy Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Funding and Budget Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FY2003 Budget Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Budget Autonomy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Federal Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Current Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Policy Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Congressional Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Delivery of Health Care Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Policy Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

District of Columbia:
Issues in the 108th Congress
In the coming months the 108th Congress may debate a number of funding,
governance, and constitutional issues affecting the District of Columbia, including
approval of the city’s budget, reinstating a general federal payment, budget autonomy
for the city, and voting representation in Congress. In addition, Congress will
consider whether to continue to approve a number of so-called social riders included
in the District’s appropriations bills. These social riders include prohibition on the
use of federal or District funds to implement needle exchange programs, a medical
marijuana initiative, and abortion services. Several of these issues again will be
considered during the appropriations process1, while others may be taken up by
House and Senate oversight committees.
Background
The United States Constitution gives Congress exclusive legislative authority
over the affairs of the District of Columbia. Congress has exercised its constitutional
authority in a number of ways. In 1974, it passed a limited Home Rule Act.2 The
Act allowed for the popular election of a mayor and city council and authorized them
to legislate and manage the city’s affairs. It also established a budget and legislative
review process allowing Congress to disapprove the implementation of any
legislative measure passed by the city’s elected leaders and to review the city’s
annual budget as a part of the congressional appropriations process.
Congress continues to play a role in District of Columbia governance. For
example, during the past 10 years Congress has passed legislation encouraging the
creation of charter schools,3 authorized the takeover of city services and finances
through the establishment of a financial control board and the Office of the Chief
Financial Officer,4 transferred responsibility for funding prisons and courts and a
greater share of Medicaid cost to the federal government, and transferred unfunded
pension liabilities for the city’s judges, police, firefighters, and teachers to the federal
1 In previous appropriations bills Congress has prohibited or restricted the District of
Columbia from using District or federal funds for abortion services, needle exchange and
medical marijuana programs.
2 P.L. 93-198
3 P.L. 104-134
4 P.L. 104-8

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government.5 Congress also has approved legislation prohibiting or restricting the
use of public funds in support of the city’s efforts to gain voting representation in
Congress,6 and to implement or fund particular initiatives and referenda approved by
the city’s voters or legislation passed by the city council. The District is currently
prohibited from, or restricted in the use of, federal or District funds for needle
exchange programs, a medical marijuana initiative, and abortion services.7
Voting Representation in Congress
Voting representation in Congress for the citizens of the District of Columbia
is an issue that dates back to the creation of the federal district in 1790, and its
subsequent occupation as the seat of government in 1800.8 District of Columbia
citizens have been able to elect a non-voting delegate to the House of Representatives
since 1971, but have unsuccessfully sought full voting representation throughout the
city’s 203-year history.9 Proponents of voting representation point out that the
United States is the world’s only democratic nation and the only federal system of
governance that does not grant citizens of its national capital voting representation
in the national legislature.
At the heart of the debate on the question of voting representation for residents
of the District of Columbia is the question of how constitutional dictates on the
political status of the District are to be balanced with the principles of representative
democracy. The U.S. Constitution confers upon Congress exclusive legislative
control of the seat of the federal government. Conversely, among the principles on
which the United States was founded is that of governance with the consent of the
governed, i.e., participation of the citizenry in the governing process. This principle
is captured in the slogan “no taxation without representation,” a rallying cry for the
5 P.L. 105-133
6 The District of Columbia Appropriations Act for FY2003, Division C of the Omnibus
Appropriations Act for FY2003, P.L. 108-7, includes two such provisions. One provision
prohibits the city from using public funds in support of statehood activities or voting
representation in Congress or the District of Columbia. This provision was first included
in the District of Columbia Appropriations Act for FY1980, P.L. 96-530. The second
provision prohibits the District Government, including the Office of the Corporation
Counsel, from providing any assistance for any petition drive or civil action seeking to
require Congress to provide voting representation in Congress for the citizens of the District
of Columbia. This provision was first included in the District of Columbia Appropriations
Act for FY1999, P.L. 105-277.
7 Congress first restricted the use of public funds for abortion services in the District of
Columbia Appropriations Act for 1980, P.L. 96-530. Congress first prohibited the use of
public funding of a needle exchange program and the implementation of a medical
marijuana initiative in the District of Columbia Appropriations Act of 1999, P.L. 105-277.
8 1 Stat. 130
9 District of Columbia Delegates to the House of Representatives include: Norton P.
Chipman (1871-1874), Water Fauntroy (1971-1991), and Eleanor Holmes Norton (since
1991). Although the District’s Delegate to Congress may vote in committee, she may not
vote in the Committee of the Whole or floor votes.

