House Passes FY 2017 Defense Appropriations Bill; President Trump to Deliver FY 2018 Budget Outline This Week; Debt Ceiling Suspension Expires This Week

Legislative Activity

FY 2017: House Passes Defense Appropriations Bill, What About the Rest?

The House passed its $577.9 billion FY 2017 defense appropriations bill (H.R. 1301) last week by a vote of 371-48 which included a $6.8 billion increase in procurement funding above the Obama Administration’s budget request for the fiscal year. The chamber still faces a short timeline to pass the remaining ten FY 2017 spending bills as the current FY 2017 Continuing Resolution (CR/P.L. 114-254) expires on April 28 (a full-year budget for the FY 2017 Military Construction-Veterans Affairs appropriations bill was included in the CR).

Congress will be in recess for two weeks in April, giving them only five working weeks for consideration and passage of the bills. The Senate will particularly face challenges with passing legislation on time due to its lengthy procedural process and schedule already being occupied with Cabinet confirmations. Thus, it currently appears that an omnibus will be the most likely scenario, with the Defense bill possibility serving as the vehicle to move the package.

A FY 2017 supplemental to address increases in military and border security funding is still anticipated from the Administration; however, President Trump’s Press Secretary Sean Spicer noted on Friday that the Administration will not address its FY 2017 priorities until the President submits his FY 2018 budget blueprint to Congress this week. The supplemental is expected to request at least $30 billion.

President Trump to Deliver FY 2018 Budget Outline This Week

President Trump is expected to deliver his FY 2018 budget blueprint to Congress on March 16, but some details are being reported that hint at major cuts to discretionary funding for domestic programs. Several weeks ago, the Administration announced the budget proposal will include an increase in defense spending by $54 billion offset by non-defense discretionary spending. As previously reported, the Department of State and USAID are rumored to see a 37 percent reduction; whereas the Environmental Protection Agency (EPA) will reportedly face cuts of at least 25 percent. Last week, reports were circulating that claim the Trump Administration intends to request a reduction in funding for the Department of Housing and Urban Development (HUD) by 16 percent ($6 billion); the Coast Guard by 14 percent; the Transportation Security Administration (TSA) by 11 percent; and the Federal Emergency Management Agency (FEMA) by 11 percent. Alternatively, the President will reportedly propose an increase of $3 billion for Customs and Border Protection (CBP) and $2.1 billion for Immigration and Customs Enforcement (ICE), in part to fund the increase in personnel called for in his recent executive orders.

These reports were met with significant pushback from Congressional Democrats, and even some Republicans. Additionally, members of President Trump’s Cabinet, including Interior Secretary Ryan Zinke and EPA Administrator Scott Pruitt, indicated they will push back on certain proposed reductions. In particular, EPA Administrator Pruitt recently highlighted water infrastructure, Superfund, and Brownfields programs as initiatives he believes should be protected.

Debt Ceiling Suspension Expires This Week

The current debt ceiling suspension enacted by the Bipartisan Budget Act of 2015 (P.L. 114-74) is set to expire this week on March 15. Congress must increase the nation’s debt limit periodically and failure to increase the debt limit would cause the government to default on its obligations, something the United States has never done. These deadlines are somewhat subjective as the Treasury Department can employ “extraordinary measures” to extend the nation’s borrowing authority for a period of time. Last week, the Congressional Budget Office estimated the current debt limit could be extended to the fall. Despite this estimation, Treasury Secretary Steven Mnuchin sent a letter to Congress requesting lawmakers raise the debt ceiling “at the first opportunity.”

This Week’s Hearings:

  • On Wednesday, March 15, the House Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, will hold a budget hearing titled “Corporation for Public Broadcast.”
  • On Thursday, March 16, the House Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, will hold a hearing titled “Investing in the Future: Early Childhood Education Programs at the Department of Health and Human Services.”
  • On Thursday, March 16, the House Appropriations Committee, Subcommittee on State, Foreign Operations, and Related Programs, will hold a Members’ Day hearing.
  • On Thursday, March 16, the House Appropriations Committee, Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, will hold an oversight hearing for the Department of Transportation and the Department of Housing and Urban Development.
  • On Tuesday, March 14, the Senate Appropriations Committee, Subcommittee on Military Construction, Veterans Affairs, and Related Agencies, will hold a field hearing titled “Arlington National Cemetery: Current Operations and Future Plans to Honor the Fallen.”
  • On Wednesday, March 15, the Senate Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, will hold a hearing titled “STEM Education: Preparing Students for the Careers of Today and the Future.”

Senate Schedules Acosta Confirmation Hearing; Department of Education Delays Gainful Employment Rule

Legislative Updates

 Senate Committee Schedules Confirmation Hearing on Nominee for Labor Secretary

The Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a confirmation hearing on Alexander Acosta’s nomination to serve as secretary of the Department of Labor on Wednesday, March 22. The hearing was originally scheduled for this Wednesday, March 15 but Sen. Lamar Alexander (R-TN), chairman of the HELP Committee, will be attending an event in Nashville with President Trump at that time.

Mr. Acosta has served in three federally appointed positions, including as a member of the National Labor Relations Board, an assistant attorney general at the Department of Justice, and U.S. Attorney for the Southern District of Florida. He has most recently served as dean of the Florida International University College of Law.

This hearing comes almost a full month after President Trump announced Mr. Acosta’s nomination following the abrupt withdrawal of previous Labor Secretary nominee, Andy Puzder. While Mr. Acosta is expected to be easily confirmed, he will face tough questions from Democrats on the Committee surrounding a 2007 case he prosecuted involving a billionaire and underage victims of sexual assault. Sen. Patty Murray (D-WA), ranking member of the HELP Committee, has also indicated she plans to ask questions surrounding his ability to stand up to political pressure and how he will advocate for workers if confirmed.

Mr. Acosta has received support from Republicans including Chairman Lamar Alexander, Senate Majority Leader Mitch McConnell (R-KY), and Rep. Virginia Foxx (R-NC), chairwoman of the House Education and the Workforce Committee. Chairman Alexander has lauded his impressive career and work in academia, and Richard Trumka, president of AFL-CIO, has expressed cautious optimism in President Trump’s selection of a proven public servant to fill the position.

Democrats Call for Hearings on Education Appointees

Based on Secretary DeVos’ statements during her confirmation hearing that she would rely heavily on her staff in critical areas including policy, civil rights, and postsecondary education, Democrats from the HELP Committee have sent a letter to Chairman Alexander requesting full hearings for all appointed positions in the Department of Education. The senators argue there is precedent for holding hearings on sub-Cabinet-level positions and it should be exercised in this case. Chairman Alexander has not responded to the request.

House Veterans Affairs Committee Pushes to Expand GI Bill Education Benefits

The House Veterans Affairs Committee passed a bill on Tuesday, March 7 that would allow veterans awarded the Purple Heart decoration to receive GI Bill educational benefits, even if they were not on active duty for the 36-month period required. The legislation, H.R. 1329 introduced by Rep. Scott Peters (D-CA), would immediately allow 1,200 to 1,500 Purple Heart recipients eligibility for GI Bill benefits, and create new beneficiaries going forward. Rep. Phil Roe (R-TN), Chairman of the VA Committee, is supportive of the bill but said it will be necessary to find the mandatory offsets to pay for the changes.

This Week’s  Hearings:

  • On Wednesday, March 15, the House Committee on Education and the Workforce, Subcommittee on Higher Education and Workforce will hold a hearing titled, “Improving Federal Student Aid to Better Meet the Needs of Students.”
  • On Thursday, March 16, the House Committee on Education and the Workforce will a hold a hearing titled, “Honoring Our Commitment to Recover and Protect Missing and Exploited Children.”

Regulatory Update

Gainful Employment Rule Delayed

The Department of Education announced it is delaying two provisions of the Obama Administration’s gainful employment rule which judges college programs based on student loan debt of graduates compared to their earnings after completing a degree. Under the Obama Administration, schools whose debt-to-earnings rates fail or are in a warning zone for multiple years would lose access to federal financial aid programs. The programs who had not met the requirement as of January 2017 were scheduled to submit “alternative earnings appeals” to the “debt-to-earnings” rates by March 10, but have been given until July 1. These programs must also comply with disclosure requirements and previously had a deadline of April 3 that has also been pushed to July 1.

The Department of Education has said officials need time to further review the rule and new staff have concerns over student data and privacy because audits must be completed by a third-party auditor. A spokesman for the Department indicated the Trump Administration is addressing the rule with an “even handed approach.”

Colleges Still Struggling with President Trump’s Immigration Executive Order

After extreme controversy over President Trump’s first executive order (EO) banning travel from seven Muslim-majority countries, he released a softened version on March 6. However, the new EO brings little relief to colleges and universities. Mary Sue Coleman, president of the Association of American Universities, has said the new order still “poses a fundamental long-term threat to America’s global leadership in higher education.” She worries the EO conveys a message that the world’s most talented students, scientists, engineers, and scholars are no longer welcome in America. The American Council on Education and the Association of Public and Land-grant Universities have released similar statements.

