NAFTA Modernization Talks – Round One Completed; Next Stop, Mexico

The first round of 5-day negotiations to modernize the North American Free Trade Agreement (NAFTA) concluded on August 20. In a joint statement released by trade officials from the United States, Mexico and Canada, they restated the commitment to updating the deal, continuing domestic consultations, and working on draft text. They also committed to a comprehensive and accelerated negotiation process to bring the agreement up to 21st Century standards to continue benefiting the citizens of North America.

Our sister publication, Latin America Legal, provides a recap for the first round of talks here. The negotiations are expected to resume in Mexico beginning September 1 and goes through September 5. The third and last round is scheduled to be in Canada, reportedly around September 23-27.

Federal Communications Commission Tackles the “Reassigned Number Problem”

Reassigned numbers have been at the center of the surge in litigation under the Telephone Consumer Protection Act (“TCPA”) during the last few years.  By now the story is well known to businesses that actively communicate with their customers: the customer consents to receive telemarketing and/or informational robocalls[1] at a wireless telephone number, but months or years later the customer changes his or her wireless telephone number and—unbeknownst to the business—the telephone number is reassigned to a different person.  When the recipient of the reassigned number starts receiving calls or messages from the business, a lawsuit often ensues under the TCPA because that party has not consented to receive such calls.  The FCC adopted on July 13 a Second Notice of Inquiry (“Second NOI”) that promises to address this problem in a meaningful way.  Specifically, the Second NOI focuses on the feasibility of “using numbering information to create a comprehensive resource that businesses can use to identify telephone numbers that have been reassigned from a consumer who has consented to receiving calls to a consumer who has not.”

Background on the Reassigned Number Problem

Under the current regime, the North American Numbering Plan (NANP) Administrator generally provides telephone numbers to voice service providers—including those who supply interconnected voice—in blocks of 1000.  The voice service providers recycle those numbers in and out of service, such that, after a number has been dropped, the number goes into a pool for a short period and then is brought out of the pool and reassigned to a different consumer.

The “reassigned number problem” occurs when a consumer consents to receive robocalls (telemarketing and/or informational), but then terminates service to the relevant wireless number without informing the businesses the consumer previously gave consent to make the robocalls.  Businesses that find themselves making robocalls to numbers that (unbeknownst to them) had been reassigned to a different consumer increasingly find themselves subject to lawsuits under the TCPA—this even though it has been widely acknowledged that (1) customers often switch telephone numbers without providing notice to businesses and (2) there is no public directory of reassigned wireless numbers that businesses can rely on to identify and scrub reassigned numbers.  When various industry groups and business entities asked the FCC to intervene, the FCC clarified that businesses making robocalls needed the consent of “the actual party who receives a call,” not of the intended recipient of the robocall.  FCC created a so-called “safe harbor” that afforded little protection in practice: a business could make a single call to a reassigned number without triggering liability under the TCPA, but the business would then be imputed with “constructive” knowledge that the number had been reassigned even if the single call did not yield actual confirmation that the number had been reassigned. The FCC did so even as it admitted that the tools available to identify reassigned numbers “will not in every case identify numbers that have been reassigned” and that the steps it was taking “may not solve the problem in its entirety” even “where the caller is taking ongoing steps reasonably designed to discover reassignments and to cease calls.”

The Second NOI

The Second NOI promises to more meaningfully address the reassigned number problem by suggesting the creation of a reliable, complete list of reassigned numbers that service providers would be required to update.  In pertinent part, the Second NOI addresses a number of other topics, including, but not limited to, possible reporting alternatives, compensation schemes, frequency of updates, and fees and eligibility requirements for accessing reassigned number data.  It also asks a number of logistical questions, including, but not limited to:

(1) What are the ways in which voice service providers could report the information in an accurate and timely way?

(2) Would the reporting—into a database or other platform—“substantially improve robocallers’ ability to identify reassigned numbers?”

(3) What information should voice service providers report?

(4) In what ways might the information reported raise concerns regarding the disclosure of private, proprietary, or commercially sensitive information?

(5) Should reassignment of toll-free numbers also be reported?

(6) What is the quantity of numbers reassigned and the benefits of reducing unwanted calls to these numbers?

(7) Should there be a safe harbor from TCPA violations for robocallers who use the new reassigned number resource?  What would be the advantages and disadvantages?

(8) How can the FCC incentivize robocallers to use the reassigned number resource?

In addition, the Second NOI seeks comment on whether the notification requirement should apply to all voice service providers or just providers of wireless services, and how to “balance the reporting burden placed on voice service providers against consumers’ privacy interests and robocallers’ interest in learning of reassignments.”   The item also seeks comment on which entity should be responsible for notification in circumstances when a voice service provider does not receive numbers directly from NANP, but instead obtains numbers “indirectly” from carrier partners.

The Commission claims it has the authority under Sections 227(b) and 251(e) of the Communications Act of 1934, as amended—which give the FCC control over the US portion of NANP and incorporate the TCPA—to require entities that obtain numbers from NANP to also report reassignments.  In fact, the Commission claims that doing so may further the statutory goals underlying the TCPA, which generally prohibits unwanted robocalls.

Although many details remain to be discussed and addressed by the FCC, the creation of the list that the FCC is proposing would address one of the main challenges faced by businesses that want to comply with the TCPA: how to gather reliable and complete information regarding which wireless telephone numbers have been reassigned.  The possibility of such a list working similar to that available to identify telephone numbers in the Do Not Call List is particularly promising, especially if it comes accompanied by safe harbor provisions similar to those attached to the Do Not Call List obligations in the FCC’s rules.   The Squire Patton Boggs TCPA team will continue to monitor these developments.

Comments are due August 28, 2017 and Reply Comments September 26, 2017.

The following attorneys authored this post: Eduardo Guzman, Paul C. Besozzi, and Koyulyn Miller.

[1] For purposes of this post “robocalls” refers to both calls made using an automatic telephone dialing system or using an artificial voice or pre-recorded message.

Trump Administration Releases NAFTA Negotiating Objectives

On July 17, the Trump Administration released its negotiating objectives for the upcoming renegotiation of the North American Free Trade Agreement (NAFTA).  The detailed objectives can be found here, and a press release from the Office of the U.S. Trade Representative can be found here.

Senate Updates the Better Care Reconciliation Act of 2017

On Thursday, July 13, Senate Republicans released their updated draft of the Better Care Reconciliation Act of 2017.  A PDF of the updated text can be accessed here.

