Capital Thinking ~ July 29, 2013

Patton Boggs Capital Thinking Weekly Update | July 29, 2013 1 of 22

July 29, 2013


Capital Thinking: Contents General Legislative ....................................................................................................... 3 Agriculture and Food .................................................................................................... 4 Budget and Appropriations .......................................................................................... 5 Cybersecurity ................................................................................................................ 6 Defense .......................................................................................................................... 7 Education ...................................................................................................................... 8 Energy ........................................................................................................................... 9 Environment ................................................................................................................ 10 Financial Services ....................................................................................................... 12 Health Care .................................................................................................................. 13 Homeland Security...................................................................................................... 14 International ................................................................................................................ 16 Tax ............................................................................................................................... 19 Technology and Communications ............................................................................. 20 Transportation and Infrastructure ............................................................................. 22


General Legislative The Senate will convene today, Monday, July 29, at 2:00pm. After any Leader remarks, the Senate will be in morning business until 4:30 pm, with senators permitted to speak for up to 10 minutes each. After morning business, the Senate will resume consideration of S. 1243, the Transportation, Housing and Urban Development and Related Agencies Appropriations bill. At 4:30 pm, the Senate will proceed to Executive Session to consider Executive Calendar #208, the nomination of James B. Comey, Jr. as Director of the Federal Bureau of Investigations. The time until 5:30 pm will be equally divided and controlled between Sens. Patrick Leahy (D-VT) and Charles Grassley (R-IA) or their designees. A roll call vote on the motion to invoke cloture on the nomination will be held at 5:30 pm.

Cloture was filed during the Senate session last Thursday, July 25, on the following nominations in this order: (1) Executive Calendar #208 – the nomination of James B. Comey, Jr. to be Director of the Federal Bureau of Investigations; (2) Executive Calendar #233 – the nomination of Kent Yoshiho Hirozawa to be a Member of the National Labor Relations Board; (3) Executive Calendar #224 – the nomination of Nancy Jean Schiffer to be a Member of the National Labor Relations Board; (4) Executive Calendar #104 – the nomination of Mark Gaston Pearce to be a Member of the National Labor Relations Board.

If cloture is invoked on any of these nominations, there would be up to 8 hours of post-cloture debate time on each nomination, and upon disposition of each nomination, the Senate will proceed to a cloture vote on the next nomination in the order above.

On Monday, July 29, the House will not be in session, but on Tuesday, July 30, 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 House will begin consideration of H.R. 2610, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2014 under an open rule, with one hour of general debate. Legislation Considered Under Suspension of the Rules will include: (1) H.R. 2094 – School Access to Emergency Epinephrine Act; (2) H.R. 2754 – Collectible Coin Protection Act; and (3) H.R. 1300 – To amend the Fish and Wildlife Act of 1956 to reauthorize the volunteer programs and community partnerships for the benefit of national wildlife refuges, and for other purposes.

On Wednesday, July 31, and Thursday, August 1, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business, and the following legislation is on the House calendar for the two days: (1) H.R. 2711 – Citizen Empowerment Act, as amended; (2) H.R. 2579 – Government Employee Accountability Act, as amended; (3) H.R. 1660 – Government Customer Service Improvement Act of 2013, as amended; (4) H.R. 313 – Government Spending Accountability Act, as amended; (5) H.R. 1541 – Common Sense in Compensation Act, as amended; (6) H.R. 2565 – STOP IRS Act; (7) H.R. 2769 – Stop Playing on Citizen’s Cash Act; (8) H.R. 2768 – Taxpayer Bill of Rights Act of 2013, as amended; (9) H.R. 1897 – Vietnam Human Rights Act of 2013, as amended; (10) H.R. 850 – Nuclear Iran Prevention Act; (11) H.Res.222 – Recognizing the long-term partnership and friendship between the United States and the

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Hashemite Kingdom of Jordan, working together towards peace and security in the Middle East, as amended; and (12) Motion to Concur in the Senate Amendment to H.R. 1911 – Bipartisan Student Loan Certainty Act of 2013. Also on the House calendar for the two days are the Complete Consideration of H.R. 2610 – Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2014 (open rule, one hour of general debate); H.R. 1582 – Energy Consumers Relief Act, Rules Committee Print (structured rule, one hour of general debate); and H.R. 367 – Regulations From the Executive in Need of Scrutiny Act of 2013 (subject to a rule).