Resolution Repealing BLM’s Planning 2.0 Rule Sent to the President; Vote on Rescinding Methane Rule Put on Hold

Legislative Activity

Resolution Repealing BLM’s Planning 2.0 Rule Sent to the President

Last week, the Senate passed H. J. Res 44, using the Congressional Review Act (CRA), to rescind the Bureau of Land Management’s Resource Management Planning rule, known as the BLM Planning 2.0 Rule, by a vote of 51-48. The House passed the resolution on February 7 by a vote of 234-186. The rule, which was finalized by the Obama Administration in December 2016, aims to increase public involvement and incorporate the most current data and technology in order to streamline the agency’s land use planning process. Critics of the rule claimed it prioritized regional and national concerns over state and local interests in land use planning for activities on public lands. The resolution is expected to be signed into law by the President in the coming days.

Vote on Rescinding BLM Methane Rule Put on Hold

Senate Republicans are having less luck securing enough votes to pass another CRA resolution, H. J. Res. 36, which would rescind the Bureau of Land Management’s Waste Prevention, Production Subject to Royalties, and Resource Conservation rule. The joint resolution was passed by the House on February 3 by a vote of 221-191. The rule, which was also finalized under the Obama Administration, intends to reduce waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities on onshore federal and Indian leases.

The resolution was originally anticipated to pass the Senate mid-February, but has since received opposition from some Republican Senators over concerns that a CRA path for repealing this rule will prevent BLM from enacting a rule that is “substantially the same” in the future. Sen. Lindsey Graham (R-SC) and Sen. Susan Collins (R-ME) have both spoken in opposition of taking a CRA path to rescinding the rule, while Sens. Lamar Alexander (R-TN), Cory Gardner (R-CO), and Rob Portman (R-OH) reportedly remain undecided on how they will vote.

This Week’s Hearings:

  • On Wednesday, March 15, the House Committee on Natural Resources, Subcommittee on Water, Power, and Oceans, will hold a hearing titled “Examining the Creation and Management of Marine Monuments and Sanctuaries.”
  • On Wednesday, March 15, the House Committee on Natural Resources, Subcommittee on Energy, will hold a hearing titled “Modernizing Energy Infrastructure: Challenges and Opportunities to Expanding Hydropower Generation.”
  • On Wednesday, March 15, the Senate Committee on Environment and Public Works will hold a hearing titled “Examining Innovative Solutions to Control Invasive Species and Promote Wildlife Conservation.”
  • On Thursday, March 16, the House Committee on Natural Resources, Subcommittee on Federal Lands, will hold a hearing titled “Identifying Innovative Infrastructure Ideas for the National Park Service and Forest Service.”
  • On Thursday, March 16, the Senate Committee on Energy and Natural Resources will hold a hearing to receive testimony on opportunities to improve American energy infrastructure.
  • On Thursday, March 16, the House Committee on Energy and Commerce, Subcommittee on Environment, will hold a hearing titled “Reinvestment and Rehabilitation of Our Nation’s Safe Drinking Water Delivery Systems.”

Lawmakers Take on Targeted Financial Services Bills, Focus on Flood Insurance

Legislative Activity

Financial Services Lawmakers Continue Work on Flood Insurance After Last Week’s Mark-Ups

The House Financial Services and Senate Banking Committees last week advanced various pieces of legislation, including bills that would extend to investment companies operating in Puerto Rico and all the U.S. territories the same rules as those that apply on the U.S. mainland. Additionally, in a rare showing of bipartisanship, both Republicans and Democrats came together to advance bills related to securities and capital formation. The Senate Banking Committee advanced five bills related to the Securities and Exchange Commission (SEC), with only Senators Jack Reed (D-RI) and Elizabeth Warren (D-MA). In the House, the Financial Services Committee approved six bills promoting capital formation, with nearly unanimous support. This simultaneous advancement of bipartisan bills in both chambers may indicate that legislators are willing to pursue financial reform efforts in narrowly focused stages, rather than through a comprehensive package.

Relatedly, last week, Mark Calabria, chief economist for Vice President Mike Pence, suggested that a Treasury-led review of the Dodd-Frank Act (Dodd-Frank) ordered by the White House may conclude that there are parts of the law that are worth keeping. Meanwhile, last Thursday, President Trump met with community bankers to discuss the difficulties they have faced under Dodd-Frank. In interviews with participants, some of the community banking leaders described President Trump as engaged and empathetic to the plight of community banks, willing to address specific concerns while committing to deliver relief as quickly as possible.

In the meantime, members of the Housing and Insurance Subcommittee met last Thursday to examine the National Flood Insurance Program (NFIP) – which is set to expire on September 30th – and discuss the significant reforms needed. Subcommittee Chairman Sean Duffy (R-WI) stated that “a timely reauthorization of the NFIP is the top priority of this subcommittee” and stressed the importance of gaining the Federal Emergency Management Agency (FEMA) perspective on the issues facing the program. Mr. Roy Wright, FEMA’s Deputy Associate Administrator for Insurance and Mitigation, testified last week before House Members and is scheduled to testify before the Senate Banking Committee this Tuesday.

The Repeal and Replace Effort Moves to the House Budget Committee

Legislative Activity

The Repeal and Replace Effort Moves to the House Budget Committee

After two marathon markups, the Republican repeal and replace effort is expected to continue on to the House Committee on the Budget.  The House Committee on Energy and Commerce and the House Committee on Ways and Means endured partisan markups due to numerous amendments which largely focused on the Medicaid expansion, preventing the repeal of specific Affordable Care Act (ACA) provisions, the lack of a Congressional Budget Office (CBO) score, and protecting individuals with preexisting conditions.  Both committees favorably reported their reconciliation instructions to the House Committee on the Budget. It is being widely reported that the CBO will release the official score of the bill on Monday, March 13 and the House Committee on the Budget will share their markup schedule the same day. It is likely that the markup will be held on Wednesday, March 15. Speaker Ryan stated that the House of Representatives plans to pass the American Health Care Act (AHCA) by the end of the month. Upon House passage, the legislation will be forwarded to the Senate where Leader McConnell hopes to hold a vote before the April recess. This will be a difficult task as opposition grows against the bill. Industry stakeholders including AARP, the American Hospital Association, the Federation of American Hospitals, and the American Medical Association do not support the AHCA. Sens. Rob Portman (R-OH), Shelley Moore Capito (R-WV), Cory Gardner (R-CO), and Lisa Murkowski (R-AK) are opposed to the Medicaid reforms in Title I of the reconciliation instructions. Additionally, conservative opposition continues to increase.  Sen. Mike Lee (R-UT) and Sen. Tom Cotton (R-AR) believe the bill is headed in the wrong direction. Sen. Rand Paul (R-KY) has been vocal about his opposition to the legislation and worked with Rep. Jim Jordan (R-OH) to introduce reconciliation language in the House and Senate which mirrors the 2015 language. House Freedom Caucus Chair Mark Meadows (R-NC) stated that he expects Republican critics to offer a “plethora of amendments” when the AHCA reaches the House Committee on Rules. The White House is working to address the conservative criticism of the AHCA. President Trump gathered with key conservative groups opposed to the bill on Wednesday evening, and Vice President Pence and Secretary Price hosted conservative leaders for a listening session regarding the multi-faceted repeal and replace approach on Friday.  Party leaders stress that budget reconciliation is step one of a three-pronged approach.  Actions from the Administration and the introduction of additional health care legislation requiring a 60 vote threshold in the Senate will follow.

This Week’s Hearings:

  • Tuesday, March 14: The House Committee on Rules will hold a business meeting on formulating the rule on H.R. 1367, to improve the authority of the Secretary of Veterans Affairs to hire and retain physicians and other employees of the Department of Veterans Affairs; H.R. 1259, the VA Accountability First Act of 2017; and H.R. 1181, the Veterans 2nd Amendment Protection Act.
  • Wednesday, March 15: The House Committee on Ways and Means Subcommittee on Human Resources will hold a hearing titled “Reauthorization of the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Program.”
  • Wednesday, March 15: The Senate Special Committee on Aging will hold a hearing titled “Raising Grandchildren in the opioid crisis and beyond.”
  • Wednesday, March 15: The Senate Committee on Veterans’ Affairs will hold a hearing titled “GAO’s High Risk List and the Veterans Health Administration.”
  • Thursday, March 16: The House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies will hold a hearing titled “Investing in the Future- Early Childhood Education Programs at the Department of Health and Human Services.”
  • Thursday, March 16: The House Committee on Veterans’ Affairs will hold a hearing titled “Health hiring: Enabling the VA to recruit and retain quality providers.”

