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Congress Adjourned Until November; Note from Capital Thinking

Posted in General Legislative

Senate Legislative Activity

Given that the House has adopted S. Con. Res. 44, the Senate will stand adjourned until 10:00 am on October 15 for a pro forma session only. Following the pro forma session, the Senate will adjourn until November 12 at 2:00 pm.

On November 12, following any Leader remarks, the Senate will hold a period of morning business until 5:30 pm. Senators will be permitted to speak for up to 10 minutes each, with the time equally divided and controlled between the two Leaders or their designees.

At 5:30 pm, the Senate will proceed to Executive Session and vote on cloture on the nominations of Randolph Moss, to be United States District Judge for the District of Columbia, and on Leigh Martin May, to be United States District Judge for the Northern District of Georgia.

Committees are authorized to report Legislative and Executive matters on October 1 from 10:00 am to 12:00 pm.

House Legislative Activity

On Friday, September 19, the House adjourned pursuant to S. Con. Res. 44. The next meeting is scheduled for 2:00 pm on November 12. 

Capital Thinking Update

In light of the fact that both the Senate and the House stand adjourned, please note that today, September 22, will be the last Capital Thinking update until November 10, the week when Congress is currently scheduled to return to Washington.

House and Senate United in Passage of Continuing Resolution

Posted in Budget and Appropriations

Legislative Activity

Congress Approves CR

Last week, the House and Senate both approved a short-term FY 2015 Continuing Resolution (CR) (H.J. Res. 124) that will maintain federal discretionary spending through December 11. The measure also authorizes military action to train and equip Syrian rebels in their fight against the Islamic state (ISIS/ISIL).

The CR sustains federal program policy and funding at the FY 2014 level of $1.012 trillion (this includes a .06 percent across-the-board cut to maintain the spending cap). Additionally, the measure:

  • Provides $88 million to address the Ebola outbreak;
  • Provides funding to expedite disability claims process at the Department of Veterans Affairs;
  • Extends the Export-Import Bank authorization through June 30, 2015;
  • Reauthorizes the Internet Tax Freedom Act moratorium on state and local taxation of internet access through December 11;
  • Extends Temporary Assistance for Needy Families (TANF) through December 11; and
  • Provides reprogramming flexibility to U.S. Customs and Border Patrol (CBP) and U.S. Immigration and Customs Enforcement (ICE) to address costs related to the recent border crisis.

White House to Issue Updated Cybersecurity Incentives

Posted in Cybersecurity

Legislative Branch Activity

Cybersecurity Legislation

Last week, the House Judiciary Committee passed the Trade Secrets Protection Act (H.R. 5233) by voice vote. The legislation, sponsored by Rep. George Holding (R-NC) and Rep. Jerry Nadler (D-NY) would provide a federal mechanism for companies to use if they believe that other companies have stolen their trade secrets. Currently, trade secret theft cases can only be brought to state courts, which has been complicated in recent years given that most trade secret theft crosses state and national borders today given the increasing use of the Internet to steal trade secrets.

Similar to many of the other pieces of cybersecurity legislation currently in Congress, it is unlikely that this bill will see any further action before the end of this year. While the House has taken action on a number of cybersecurity bills, the Senate has yet to consider any legislation on the floor and has not announced any plans to do so in the lame duck session as of now. Several Senators have introduced cyber-related amendments to the FY 2015 National Defense Authorization Act, which may provide a vehicle for the Senate to consider cybersecurity legislation.

Executive Branch Activity

Cybersecurity Incentives

White House Cybersecurity Coordinator Michael Daniel announced last week that the Obama Administration plans to provide an update on its proposed cybersecurity incentives for private sector partners that participate in the National Institute of Standards and Technology (NIST) Cybersecurity Framework. The White House previously issued a list of incentives for industry in August 2013 but stakeholders have been generally disappointed that the White House has not done more to incentivize private sector companies to improve their cybersecurity. The Obama Administration has also been looking into the barriers currently in place that impede efforts to share cybersecurity information between the federal government and the private sector. The White House may also issue guidance on eliminating some of these barriers but it is still currently identifying and studying the most effective way to eliminate them.