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nation in its war of independence that has been embraced by many citizens of the
District of Columbia.
Strict readers of the Constitution see little merit and several hurdles to granting
District residents voting representation in Congress. They point to constitutional
provisions granting voting representation in the House and Senate only to states, and
granting Congress “exclusive Legislation in all Cases whatsoever” over the District
of Columbia. The further cite the founders’ clear intention that the national interest
should be paramount in the federal district, asserting that the principle remains valid
today. Proponents of voting representation note that the United States in the only
federal democratic republic denies citizens of the national capital voting
representation in the national legislature, while such citizens must meet all other
requirements of citizenship including the payment of federal taxes and military
service.
In recent years, citizens of the District have renewed efforts to gain voting
representation, petitioning both the Supreme Court and Congress. In a decision
issued in 2000, the Supreme Court affirmed a lower court ruling on voting
representation in Congress for District residents. On March 20, 2000, in Adams v.
Clinton
and Alexander v. Daley, the United States District Court for the District of
Columbia ruled that the question of voting rights for the citizens of the District was
a legislative issue that could only be addressed by Congress through the political
process.10 Over the past few years legislation has been introduced in Congress that
would convey voting rights to the citizens of the District of Columbia. These
proposals fall into four categories:
! bills that would retrocede the non-federal portion of the District of
Columbia back to Maryland,
! bills granting statehood to the non-federal portion of the District of
Columbia,
! bills seeking full voting representation in Congress, and
! bills allowing city residents to vote for Maryland House and Senate
candidates.
Current Legislative Proposals. H.R. 381, the District of Columbia-
Maryland Reunion Act, introduced by Representative Regula on January 27, 2003,
would retrocede a portion of the District to Maryland and create a National Capital
Service Area, which would remain under congressional control. The National
Capital Service Area would comprise the principal federal monuments, the White
House, the Capitol Building, the United States Supreme Court, and the federal
executive, legislative, and judicial office buildings located adjacent to the Mall and
the Capitol. The bill allows for a temporary increase in the number of representatives
until the first reapportionment occurring after the effective date of the Act with the
10 Adams v. Clinton and Alexander v. Daley. D.C. D.C., Civil Action No. 98-1665 and 98-
2187. Opinions filed March 20, 2000.

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city’s Delegate to the House of Representatives serving as a member of the House of
Representatives from the State of Maryland.

During congressional consideration of previous District of Columbia
appropriations acts, District officials have asked Congress to remove certain
general provisions denying District citizens the use of public funds to lobby on behalf
of statehood or voting representation before Congress or any state legislature, but
Congress has not acted on these proposals. Currently two general provisions are
included in the District of Columbia Appropriations Act for FY2003, P.L. 108-7.
One allows the use of District funds for lobbying activities, except in instances
involving the promotion of any boycott or activity in support of statehood for the
District or voting representation in Congress for District citizens. Another provision
prohibits the use of federal and District funds, including funds for the corporation
counsel, to cover the cost of court challenges aimed at providing city residents with
voting representation in Congress.
Policy Questions. The United States Supreme Court has ruled that a judicial
response to the voting representation issue would be inappropriate and suggested that
any remedy must be achieve through the legislative process. The lack of a judicial
remedy may allow proponents of voting rights to focus on Congress and the political
process, although Congress has been reluctant to address this issue because of its
broad political implications.
A number of specific policy and constitutional questions would have to be
addressed if Congress considered legislation granting District citizens voting
representation in the national legislature. These include identifying a constitutionally
acceptable means by which representation could be achieved (a constitutional
amendment, statehood, retrocession, and the secondary effects of each option).
Should residents of the District of Columbia, which is not a state, gain the same
standing as states, including voting representation in both chambers House and
Senate and would such an accommodation violate the Constitution? Would the
granting of such representation necessitate a repeal of the 23rd Amendment, which
grants District citizens the right to vote in national elections and conveys three votes
in the electoral college to District voters?
Funding and Budget Issues
Given the District’s status as the seat of the national government, what should
Congress do to ensure the long term fiscal health of the nation’s capital? Despite its
success in producing 6 consecutive years of balanced or surplus budgets, city leaders
contend that the city faces a long term structural imbalance. One option Congress
may consider is the reinstatement of a general federal payment, but at what level?
The city’s mayor has suggested an annual federal payment of $400 million.
Alternatively, given the District’s unique status as the nation’s capital, Congress
could shift additional state-like functions to the federal government. The city’s chief
financial officer estimates that the city currently spends $500 million in local funds
for such activities. Congress could also approve legislation granting the city
unrestricted control over locally generated revenues.