President Trump Signs Updated Executive Order on Travel to the US; DHS Secretary Condemns Attacks on Jewish Institutions

Legislative Activity

This Week’s Hearings:

  • On Wednesday, March 15, the Senate Judiciary Committee has scheduled a hearing titled “Vows for Visas: Investigating K-1 Fiance Fraud.”
  • On Wednesday, March 15, the Senate Homeland Security and Governmental Affairs Committee has scheduled a business meeting to consider the nomination of the Honorable Elaine Duke to be Deputy Secretary, U.S. Department of Homeland Security and legislation.
  • On Thursday, March 16, the House Armed Services Subcommittee on Readiness has scheduled a hearing titled “Current State of the U.S. Navy.”
  • On Thursday, March 16, the House Homeland Security Subcommittee on Oversight and Management Efficiency has scheduled a hearing titled “Immigration Benefits Vetting: Examining Critical Weaknesses in USCIS Systems.”

Executive Branch Activity

President Trump Signs Updated Executive Order on Travel to the US

On Monday, March 6, President Trump signed an Executive Order (EO) titled “Protecting the Nation From Foreign Terrorist Entry Into the United States.” The EO revokes and replaces a previous EO of the same title issued on January 27, 2017 (EO 13769) that was stayed by the Ninth Circuit of the U.S. Court of Appeals on February 9.

The revised EO includes many provisions similar to those contained in EO 13769. Effective March 16, 2017, the EO:

  • Temporarily suspends the entry of foreign nationals from Iran, Libya, Sudan, Somalia, Syria, and Yemen into the United States for a 90 day period.
  • Directs the development of a list of countries for which the entry of foreign nationals into the United States should be temporarily prohibited based on a lack of information affecting adequate vetting of individuals attempting to enter the United States from those countries.
  • Suspends the U.S. Refugee Admissions Program (USRAP) for 120 days and directs a review of the USRAP application process to determine what additional vetting procedures are required to ensure refugees “do not pose a threat to the security or welfare of the United States.”
  • Suspends the Visa Waiver Interview Program and requires all individuals seeking a nonimmigrant visa to undergo an in-person interview.
  • Directs the collection of information regarding the number of foreign nationals who have been “radicalized” in the United States and engaged in terrorism-related activities.
  • Reduces the total number of refugees allowed to enter the United States in Fiscal Year 2017 from 110,000 to 50,000.

However, the March EO differs from its predecessor in several keys ways:

  • The revised EO contains a delayed effective date, set for March 16, 2017.
  • The revised EO does not prohibit the admission of foreign nationals from Iraq into the United States.
  • The revised EO includes language detailing the scope of implementation and exempts certain individuals from the prohibition on entry into the United States. Exemptions apply to individuals such as: (1) lawful residents of the United States; (2) diplomats; (3) individuals who have already been granted asylum; (4) refugees who have already been admitted to the United States; and (5) current visa holders. The revised EO also allows for case-by-case waivers under certain circumstances including: (1) foreign nationals admitted for continuous work or study; (2) foreign nationals seeking to enter the United States for significant business or professional obligations; or (3) foreign nationals seeking to visit close family members who are United States citizens.
  • The revised EO removes the indefinite ban on Syrian refugees and language directing the prioritization of refugee claims made by individuals who are religious minorities.

The EO was accompanied by a Memorandum for the Secretary of State, Secretary of Homeland Security, and Attorney General providing guidance on “Implementing Immediate Heightened Screening and Vetting of Applications for Visas and Other Immigration Benefits, Ensuring Enforcement of All Laws for Entry into the United States, and Increasing Transparency among Departments and Agencies of the Federal Government and for the American People.” The Memorandum directs the Secretary of State and Secretary of Homeland Security, in consultation with the Attorney General, to implement protocols to enhance the screening and vetting of applications for visas and other immigration benefits to “increase the safety and security of the American people.”

The new EO already faces stiff legal challenges.  The State of Hawaii filed suit against the EO and additional states have indicated their intention to join the litigation, including Oregon and New York.  The State of Washington initially sought to have its Restraining Order against the original EO apply to the new EO, but the judge in that case is requiring an amended complaint in that case before ruling on the matter.  Cases have also been brought by individuals and nonprofits in Maryland and Wisconsin, the latter already resulting in a limited Temporary Restraining Order disallowing the new EO’s application against the family of a U.S.-based Syrian man who was already granted asylum and seeks to bring his family to the U.S.   Action in all cases is expected this week, along with several likely new cases.

DHS Secretary Condemns Attacks on Jewish Institutions

On Thursday, March 9, Secretary of Homeland Security John Kelly released a statement condemning recent seemingly hate-inspired attacks in the United States, which include roughly 140 reported bomb threats against Jewish institutions since January 4, 2017. Nearly 100  incidents were reported against Jewish Community Centers (JCCs) and Jewish day schools at 81 locations in 33 states in the first two months of 2017, according to the Jewish Federations of North America. In his statement, Secretary Kelly pledged to provide the full support of the Department of Homeland Security (DHS) to local, state, and federal investigations into these incidents and announced that he has directed the Office for Civil Rights and Civil Liberties to conduct outreach to support affected groups.

He stated that “The Office of Civil Rights and Civil Liberties will hold Incident Communication Coordination Team calls with impacted communities.  The DHS Office of International Engagement will also continue to work with foreign governments whose nationals have been affected by these violent acts. The United States has a history of welcoming and accepting individuals regardless of religion, race, ethnicity, or national origin.  Freedom of religion is a cherished American value, guaranteed by the United States Constitution. DHS is committed to protecting all people’s right to that essential freedom.”

The full statement is available here.

President Trump Welcomes German Chancellor to the White House; Senate Finance Committee to Hold a Hearing for Robert Lighthizer; Congressional Committees to Focus on Russia and Syria

President Donald Trump focused last week on health care reform and the Fiscal Year 2018 Budget proposal, with the skinny budget proposal due to be released this week.  President Trump spoke with President Mahmoud Abbas of the Palestinian Authority on Friday, President Uhuru Kenyatta of Kenya on Tuesday, and Prime Minister Benjamin Netanyahu of Israel on Monday.

Last Thursday, the Senate Foreign Relations Committee favorably reported the nomination of David Friedman to serve as U.S. ambassador to Israel to the full Senate for consideration. The Senate Intelligence Committee voted 13-2 on Thursday to advance Dan Coats’ nomination to serve as Director of National Intelligence to the Senate floor for consideration.  Congress will be in session this week.

The Trump Administration and Congress have also more generally focused on the alleged theft of cyber tools from the Central Intelligence Agency (CIA) and WikiLeaks’ posting of thousands of documents that cataloged the agency’s cyber hacking capabilities.  The Federal Bureau of Investigation is investigating the leak of classified material.

Last Thursday, Chairman of the Joint Chiefs of Staff Marine Corps Gen. Joe Dunford called Jordan “an enduring partner” that worked with U.S. service members long before ISIS raised its ugly head.  During his two-day visit to Amman, Chairman Dunford met with King Abdullah II, Defense Minister Hani Mulki and Gen. Mahmoud Freihat, the chief of defense.

White House Visit – Germany

President Trump will meet with German Chancellor Angela Merkel on Tuesday.  The President is expected to discuss Berlin’s plans to devote more resources to the annual NATO military budget at the meeting with German Chancellor Merkel.  He is also expected to discuss Russian President Vladimir Putin and possibly the Transatlantic Trade and Investment Partnership (TTIP).

Trade Recap – Lighthizer Hearing Set; Ross Met with Mexican Counterpart

The Senate Finance Committee (SFC) is scheduled to hold a hearing on Tuesday for Robert Lighthizer to serve as the U.S. Trade Representative.  The nomination has been held up by the SFC Democrats who want the congressional waiver for Lighthizer to include a measure that would provide pension and healthcare benefits for coal miners.  Lighthizer needs both chambers of Congress to pass a congressional waiver because he previously represented foreign governments in trade negotiations, as a lawyer in the private sector.

U.S. Secretary of Commerce Wilbur Ross and Mexican Secretary of Economy Ildefonso Guajardo Villarreal announced a renewed effort to resolve ongoing issues with Mexican sugar export and anti-bunching limits on Friday.  Secretary Ross said:

“With the deadline for conclusion of the Department’s administrative review fast approaching, after consultations with the American sugar industry and the Government of Mexico, I can today announce an extension of the final decision date for the review from April 4 until May 1.”

Immigration E.O. Released

President Trump signed an immigration-related Executive Order (E.O.) last Monday that is intended to overcome previous legal challenges to a January immigration order.  The new E.O. continues a temporary pause on nationals from six countries – Iran, Libya, Somalia, Sudan, Syria and Yemen – seeking visas to the United States, subject to certain exceptions and case-by-case waivers.  The previous order included Iraq on the list of restricted countries, but it was noted Iraq implemented additional vetting measures since the January order.  The new order goes into effect on 16 March.

Middle East Peace – White House Outreach

President Trump and Palestinian Authority President Mahmoud Abbas spoke Friday by phone to discuss ways to advance peace throughout the Middle East region, including a comprehensive agreement that would end the Israeli-Palestinian conflict.  According to the White House, the President “underscored that such a peace agreement must be negotiated directly between the two parties, and that the United States will work closely with Palestinian and Israeli leadership to make progress toward that goal.  The President noted that the United States cannot impose a solution on the Israelis and Palestinians, nor can one side impose an agreement on the other.”