We found the following documents and articles helpful:

  • An updated Congressional Research Service Section-by-Section for Titles I and II of the Better Care Reconciliation Act of 2017 (link)
  • A summary of the newly included Title III (link)
  • The Washington Post’s Sean Sullivan, Kelsey Snell, and Juliet Eilperin provide an overview of the revised bill (link)

The Latest on Fintech: Federal and Beyond

As one of the most rapidly growing industries in the financial services sector, financial technology (fintech) is receiving significant attention in the nation’s capital and around the world.

This article analyzes and provides updates on recent key fintech developments at the regulatory level, on Capitol Hill, and in the courts – including a brief update on the international regulation of the fintech industry.  A PDF version of this article can be found here.

OCC

In March of this year, the Office of the Comptroller of the Currency (OCC) released a draft supplement to its licensing manual on the licensing of special purpose fintech banks (analyzed in greater detail here). The OCC provided an opportunity for public comments on the licensing supplement, a move intended to be consistent with the agency’s guiding principles of transparency and fostering open dialogue with stakeholders.

The comment period closed on April 14, and since that time, we understand that the OCC has decided to press “pause” on considering applications for and issuing fintech bank charters for entities that would not be accepting deposits. Though the agency has yet to clarify what its next steps will be regarding issuing fintech bank charters to entities not already eligible for a national bank charter, there are a few critical factors likely to impact how the OCC ultimately decides to proceed.

Leadership Change

Importantly, the OCC is undergoing a change in leadership. Comptroller Curry’s term expired on April 9, 2017, and on May 5, Comptroller Curry stepped down and Keith Noreika was named Acting Comptroller. Acting Comptroller Noreika was previously head of the financial institutions regulatory practice at an international law firm. President Trump has since nominated Joseph Otting – former CEO of One West Bank – to serve as the Comptroller of the Currency. Mr. Otting will need to be confirmed by the Senate before taken the charge of the agency.

Until Mr. Otting takes the helm of the OCC, the fate of the agency’s fintech bank charter proposal lies with Acting Comptroller Noreika. That said, it is notable that neither of the two has yet to opine on the concept. However, the fact that the Acting Comptroller failed to even mention the fintech proposal in either his written or oral testimony during his participation in last week’s Senate Banking Committee hearing on regulatory reform could suggest a shift away from the OCC’s current approach. Nevertheless, there are several possible outcomes under new OCC leadership. The agency could: (1) finalize the licensing supplement on fintech banks with no substantial changes from the draft released in March; (2) finalize the supplement with substantive changes, which would not be subject to public notice and comment; (3) withdraw the draft supplement and not move forward with chartering fintech banks; or (4) hit “pause” and take no action either in finalizing or in withdrawing the draft licensing supplement.

Any concrete shift away from the agency’s current approach (i.e., hitting “pause” or withdrawing the draft manual entirely) likely would be well received by various stakeholders in Washington DC, including House Financial Services Committee Chairman Jeb Hensarling (R-TX). In March of this year, Chairman Hensarling wrote then-Comptroller Curry urging the OCC to not rush its decision and instead “provide a full and fair opportunity for stakeholders” to assess the charter. Relatedly – though for different reasons – Democratic Senators Sherrod Brown (D-OH) and Jeff Merkley (D-OR) also wrote to Curry in January warning that fintech charters could “undermine financial stability and jeopardize consumer protections.”

Note, too, as was highlighted in a recent Senate Banking Committee hearing that examined the Upper Chamber’s approach to financial services regulatory reform, there is concern by some that the OCC’s fintech bank charter proposal could further impede the ability of community banks and credit unions to compete for deposits as they lose locational advantages to mobile banking platforms.

In sum, this bipartisan, bicameral opposition could spell trouble for the OCC’s proposal going forward.

Challenges in Court

It is possible that the future of the OCC’s fintech proposal will be determined by a court. Since the OCC released the draft licensing supplement in March, at least two entities have filed law suits challenging the OCC’s authority to issue fintech bank charters. First, the Conference of State Bank Supervisors (CSBS) is seeking an injunction to prevent the OCC from issuing any fintech bank charters. CSBS argues that the OCC lacks the authority to issue a fintech bank charter and that doing so would violate the National Bank Act (NBA), the Administrative Procedure Act and the Supremacy Clause of the Tenth Amendment of the Constitution. CSBS claims that the OCC can only charter institutions that carry on either (1) the “business of banking” under the NBA, which CSBS contends requires – at a minimum – engaging in receiving deposits; or (2) certain special purposes expressly authorized by Congress. As detailed in the OCC’s licensing supplement, these fintech banks would not receive deposits, nor has Congress expressly authorized their existence. The OCC’s response to CSBS’s complaint is due at the end of July, after having received an extension by the US District Court for the District of Columbia.

Separately, the New York Department of Financial Services (NYDFS) Superintendent Maria Vullo filed a complaint in the Southern District of New York alleging the OCC’s actions to charter fintech banks “grossly exceeds the agency’s statutory authority.” Superintendent Vullo makes similar arguments as CSBS. The OCC’s response will likely be due in July.

These cases are clearly in their early stages, but could easily impact the OCC’s ultimate decision on whether to move forward with the fintech bank charter.

CFTC and Other Regulators

The Commodity Futures Trading Commission (CFTC) recently announced the creation of LabCFTC, a new initiative aimed at promoting responsible fintech in the markets CFTC oversees. LabCFTC will focus on ways to use fintech to improve the quality, resiliency, and competitiveness of the markets. LabCFTC will also focus on the CFTC’s engagement with fintech and regtech solutions that may enable the agency to carry out its mission more effectively and efficiently. Though little information has been released about the program, LabCFTC, which will be located in New York, will have two core components: (1) GuidePoint – a dedicated point of contact for fintech innovators to engage with CFTC; and (2) CFTC 2.0 – an initiative to foster and help initiate the adoption of new technology within the CFTC’s own activities. Note, however, given the current makeup of the CFTC (i.e., there are only two Commissioners – and one, Commissioner Sharon Bowen, is set to resign), we do not anticipate significant developments until CFTC nominees Brian Quintenz and Chris Brummer are confirmed as commissioners.

LabCFTC is just one example of federal regulators’ increasing interest in fintech and its potential impact on the industries they regulate. Indeed, both the Federal Reserve System (Fed) and the Consumer Financial Protection Bureau (CFPB), among other regulators, have shown interest in fintech in recent months. In April of this year, Fed Governor Lael Brainard indicated that the Fed wants to provide input on future rules governing how technology companies move into consumer lending markets. At the CFPB, the agency released a report last year from its “Project Catalyst” on promoting consumer-friendly innovation and highlighting the importance of ensuring consumer protections are built into emerging products and services.