Congress to Address the NDAA during the Lame Duck Session

Posted in Defense

Legislative Activity

National Defense Authorization Act (NDAA)

The NDAA is considered a must-pass annual bill. While the House passed its measure (H.R. 4435) in May, the Senate is behind on considering its respective bill (S. 2410). Therefore, the House and Senate Armed Services Committees started pre-conference meetings last week to try and reach agreement on a final Fiscal Year 2015 NDAA bill that will be taken up by Congress in the “lame duck” session; which commences after the November 4 midterm elections.

Last week, Senate Armed Services Chairman Carl Levin (D-Michigan) said that the NDAA could be a “logical place” for the authorization for military force (AUMF) against ISIL. However, House Armed Services Committee Republicans  said they would resist any such efforts to attach the AUMF to the NDAA bill.

Child Care and Development Block Grant Bill on Hold Despite Compromise, While Administration Moves on Promise Zones

Posted in Education

Legislative Activity

Child Care and Development Block Grant

Last Monday, the House passed a bipartisan Child Care and Development Block Grant (CCDBG) reauthorization bill by voice vote. The legislation represented a compromise between House and Senate leaders to reauthorize the CCDBG program for six years to provide funding to states for the child care costs of low-income families. After the House considered the bill last week, the Senate was also expected to vote on it prior to recessing until after the November elections but failed to do so after Senator Pat Toomey (R-PA) put a hold on the bill until he could guarantee that the Senate would also consider his bill to strengthen background checks for teachers and principals. As such, the Senate plans to consider the CCDBG reauthorization bill when it returns after the mid-term elections and has tentatively scheduled a vote on the bill for November 13.

FY 2015 Labor-HHS-Education Appropriations

This week, Ranking Member of the House Appropriations Subcommittee on Labor-Health and Human Services (HHS)-Education released the House Democrats’ proposal for the FY 2015 Labor-HHS-Education appropriations bill, which was the only appropriations measure not considered by the House Appropriations Committee this year. The bill would return “nearly all” programs within the Departments of Labor, HHS, and Education to pre-sequester levels. It does not include funding for the Department of Education’s request for a $300 million Race to the Top – Equity and Opportunity program but does provide $250 million for the Administration’s request for competitive grants for preschool development.

While the Senate Appropriations Committee also did not mark up a FY 2015 Labor-HHS-Education appropriations bill this year, it did release a draft bill and committee report in July in order to ensure that it was in a position to negotiate with the House on a future omnibus bill for FY 2015. The House Democrats’ proposal also serves a similar purpose and will be used as a tool for Democratic members to highlight the differing funding priorities of Republicans on issues related to healthcare and education.

Student Loan Reform Legislation

Last week, the Senate tried once again to consider Senator Elizabeth Warren’s (D-MA) student loan reform legislation – the Bank on Students Emergency Loan Refinancing Act (S. 2432) – on the Senate floor. Similar to the previous attempt to pass the legislation in June, the bill came before the Senate but was unable to bypass the Senate procedural motions to allow it to be considered on the floor due to Republican opposition to the bill. If passed, the legislation would allow students to refinance rates on high-interest and private student loans.

Strengthening Education Through Research Act

Last Wednesday, the Senate Health, Education, Labor and Pensions (HELP) Committee passed the Strengthening Education through Research Act that would reauthorize federal research programs in the Education Sciences Reform Act (ESRA). The bill would authorize funding for the research activities at the Department of Education, including the Institute for Education Sciences. The House previously passed a similar version of the bill earlier this year which varies slightly from the version that the Senate HELP Committee considered. Most of the changes are related to spending levels for certain programs in order to take into account the feedback that stakeholders provided to the Senate HELP Committee leaders. Prior mark-up, the Senate leaders negotiated the changes to the bill with House leadership in order to ensure that it could be considered in both chambers when Congress returns in November.

Regulatory Activity

Promise Zones

The Obama Administration has launched its second Promise Zones competition for urban, rural, and tribal communities to submit plans to partner with local business and community leaders to make evidence-based investments to improve educational opportunities, spur economic growth, and revitalize communities. If selected, recipients will receive preferred access to: (1) specific competitive federal investments that further their strategic plans; (2) federal staff to help implement their goals; and (3) five full-time AmeriCorps VISTA members to strengthen the capacity of Promise Zone partners. Applications are due by November 21, 2014.