President Trump spoke on Monday with Israeli Prime Minister Benjamin Netanyahu.  The two leaders discussed the need to counter continuing threats and challenges facing the Middle East region, among other topics.  Vice President Michael Pence held a bilateral meeting with Israeli Minister of Defense Avigdor Lieberman on Tuesday.  According to the White House:  “The Vice President underscored the unbreakable bond between the United States and Israel and reaffirmed the United States’ commitment to upholding Israel’s qualitative military edge.  The Vice President and Minister Lieberman agreed on the need to counter threats posed by Iran and its proxies as well as terrorist organizations, and discussed ways in which our militaries can work even more closely together to address shared threats.  The two leaders also discussed the crisis in Syria and other regional issues.”  Secretary of Defense James Mattis also met with the Israeli Defense Minister on Tuesday to discuss the U.S.-Israeli defense relationship.

Yemen – State Department Approves Arms Sales; CENTCOM Chief Takes Responsibility for January Raid

The State Department has approved a resumption of weapons sales to Saudi Arabia, reversing a decision made late in the Obama Administration to suspend the sale of precision guided munitions to Riyadh.  Secretary of State Rex Tillerson’s approval last week of the measure, which will need White House backing to go into effect, provides an early indication of the Trump Administration’s more Saudi-friendly approach, particularly as Saudi Arabia leads a Coalition fighting the Houthi in Yemen.  The move comes as the Trump Administration considers its approach to the conflict in Yemen.  While the U.S. military has provided support to the Coalition air campaign since 2015, the Obama Administration sought to scale back U.S. support last year amid allegations of Saudi strikes on civilian targets.  President Trump has shown support for the expansion of U.S. military activities in Yemen, with the U.S. military carrying out 40 airstrikes on al-Qaida in the Arabian Peninsula (AQAP) targets last week.

The surge of airstrikes is part of a ramp-up of U.S. counterterrorism operations and comes roughly a month after President Trump approved the raid on an al-Qaida compound which resulted in the death of Navy SEAL Ryan Owens and several civilians. Gen. Joseph Votel, head of U.S. Central Command, took responsibility for the raid and told Senators last week that he had determined the military exhibited sound judgment and decision-making in moving forward with the mission, adding that there was no need for further investigations.

Kenya – White House Outreach

President Trump spoke on Tuesday with Kenyan President Uhuru Kenyatta.  According to the White House, the two leaders discussed regional security and terrorism concerns, as well as boosting bilateral trade and investment in Kenya.

House Approves FY 2017 Defense Spending Measure

Last week, the House approved the final $584 billion defense spending bill for the remainder of Fiscal Year (FY) 2017.  Forty-three Democrats and five Republicans opposed the measure.  Unlike an initial defense spending measure passed by the House in June, the revised bill does not short fund the Pentagon’s war account to boost base spending.  Instead, the new measure largely conforms to the National Defense Authorization Act passed in December.

The legislation includes $516.1 billion for the Pentagon’s base budget as well as $61.8 billion for the war-related Overseas Contingency Operations (OCO) account, as well as a $6.8 billion boost in procurement funding above the Obama Administration’s FY 2017 budget request.  That includes $979 million for 12 Boeing-made F/A-18 Super Hornets, $750 million for six additional Navy and Marine Corps F-35 Joint Strike Fighters and $495 million for five extra Air Force F-35s.  There is also an additional nearly $3 billion for Navy shipbuilding, including $1.8 billion for an LPD-17 amphibious ship, $433 million for the DDG-51 destroyer program, a third Littoral Combat Ship and $150 million in advance procurement for a new polar icebreaker.

The bill also funds provisions in the defense policy bill that mandate more active-duty troops in the Army and Marine Corps.  In addition to the full-year defense spending bill, the Pentagon is preparing a separate supplemental spending request of about $30 billion for FY 2017 that is expected to boost readiness funding.

Lawmakers Encourage Creation of Asia-Pacific Defense Fund

A bipartisan group of lawmakers, which includes four members of the Senate Armed Services Committee and five members of the House Armed Services Committee, have urged Defense Department Secretary Mattis to fund an Asia-Pacific Security Initiative aimed at countering threats from Russia, China, and North Korea. If created, the fund would support additional military exercises, infrastructure, munitions, and forces. While the Members of Congress did not request a specific amount for the fund, the House Members requested that it span defense spending for FY 2018 through 2022.

South Korea – U.S. Deploys THAAD Missile

The U.S. military began deploying an advanced defensive missile system to South Korea last week, as agreed upon with the government in Seoul last summer.  The Terminal High Altitude Area Defense (THAAD) system does not use warheads and is designed to shoot down ballistic missiles.  The deployment comes despite protests from Chinese officials, who have called it a threat to Chinese security and warned that South Korea would face consequences for hosting the system.  When Seoul and Washington agreed on the THAAD unit, they were aiming for deployment by the end of July, with the arrival of the first components, it could be operational sooner.  The deployment was announced as North Korean state media reported that the four missiles Pyongyang launched Sunday were practice for a North Korean attack on U.S. military bases in Japan.  The deployment also comes at a politically sensitive time for South Korea, after Park Geun-hye, was removed from the presidency last week by a South Korean court.

NATO’s 2 Percent Defense Spending Requirement

A senior British defense official suggested last week that the North Atlantic Treaty Organization could reconsider the 2 percent of GDP spending commitment for member nations in future reforms. Stephen Lovegrove, permanent secretary for the British Ministry of Defense, told the Atlantic Council that, “There will be a moment coming up when we need to think quite carefully about what 2 percent means for each of the members of NATO.” Such reforms would involve looking at total alliance spending to ensure member contributions. U.S. Secretary of Defense Jim Mattis has urged European alliance members to meet their commitments during a visit to NATO headquarters last month and Lovegrove said that Mattis’s comments resonated powerfully in Europe.

Pentagon Report Calls Cyber Deterrence an Urgent Priority

The Pentagon’s Defense Science Board called on the Trump Administration to make cyber deterrence “an urgent priority” in a new report to Defense Secretary Jim Mattis.  The board recommended the Department of Defense to pursue three initiatives: (1) plan and conduct tailored cyber deterrence campaigns; (2) create a cyber-resilient “thin-line” of key U.S. strike systems; and (3) enhance foundational cyber capabilities.  The report cited Russian hacking to undermine the 2016 presidential election as one example of the type of cyberattacks that pose a growing risk to U.S. national security.

Afghanistan – More U.S. Troops Recommended

U.S. Central Command Chief Gen. Votel told Senators last week that more troops are needed in Afghanistan to break a stalemate. Responding to questioning from Senate Armed Services Chairman John McCain (R-Arizona) at a committee hearing, Gen. Votel agreed with the assessment that Afghanistan is at a military deadlock, echoing the opinion expressed by the U.S. commander there, Army Gen. John Nicholson.  Gen. Nicholson had told Senators last month that a few thousand more troops are necessary to break the stalemate.

GITMO – President’s Statement on the Obama Administration’s Decision to Release Prisoners

President Trump has criticized the Obama Administration’s decision to release prisoners from the detention center at Naval Station Guantanamo Bay (GITMO), tweeting that “122 vicious prisoners, released by the Obama Administration from GITMO, have returned to the battlefield. Just another terrible decision!”  The Office of the Director of National Intelligence released a report last September stating that 122 of the 693 prisoners transferred out of Guantanamo Bay are confirmed to have returned to terrorist activities, while an additional 86 former detainees are suspected of returning to terrorist activities.  However, the report notes that 113 of the 122 former detainees who returned to terrorist activities were released before 22 January 2009, only two days into President Obama’s first term.

Foreign Policy-Focused Congressional Hearings This Week

  • On Wednesday, 15 March, the House Foreign Affairs Subcommittee on the Western Hemisphere is scheduled to hold a hearing titled “Venezuela’s Tragic Meltdown.”
  • On Wednesday, 15 March, the Senate Banking Committee is scheduled to hold a hearing titled “Assessing U.S. Sanctions on Russia: Next Steps.”
  • On Wednesday, 15 March, the Senate Judiciary Subcommittee on Crime and Terrorism is scheduled to hold a hearing titled “The Modus Operandi and Toolbox of Russia and Other Autocracies for Undermining Democracies Throughout the World.”
  • On Wednesday, 15 March, the Senate Foreign Relations Committee is scheduled to hold a hearing titled “Six Years of War in Syria: The Human Toll.
  • On Thursday, 16 March, the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs is scheduled to hold a Members’ Day hearing.

Defense-Focused Congressional Hearings This Week

  • On Wednesday, 15 March, the House Armed Services Committee is scheduled to hold a hearing titled “Military Assessment of the Security Challenges in the Greater Middle East.”
  • On Wednesday, 15 March, the House Armed Services Subcommittee on Emerging Threats and Capabilities is scheduled to hold a hearing titled “Crafting an Information Warfare and Counter-Propaganda Strategy for the Emerging Security Environment.”