Legislative

Aside from regulatory efforts, lawmakers also have expressed an interest in oversight of the fintech industry. In September 2016, Representative Patrick McHenry (R-NC), Chief Deputy Whip in the House, introduced the Financial Services Innovation Act of 2016 to create a regulatory “sandbox” approach for fintech firms. The sandbox approach, which loosely mirrors a similar program in the UK, allows companies to work alongside a regulator when testing a fintech product or service. The bill intends to give these firms the ability to test a new product or service with a limited launch without going through the full regulatory process. Representative McHenry’s bill also requires the 12 financial federal regulators to develop an internal “Financial Services Innovation Office” where companies can seek help in testing a product or service. While the bill has not been reintroduced at the time of publication, we anticipate that a “2.0” version of the legislation will serve as the starting point for congressional action on fintech legislation this Congress – an effort that we believe may have much-needed support from some in the Senate.

International

As interest in fintech continues to grow in the US, the industry is also drawing attention from governments across the world, especially the European Union (EU). On March 23, 2017, the European Commission (EC) published a new Action Plan on Consumer Financial Services (Action Plan). The Action Plan sets out ways to provide European consumers with greater choice and better access to financial services across the EU. As a complement to the Action Plan, the EC recently launched a public consultation on fintech, looking into technology and its impact on the European financial services sector. The consultation remained open until June 15, 2017. The responses of the public consultation will feed into the work of the EC’s fintech task force. Note, in a March conference, EC Vice-President Valdis Dombrovskis pointed out the need to do more work towards harmonizing the standards of innovation within the fintech space across the EU, which would enable a coherent EU approach to fintech. Nevertheless, as the industry continues to expand, the EC appears to be taking a “wait-and-see” approach to promulgating fintech regulatory measures for the time being.

Additionally, in a recent firm fintech seminar, panelists from various regulators and the financial services industry discussed a number of fintech-related topics. Notably, one panel concurred that competition law provides a flexible and effective tool for fintech companies and that it can be used as a “shield” to disentangle the pro-competitive effects of certain cooperation arrangements (such as information exchanges in blockchain technology) from its potentially anticompetitive effects; or, conversely, can be used as a “sword” in commercial negotiations with more established companies to reduce artificial market barriers. Further discussion centered on the potential impact of Brexit on UK-based fintech companies and the payments industry, which will be significantly impacted given the lack of equivalence rules for third countries in the applicable EU Payment Services and Electronic Money Directives.

Please contact the following individuals regarding this article:

Matthew Cutts
Partner, Washington DC
T +1 202 457 6079
E matthew.cutts@squirepb.com

Jim Sivon
Of Counsel, Washington DC
T +1 202 262 4271
E james.sivon@squirepb.com

Katie Wechsler
Of Counsel, Washington DC
T +1 202 360 8895
E katie.wechsler@squirepb.com

Brandon Roman
Associate, Washington DC
T +1 202 457 5330
E brandon.roman@squirepb.com

Patrick Kirby
Associate, Washington DC
T +1 202 457 5294
E patrick.kirby@squirepb.com

Senate Republicans Release Better Care Reconciliation Act of 2017

On Thursday, June 22, Senate Republicans released the text of their health reform discussion draft.  A PDF of the text can be accessed here.

We found the following documents and articles to be particularly useful:

  • The Congressional Research Service Section-by-Section Summary of the Better Care Reconciliation Act of 2017 (link)
  • The Washington Post’s Kim Soffen and Darla Cameron explain the Senate draft (link)
  • The Atlantic’s Vann R. Newkirk II discusses the Medicaid policy changes (link)

Senate Continues Work on Iran and Russia Sanctions

Senate Legislative Activity

The Senate will convene on Monday, June 12 at 4:00 pm.  Following any Leader remarks, the Senate will be in a period of morning business until 5:00 pm.

At 5:00 pm, the Senate will proceed to Executive Session to consider the nomination of Kenneth P. Rapuano, of Virginia, to be Assistant Secretary of Defense. There will be up to 30 minutes for debate prior to a roll call vote on confirmation of the nomination. Following disposition of the nomination, the Senate will resume consideration of the motion to proceed to S.722, Iran Sanctions, with all post-cloture time considered expired.

There will be at least one roll call vote at 5:30 pm with the potential of a second.

House Legislative Activity

On Monday, the House will meet at 12:00 p.m. for morning hour and 2:00 pm for legislative business. Votes will be postponed until 6:30 pm.

The following legislation will be considered under suspense on of the rules:

  1. H.R. 338 – To promote a 21st century energy and manufacturing workforce (Sponsored by Rep. Bobby Rush / Energy and Commerce Committee)
  2. H.R. 446 – To extend the deadline for commencement of construction of a hydroelectric project (Sponsored by Rep. Morgan Griffith / Energy and Commerce Committee)
  3. H.R. 447 – To extend the deadline for commencement of construction of a hydroelectric project (Sponsored by Rep. Morgan Griffith / Energy and Commerce Committee)
  4. H.R. 627 – Streamlining Energy Efficiency for Schools Act of 2017 (Sponsored by Rep. Matt Cartwright / Energy and Commerce Committee)
  5. H.R. 951 – To extend the deadline for commencement of construction of a hydroelectric project (Sponsored by Rep. Virginia Foxx / Energy and Commerce Committee)
  6. H.R. 1109 – To amend section 203 of the Federal Power Act (Sponsored by Rep. Tim Walberg / Energy and Commerce Committee)
  7. H.R. 2122 – To extend the deadline for commencement of construction of a hydroelectric project involving Jennings Randolph Dam (Sponsored by Rep. David McKinley / Energy and Commerce Committee)
  8. H.R. 2274 – HYPE Act (Sponsored by Rep. Scott Peters / Energy and Commerce Committee)
  9. H.R. 2292 – To extend a project of the Federal Energy Regulatory Commission involving the Cannonsville Dam (Sponsored by Rep. John Faso / Energy and Commerce Committee)
  10. H.R. 2457 – J. Bennett Johnston Waterway Hydropower Extension Act of 2017 (Sponsored by Rep. Mike Johnson / Energy and Commerce Committee)

On Tuesday, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

H.R. 2581 – Verify First Act (Subject to a Rule) (Sponsored by Rep. Lou Barletta / Ways and Means Committee)

H.R. 1094– Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 (Subject to a Rule) (Sponsored by Sen. Marco Rubio / Veterans Affairs Committee)

On Wednesday, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

H.R. 2372 – VETERAN Act (Subject to a Rule) (Sponsored by Rep. Sam Johnson / Ways and Means Committee)

On Thursday, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

H.R. 1215 – Protecting Access to Care Act of 2017, Rules Committee Print (Subject to a Rule) (Sponsored by Rep. Steve King / Judiciary Committee)

On Friday, the House will meet at 9:00 am for legislative business. Last votes expected no later than 3:00 pm.