On Friday, August 2, the House will meet at 9:00 am for legislative business, and last votes are expected no later than 3:00 pm. H.R. 2009, Keep the IRS Off Your Health Care Act of 2013 (subject to a rule) is on the House calendar for Friday.

Agriculture and Food LEGISLATIVE ACTIVITY

Farm Bill. Last week, the Nutrition Working Group convened to discuss the House’s nutrition title bill that would look to reform the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). Based on signals from members of the Working Group, it appears that a bill will not be brought to the floor this week. If this is the case, this means that the House will still not have a nutrition title to include in the conferencing of the Farm Bill before leaving for the month-long August recess. Thus, the Republican leadership will look to further stall the start of formal conferencing proceedings, which Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) continues to call for, especially after the Senate sent its bill to the House to start the conferencing process nearly two weeks ago. A stall of formal proceedings may also make it more difficult for the Republican leadership to address growing frustrations and pressures within its own party, particularly Republican members with agriculture interests who must answer to their constituents in August about Congress potentially letting the Farm Bill expire again on September 30. For example, last week, House Agriculture Committee Chairman Frank Lucas (R-OK) publicly remarked that the House should formally move on conferencing the Farm Bill this week, even if no nutrition title bill is considered before the August recess. Currently, informal staff discussions between the House and Senate Agriculture Committees on the Farm Bill are occurring behind the scenes.

Senate Agriculture Committee Changes. Sen. Bob Casey (D-PA) has returned to the Senate Agriculture Committee following former Sen. Mo Cowan’s (D-MA) departure from the Senate with the election of Sen. Edward Markey (D-MA).

This Week’s Hearings:

o Wednesday, July 31: Senate Commerce, Science and Transportation Committee will hold a hearing titled “Energy Drinks and Marketing to Youth.”

http://www.gpo.gov/fdsys/pkg/BILLS-113hr1911eas/pdf/BILLS-113hr1911eas.pdf





http://www.pattonboggs.com/viewpoint/capital-thinking-update-july-22-2013


Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Dana Weekes at 202-457-6307 or [email protected].

Budget and Appropriations LEGISLATIVE ACTIVITY

House Appropriations Action. Last week, the House approved its $595 billion FY 2014 Defense appropriations bill (H.R. 2397) by a vote of 315-105. An amendment from Rep. Justin Amash (R-MI) to eliminate funding for the National Security Administration’s (NSA) telephone record collection program, which Republican leadership resisted bringing to the floor, was narrowly defeated by 205-217. In addition, the House Appropriations Committee passed the FY 2014 State and Foreign Operations appropriations bill, and the Subcommittee on the Interior and Environment passed its bill last week. The House Appropriations Committee has yet to act on its Labor, Health and Human Services, and Education bill; the bill was scheduled to be marked up in the subcommittee last week, but was postponed due to floor action on the Defense bill.

Senate Appropriations Action. The Senate Appropriations Committee passed its 2014 State and Foreign Operations bill last week and held a subcommittee markup of the 2014 Financial Services bill. In addition, the Senate began to debate the FY 2014 Transportation, Housing, and Urban Development appropriations bill (S.1243), although floor action was derailed by votes on the student loan bill. The Senate is scheduled to continue work on the appropriations bill today, Monday, July 29, and hopes to finish by the end of the week.

Although both Appropriations Committees have worked diligently to mark up and pass their FY 2014 appropriations bills, it is expected that a continuing resolution or omnibus bill will be passed in September, due to the unresolved disagreement about overall spending levels. In this event, Republicans are likely to require that the continuing resolution adheres to the Budget Control Act of 2011’s spending limit of $967 billion, while Democrats are expected to seek a broader deal that replaces the sequester.


o Tuesday, July 30: Defense – Senate subcommittee markup

o Thursday, August 1: Defense – Senate committee markup

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this section: Melanie Goggins at 202-457-5649 or [email protected], and Pamela Welsh at 202-457-6493 or [email protected].