Looking Ahead

Washington is expected to focus on the following events:

  • 14 March: President Trump to host German Chancellor Angela Merkel at the White House
  • 14-15 March: Chile to host a Pacific Trade Summit in Vina del Mar
  • Mid-March: Release of the President’s Budget for Fiscal Year 2018
  • Mid-March: Trump Administration expected to formally notify Congress of intent to renegotiate NAFTA
  • 21-23 April: World Bank/International Monetary Fund Spring Meeting in Washington
  • 28 April: S. Federal Government funding expires

Tax Reform Talks Continue as “Tax Dodging” in Democrats’ Crosshairs

Legislative Activity

Corporate “Tax Dodging” in Spotlight as Tax Reform Timing in Question

It is becoming increasingly clear that the timing of tax reform is largely tied to what happens with the House Blueprint. Assuming the proposal moves forward largely as is, the House is aiming to wrap up debate and successfully enact tax reform by August.  That said, the likelihood that final action on tax reform – if it happens – slipping until the end of the year appears to be a possibility growing more likely by the day, as the politics of tax reform seem to be slowing the process.  In fact, while Chairman Kevin Brady (R-TX) is still proceeding publicly as though Congress will be able to enact tax reform by August, Senate Majority Leader Mitch McConnell (R-KY) and Senate Finance Committee Chairman Orrin Hatch (R-UT) last week both expressed skepticism that tax reform will get done by August, suggesting that it could slip to 2018.  Notably, the Administration did not cede this, but also would not rule it out.

Note too, a large part of the Blueprint’s success will depend on whether it receives support from President Trump – especially as relates to the Border Adjustable Tax (BAT).  Though the President walked back his earlier comments suggesting that the BAT may be overly-complicated, he has at the same time failed to fully embrace the concept (or at least the concept as proposed in the Blueprint). Moreover, while President Trump’s recent address to a joint session of Congress acknowledged the need to encourage U.S. exports, the President’s advisors (chiefly Secretary of Commerce William Ross) made clear that he was not endorsing BAT. Many considered this a loss for Speaker Ryan and the House proposal, as the BAT needs buy-in from the Administration if it is ultimately going to move forward in the tax reform debate.  However, the Trump Administration has another opportunity to express (or withhold) its support of BAT: the “skinny budget,” which is expected this week (potentially as early as March 15). While nothing has been confirmed, it appears that President Trump may be more in line with the Senate in questioning whether a BAT is appropriate and effective. That said, there still appears to be a divide even with the White House, with the political staff favoring the BAT and the policy staff generally opposing it.

In the interim, as the tax reform debate continues on, Senators Bernie Sanders (I-VT) and Brian Schatz (D-HI) have introduced the Corporate Tax Dodging Prevention Act – “a bill to eliminate tax breaks that encourage corporations to shift jobs and profits offshore.” Rep. Jan Schakowsky (D-IL) introduced a companion bill in the House.  The bill, which is largely consistent with the Democrats’ approach to inversions over the last several years, follows the release of a report by The Institute on Taxation and Economic Policy, which shows that 100 large corporations paid zero or less in federal income taxes at least once over the last decade.

To crack down on “corporate tax dodging,” the bill would:

  • End the rule allowing deferral of U.S. income tax on offshore profits – though American corporations would still be allowed a credit that reduces their federal income tax liability by an amount equal to income taxes paid to foreign governments on these profits;
  • Impose a one-time, 35 percent tax on the nearly $2.5 trillion in offshore profits – a tax that would be payable over an eight-year period;
  • Disallow the use of foreign tax credits generated by profits earned in one country against U.S. income tax on profits earned in another country;
  • Prevent a corporation from claiming to be foreign if its management and control operations are located in the U.S.;
  • Tax inverted companies as American corporations so long as they are still majority-owned by the owners of the American party to the merger or acquisition;
  • Disallow a U.S. affiliate of a foreign-owned multinational corporation from deducting interest expenses that are disproportionate to its share of income of the entire corporate group (i.e., the entire group of corporations owned by the same parent company) – though the U.S. affiliate could choose instead to be subject to a different rule limiting deductions for interest payments to ten percent of its income;
  • Prevent large oil companies from “disguising” royalty payments to foreign governments as foreign taxes.

While the move comes as no surprise (Senator Sanders has introduced similar legislation previously), this and other such legislation are unlikely to move through the Congress at this time.  That said, it will be important to keep apprised of such legislation from leading progressives in the Senate.

FCC Chairman Ajit Pai Nominated for Second Term

Legislative Activity

Bill on Unwanted Robocalls and Texts Introduced in Senate

On March 8, Sens. Edward Markey (D-MA) and Mike Lee (R-UT) introduced the Help Americans Never Get Unwanted Phone Calls (HANGUP) Act of 2017. The legislation, a version of which was introduced in 2016, would eliminate a provision of the 2015 Bipartisan Budget Act that exempts debt collectors calling or texting on behalf of the federal government, such as those targeting student loans or mortgage debt, from penalties for potential violations under the Telephone Consumer Protection Act (TCPA). The legislation also rescinds the Federal Communications Commission’s (FCC’s) 2016 declaratory ruling that exempted government contractors from the TCPA. According to a press release on Sen. Markey’s website, the bill “will ensure that government contractors are subject to meaningful rules protecting consumers from abusive robocalls and robotexts.” The bill has not yet been referred to an appropriate committee of jurisdiction in the Senate.

Measures Designed to Increase Transparency in Political Advertising Introduced in House

On March 8, Rep. Ben Lujan (D-NM) introduced two bills that would “increase transparency and openness in the political system by making it easier to determine exactly who is pay for political ads,” according to a press release. The first bill, H.R.1440, the FCC Transparency Act, would require the FCC to make available information concerning purchase of political advertisements in a format that is searchable, sortable, and downloadable. The second bill, H.R.1439, the Keeping Our Campaigns Honest (KOCH) Act, would require the FCC to revise its sponsorship identification rules to require the disclosure by broadcasters of the names of significant donors to persons paying for or furnishing broadcast matter that is political in nature or involving the discussion of a controversial issue of public importance. Both bills have been referred to the House Energy and Commerce Committee (House Commerce Committee).

This Week’s Hearings:

  • Thursday, March 16: The Subcommittee on Digital Commerce and Consumer Protection of the House Commerce Committee will hold a hearing titled “Disrupter Series: Smart Communities.” Witnesses will be announced.

Regulatory Activity

FCC Chairman Ajit Pai Nominated for Second Term on Federal Communications Commission

FCC Chairman Ajit Pai announced on March 7 that he had been nominated by President Donald Trump to serve a second term at the Federal Communications Commission. Chairman Pai previously served as a Commissioner of the FCC—he was nominated for his first term at the FCC in 2012 by then-President Barack Obama, and was designated Chairman by President Trump in January of this year. In a statement, Chairman Pai said that he was “deeply honored” to have been nominated for a second term, and that if confirmed by the Senate, he would “continue to work with my colleagues to connect all Americans with digital opportunity, foster innovation, protect consumers, promote public safety, and make the FCC more open and transparent to the American people.” The FCC currently comprises three members, two short of the five spots allocated by statute. Some say that former FCC Commissioner Jessica Rosenworcel—a democrat whose term was allowed to expire at the end of last year—might still be in the running for re-nomination to the FCC.

Comments Due May 9 On FCC’s Proposal to Authorize Permissive Use of “Next-Gen” Broadcast TV Standard

On February 24, the FCC issued a Notice of Proposed Rulemaking (NPRM) proposing to “authorize television broadcasters to use the ‘Next Generation’ broadcast television . . . transmission standard” – ATSC 3.0 – “on a voluntary, market-driven basis, while they continue to deliver current-generation digital television.” Comment deadlines in this proceeding have now been set – comments are due May 9, and reply comments are due June 8, according to a notice in the Federal Register. More information about ATSC 3.0 and the FCC’s NPRM is available in our post here.

FCC To Investigate 911 Service Outage

FCC Chairman Pai has announced that the agency has “launched an investigation into the 911 outage that impacted AT&T wireless subscribers across the United States” on the evening of March 8. Chairman Pai issued a statement that: “Every call to 911 must go through. So when I first learned of [the] outage, I immediately directed FCC staff to contact AT&T about it and the company’s efforts to restore access to emergency services to the American public.” Lisa Fowlkes, Acting Chief of the FCC’s Public Safety and Homeland Security Bureau, said of the investigation into the outage: “The FCC’s public safety professionals are on the case. . . . We will fully investigate this outage and determine the root cause and its impact.”

FCC’s Communications Security, Reliability, and Interoperability Council to Meet March 15

The FCC’s Communications Security, Reliability, and Interoperability Council (CSRIC) will hold its eighth meeting on March 15, at 1 p.m., according to a Public Notice. The CSRIC is a “federal advisory committee that provides recommendations to the [FCC] regarding best practices and actions the [FCC] can take to help ensure the reliability of communications systems and infrastructure,” according to the Public Notice. The meeting is open to the public and will be held in the Commission Meeting Room at FCC Headquarters, located at 445 12th Street SW, Room TW-C305, Washington, DC 20554, and will be streamed live at fcc.gov/live.