H.R. 2579 – Broader Options for Americans Act (Subject to a Rule) (Sponsored by Rep. Pat Tiberi / Ways and Means Committee)

Sources:  www.democrats.senate.govhttp://www.majorityleader.gov/

State Attorneys General June 12 Update

Squire Patton Boggs’ State Attorneys General Practice Group is comprised of lawyers who have served at senior levels in state AG offices around the country and whose practices focus, to one degree or another, on representing clients before these increasingly assertive and powerful, yet often overlooked, government agencies, as explained in detail here.

In these updates, we will call attention to the most noteworthy state AG news or developments emerging in the previous week.

Advocacy

Massachusetts AG Maura Healey and 32 State AGs have joined together to oppose President Trump’s proposal to eliminate federal funding for the Legal Services Corporation (LSC). The coalition of AGs drafted a letter to Congress extolling the role of LSC in “help[ing] residents nationwide receive justice.”

Virginia AG Mark Herring and a coalition of 20 other AGs in a joint letter are urging House leadership to reject “anti-consumer legislation that would roll back many of the critical protections adopted in the wake of the financial crises that harmed so many hard-working Americans.” Their principal objective is defunding the Consumer Financial Protection Bureau (CFPB).

Regulatory

Texas AG Ken Paxton and 16 fellow AGs are calling for regulatory reform to protect citizens and businesses from what they see as federal government overreach. In a letter, the AGs encouraged the president to push Congress to limit the enforcement authority of federal agencies.

House Agriculture Committee Hearing to Focus on Watershed Programs

Legislative Activity

House Agriculture Committee Hearing to Focus on Watershed Programs

On Wednesday, the House Agriculture Committee’s Subcommittee on Conservation and Forestry is scheduled to hold a hearing focused on small watershed infrastructure, specifically the Watershed Rehabilitation Program and the Watershed and Flood Prevention Operations (WFPO) Program. Both programs are administered by the United States Department of Agriculture’s Natural Resources Conservation Service, which partners with local watershed sponsors to fund projects relating to soil conservation; flood prevention, such as dam rehabilitation; water conservation, usage, and disposal; and surveys.

Rep. Frank Lucas (R-OK), Chairman of the Subcommittee, has a longstanding interest in watershed infrastructure, particularly in the rehabilitation of aging small upstream flood control measures. Rep. Lucas was the sponsor of the Small Watershed Rehabilitation Amendments of 2000, which included language to create the Watershed Rehabilitation Program. The Grain Standards and Warehouse Improvement Act of 2000 ultimately included Rep. Lucas’ legislative language to create the Watershed Rehabilitation Program, which was most recently amended by the 2014 Farm Bill.

The WFPO Program, often referred to as the PL-566 Small Watershed Program or simply PL-566, is a permanently authorized program with roots back to the Flood Control Act of 1944 and the Watershed Protection and Flood Prevention Act of 1954. The WFPO Program relies on annual discretionary funds and is facing significant backlog, as it has not received appropriations since Fiscal Year 2010. However, last month, President Trump signed the Fiscal Year 2017 omnibus appropriations legislation into law, which included $150 million for the WFPO Program.

Rep. Lucas is expected to highlight the importance of the programs and their role in not only protecting life and property, but also in preventing disaster expenses and creating jobs, especially for rural America. This week’s hearing will also allow the committee to consider the future of existing programs and to deliberate the effects of the six-year funding gap for the WFPO Program.

Markups on Appropriations Bills Begin in the House this Week with FY2018 MilCon-VA Bill; House Republican Members Push for an Omnibus Before August Recess

Legislative Activity

Markups on Appropriations Bills Begin in the House this Week with FY2018 MilCon-VA Bill; House Republican Members Push for an Omnibus Before August Recess

Appropriations subcommittees in the House will commence FY 2018 spending bill markups this week, with the Military Construction and Veterans Affairs (MilCon-VA) subcommittee markup scheduled for this evening. Still lacking a comprehensive FY 2018 budget resolution, the committee is reportedly planning to release the top-line discretionary spending level (302A) later this month.

The Republican Study Committee joined Rep. Tom Graves (R-GA), who chairs the House Appropriations Subcommittee on Financial Services and General Government, in supporting his strategy to move directly to a 12-bill omnibus, with the intent to send it to the Senate prior to the August recess. While proponents of the plan recognize the challenge in achieving this goal, given the House is only in session six weeks before the August recess, they feel it will provide leverage as they eventually work through an FY 2018 compromise with the Senate.

This Week’s Hearings:

House Appropriations Committee

  • On Monday, June 12, the House Appropriations Subcommittee on Financial Services and General Government has scheduled a Department of Treasury budget hearing. The witness will be:
    • The Honorable Steven Mnuchin, Secretary, Department of the Treasury
  • On Monday, June 12, the House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related Agencies has scheduled a markup for the FY 2018 Military Construction and Veterans Affairs Appropriations Bill. The witnesses will be announced.
  • On Tuesday, June 13, the House Appropriations Subcommittee on Homeland Security has scheduled a hearing titled “Immigration and Customs Enforcement &Customs and Border Protection FY18 Budget Request.” The witnesses will be:
    • Thomas D. Homan, Acting Director, Immigration and Customs Enforcement
    • John P. Wagner, Deputy Executive Assistant Commissioner, Customs and Border Protection
    • Carla L. Provost, Acting Chief, United States Border Patrol
  • On Tuesday, June 13, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a Department of Justice budget hearing. The witness will be:
    •  The Honorable Jefferson Sessions, Attorney General
  • On Wednesday, June 14, the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a hearing titled “Department of the Treasury – International Programs Budget Hearing.” The witness will be:
    • The Honorable Steven Mnuchin, Secretary, Department of the Treasury
  • On Wednesday, June 14, the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a Department of State budget hearing. The witness will be:
    • The Honorable Rex Tillerson, Secretary, Department of State
  • On Thursday, June 15, the House Appropriations Subcommittee on Defense has scheduled a Department of Defense budget hearing. The witnesses will be:
    • The Honorable James N. Mattis, Secretary, Department of Defense
    • General Joseph Dunford, USMC, Chairman, Joint Chiefs of Staff
  • On Thursday, June 15, the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a Department of Transportation budget hearing. The witness will be:
    • The Honorable Elaine Chao, Secretary, Department of Transportation
  • On Thursday, June 15, the House Appropriations Subcommittee on Interior, Environment, and Related Agencies has scheduled an Environmental Protection Agency budget hearing. The witnesses will be:
    • The Honorable Scott Pruitt, Administrator, Environmental Protection Agency
    • Ms. Holly Greaves, Senior Advisor to the Administrator, Environmental Protection Agency
  • On Friday, June 16, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a Federal Bureau of Investigation budget hearing. The witnesses will be:
    • The Honorable Andrew G. McCabe, Acting Director, Federal Bureau of Investigation