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Cybersecurity LEGISLATIVE BRANCH ACTIVITY

Cybersecurity Legislation. Last week, Senate Commerce, Science and Transportation Committee Chairman John Rockefeller (D-WV) and Ranking Member John Thune (R-SD) introduced the Cybersecurity Act of 2013 (S. 1353) and also held a hearing related to the legislation. The bill would give authority to the National Institute of Standards and Technology (NIST) to facilitate and support the development of voluntary, industry-led cyber standards and best practices for critical infrastructure. The legislation also addresses cybersecurity workforce training education, and research and development programs. The committee plans to mark up the bill this week before Congress leaves for August recess.

EXECUTIVE BRANCH ACTIVITY

Cybersecurity Incentives. As part of the President’s February Executive Order (EO), the Departments of Homeland Security (DHS), Commerce and the Treasury were required to compile a list of incentives for critical infrastructure that would be needed to promote participation in the voluntary NIST Cybersecurity Framework that was required in the EO. The Obama Administration is currently reviewing this list of incentives that may include limited protections from legal liability, tax incentives, and procurement considerations for entities that participate in the Cybersecurity Framework. DHS is expected to publically release the report on proposed incentives for critical infrastructure before the end of the month.

DHS Performance Goals. The EO also required DHS to draft a list of performance goals for the NIST Cybersecurity Framework. These goals will serve to guide the Framework development process and ensure that there are national goals in place for critical infrastructure owners and operators that choose to participate in the Framework. After a call last week with stakeholders, DHS is working to finalize the list of performance goals in the coming weeks.

NIST Cybersecurity Framework Workshop. The next NIST Cybersecurity Framework workshop will take place September 11-13 in Dallas, TX. NIST intends to release a draft preliminary version of the Framework in mid-August in preparation for the workshop. After reviewing feedback from stakeholders that attend the September workshop, NIST will release its draft Cybersecurity Framework in October, as required by the EO.

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this section: Amy Davenport at 202-457-6528 or [email protected], and Norma Krayem at 202-457-5206 or [email protected].

http://www.commerce.senate.gov/public/?a=Files.Serve&File_id=7ca496db-c74b-423c-b912-2d893911aa94




Defense

LEGISLATIVE AND EXECUTIVE BRANCH ACTIVITY

Defense Appropriations. This week, the Senate Appropriations Subcommittee on Defense will mark up its FY 2014 Department of Defense Appropriations Bill. Last week, the House passed its FY 2014 Defense spending measure (H.R. 2397). The House bill provides $3.55 billion less for Overseas Contingency Operations (OCO), which some say is a sign of waning Congressional support for the Afghanistan war.

State-Foreign Operations Appropriations Update. Last week by a vote of 23-7, the Senate Appropriations Committee advanced its $50.6 billion spending measure for the State Department, with $6.5 billion for OCO. Similar to the House bill, the Senate bill did not alter the existing language that blocks foreign aid to governments that have undergone a coup d’état. The Senate bill will, however, incrementally condition military aid to Egypt based on four good-governance requirements, which can be waived by the President. Meanwhile, the media reports Egypt is buying more U.S. military goods and services under a mechanism called “cash flow financing,” which allows Cairo to enter into agreements for such purchases on the assumption of continued Congressional funding. The Administration also reversed its decision two weeks ago and now will not deliver the four new F-16 fighter jets to Egypt.