Transportation Stakeholders Hopeful for More Information This Week; House Transportation Committee Holds Hearing on FAST Act Implementation; President Trump Will Nominate Jeffrey Rosen as DOT Deputy Secretary

Legislative Activity

Transportation Stakeholders Hopeful for More Information This Week

As the Trump Administration and Congress continue to develop a large-scale infrastructure proposal, transportation stakeholders are hopeful they will get additional information this week. The President’s ‘Skinny Budget” is expected to be released on Thursday, March 16. While it is unclear how much detail will be included in the Skinny Budget, it could give some indication of the President’s agenda for transportation. However, it could only include top-line numbers by agency, which would not necessarily indicate the Administration’s priorities.

While President Trump continues to call for a significant investment in transportation and infrastructure, few details are known. Congress continues to evaluate their own priorities, with the relevant House and Senate Committees holding Congressional hearings, as they approach an expected large-scale infrastructure bill this year. Congress is still considering FY 2017 appropriations bills, so we may not see an FY 2018 Transportation, Housing and Urban Development Appropriations bill until much later this year. It will be particularly interesting to see if the Trump Administration and Republican Congress reduce transportation and infrastructure discretionary grant programs, such as New Starts and the TIGER grant program, to pay for their own priorities.

As we have discussed previously, Democrats have been offering their own transportation and infrastructure proposals this year. Rep. Earl Blumenauer (D-OR) recently introduced H.R. 1458, the Raise And Index to Sustainably and Efficiently Invest In Transportation (RAISE IT) Act, legislation that would index federal gas and diesel taxes to inflation and phase in a 15 cent per gallon increase over three years, reportedly raising $210 billion in revenues for transportation and infrastructure projects.

House Transportation Committee Holds Hearing on FAST Act Implementation

On Wednesday, March 15, the House Transportation and Infrastructure Subcommittee on Highways and Transit will hold a hearing titled “FAST Act Implementation: State and Local Perspectives” on Wednesday, March 15. The witnesses will be Mr. John Schroer, Commissioner, Tennessee Department of Transportation, on behalf of the American Association of State Highway Transportation Officials (AASHTO); Mr. Gary Thomas, President and Executive Director, Dallas Area Rapid Transit on behalf of the American Public Transportation Association (APTA); and the Honorable Karen Freeman-Wilson, Mayor of Gary, Indiana on behalf of the National League of Cities (NLC).

Regulatory Activity

President Trump Will Nominate Jeffrey Rosen as DOT Deputy Secretary

President Trump is going to nominate Jeffrey Rosen to be the Deputy Secretary at the Department of Transportation (DOT). Mr. Rosen previously served as general counsel at DOT during the George W. Bush Administration from 2003 to 2006 and at the Office of Management and Budget from 2006 to 2009. As Deputy Secretary, Mr. Rosen will be responsible for day-to-day operation of DOT. Mr. Rosen has been a proponent of “regulatory budgeting,” which advocates limiting the total regulatory cost an agency can impose on an industry.

This Week’s Hearings:

  • On Tuesday, March 14, the Senate Energy and Natural Resources Committee has scheduled a hearing titled “Opportunities to Improve American Energy Infrastructure.” The witnesses will be:
    • Stefan Bird, Chief Executive Officer, Pacific Power;
    • Carl Imhoff, Manager, Electricity Market Sector, Pacific Northwest National Laboratory;
    • Clay Koplin, Chief Executive Officer, Cordova Electric Cooperative;
    • Jeffrey Leahy, Deputy Executive Director, National Hydropower Association;
    • Diane Leopold, CEO and President, Dominion Energy;
    • Terry O’Sullivan, General President, Laborers’ International Union of North America; and
    • Ethan Zindler, Head of Policy Analysis, Bloomberg New Energy Finance
  • On Tuesday, March 14, the Senate Commerce, Science, and Transportation Subcommittee on Surface Transportation and Merchant Marine Infrastructure has scheduled a hearing titled “Continuing to Improve Truck Safety on our Nation’s Highways.” The witnesses will be:
    • The Honorable Christopher A. Hart, Chairman, National Transportation Safety Board;
    • Captain Chris Turner, Kansas Highway Patrol;
    • Paul P Jovanis, Professor Emeritus, Pennsylvania State University; Chair, Transportation Research Board Committee;
    • Jerry Moyes, Chairman Emeritus, Swift Transportation; and
    • Adrian Lund, President, Insurance Institute for Highway Safety
  • On Wednesday, March 15, the Senate Commerce, Science, and Transportation Committee has scheduled a hearing titled “Unmanned Aircraft Systems: Innovation, Integration, Successes, and Challenges.” The witnesses will be:
    • Earl Lawrence, Director of the Office of Unmanned Aircraft Systems, Federal Aviation Administration;
    • Diana Marina Cooper, Vice President of Legal and Policy Affairs, Precision Hawk USA Inc.; President, sUAV Coalition;
    • Ben Fowke, Chairman, President and CEO, Xcel Energy;
    • Brendan Schulman, Vice President of Policy and Legal Affairs, DJI;
    • John Villasenor, Professor of Engineering and Public Policy, UCLA; Visiting Fellow, Hoover Institution; and
    • Emilio Gonzalez, Director and Chief Executive Officer, Miami-Dade Aviation Department
  • On Wednesday, March 15, the House Transportation and Infrastructure Subcommittee on Highways and Transit has scheduled a hearing titled “FAST Act Implementation: State and Local Perspectives.” The witnesses will be:
    • Mr. John Schroer, Commissioner, Tennessee Department of Transportation, on behalf of the American Association of State Highway Transportation Officials (AASHTO)
    • Mr. Gary Thomas, President and Executive Director, Dallas Area Rapid Transit on behalf of the American Public Transportation Association (APTA)
    • The Honorable Karen Freeman-Wilson, Mayor of Gary, Indiana on behalf of the National League of Cities (NLC)
  • On Wednesday, March 15, the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation has scheduled a hearing titled “Authorization of Coast Guard and Maritime Transportation.” The witnesses will be announced.
  • On Wednesday, March 15, the House Energy and Commerce Subcommittee on Energy has scheduled a hearing titled “Modernizing Energy Infrastructure: Challenges and Opportunities to Expanding Hydropower Generation.” The witnesses will be announced.
  • On Wednesday, March 15, the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection has scheduled a hearing titled “Disrupter Series: Advanced Materials and Production.” The witnesses will be announced.
  • On Thursday, March 16, the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled an oversight hearing for the Department of Transportation and the Department of Housing and Urban Development. The witnesses will be:
    • The Honorable David Montoya, Inspector General, Department of Housing and Urban Development; and
    • The Honorable Calvin Scovel, Inspector General, Department of Transportation
  • On Thursday, March 16, the House Armed Services Subcommittee on Oversight and Investigations has scheduled a hearing titled “Oversight Review of Infrastructure Needs and Projects Ready for Immediate Implementation in the Nuclear Security Enterprise.” The witnesses will be:
    • The Honorable Frank Klotz, Administrator, National Nuclear Security Administration;
    • James McConnell, Associate Administrator for Safety, Infrastructure, and Operations;
    • Charlie McMillian, Director, Los Alamos National Laboratory;
    • Morgan Smith, President and Chief Executive Officer, Consolidated Nuclear Security, LLC; and
    • The Honorable Sean Sullivan, Chairman, Defense Nuclear Facilities Safety Board
  • On Thursday, March 16, the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection will hold a hearing titled “Disrupter Series: Smart Communities.” The witnesses will be announced.
  • On Thursday, March 16, the House Energy and Commerce Subcommittee on the Environment has scheduled a hearing titled “Reinvestment and Rehabilitation of Our Nation’s Safe Drinking Water Delivery Systems.” The witnesses will be announced.

EU Public Policy March 13 Update

Council adopts EU rules on Medical Devices

On March 7 2017, the Council of the EU adopted rules which would be contributing to the safety of medical devices in the EU. These rules comprise of two proposals, a Regulation on Medical Devices and a Regulation on Vitro Diagnostic Medical Devices. The adopted rules will give manufacturers the opportunity to improve any devices on a continuous basis, as well as to implement fast and effective measures when faced with safety problems.

The European Parliament is expected to adopt these rules in April 2017, after which the rules will be submitted for publication at the Official Journal of the EU.

EU-US agreement on Mutual Recognition of Inspections of Medicine Manufacturers

The European Commission and the United States Food and Drugs Administration adopted on March 2 2017 an agreement to mutually recognize inspections of premises where medicines are produced. The agreement will not affect the procedure of approving medicines but will allow the EU to identify problems at medicine factories faster and will reduce the administrative burdens and costs for pharmaceutical manufacturers.

EU Trade Talks

On March 10 2017, the EU and the Association of Southeast Asian Nations (ASEAN) agreed in a joint statement to take new steps to continue their trade talks for a region-to-region agreement.

Similarly, on March 7 2017, the EU Commissioner for Trade Cecilia Malmström and New Zealand’s Trade Minister Todd McClay met in Brussels to agree on the last elements of the preparatory talks over a Free Trade Agreement. The European Commission will now be seeking a negotiating mandate by the EU28 Member States to begin the trade negotiations with New Zealand.