Senate Appropriations Committee

  • On Tuesday, June 13, the Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a hearing titled “Review of the FY 2018 Budget Request for the U.S. Department of Justice.” The witness will be:
    • The Honorable Jeff Sessions, Attorney General, U.S. Department of Justice
  • On Tuesday, June 13, the Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies has scheduled a hearing titled “Hearing to Review the FY 2018 USDA Budget Request.” The witnesses will be:
    • The Honorable Sonny Perdue, Secretary, U.S. Department of Agriculture
    • Dr. Robert Johansson, Chief Economist, U.S. Department of Agriculture
    • Mr. Michael Young, Budget Officer, U.S. Department of Agriculture
  • On Tuesday, June 13, the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a hearing titled “Review of the FY2018 Budget Request for the U.S. Dept. of Transportation.” The witness will be:
    • The Honorable Elaine Chao, Secretary, U.S. Department of Transportation
  • On Tuesday, June 13, the Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a hearing titled “Review of the FY 2018 Budget for the U.S. Department of State.” The witness will be:
    • The Honorable Rex Tillerson, Secretary, U.S. Department of State
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on Defense has scheduled a hearing titled “Review of the FY 2018 Budget Request for the U.S. Dept. of Defense.” The witnesses will be:
    • The Honorable James N. Mattis, Secretary, U.S. Department of Defense
    • General Joseph F. Dunford, Jr., USMC, Chairman, Joint Chiefs of Staff
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on the Legislative Branch has scheduled a hearing titled “Review of the FY 2018 Budget Requests for the Senate Sergeant at Arms, U.S. Capitol Police.” The witnesses will be:
    • The Honorable Frank R. Larkin, Sergeant At Arms, United States Senate
    • Matthew Verderosa, Chief of Police, United States Capitol Police
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on Energy and Water Development has scheduled a hearing titled “Review of the FY2018 Budget Request for the National Nuclear Security Administration.” The witnesses will be:
    • Lieutenant General Frank G. Klotz, USAF (Ret.), Under Secretary For Nuclear Security Administrator, National Nuclear Security Administration
    • Mr. Philip T. Calbos, Acting Deputy Administrator For Defense Programs, National Nuclear Security Administration, U.S. Department of Energy
    • Mr. David G. Huizenga, Acting Deputy Administrator For Defense Nuclear Nonproliferation, National Nuclear Security Administration, U.S. Department of Energy
    • Admiral James F. (Frank) Caldwell Jr., USN, Deputy Administrator For Naval Reactors, National Nuclear Security Administration, U.S. Department of Energy
  • On Thursday, June 15, the Senate Appropriations Subcommittee on Departments of Labor, Health and Human Services, Education, and Related Agencies has scheduled a hearing titled “Review of the FY2018 Department of Health & Human Services Budget Request.” The witness will be:
    • The Honorable Thomas Price, Secretary, U.S. Department of Health and Human Services

Senate Budget Committee

  • On Tuesday, June 13, the Senate Budget Committee has scheduled a hearing titled “President’s FY 2018 Budget and Revenue Proposals.” The witness will be:
    • The Honorable Steven T. Mnuchin, Secretary, U.S. Department of the Treasury

Secretary DeVos Testifies on Education Budget; Department of Education Must Make Decisions on Higher Ed Regulations

Legislative Activity

Effective Apprenticeships Rebuild National Skills (EARNS) Act

Members of the House Committee on Education and the Workforce introduced two bills that seek to promote fair union elections and restore important protections for workers and employers. The first is the Workforce Democracy and Fairness Act (H.R. 2776), introduced by Rep. Tim Walberg (R-MI), chairman of the Subcommittee on Health, Employment, Labor, and Pensions. The bill seeks to protect worker freedom by addressing the National Labor Relations Board’s (NLRB) ambush election rule and micro-union scheme. The second, introduced by Rep. Joe Wilson (R-SC), is the Employee Privacy Protection Act (H.R. 2775), which will roll back NLRB policies that may jeopardize the privacy of workers and their families.

House Expresses Concern on Job Corps

Last week, House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Subcommittee on Higher Education and Workforce Development Chairman Brett Guthrie (R-KY) sent a letter to the Department of Labor (DOL) to express concerns over challenges facing the federal Job Corps program, as well as to request detailed information on steps the Department is taking to improve the health and safety of those who participate in the program. In 2014, the Workforce Innovation and Opportunity Act was signed into law to modernize our nation’s workforce development system. The legislation enacted several reforms to help put more Americans back to work, including provisions to improve Job Corps. However, the Committee is concerned about multiple reports, including from DOL’s Inspector General, which they say have revealed mismanagement of the program.

This Week’s Hearings:

  • On Wednesday, June 14, the House Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions has scheduled a hearing to consider the following legislative reforms to the National Labor Relations Act: H.R. 2776, Workforce Democracy and Fairness Act; H.R. 2775, Employee Privacy Protection Act; and, H.R. 2723, Employee Rights Act. The witnesses will be announced.
  • On Thursday, June 15, the House Education and the Workforce Subcommittee on Higher Education and Workforce Development has scheduled a hearing titled “Helping Americans Get Back to Work: Implementation of the Workforce Innovation and Opportunity Act.” The witnesses will be announced.

 

Regulatory Activity

Secretary DeVos Testifies on Department of Education Budget

Last Tuesday, June 6, Secretary of Education Betsy DeVos testified before the Senate Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education and Related Agencies (LHHS), about President Donald Trump’s budget request, which proposes cuts of more than 13 percent to the Department of Education. Sen. Roy Blunt (R-MO), Chairman of the Subcommittee, told Secretary DeVos that the President’s proposed cuts are not likely to occur. Sen. Shelley Moore Capito (R-WV) expressed her frustration with the Department’s rejection of Upward Bound applications over formatting errors, and Sen. Jerry Moran (R-KS) showed concerns over cuts to Impact Aid, which provides funds to school districts on nontaxable federal lands.

Democrats on the Committee, including Sens. Patrick Leahy (D-VT), Chris Murphy (D-CT), and Joe Manchin (D-WV) explained the ways their respective states will be harmed by the proposed budget cuts. Additionally, Sen. Patty Murray (D-WA), Ranking Member of the LHHS Subcommittee, pressed Secretary DeVos on her plans to thoroughly respond to letters requesting information. Secretary DeVos replied that the Department had sent responses to over half of the letters already, and that they would continue to respond to requests for information.