The Senate State-Foreign Operations bill also addresses reports that Afghan President Hamid Karzai’s government is imposing taxes on the transport of U.S. property out of Afghanistan. The Senate spending measure includes a provision that will withhold $5 in foreign aid for every dollar in fines Afghanistan imposes.


o Tuesday, July 30: The Senate Appropriations Subcommittee on Defense will hold a markup of the FY 2014 Department of Defense Appropriations Bill.

o Tuesday, July 30: The Senate Armed Services Committee will consider the nominations of Admiral Cecil E.D. Haney, USN, for reappointment to the grade of Admiral and to be Commander of U.S. Strategic Command; and Lieutenant General Curtis Scaparrotti to be General and Commander of U.N. Command/Combined Forces Command/United States Forces Korea.

o Wednesday, July 31: The House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation will hold a hearing on “How to Improve the Efficiency, Safety, and Security of Maritime Transportation: Better Use and Integration of Maritime Domain Awareness Data.”

o Wednesday, July 31: The Senate Veterans’ Affairs Committee will hold a hearing on “the Rights of Servicemembers, Veterans, and their Families in the Financial Marketplace.”



Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Stacy Swanson at 202-457-5627 or [email protected].

Education LEGISLATIVE ACTIVITY

Student Loan Interest Rates. Last week, the Senate passed its student loan interest rate compromise bill by an 81-18 vote. As previously noted, this proposal would peg interest rates to the 10-year Treasury note, plus 2.05 percent for both the subsidized and unsubsidized portions of the undergraduate loans, plus 3.6 percent for graduate loans, and plus 4.6 percent for PLUS loans. Those rates would be capped at 8.25 percent, 9.5 percent, and 10.5 percent, respectively. Two amendments were considered on the floor by Democratic lawmakers unhappy with the agreement, including an amendment by Sens. Jack Reed (D-RI) and Elizabeth Warren (D-MA) to cap rates for undergraduates and graduate loans at 6.8 percent and rates for PLUS loans at 7.9 percent, which would be paid for by a surcharge on people making more than $1 million. Another amendment by Sen. Bernie Sanders (I-VT) would have limited the bill to two years to avert the predicted market rate increases after two years. Those amendments ultimately were not included in the final bill. Those and several other senators noted they would take the issue up again as Congress considers reauthorization of the Higher Education Act this fall.

We expect the House to pass the bill early this week, possibly under extension of the rules, which will then be signed swiftly by President Obama in advance of students signing their promissory notes in August.

Comments on Higher Education Act Reauthorization. The deadline to submit comments to the House Education and the Workforce Committee on the Higher Education Act reauthorization is this Friday, August 2.

Burdensome Regulations. The House Education and the Workforce Committee marked up the Supporting Academic Freedom through Regulatory Relief Act (H.R. 2637) last Wednesday, July 24, which would repeal three of the Department of Education’s (DOE) “program integrity” regulations: the gainful employment, state authorization, and federal credit hour regulations. Additionally, the bill includes a provision to prohibit DOE from issuing additional regulations on such matters until after Congress reauthorizes the Higher Education Act, which appears to be aimed primarily at the department’s renewed effort to pursue regulations on gainful employment. DOE announced in June its intentions to establish a negotiated rulemaking committee to prepare regulations on gainful employment this fall. While the bill could be considered on the House floor before the August recess, it is unlikely to be taken up in the Senate.


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o Wednesday, July 31: The Senate Health, Education, Labor and Pensions Committee will hold a hearing to mark up the Workforce Investment Act of 2013 (S. 1356). The newly-introduced measure has bipartisan support and is likely to be favorably reported out of committee. However, it is unknown at this point whether lawmakers will successfully reconcile the measure with a very different, more partisan House-passed bill (H.R. 803).


Student Loan Rulemaking. Today, Monday, July 29, DOE plans to publish a Notice of Proposed Rulemaking (NPRM) related to student loan programs in the Federal Register. The NPRM would amend the Student Assistance General Provisions, Federal Perkins Loan (Perkins Loan) Program, Federal Family Education Loan (FFEL) Program, and William D. Ford Federal Direct Loan (Direct Loan) Program regulations. Some of the proposed changes result from the Health Care and Education Reconciliation Act of 2010, while others are general updates and clarifications aimed at operating Title IV student aid programs more efficiently. Comments will be due 30 days after the NPRM is published in the Federal Register, on or around August 29.