This past January, the Department of Housing and Urban Development and the U.S. Department of Agriculture led an interagency panel in selecting five Promise Zones in Choctaw Nation of Oklahoma; Los Angeles, California; Philadelphia, Pennsylvania; Southeastern Kentucky, and San Antonio, Texas.

Energy Omnibus Bill Passes House

Posted in Energy

Legislative Activity

House Passes Energy Omnibus Legislation – White House Issues Veto Threat

Last Thursday, September 18, the House considered and passed H.R. 2, the “American Energy Solutions for Lower Costs and More American Jobs Act,” by a largely partisan vote of 226-191. The

legislative package includes thirteen energy policy proposals ranging from provisions to require executive approval of the presidential permit to build the Keystone XL pipeline, to a provision that would amend the Natural Gas Act to force the Department of Energy to expedite consideration of applications to export liquefied natural gas (LNG). The legislation was considered under a closed rule prohibiting amendment. Not surprisingly, the White House issued a statement of administration policy explaining that, if presented to the President in its current form, the President’s senior advisors would recommend that he veto H.R. 2.

Senate Foreign Relations Committee Passes Russian Sanctions Bill

On Thursday, September 18, the Senate Foreign Relations Committee unanimously approved legislation that would impose new sanctions on Russia’s energy and defense sector. The legislation, titled “The Ukraine Freedom Support Act of 2014,” would require President Obama to impose a minimum of three additional sanctions against: (1) Rosoboronexport and other defense firms that allegedly contribute to instability in Ukraine and the region; (2) firms that invest in unconventional Russian crude oil energy projects; and (3) Gazprom, if President Obama determines that Gazprom is withholding significant natural gas supplies from NATO member countries or withholds natural gas from countries in the region. The legislation passed by a roll call vote of 18-0.

Regulatory Activity

EPA Extends Comment Deadline in Clean Power Plan Docket

On Tuesday, September 16, the EPA agreed to extend its comment deadline in the Clean Power Plan docket by 45 days. EPA agreed to extend the deadline after 53 senators wrote a letter to the EPA making a request for an extension of 60 days. The comment deadline will now fall on December 1, 2014. In a letter responding to the Sen. Heitkamp (D-ND) (who co-authored the original letter of request with Sen. Deb Fischer (R-NE)), EPA’s acting chief of the Air Office, Ms. Janet McCabe, agreed to extend the deadline even though EPA’s outreach process, in her view, has already been extensive. She noted that the EPA has already received comment from at least 300 stakeholder groups from around the country, and conducted 8 days of public hearings where agency officials received testimony from roughly 1,300 people.

Clean Power Plan Deadline Extended

Posted in Environment and Natural Resources

Regulatory Activity

EPA Extends Comment Period for Proposed Rule on Clean Power Plan

The Environmental Protection Agency (EPA) has extended the public comment period for its Clean Power Plan proposed rule which would limit carbon dioxide emissions from existing power plants. The comment deadline which was formerly October 20 is now December 1. Read our detailed alert on the proposed rule here.

Water Infrastructure Financing

EPA is planning on holding public input sessions from September through December concerning implementation of the ‘‘Water Infrastructure Finance and Innovation Act of 2014’’ (WIFIA).  WIFIA, which became law on June 11, is a new financing mechanism for water-related infrastructure of national or regional significance, including drinking water and waste water systems. On September 22, EPA will hold a public input session in New York City.  See our detailed analysis of WIFIA here.

Renewable Energy Financing

The Department of Energy will hold a webinar titled “Successful Project Financing Mechanisms” on Wednesday, September 24 to discuss two vehicles to finance renewable energy and energy efficiency projects: energy savings performance contracts (ESPCs) and utility energy service contracts (UESCs).