The LHHS Subcommittees in the House and Senate will markup their bills in the coming weeks, with hopes to get them done before the August recess.

Higher Ed Regulations

The Department of Education must take action before a July 1 deadline on two major Obama-era rules that affect colleges and universities, particularly for-profit schools. The first, the borrower defense to repayment package of regulations, includes new standards for debt relief for defrauded student loan borrowers, expanded powers for Department regulators, and a ban on mandatory arbitration agreements at colleges. The second, the gainful employment rule, cuts off federal funding to career colleges, mostly for-profit schools, where students end up with high student debt relative to their earnings. The administration may further delay both rules until they make a decision on whether to try rewriting them.

The California Association of Private Postsecondary Schools, a trade association for California for-profit colleges, has sued to block the entire package of borrower defense to repayment regulations. Meanwhile, a report published by the Center for American Progress and written by a former Obama administration official who helped create the rule, says the typical graduate of programs would benefit greatly from the federal government’s income-driven repayment plan, which lets students pay a percentage of their income for 20 or 25 years and then forgives the remaining debt.

Return of Senate’s Comprehensive Energy Bill to Move Prior to July 4th Recess; Administration Reviews Clean Power Plan

Legislative Activity

Revival of the Comprehensive Energy Bill

Last week, by unanimous consent, the House Energy and Commerce Committee advanced 11 bills governing energy infrastructure and efficiency. The bills address a range of issues including:  skill preparation for energy-related jobs; improvement to hydroelectric licensing; retrofits for schools; increasing energy and water efficiency for federal facilities and amending monetary thresholds for mergers of FERC-regulated facilities. Several of the issue areas that these bills address were included in the larger comprehensive energy bill that Congress had tried but failed to pass last session.

In the Senate, Chairman Lisa Murkowski (R-AK) of the Energy and Natural Resources Committee has begun the effort to revive the bi-partisan comprehensive energy bill. The all-encompassing 800-page bill from the 114th Congress, S. 2012, as engrossed by the Senate, will serve as the base bill. It will also include several of the agreed-upon items from conference (such as the SAVE Act). The Chairman intends have the bill ready to move to the Senate Floor prior to the July 4 recess. 

This Week’s Hearings:

  • On Tuesday, June 13, the Senate Committee on Environment and Public Works will hold a hearing to consider the following agency nominations:
    • Kristine Svinicki to be reappointed as Chairman of the U.S. Nuclear Regulatory Commission
    • Annie Caputo and David Wright to be Members of the U.S. Nuclear Regulatory Commission
    • Susan Bodine to be Assistant Administrator of the Office of Enforcement and Compliance Assurance of EPA
  • On Wednesday, June 14, the House Committee on Energy and Commerce, Subcommittee on Energy, will hold a hearing titled “States’ Perspectives on Energy Security Planning, Emergency Preparedness, and State Energy Programs.”
  • On Wednesday, June 14, the House Committee on Natural Resources, Subcommittee on Federal Lands, will hold a hearing on the discussion draft on the controversial Sportsmen’s Heritage and Recreational Enhancement Act (SHARE Act). The bill aims to open public lands to hunting, fishing and shooting activities and to prevent new regulations that may limit or block access for those activities.
  • On Wednesday, June 14, the Senate Committee on Environment and Public Works will hold a hearing to examine the Consumer and Fuel Retailer Choice Act (S. 517). The bill would amend the ethanol waiver for Reid vapor pressure limitations under the Clean Air Act.
  • On Wednesday, June 14, the Senate Committee on Appropriations, Subcommittee on Energy and Water, will hold a hearing on the National Nuclear Security Administration’s FY 2018 budget.
  • On Wednesday, June 14, the Senate Committee on Energy and Natural Resources, Subcommittee on Water and Power, will hold a hearing to discuss several pieces of legislation including:
    • S. 677, the Water Supply Permitting Coordination Act;
    • S. 685, the Clean Water for Rural Communities;
    • S. 930, the Western Area Power Administration Transparency Act;
    • S. 1029, to amend the Public Utility Regulatory Policies Act of 1978 to exempt certain small hydroelectric power projects that are applying for relicensing under the Federal Power Act from the licensing requirements of the Act; and
    • S. 1030, to require FERC to submit to Congress a report on certain hydropower projects.
  • On Thursday, June 15, the Senate Committee on Energy and Natural Resources will hold a hearing to “examine the President’s budget request for the U.S. Forest Service for Fiscal Year 2018.”
  • On Thursday, June 15, the House Committee on Natural Resources, Subcommittee on Federal Lands, will hold a hearing on the discussion draft of the Resilient Federal Forests Act of 2017. The bill intends to expedite forest management activities on National Forest System lands, on public lands under the jurisdiction of the Bureau of Land Management, and on Tribal lands in effort to return resilience to overgrown, fire-prone forested lands.
  • On Thursday, June 15, the House Committee on Appropriations, Subcommittee on Interior and Environment, will hold a hearing on the Environmental Protection Agency’s FY 2018 budget. The Administrator of the Environmental Protection Agency, Scott Pruitt, and the Senior Advisor to the Administrator, Holly Greaves, will testify.
  • On Thursday, June 15, the Senate Committee on Appropriations, Subcommittee on Energy and Natural Resources, will hold a hearing on the Forest Service’s FY 2018 budget.

Regulatory Activity

Clean Power Plan

Last Thursday, the Environmental Protection Agency (EPA) sent its proposed review of the Clean Power Plan (CPP) to the Office of Management and Budget (OMB) for review. While the notice did not include details, the proposal is anticipated to seek the repeal of the CPP. This follows EPA Administrator Pruitt’s statements last month that he has not decided whether to craft new rules in addition to repealing the CPP. OMB is anticipated to spend the next few months reviewing the proposal before it is publicly released.