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this section: Amy Budner Smith at 202-457-6154 or [email protected], and Dana Weekes at 202-457-6307 or [email protected].

Energy LEGISLATIVE ACTIVITY

Energy Efficiency. The “Shaheen-Portman” bill (S. 761) is expected to be considered on the Senate floor this week. Senate leaders are working to reach an agreement on amendments, some of which would be controversial (e.g., expedited approval of the Keystone XL pipeline).

Natural Gas. Senate Energy and Natural Resources Committee Chairman Ron Wyden (D-OR) announced his policy priorities to “maximize the advantages of America's natural gas boom,” which include: accelerating pipeline development while reducing methane leaks, incentivizing usage as a transportation fuel, clarifying the export process, and improving public transparency in the production process.


o Tuesday, July 30: The Senate Energy and Natural Resources Committee will hold a legislative hearing on the Nuclear Waste Administration Act of 2013 (S. 1240).

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o Wednesday, July 31: A House Energy and Commerce Subcommittee will hold an oversight hearing on the Department of Energy's (DOE) strategy for the management and disposal of spent nuclear fuel and waste.

REGULATORY ACTIVITY

Offshore Wind. The Bureau of Ocean Energy Management (BOEM) has issued a final sale notice for commercial wind power leasing off the coast of Virginia. An auction will be held September 4.

Fossil Fuel Loans. DOE’s Loan Programs Office will hold a series of public meetings in coming weeks to receive comments on the draft Advanced Fossil Energy Projects federal funding solicitation.

FERC Standards. The Federal Energy Regulatory Commission (FERC) has proposed approving a revised Reliability Standard to supersede four existing standards (Transmission and Generation Protection System Maintenance and Testing, Underfrequency Load Shedding Equipment Maintenance, Undervoltage Load Shedding Equipment Maintenance, and Special Protection System Maintenance and Testing). Comments are due September 23. This week, FERC is also expected to (1) issue a final rule approving revisions to the Modeling, Data, and Analysis Reliability Standard; and (2) issue a Notice of Proposed Rulemaking (NPRM) to approve the Frequency Response and Frequency Bias Setting Reliability Standard.

FERC Technical Conference. Staff will host a September 25 technical conference in Washington, D.C. to consider how current centralized capacity market rules and structures are supporting the procurement and retention of resources necessary to meet future reliability and operational needs.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Tanya DeRivi at 202-457-6504 or [email protected].

Environment LEGISLATIVE ACTIVITY

Nuclear Waste. Nuclear waste is one of the topics of the week in Congress, with both the House and Senate holding hearings on how to address nuclear waste and nuclear waste facilities.


o Monday, July 29: The House Natural Resources Committee, Subcommittee on Water and Power, will hold a hearing concerning federal lands and property rights.

o Tuesday, July 30: The Senate Energy and Natural Resources Committee, Subcommittee on Public Lands, Forests and Mining, will consider National Forest System land and other public lands bills.

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o Tuesday, July 30: The Senate Energy and Natural Resources Committee will hold a full committee hearing to consider the S. 1240, the Nuclear Waste Administration Act of 2013, which is intended to establish a new organization to manage nuclear waste, provide a process for siting nuclear waste facilities and ensure funding for managing nuclear waste.

o Wednesday, July 31: The House Energy and Commerce Committee, Subcommittee on Environment and the Economy, will hold an oversight hearing concerning the Department of Energy’s (DOE) strategy for the management and disposal of used nuclear fuel and radioactive waste. DOE Secretary Ernest Moniz will testify.

o Wednesday, July 31: The Senate Energy and Natural Resources Committee, Subcommittee on National Parks will hold hearings on National Parks lands bills.

o Thursday, August 1: The House Natural Resources Committee will hold a full committee hearing concerning a review of the Administration’s approach to endangered species.

REGULATORY ACTIVITY

Chemical Safety. The Environmental Protection Agency (EPA) has added more than 130 chemicals to its Safer Chemical Ingredients List (the List). The List, which now contains 602 chemicals, is intended by EPA to serve as a resource for manufacturers interested in making safer products; health and environmental advocates seeking to encourage the use of safer chemicals; and consumers seeking information on the ingredients in safer chemical products. The Safer Chemical Ingredients List can be accessed here.