Lawmakers Discuss FSOC Oversight; SEC, CFPB to Hold Meetings

Posted in Financial Services

Legislative Activity

Lawmakers Discuss FSOC Oversight

On Wednesday, September 17, the House Financial Services Subcommittee on Oversight and Investigations held a hearing titled “Oversight of the Financial Stability Oversight Council.” During the hearing, Members emphasized the importance of transparency within the Financial Stability Oversight Council (FSOC) and called for increased due process and accountability. At the hearing, FSOC Deputy Assistant Secretary Patrick Pinschmidt indicated the FSOC would coordinate a working group on asset management activities. Further, all systemically important designations, including for insurance companies, are determined based on the individual company and factors such as leverage and interconnection with the rest of the financial system. Mr. Pinschmidt also emphasized that FSOC’s authority is limited to the designation process and does not extend to the regulatory oversight of designated entities.

House Passes Jobs Package

On Thursday, September 18, the House voted 253-163 to pass H.R. 4, the Jobs for America Act. The legislative package contains two financial services bills: (1) H.R. 1105, the Small Business Capital Access and Jobs Preservation Act, which would exempt private equity funds advisers from certain disclosure requirements; and (2) H.R. 2274, the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2014, which would allow certain mergers and acquisitions brokers to bypass registration requirements.

Regulatory Activity

CFTC Adopts Rules on Margin Requirements, Utility Special Entities

On Wednesday, September 17, the Commodity Futures Trading Commission (CFTC) held an open meeting and voted unanimously to adopt a proposed rule on margin requirements and a final rule on utility special entities. The proposed rule on margin requirements would require swap dealers and major swap participants to post and collect collateral for uncleared swap transactions.  The final rule on utility special entities would amend the definition of the term “swap dealer” to permit a person to exclude certain types of swaps entered into with special entities that are utilities from the $25 million special entity de minimis threshold above which a person dealing in such swaps must register as a swap dealer. The CFTC also released an advance notice of proposed rulemaking soliciting comments regarding how the uncleared margin rule should apply in a cross-border context, including whether the rules should apply at the transaction-level or the entity-level. This measure may be partially in reaction to the recent U.S. District Court of the District of Columbia decision related to the CFTC’s guidance for cross-border application of its Dodd-Frank Act rules.

SEC, CFPB to Hold Meetings

On October 1, the Consumer Financial Protection Bureau (CFPB) will hold a meeting of its Credit Union Advisory Council (Council). During the meeting, the Council will discuss issues related to overdrafts and consumer complaints. Additionally, on October 9, the Securities and Exchange Commission (SEC) will hold a meeting of its Investor Advisory Committee.

President Barack Obama to Attend the U.N. General Assembly

Posted in International

U.N. General Assembly

President Barack Obama heads to New York City this Tuesday to attend the 69th Session of the U.N. General Assembly.  The President will address the General Assembly on Wednesday.

Iraq/Syria Crises

This Wednesday in New York City, President Obama will also chair a UNSC meeting on foreign terrorist fighters. Congress passed a stopgap funding bill last week that also provides short-term authorization for the U.S. military to train and equip moderate Syrian rebels. Last Friday, Secretary of State John Kerry chaired a U.N. Security Council (UNSC) meeting on Iraq. France joined U.S. efforts to combat ISIL last Friday, conducting its first airstrikes in Iraq against the insurgency.

Ebola Crisis

On 16 September, President Obama visited the Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia. In a speech at the CDC, President Obama said,

“Ebola is now an epidemic of the likes that we have not seen before. It’s spiraling out of control.”

He declared the crisis a national security priority and authorized the deployment of 3,000 U.S. troops to West Africa. This Thursday, 25 September, President Obama will deliver remarks at a United Nations meeting on the Ebola epidemic.


U.S. officials reported last week that initial conversations of the resumed P5+1 Talks with Iran demonstrate promise for continued discussions this week in New York City. The P5+1 are seeking to find a long-term solution with Iran to address Iran’s nuclear program in advance of the upcoming Joint Plan of Action deadline (24 November). While President Obama currently is currently not scheduled to meet with Iranian President Hassan Rouhani on the margins of the U.N. General Assembly, he is reportedly open to such a meeting.

Russia/Ukraine Crisis

In his address before a joint session of Congress last Thursday, Ukraine President Petro Poroshenko said,

“I strongly encourage the United States to give Ukraine a special security and defense status which reflect the highest level of interaction with non-NATO allies.  And I also ask that the United States be forceful and stand by its principles with the respect of further sanction against the aggressor.”