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In October 2002, at the urging of Congress, the mayor and the city council
submitted to Congress a revised budget for FY2003 aimed at addressing a $323
million shortfall. Although District officials contend that the current shortfall is the
result of a cyclical downturn in the economy, they continue to maintain that the
District faces an imbalance between its long-term expenditure needs and the city’s
ability to generate sufficient revenues in support of the current level of program
services and capital investments. In congressional testimony and several public
forums, District officials, including the city’s chief financial officer (CFO), the
mayor, and former chair of the city’s control board, have argued that the city faces
a “fiscal structural imbalance.” Several factors contribute to this imbalance,
including security planning; public services and facilities costs associated with the
federal presence in the city; the financial burden placed on the District in carrying out
state-like functions; and restrictions on the District’s ability to expand its tax base,
including the institution of a commuter tax and the inability to generate revenues
from properties owned by tax-exempt entities.
FY2003 Budget Outlook. Congress recently completed its review and
approved the District’s Appropriation Act for FY2003, Division C of P.L. 108-7, the
Omnibus Appropriations Act for FY2003. Congress passed the legislation on
February 13, 2003, and it was approved by the President on February 20, 2003. In
October 2002, the mayor and the city council submitted to Congress a revised budget
for FY2003 aimed at addressing the $323 million shortfall.
Budget Autonomy. City leaders argue that the District’s operating budget,
which is financed with local revenues, was held hostage as Congress considered an
omnibus appropriations act and other national issues. City leaders continue to
contend that congressional review of the city’s budget hinder their ability to manage
the District’s financial affairs. They have noted that the delays in passing the city’s
appropriations act for FY2003 and the subsequent passage of several continuing
budget resolutions, which required. the District to operate at its FY2002
appropriations level, negatively impacted city services. Congress’s delay in
approving the District’s FY2003 budget and, the city’s attempts to a address a
projected $323 million budget shortfall, prompted city leaders to reiterate their call
for budget autonomy over locally raised revenues. During the 107th Congress two
bills were introduced that would have granted local official some level of budget
autonomy.11 Some version of these bills may be reintroduced during the 108th
Congress. Proponents of increased budget autonomy note that the Bush
Administration’s budget for FY2004 includes a statement in support of budget
autonomy for the District of Columbia.

11 H.R. 2995, which was introduced by Representative Morella of Maryland, was referred
to the House Government Reform Committee, Subcommittee on the District of Columbia.
The Subcommittee considered and marked-up the bill of November 15, 2001. No action was
taken by the full committee.
S. 2316, which was introduced by Senator Landrieu, was referred to the Committee on
Governmental Affairs, Subcommittee on Oversight of Government Management,
Restructuring and the District of Columbia. No action was taken by the subcommittee or
the full committee.

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Federal Payment. One possible response to the asserted “structural
imbalance” affecting the city’s long term fiscal health is a general federal payment
that compensates the city for the cost attributable to the federal presence. Another
possible alternative is institution of a commuter tax. Based on previous responses
to proposals involving such a tax, an effort to enact a commuter tax would likely be
opposed by some Members from the surrounding states of Virginia and Maryland.
In the past, some legislators have maintained, that given the District’s unique status
as the Nation’s capital, any costs attributable to the federal presence should be shared
by all states.