White Paper about the Future of Europe

The European Commission published on March 1 2017 a White Paper outlining 5 scenarios about the Future of Europe. The White Papers provides reflections and scenarios for EU27 Member States by 2025, during which time the Brexit process is estimated to be completed.

House to Consider Defense Spending Bill; Senate Schedule Free of Cabinet Confirmations

Senate Legislative Activity

The Senate stands adjourned until today, March 6 at 2:00 pm.

Following any Leader remarks, the Senate will resume consideration of H.J.Res.37, disapproving the rule submitted by the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration relating to the Federal Acquisition Regulation, with the time until 6:00 pm equally divided.

At 6:00 pm, all time will expire and the Senate will vote on passage of the joint resolution.

House Legislative Activity

Today, the House will meet at 4:00 pm in pro forma session. No votes are expected in the House.

On Tuesday, March 7, the House will meet at 12:00 pm 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 suspension of the rules:

  1. H.R. ____ – To name the Department of Veterans Affairs community-based outpatient clinic in Pago Pago, American Samoa, the Faleomavaega Eni Fa’aua’a Hunkin VA Clinic (Sponsored by Rep. Amata Coleman Radewagen / Veterans Affairs Committee)
  2. H.R. 1214 – Disaster SAVE Act, as amended (Sponsored by Rep. Lou Barletta / Transportation and Infrastructure Committee)
  3. H.R. 375 – To designate the Federal building and United States courthouse located at 719 Church Street in Nashville, Tennessee, as the Fred D. Thompson Federal Building and United States Courthouse (Sponsored by Rep. Marsha Blackburn / Transportation and Infrastructure Committee)
  4. H.R. 1117 – To require the Administrator of the Federal Emergency Management Agency to submit a report regarding certain plans regarding assistance to applicants and grantees during the response to an emergency or disaster (Sponsored by Rep. Vicky Hartzler / Transportation and Infrastructure Committee)
  5. H.R. 1174 – Fairness For Breastfeeding Mothers Act of 2017, as amended (Sponsored by Rep. Eleanor Holmes Norton / Transportation and Infrastructure Committee)
  6. H.R. 654 – Pacific Northwest Earthquake Preparedness Act of 2017 (Sponsored by Rep. Peter DeFazio / Transportation and Infrastructure Committee)
  7. H.R, 442– National Aeronautics and Space Administration Transition Authorization Act of 2017 (Sponsored by Sen. Ted Cruz / Science, Space, and Technology Committee)

On Wednesday, March 8, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

  1. H.R. 1301 – Department of Defense Appropriations Act, 2017 (Subject to a Rule) (Sponsored by Rep. Rodney Frelinghuysen / Appropriations Committee)

The following legislation will be considered under suspension of the rules:

  1. H.R. 132 – Arbuckle Project Maintenance Complex and District Office Conveyance Act of 2017 (Sponsored by Rep. Tom Cole / Natural Resources Committee)
  2. H.R. 648 – To authorize the Secretary of the Interior to amend the Definite Plan Report for the Seedskadee Project to enable the use of the active capacity of the Fontenelle Reservoir (Sponsored by Rep. Liz Cheney / Natural Resources Committee)
  3. H.R. 267 – Martin Luther King, Jr. National Historical Park Act of 2017, as amended (Sponsored by Rep. John Lewis / Natural Resources Committee)

On Thursday, March 9, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

  1. H.R. 725 – Innocent Party Protection Act (Subject to a Rule) (Sponsored by Rep. Ken Buck / Judiciary Committee)
  2. H.R. 985 – Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, Rules Committee Print (Subject to a Rule) (Sponsored by Rep. Bob Goodlatte / Judiciary Committee)

On Friday, March 10, the House will meet at 9:00 am for legislative business.  Last votes expected no later than 3:00 pm.

  1. H.R. 720 – Lawsuit Abuse Reduction Act of 2017 (Subject to a Rule) (Sponsored by Rep. Lamar Smith / Judiciary Committee)

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

State Attorneys General March 6 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.

Litigation

In December 2016, 20 state AGs filed a federal antitrust suit against several generic drug manufacturers “alleging that they entered into illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs,” according to a press release from Connecticut AG George Jepsen, who is leading the suit. In a March 1 press release, AG Jepsen announced that 20 additional states have joined the suit. The amended complaint, now from 40 states, also “adds claims of alleged violations of state antitrust laws . . . in each of the 40 states, as well as state consumer protection laws in most of the states.” The press release states that in 2014, Connecticut “initiated an investigation of the reasons behind suspicious price increases of certain generic pharmaceuticals,” and the investigation “uncovered evidence of a well-coordinated and long-running conspiracy to fix prices and allocate markets for doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication.” The states claim that the generic drug manufacturers’ “allegedly anticompetitive conduct . . . caused significant, harmful and continuing effects in the country’s healthcare system,” according to the press release.

Massachusetts AG Maura Healey has announced that “[m]ultiple individuals will receive monetary damages and several property owners and management companies across the state will strengthen their anti-discrimination and fair housing policies after three separate settlements were reached over claims of disability-based housing discrimination against tenants,” according to a Massachusetts AG press release. The press release states that the settlements secured $155,000 in restitution for tenants, penalties and funding for related educational programs. The settlements “resolv[ed] allegations that the defendants, mainly property owners and managers, discriminated against tenants by failing to reasonably accommodate their disabilities,” according to the press release. The press release notes that under Massachusetts law, “it is illegal to discriminate on the basis of disability in the rental of housing accommodations.”

Advocacy

On February 28, a “coalition” of state AGs from five states and the District of Columbia issued a statement that they “strongly oppose President Trump’s [executive order] that undermines Clean Water Act protections and the public health and environment,” according to a press release from New York AG Eric Schneiderman, who is leading the “coalition.” The President has “described [the executive order] as paving the way to the elimination of the [Environmental Protection Agency’s (EPA)] Clean Water Rule,” per the press release. The AGs say that the Clean Water Rule is a “measured, reasonable, and lawful application of sound and uncontroverted science to protect our nation’s upstream source waters,” and that the President’s executive order “runs counter to the Clean Water Act’s, and the EPA’s, very purpose: achieving clean water.”

Texas AG Ken Paxton also issued a statement on March 1 regarding that executive order, saying: “We welcome President Trump’s action today and are reviewing his executive order. The Obama administration’s illegal federal overreach on the [Clean Water Rule] poses a burden to Texas property owners and others whose land would be subject to new EPA regulations.” AG Paxton noted that “[f]armers, ranchers and agriculture workers in Texas and throughout the country opposed the rule.”

Homeland Security and Agriculture Issues Intersect: Agro-Terrorism Bills Introduced in Both Chambers; House Committee to Hold Markup

Legislative Activity

Homeland Security and Agriculture Issues Intersect: Agro-Terrorism Bills Introduced in Both Chambers; House Committee to Hold Markup

This week, the House Homeland Security Committee will mark up a bill, H.R. 1238, the “Securing Our Agriculture and Food Act,” introduced on February 28 by Reps. David Young (R-IA), Donald Payne, Jr. (D-NJ), and Daniel Donovan (R-NY). On March 2, Sens. Pat Roberts (R-KS), chairman of the Senate Agriculture Committee, and Claire McCaskill (D-MO), ranking member of the Senate Homeland Security and Governmental Affairs Committee, introduced S. 500, a companion bill. These bills seek to increase collaboration between federal agencies to better prepare them to respond to acts of terrorism to the nation’s food supply. Specifically, the legislation would require the Department of Homeland Security’s Assistant Secretary for Health Affairs to lead national, coordinated efforts to respond to threats and acts of terrorism to the nation’s food, agriculture, and veterinary systems.

In the 114th Congress, Rep. Young introduced a nearly identical bill, H.R. 5346, which passed the House in late 2016; however, the bill was not considered by the Senate. This legislation reportedly stemmed from a recent avian influenza outbreak that set records as the largest animal disease outbreak in the history of several of the 15 affected states.

Between December 2014 and June 2015, highly pathogenic avian influenza (HPAI) spread throughout the United States, largely affecting commercial flocks of layer hens and turkeys, as well as some backyard flocks. The Animal and Plant Health Inspection Service within the U.S. Department of Agriculture reported more than 50 million birds were affected in the West and Midwest.

According to Rep. Young, weaknesses were uncovered during the federal government’s response to the HPAI outbreak. Realizing such weaknesses existed in the nation’s ability to coordinate efforts to combat a large animal disease outbreak, it triggered serious reservations regarding the federal government’s ability to adequately respond to agro-terrorism threats and attacks, therefore prompting the need for federal legislation.

As H.R. 1238 is bipartisan and uncontroversial, the House Homeland Security Committee is likely to favorably report the legislation by voice vote.