He also requested lethal and non-lethal assistance from the United States. That afternoon, the Senate Foreign Relations Committee (SFRC) markup of S. 2828 – the Ukraine Freedom Support Act – advanced by a vote of 18-0 out of Committee. While SFRC Ranking Member Bob Corker (R-Tennessee) indicated the House is waiting for the bill, Congress recessed and is not expected to return to Washington until after the 4 November midterm elections. S. 2828 could be one of many bills expected to be addressed during the “lame duck” session of Congress; at which time, the dynamics on the ground in Ukraine could be very different and could further change the content of the bill.

President Obama met with President Poroshenko Thursday afternoon at the White House to discuss finding a diplomatic resolution to the crisis in eastern Ukraine, as well as U.S. continued support for Ukraine’s struggle to defend its sovereignty and territorial integrity. The White House announced the United States would provide $53 million in new security and humanitarian assistance for Ukraine and said a U.S. team will travel to Kyiv this week to discuss energy-saving steps Ukraine could institute in order to avoid significant energy issues this winter.  U.S. Commerce Secretary Penny Pritzker will also lead a U.S. Government delegation to Ukraine (26-27 September) to meet with senior Ukrainian government and business leaders and discuss Ukrainian economic reform efforts. Meanwhile, in Ukraine, the tenuous 5 September Minsk ceasefire continues to hold, despite ongoing, reported exchanges of fire by both sides.


This week USTR Ambassador Michael Froman will meet with Japanese Economy Minister Akira Amari to discuss the remaining bilateral agriculture and automotive issues that are holding up the overall Trans-Pacific Partnership (TPP). The Office of the U.S. Trade Representative (USTR) reported the next TTIP negotiating round will be in Chevy Chase, Maryland, later this month (29 September – 3 October). In previewing his November agenda last week, Senate Majority Leader Harry Reid (D-Nevada) made no mention of a bill to renew Trade Promotion Authority (TPA) or any other trade legislation.


Last week, President Obama announced his intention to nominate Brian James Egan to be Legal Adviser (State Department).  He also announced the following individuals as nominees to be U.S. Ambassadors:  Maria Echaveste (Mexico); Richard Rahul Verma (India); Paul Folmsbee (Mali); and Mary Catherine Phee (South Sudan. Prior to recessing, the Senate confirmed Robert Holleyman to be Deputy U.S. Trade Representative.

Lawmakers Consider Energy Tax Reform; Administration to Act ‘Very, Very Soon’ on Inversions

Posted in Tax and Retirement

Legislative Activity

Lawmakers Consider Energy Tax Reform

On Wednesday, September 17, the Senate Finance Committee held a hearing titled “Reforming America’s Outdated Energy Tax Code.” During the hearing, discussion centered on how to best address certain energy-related provisions within the U.S. Tax Code. Lawmakers discussed taking a technology neutral, “performance-based” approach, rather than considering the type of fuel at issue. Additionally, lawmakers agreed on a bipartisan basis regarding the urgent need to finalize a tax extenders package. The hearing also focused on the benefits of “straight expensing,” the need to continue allowing a deduction for intangible drilling costs, and the importance of implementing “market-oriented” policy changes to spur American energy production.

Members Release Additional Anti-Inversion Proposals

While Congress has yet to pass inversion legislation, anti-inversion legislative proposals continue to make headlines, with the most recent proposal released on Friday, September 19 by Senators Sherrod Brown (D-OH) and Dick Durbin (D-IL).

Regulatory Activity

Administration to Act on Inversions ‘Very, Very Soon’

On September 21, following the G-20 meeting, U.S. Treasury Secretary Jack Lew reemphasized that “there is one loophole that should be shut down immediately—inversions.” Secretary Lew, who has recently placed companies “on notice” that the Administration plans to take action on inversions “very, very soon,” acknowledged that because “the pace of these deals [is] on the rise and [there is] no clear sign of when Congress will have legislation in place, Treasury is completing its work on administrative action to use our existing authority to limit the economic benefits of inversions.”  However, as he has previously indicated, “Administrative action cannot shut the door completely, and Congress will still need to act.”  While various legislative proposals continue to be introduced, it is unclear when and how Congress plans to act on inversions.