2014 Clean Air Awards. The EPA is accepting nominations for its 2014 Clean Air Excellence Awards Program (CAEAP). The CAEAP is open to both public and private entities. Entries are limited to efforts related to air quality in the U.S. There are five general award categories: (1) Clean Air Technology; (2) Community Action; (3) Education/Outreach; (4) Regulatory/ Policy Innovations; and (5) Transportation Efficiency Innovations. Details of the submission process can be accessed here. All submissions of entries for the CAEAP must be postmarked by September 27.

Children’s Health. The EPA is inviting nominations for candidates to be considered for appointment to its Children’s Health Protection Advisory Committee (CHPAC). The CHPAC is looking for experience in children’s environmental health policy, research, and in specific issues such as lead poisoning and asthma, prenatal environmental exposures, chemical exposures, public health information tracking, knowledge of EPA regulation development, risk assessment, exposure assessment, tribal children’s environmental health, and children’s environmental health disparities. CHPAC is seeking applicants from the private sector, state and local government, academia (including a graduate level student representative), NGOs, public health practitioners, pediatricians, obstetrics, occupational medicine, community nurses, environmental groups, health groups, health research, epidemiology and toxicology. Details of the application process can be accessed here. Vacancies are anticipated to be filled by December.


http://www.epa.gov/dfe/saferingredients.htm#about




Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Sarah Vilms, at 202-457-5248 or [email protected].

Financial Services LEGISLATIVE ACTIVITY

House Financial Services Committee Sends PATH Act to the Floor. The House Financial Services Committee approved the Protecting American Taxpayers and Homeowners Act of 2013, also known as the PATH Act (H.R. 2767). The PATH Act now awaits consideration by the House. The housing finance reform bill includes provisions to wind-down the government sponsored enterprises (GSEs) and nearly eliminate the government guarantee on mortgages. The PATH Act differs substantially from a bipartisan bill titled the Housing Finance Reform and Taxpayer Protection Act, sponsored by Sens. Bob Corker (R-TN) and Mark Warner (D-VA) (S. 1217). Progress on the Corker-Warner bill has been slower in the Senate Banking Committee, as the Committee’s Chairman Tim Johnson (D-SD) has emphasized the need to reform the Federal Housing Administration (FHA) before housing finance and GSE reform can be addressed.

Senate Banking Committee Takes up FHA Reform. The Senate Banking Committee has taken up discussion of the draft FHA Solvency Act of 2013. During a hearing on the proposed legislation, FHA Assistant Secretary Carol Galante made several requests for changes to the bill such as increased FHA authority to transfer servicing to another servicer, and additional flexibility regarding the mandatory premium increases during times the capital reserve ratio falls below required levels. The committee is expected to markup the bill before the August recess.

Lawmakers Turn Attention to Banks’ Involvement in Commodities and Warehousing. Following a June 20 New York Times article, there has been increased interest among lawmakers regarding the involvement of banks and financial institutions in the commodities markets. Last Tuesday, July 23, the Senate Banking Subcommittee on Financial Institutions and Consumer Protection held a hearing on whether banks should be allowed to control warehouses, pipelines and other infrastructure used to store and transport essential goods. Several senators have demanded further investigation or an end to the practice all together. The Commodity Futures Trading Commission (CFTC) is now gathering information on these warehouse operations.


o Tuesday, July 30: The Senate Banking Committee will hold a hearing titled “Mitigating Systemic Risk in Financial Markets through Wall Street Reforms.” Securities and Exchange Commission (SEC) Chairman Mary Jo White and CFTC Chairman Gary Gensler will testify.




http://www.cq.com/file/govdoc-4315222/FHA%20Solvency%20Act.pdf

http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html?pagewanted=all



Deputy Treasury Secretary Steps Down. Department of Treasury (DOT) Deputy Secretary Neal Wolin announced he will end his tenure in August. Deputy Secretary Wolin has played a key role on President Obama’s financial team and was an important figure in formulating the Administration’s response to the 2008 financial crisis, including being a strong advocate of the Dodd-Frank Act.