WOTUS

On Thursday, June 29, the EPA’s Small Communities Advisory Subcommittee (SCAS) and Local Government Advisory Committee (LGAC) will meet to discuss and formulate recommendations on revising the definition of ‘‘Waters of the U.S.’’ (WOTUS) under the Clean Water Act, as well as other environmental issues effecting small communities and local governments. This follows EPA’s letter to state governors last month soliciting comments as to how the agency should rewrite WOTUS in response to President Trump’s February 28 executive order directing the agencies to revise the contested Obama Administration rule. The meetings are open to all interested parties who would like to participate. More information on how to submit comments can be found here

House Moves Forward with Financial Services Reform as Banking Looks to Find Its Own Path

Legislative Activity

House Moves CHOICE Act Forward as Senate Banking Committee Discusses Banking Reforms

Last week, the House passed the Financial CHOICE Act of 2017 (CHOICE Act) by a vote of 233-186. The comprehensive deregulatory bill would roll back many of the regulations put in place by the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). For now, passage of the bill amounts to little more than a messaging exercise from the House GOP, since Senate Republicans do not plan to take up the legislation as written. House Financial Services Committee Chairman Jeb Hensarling (R-TX) – the author of the CHOICE Act – has expressed his hope that at least parts of the bill will become law during this Congress. That said, he has also conceded it is a “long game” with some of the bill’s proposals, recognizing the challenging political obstacles of moving the bill through the Senate. Note that the CHOICE Act vote was along party lines except for one Republican, Rep. Walter Jones (R-NC), who voted against the bill.

Meanwhile, on the other side of Capitol Hill, the Senate Banking Committee held a hearing last week titled “Fostering Economic Growth: The Role of Financial Institutions in Local Communities.” Broadly speaking, the hearing focused on banking regulatory reform – especially as it relates to community banks and credit unions. Relatedly, on Thursday, June 15, the Senate Banking Committee is set to hold a hearing on potential regulatory reforms for mid-sized, regional, and large financial institutions.

This Week’s Hearings:

  • On Monday, June 12, the House Appropriations Subcommittee on Financial Services and General Government has scheduled a Department of Treasury budget hearing.
  • On Tuesday, June 13, the Senate Banking, Housing, and Urban Affairs Committee has scheduled a business meeting to consider the following nominations:
    • Mr. Kevin A. Hassett to be Chairman of the Council of Economic Advisers; and
    • The Honorable Pamela H. Patenaude to be Deputy Secretary of Housing and Urban Development
  • On Wednesday, June 14, the House Financial Services Committee has scheduled a markup to consider the following legislation:
    • H.R. 1422, the “Flood Insurance Market Parity and Modernization Act” (Section-by-Section);
    • H.R. 1558, the “Repeatedly Flooded Communities Preparation Act” (Section-by-Section);
    • H.R. 2246, the “Taxpayer Exposure Mitigation Act of 2017” (Section-by-Section);
    • H.R. 2565, To require the use of replacement cost value in determining the premium rates for flood insurance coverage under the National Flood Insurance Act, and for other purposes. (Section-by-Section);
    • H.R. 2868, the “National Flood Insurance Program Policyholder Protection Act of 2017” (Section-by-Section);
    • H.R. ____, the “National Flood Insurance Program Administrative Reform Act of 2017” (Section-by-Section); and
    • H.R. ____, the “21st Century Flood Reform Act” (Section-by-Section)
  • On Thursday, June 15, the Senate Banking, Housing, and Urban Affairs Committee has scheduled a hearing titled “Fostering Economic Growth: Midsized, Regional, and Large Institution Perspective.”

Regulatory Activity

Trump Nominates Otting to Lead OCC

Last week, President Donald Trump nominated Joseph Otting to be Comptroller of the Currency. Mr. Otting served as CEO of Treasury Secretary Steven Mnuchin’s former bank, OneWest, from 2010 to 2015. House and Senate Democrats wasted no time criticizing the nomination, taking aim at OneWest’s foreclosure practices during the financial crisis – similar to the criticisms they voiced during Secretary Mnuchin’s confirmation process. If confirmed by the Senate, Mr. Otting will play a central role in trying to ease financial rules that the Trump Administration blames for stunting economic growth since Dodd-Frank.

SEC Names Co-Directors of Enforcement

Last week, the Securities and Exchange Commission (SEC) announced that Acting Director of the Division of Enforcement Stephanie Avakian and former federal prosecutor Steven Peikin have been named Co-Directors of the Division of Enforcement. The Division of Enforcement is the agency’s largest unit with more than 1,200 investigators, accountants, trial attorneys, and other professionals.

House to Vote on Additional Health Care Legislation; CMS Revises Requirements for Long-Term Care Facilities; CMS Issues Request for Information

Legislative Activity

House to Vote on Additional Health Care Legislation

This week Majority Leader Kevin McCarthy (R-CA) announced that the House of Representatives is scheduled to vote on two pieces of health care legislation. These bills are part of the third phase of Speaker Paul Ryan’s repeal and replace strategy. H.R. 2579, the Broader Options for Americans Act, was introduced by House Committee on Ways and Means Subcommittee on Health Chairman Pat Tiberi (R-OH), and H.R. 1215, the Protecting Access to Care Act of 2017, was introduced by Rep. Steve King (R-IA). H.R. 2579 amends H.R. 1628, the American Health Care Act (AHCA), as passed by the House of Representatives on May 4, 2017. The bill expands financial support for purchasing health insurance by allowing the health insurance tax credit created in the AHCA to also be available for Americans who have lost their group coverage as a result of losing their job. H.R. 1215 establishes provisions governing health care lawsuits where coverage for care was provided or subsidized by the federal government. The intent of the legislation is to reduce the burden the liability system places on the health care delivery system, lower health care costs, and increase health care access. Both pieces of legislation passed their committees of jurisdiction by party line votes and are scheduled for a vote on the House floor by the end of the week. While these bills could be incorporated into the Senate health care package, it is unlikely H.R. 2579 or H.R. 1215 would pass the Senate as stand-alone bills.

This Week’s Hearings:

  • On Monday, June 12, the House Committee on Rules will hold a meeting to formulate a rule on S. 1094, the Department of Veterans’ Affairs Accountability and Whistleblower Protecting Act; H.R. 2372, the Veterans Equal Treatment Ensures Relief and Access Now (VETERAN) Act; H.R. 2579, the Broader Options for Americans Act; and H.R. 2581, the Verify First Act. The witnesses will be announced.
  • On Tuesday, June 13, the Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a hearing titled “The Cost of Prescription Drugs: How the Drug Delivery System Affects What Patients Pay.” The witnesses will be:
    • Mr. Dan Mendelson, President, Avalere Health
    • Mr. Allan Coukell, Senior Director of Health Programs, Pew Charitable Trusts
    • Dr. Paul Howard, Ph. D, Senior Fellow and Director of Health Policy, Manhattan Institute
    • Dr. Gerard Anderson, Professor of Medicine, Johns Hopkins University School of Medicine
  • On Tuesday, June 13, The Senate Committee on Indian Affairs will hold a hearing on various legislation including S. 1250, to amend the Indian Health Care Improvement Act to improve the recruitment and retention of employees in the Indian Health Service, restore accountability in the Indian Health Service, improve health services, and for other purposes. The witnesses will be announced.
  • On Tuesday, June 13, the House Committee on Rules will hold a hearing on H.R. 1215, the Protecting Access to Care Act of 2017. The witnesses will be announced.
  • On Wednesday, June 14, the House Committee on Energy and Commerce Subcommittee on Health will hold a hearing titled “Examining the Extension of Safety Net Health Programs.” The witnesses will be announced.
  • On Wednesday, June 14, the House Committee on Foreign Affairs will hold a markup of H.R. 1415, the End Neglected Tropical Diseases Act.
  • On Thursday, June 15, the Senate Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies will hold a hearing on proposed budget estimates and justification for FY 2018 for the U.S. Department of Health and Human Services. The witness will be:
    • The Honorable Tom Price, Secretary, U.S. Department of Health and Human Services (HHS)