This Week’s Committee Activities:

  • On Wednesday, March 8, the House Homeland Security Committee has scheduled a markup of H.R. 1238, the “Securing Our Agriculture and Food Act.”
  • On Thursday, March 9, the House Agriculture Subcommittee on Biotechnology, Horticulture, and Research has scheduled a hearing titled “RE: The Next Farm Bill: Specialty Crops.” The witnesses will be announced.
  • On Thursday, March 9, the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit has scheduled a hearing titled “RE: The Next Farm Bill Rural Development & Energy Programs.” The witnesses will be announced.

Fiscal Year 2017 Defense Appropriations Bill Revives Process; Legislative Fate of Other Spending Bills Uncertain; President Trump’s Budget Receives Differing Reactions; House Appropriators Begin Work on FY 2018

Legislative Activity

FY 2017 Defense Appropriations Bill

The House is expected to vote on its FY 2017 defense spending bill this week. The legislation, released by appropriators on Thursday, totals $577.9 billion, which is $5.2 billion higher than  the FY 2016 level, and in line with the parameters contained in last year’s National Defense Authorization Act (P.L. 114-328). The legislation does not include funds for the Overseas Contingency Operations account, which has been a sticking point for Democrats because the account falls outside of discretionary caps. Key Democrats such as House Appropriations Committee Ranking Member Nita Lowey signaled their support because the bill adheres to the FY 2017 spending caps mandated in the 2015 budget agreement (P.L. 114-074). However, finding time for a vote in the Senate will be a challenge as they continue to work through confirmation of cabinet nominees and a number of other matters.

Future Path Forward for Remaining Spending Legislation

The current FY 2017 Continuing Resolution (CR/P.L. 114-254) expires on April 28; however, Congress will be in recess for two weeks in April, significantly reducing time for consideration and passage of the remaining eleven FY 2017 spending bills (the FY 2017 Military Construction-Veterans Affairs appropriations bill was included in the current CR). Hence, it is highly unlikely that they will be passed out individually in “regular order.” There are numerous potential scenarios. The defense bill could serve as the basis for an omnibus; it could also be a vehicle for a “minibus” of several bills, leaving the others to also be packaged into minibuses. There could also be a “cromnibus” wherein some agencies would operate under a continuing resolution while others would be wrapped into an omnibus. Finally, if bipartisan disagreements prevail, there is also the option of a CR through September 30, 2017.

One potential complication for resolution of the FY 2017 budget is the suspension of the nation’s borrowing authority, which in recent years has required discretionary offsets. This is set to expire on March 16 but may be extended through late summer. Such a move would make the FY 2017 appropriations process easier because spending can remain at each top-line level established last year without requiring additional offsets.

President Trump’s FY 2018 budget

President Trump is expected to deliver his FY 2018 budget blueprint to Congress on March 16 but some details have already been released and discussed. The budget proposal is expected to increase defense spending by $54 billion (to $603 billion) which will be offset by cuts in non-defense spending.

Many congressional Democrats, and even some Republicans, are concerned about potential slashes to domestic programs and foreign aid, particularly because it is likely defense, homeland security, and veterans programs will be exempt from reductions. For example, the Department of State and USAID are rumored to see a 37 percent reduction; whereas the Environmental Protection Agency (EPA) will reportedly face cuts of at least 25 percent. Members of President Trump’s cabinet, including Interior Secretary Ryan Zinke and EPA Administrator Scott Pruitt, indicated they will push back on certain proposed reductions. In particular, EPA Administrator Pruitt emphasized water infrastructure, Superfund, and Brownfields programs as initiatives he believes should be protected.

Meanwhile, Republican “defense hawks”, including Senate Armed Services Committee Chairman John McCain (R-AZ), believe $54 billion is not sufficient to fulfill key defense priorities. Instead, they propose a $640 billion defense budget for FY 2018.

The White House is also expected to submit a supplemental funding request to include an additional $30 billion in defense and $12-15 billion for a border fence between the U.S. and Mexico. The spending will be deemed “emergency” and thus will not require offsets or be subject to budget caps.

House Appropriators Move Forward with FY 2018

Despite the lack of a budget framework, House appropriators have begun their work on spending legislation for fiscal year 2018. The subcommittees have been holding “Member Days” and hearings where public witnesses are able to testify. Listed below are the subcommittee deadlines for member requests for programmatic funding levels and report language.

 

Subcommittee  Deadline
Agriculture, Rural Development, Food and Drug Administration, and Related Agencies April 5, 2017
Commerce, Justice, Science, and Related Agencies April 4, 2017
Defense
Energy and Water Development, and Related Agencies April 5, 2017
Financial Services and General Government
Homeland Security April 4, 2017
Interior, Environment, and Related Agencies March 30, 2017
Labor, Health and Human Services, Education, and Related Agencies April 6, 2017
Legislative Branch March 29, 2017
Military Construction, Veterans Affairs, and Related Agencies March 30, 2017
State, Foreign Operations, and Related Programs March 30, 2017
Transportation, Housing and Urban Development, and Related Agencies April 4, 2017

 

This Week’s Hearings:

House Appropriations Committee

  • On Wednesday, March 8, the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies has scheduled a Public Witnesses Day hearing.
  • On Wednesday, March 8, the House Appropriations Subcommittee on Energy and Water Development, and Related Agencies has scheduled a Members’ Day hearing.
  • On Wednesday, March 8, the House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related Agencies has scheduled a hearing titled “Quality of Life in the Military.” The witnesses will be:
    • Daniel A. Dailey, Sergeant Major, US Army
    • Steven S. Giordano, Master Chief Petty Officer, US Navy
    • Ronald L. Green, Sergeant Major, US Marine Corps
    • Kaleth O. Wright, Chief Master Sergeant, US Air Force
  • On Thursday, March 9, the House Appropriations Subcommittee on Financial Services and General Government has scheduled a Members’ Day hearing.
  • On Thursday, March 9, the House Appropriations Subcommittee on Defense has scheduled a Members’ Day hearing.
  • On Thursday, March 9, the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a Members’ Day hearing.
  • On Thursday, March 9, the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a hearing titled “Oversight of the Department of State and Foreign Operations Programs.” The witnesses will be:
    • Mrs. Ann Calvaresi Barr, Inspector General, U.S. Agency for International Development
    • Mr. Steve Linick, Inspector General, U.S. Department of State and Broadcasting Board of Governors
  • On Thursday, March 9, the House Appropriations Committee has scheduled a hearing titled “Management Challenges and the Departments of Labor, Health and Human Services, and Education and the Social Security Administration.” The witnesses will be:
    • Mr. Scott S. Dahl, Inspector General, U.S. Department of Labor
    • Mr. Daniel R. Levinson, Inspector General, U.S. Department of Health and Human Services
    • Ms. Gale Stallworth Stone, Acting Inspector General, Social Security Administration
    • Ms. Kathleen Tighe, Inspector General, U.S. Department of Education
  • On Thursday, March 9, the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies has scheduled a Members’ Day hearing.

Senate Appropriations Committee

  • On Tuesday, March 7, the Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a hearing titled “Hearing on Russian Policies & Intentions Toward Specific European Countries.” The witnesses will be:
    • The Honorable Valeriy Chaly, Ambassador, Embassy of Ukraine
    • The Honorable Piotr Wilczek, Ambassador, Embassy of the Republic of Poland
    • The Honorable David Bakradze, Ambassador, Embassy of Georgia
    • The Honorable Andris Teikmanis, Ambassador, Embassy of the Republic of Latvia
    • The Honorable Rolandas Krisciunas, Ambassador, Embassy of the Republic of Lithuania
    • The Honorable Eerik Marmei, Ambassador, Embassy of the Republic of Estonia
  • On Wednesday, March 8, the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a hearing titled “Investing in America: Funding our Nation’s Transportation Infrastructure Needs.” The witnesses will be:
    • Mr. David Bernhardt, Commissioner, Maine Department of Transportation, President, American Association of State Highway Transportation Officials
    • Mr. Jim Tymon, Chief Operating Officer and Director of Policy Management, American Association of State Highway Transportation Officials
    • Mr. Todd Hauptli, President and CEO, American Association of Airport Executives
    • Mr. Edward L. Mortimer, Executive Director for Transportation Infrastructure, U.S. Chamber of Commerce
    • Ms. Beth Osborne, Senior Policy Advisor, Transportation for America
  • On Wednesday, March 8, the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies has scheduled a hearing titled “Hearing on Saving Lives Through Medical Research.” The witnesses will be:
    • Timothy J. Eberlein, M.D., Director, Alvin J. Siteman Cancer Center, Washington University School of Medicine in St. Louis, Surgeon-in-Chief, Barnes-Jewish Hospital
    • Dr. Thomas J. Grabowski Jr., M.D., Director, Memory and Brain Wellness Center, Alzheimer’s Disease Research Center, Integrated Brain Imagining Center, University of Washington, Seattle
    • Ms. Stacey Schultz-Cherry, Ph.D., Member, Department of Infectious Diseases, St. Jude Children’s Research Hospital, Memphis, Tennessee
    • Ms. Jennifer M. Sasser, Ph.D., Assistant Professor, University of Mississippi Medical Center, Jackson, Mississippi
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