Detroit Declares Bankruptcy. On July 18, under the direction of emergency manager Kevyn Orr, the city of Detroit filed for Chapter 9 bankruptcy, making it the largest municipality to ever file for bankruptcy in the U.S. Mr. Orr estimates Detroit’s long-term debts at $18 billion. Although Mr. Orr has proposed a plan for restructuring, it is unclear how the bankruptcy will play out.

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this section: Caroline Cauley at 202-457-6625 or [email protected], Mara Giorgio at 202-457-6522 or [email protected], and Matt Kulkin at 202-457-6056 or [email protected].

Health Care LEGISLATIVE ACTIVITY


o Tuesday, July 30: The Senate Budget Committee will hold a hearing on “Containing Health Care Costs: Recent Progress and Remaining Challenges.”

o Wednesday, July 31: The House Committee on Energy and Commerce will mark up H.R. 2810, the sustainable growth rate and Medicare payment for physicians reform bill.

o Wednesday, July 31: The House Committee on Oversight and Government Reform will hold a hearing on “Oversight of IRS’s Legal Basis for Expanding ObamaCare’s Taxes and Subsidies.”

o Wednesday, July 31: The Senate Committee on Commerce, Science and Transportation will hold a hearing on “Energy Drinks and Marketing to Youth.”

o Wednesday, July 31: The Senate Committee on Environment and Public Works will hold a hearing on “Strengthening Public Health Protections by Addressing Toxic Chemical Threats.”

o Thursday, August 1: The House Committee on Energy and Commerce will hold a hearing on “PPACA Pulse Check.”

o Thursday, August 1: The House Committee on Foreign Affairs Subcommittee on Africa, Global Human Rights, and International Organizations will hold a hearing on “The Impact of U.S. Water Programs on Global Health.”





o Thursday, August 1: The House Committee on Ways and Means will hold a hearing on the “Status of the Affordable Care Act Implementation.”


CMS FY 2012 DSH Allotments; State Allotments for Medicare Part B QIs. The Centers for Medicare & Medicaid Services (CMS) released a notice announcing “the final federal share disproportionate share hospital (DSH) allotments for federal fiscal year (FY) 2012 and the preliminary federal share DSH allotments for FY 2013. This notice also announces the final FY 2012 and the preliminary FY 2013 limits on aggregate DSH payments that states may make to institutions for mental diseases (IMDs) and other mental health facilities. This notice also includes background information describing the methodology for determining the amounts of states’ FY DSH allotments and IMD DSH limits.” It is effective on August 26. CMS also released a notice that “sets forth the States’ final allotments available to pay the Medicare Part B premiums for Qualifying Individuals (QIs) for the Federal fiscal year (FY) 2012 and the preliminary QI allotments for FY 2013. The amounts of these QI allotments were determined in accordance with the methodology set forth in regulations and reflect funding for the QI program made available under recent legislation.”

Orphan Drug Rule. The Health Resources and Services Administration (HRSA) released the Exclusion of Orphan Drugs for Certain Covered Entities under 340B Program Final Rule. According to the notice, “HHS is issuing this final rule to clarify how section 340B(e) of the Public Health Service Act (PHSA) will be implemented. The final rule applies section 340B(e) of the PHSA only to drugs transferred, prescribed, sold, or otherwise used for the rare condition or disease for which the orphan drug was designated under section 526 of the Federal Food, Drug, and Cosmetic Act (FFDCA). The final rule also sets forth that it is the responsibility of the 340B covered entity to maintain auditable records that demonstrate compliance with the terms of the orphan drug exclusion requirements. This rule will provide clarity in the marketplace, maintain the 340B savings for newly-eligible covered entities, and protect the financial incentives for manufacturing orphan drugs designated for a rare disease or condition as indicated in the Affordable Care Act and intended by Congress.”