Regulatory Activity

CMS Revises Requirements for Long-Term Care Facilities

On Monday, June 5, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to revise the requirements that Long-Term Care (LTC) facilities must meet to participate in the Medicare and Medicaid programs. The proposed rule removes provisions prohibiting LTC facilities’ use of binding pre-dispute arbitration, reversing a final rule issued by the Obama Administration in September of 2016. Advocates for the elderly believe allowing pre-dispute arbitration puts nursing home residents at risk, while LTC centers argue it prevents needless lawsuits. The proposed rule is consistent with the Administration’s approach to eliminating unnecessary burdens on providers. The proposed rule was posted in the Federal Register on June 8, 2017, and is open for public comment for 60 days.

CMS Issues Request for Information

On Thursday, June, 8, CMS issued a Request for Information (RFI) titled “Reducing Regulatory Burdens and Improving Health Care Choices to Empower Patients.” The RFI seeks feedback from the public on how to create a more flexible regulatory structure for the individual and small group market and follows the Market Stabilization Final Rule released by CMS on April 18, 2017.The goal of the RFI is to identify regulations that are not necessary and may interfere with regulatory reform policies, and revise them to be more patient centered. The RFI will be published in the Federal Register on June 12, 2017, and is open for public comment for 30 days.

House Armed Services Committee Introduces “By Request” NDAA Bill; Mattis and Dunford to Testify at Armed Services and Appropriations Hearings; Trump Administration Considering Expansion of Laptop Ban

Legislative Activity

House Armed Services Committee Introduces “By Request” NDAA Bill

On June 7, House Armed Services Committee Chairman Mac Thornberry (R-TX) and Ranking Member Adam Smith (D-WA) introduced H.R. 2810, the “by request” version of the Fiscal Year 2018 National Defense Authorization Act (NDAA).

This procedural measure is traditionally the first step in the legislative process for the NDAA. The introduced bill only reflects the legislative proposals submitted by the Department of Defense, but Armed Services Committee’s proposals will be incorporated into the bill during its markup.

The Committee is expected to hold its first markup of the legislation on June 28.

Mattis and Dunford to Testify at Armed Services and Appropriations Hearings

This week, Secretary of Defense James Mattis and Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford will testify during four House and Senate hearings on the Department of Defense’s Fiscal Year 2018 budget.

Secretary Mattis and Gen. Dunford will discuss the Pentagon’s budget before the House and Senate Armed Services Committees, as well as the House and Senate Appropriations Subcommittees on Defense.

Their testimony will come as the House and Senate Armed Services Committees prepare to begin consideration of the NDAA in late June.

This Week’s Hearings:

  • On Monday, June 12, the House Armed Services Committee has scheduled a hearing titled “The Fiscal Year 2018 National Defense Authorization Budget Request from the Department of Defense.”
  • On Tuesday, June 13, the Senate Armed Services Committee has scheduled a hearing titled “Department of Defense Budget Posture.”
  • On Tuesday, June 13, the Senate Armed Services Subcommittee on Seapower has scheduled a hearing titled “Navy and Marine Corps Aviation Programs.”
  • On Tuesday, June 13, the House Appropriations Subcommittee on Homeland Security has scheduled a hearing titled “Immigration and Customs Enforcement &Customs and Border Protection FY18 Budget Request.”
  • On Wednesday, June 14, the Senate Homeland Security and Governmental Affairs Committee has scheduled a hearing titled “Ideology and Terror: Understanding the Tools, Tactics, and Techniques of Violent Extremism.”
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on Defense has scheduled a hearing titled “Review of the FY 2018 Budget Request for the U.S. Dept. of Defense.”
  • On Wednesday, June 14, the House Homeland Security Committee has scheduled a markup of H.R. 2825 to amend the Homeland Security Act of 2002 to make certain improvements in the laws administered by the Secretary of Homeland Security and for other purposes.
  • On Thursday, June 15, the House Appropriations Subcommittee on Defense has scheduled a Department of Defense budget hearing.
  • On Thursday, June 15, the Senate Armed Services Committee has scheduled a hearing titled “Posture of the Department of the Navy.”
  • On Friday, June 16, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a Federal Bureau of Investigation budget hearing.

Executive Branch Activity

Trump Administration Considering Expansion of Laptop Ban

In testimony before the House Homeland Security Committee last week, Homeland Security Secretary John Kelly confirmed that the Trump Administration is considering whether to expand a ban on large electronic devises in airplane cabins to 71 additional airports in Europe, Africa, and the Middle East.  The restrictions, which currently apply to approximately 350 flights a week originating in 10 airports primarily in the Middle East, would expand to up to 400 flights a day, posing significant logistical challenges for airlines and airport administrators around the world.

Secretary Kelly confirmed that Deputy Homeland Security Secretary Elaine Duke will attend a conference in Malta next week where the US Government will present proposed security standards in an effort to mitigate the security risk posed by these electronics.

Pentagon’s BRAC Proposal Includes New Savings Requirement

The Defense Department’s Fiscal Year 2018 budget proposal requests authority from Congress to conduct a new round of base realignment and closures (BRAC) in 2021. Peter Potochney, the Acting Assistant Secretary of Defense for Energy, Installations, and the Energy, reassured the Senate Appropriations Subcommittee on Military Construction, Veterans Affairs, and Related Agencies in a hearing last week that the proposal includes a requirement that the Secretary certify savings will follow within 5 years of the recommendations.  He also noted that the recommendation would limit the Defense Secretary’s ability to recommend proposals that do not show cost savings within 20 years.

According to the Government Accountability Office, the up-front costs of the Defense Department’s 2005 BRAC round have increased from $21 billion to approximately $35.1 billion by 2011, a fact that some lawmakers have cited to argue against a new BRAC round.

During his testimony, Potochney also said that the proposal would not be limited to closing facilities on existing bases, but could also include the closure of entire facilities, adding “[e]verything’s on the table.”

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