When it enacted the National Capital Revitalization Ac of 1997, P.L. 105-133,
Congress eliminated an annual federal payment (that amounted to $660 million the
last fiscal year it was provided) in exchange for the federal government assuming
responsibility for the District’s unfunded pension liability for teachers, judges,
policeman, and firefighters, and the assumption of certain state-like functions most
notably, the criminal justice system including the courts, corrections, and offender
supervision. The 1997 Revitalization Act also transferred responsibility for funding
of several state-like functions from the District to the federal government, most
notably, corrections and the courts, and increased the federal share of the city’s
Medicaid program from 50% to 70%. The District’s CFO estimates that the city
currently expends $500 million annually in state-like functions such as human
services, mental health and higher education.
Current Legislation. The FY2003 Appropriations Act for the District of
Columbia includes a number of special federal payments to the city, but not a
general payment. For the current fiscal year, these special federal payments will total
$512 million. The majority of these special federal payments are allocated to courts
and criminal justice activities. Of the $512 million in special federal payments
included in proposed District appropriations for FY2003, approximately 69% of the
funds are for court operations, defender services, and court services and offender
supervision.
Policy Questions. Given the District’s status as the seat of the national
government, what should Congress do to ensure the long term fiscal health of the
Nation’s Capital? Is there a structural imbalance that impinges on the city’s long-
term ability to maintain an adequate level of services? What factors contribute to any
imbalance, and what might be done to address it? Should the federal government
provide a general federal payment to the District to compensate the it for costs
associated with the federal presence? If a federal payment is justified, what should
be the basis for such a payment? Are there certain state-like functions that the
federal government should assume, and what is the long-term impact on the District,
and on the federal government, of such actions?
Congressional Oversight
Delivery of Health Care Services. Despite the bankruptcy of the Greater
Southeast Community Hospital, the lead provider of health care services for the city’s
indigent, Mayor Williams and his administration insist that the city’s new health care
delivery system is a success, while critics counter that it is a failure. Who is right?
What role should Congress play in the delivery of health care services? Should

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Congress review the state of the current health care delivery system for the poor as
a part of its oversight responsibilities? District officials contend that congressional
intervention would run counter to the spirit of home rule. While others counter that
such a review is part of Congress’ oversight responsibilities.
Reform of the city’s health care delivery system for the poor continues to be a
divisive political issue. During the past 2 years, the city’s political leadership has
become bitterly divided over the downsizing of D.C. General Hospital, the demise
of the city financed Public Benefit Corporation (PBC), and the restructuring of the
city’s health care delivery system for indigent and uninsured residents of the city.
Reform in the city’s delivery of health care for the poor was sought by Congress
because of the PBC’s mismanagement of D.C. General Hospital. From 1997 to its
dismantling in 2001, the PBC amassed $109 million in unbudgeted loans from the
city, using its power to borrow from the city’s general fund to cover deficit spending
and defer repayment of mounting debt. The new system administered by the newly
created Health Care Safety Net Administration began functioning on April 21, 2001.
It provides health care services to District residents whose incomes that do not
exceed 200% of the poverty level through a contract with the Health Care Alliance,
a coalition of health care providers headed by Greater Southeast Community
Hospital.
The effectiveness of the new system has been called into question by two recent
events. First, Greater Southeast Community Hospital faces an ongoing financial
crisis requiring it to curtail services. Second, an October 2, 2002, audit by the city’s
Inspector General found significant problems in the Department of Health’s oversight
of the city’s contract with the Health Care Alliance, and the Health Care Alliance’s
administration of the enrollment process. Specifically, the report noted that the city’s
Department of Health had failed to hire critical personnel in a timely fashion, and the
Health Care Alliance had failed to properly screen and eliminate thousands of
ineligible enrollees, including Medicaid recipients. The city’s current plan is financed
with city funds. Residents who receive Medicaid are ineligible for assistance under
the health care alliance. Under the new program, Medicaid is considered a third-party
insurance provider. Shifting eligible residents to Medicaid could lower the city cost
of providing services under its health care plan.

Policy Questions. Should Congress defer to local officials, in the name of
home rule, in addressing the issues surrounding the delivery of health care services,
or should it take a more active role in carrying out its oversight responsibility? Is the
new system the most cost effective means of delivering health care services? Should
District officials reconsider the city’s commitment to the new system of privatized
health care for the indigent? What is the interface between Medicaid, which provides
federal assistance to the poor, and the city’s health care delivery system, and is the
city effectively managing both systems?