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Eugenia Edwards, at 202-457-5622 or [email protected].

Homeland Security LEGISLATIVE ACTIVITY

Budget and Appropriations. Action on the FY 2014 Homeland Security appropriations bill continues, with the respective funding levels varying by $200 million, closer than other appropriations bills to date. The full House has already passed its appropriations bill, while timing for Senate floor action has not yet been announced.


Immigration and Border Security. The House is not likely to vote before recess on any of the individual immigration bills being marked up in the House Judiciary Committee. The committee most recently held a hearing on a Republican-backed version of the DREAM Act, dubbed the “Kids Act,” which has been discussed by Majority Leader Eric Cantor (R-VA). This bill would address the status of immigrants who were brought illegally to the U.S. as children by their parents. However, challenges remain to address issues like a pathway to legalization that can garner Republican support. House Republicans are expecting immigration to be a heated issue in their districts during the upcoming recess and timing for bills to move forward will be in the fall.

Nominations:

o Bureau of Alcohol, Tobacco, Firearms and Explosives. Senate Majority Leader Harry Reid (D-NV) plans to proceed with the controversial nomination of B. Todd Jones to serve as the next Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The ATF has not had a permanent director for the past eight years. The Senate Judiciary Committee approved his nomination by a party-line vote, however it is expected he will be confirmed by the full Senate.

o DHS Deputy Secretary. Homeland Security and Governmental Affairs Committee Ranking Member Tom Coburn (R-OK) requested a hold on the administration’s nomination for deputy secretary of the U.S. Department of Homeland Security (DHS), Alejandro Mayorkas. The DHS Office of Inspector General has confirmed that it is in the preliminary stage of an investigation into whether Mayorkas improperly helped a company secure an international investor visa for a Chinese executive while serving in his current position as director of U.S. Citizenship and Immigration Services.


o Wednesday, July 31: The House Homeland Security Subcommittees on Oversight and Management Efficiency and Transportation Security will hold a joint hearing titled “TSA Integrity Challenges: Examining Misconduct by Airport Security Personnel.”

o Wednesday, July 31: The Senate Homeland Security and Governmental Affairs Committee will hold a full committee markup of 15 pending bills and consider the following nominations: John Thompson to be Director of the Census, and Katherine Archuleta to be Director of the Office of Personnel Management.

o Wednesday, July 31: The Senate Homeland Security and Governmental Affairs Subcommittee on Emergency Management, Intergovernmental Affairs and the District of Colombia will hold a hearing on “D.C. Emergency Preparedness.”

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this section: Alexis Early at 202-457-5105 or [email protected], and Norma Krayem, at 202-457-5206 or [email protected].




International EXECUTIVE AND LEGISLATIVE BRANCH ACTIVITY State-Foreign Operations Appropriations Update. Last week, Senate Appropriations Committee

members added a provision in the Senate FY 2014 State-Foreign Operations spending bill that seeks to sanction any nation that grants asylum to Edward Snowden, a former U.S. contractor facing felony charges in the U.S. for having leaked U.S. surveillance secrets. Meanwhile, after a month of staying in the transit area of Moscow’s international airport, the Russian Ministry of Immigration issued Snowden a document last week that will enable him to leave Sheremetyevo Airport and temporarily stay in Russia.

By a vote of 23-7, the Committee advanced its $50.6 billion spending measure for the State Department, with $6.5 billion for Overseas Contingency Operations (OCO). The House appropriations bill is $10 billion less at $40.6 billion. Similar to the House, the Senate bill did not alter the existing language that blocks foreign aid to governments that have undergone a coup d’état. The Senate bill will, however, incrementally condition military aid to Egypt based on four good-governance requirements, which can be waived by the President. Additionally, in response to reports Afghan President Hamid Karzai’s government is imposing taxes on the transport of U.S. property out of Afghanistan, the Senate bill includes a provision that will withhold $5 in foreign aid for every dollar in fines Afghanistan imposes. The Senate bill also includes State-Foreign Operations Subcommittee Chair Patrick Leahy’s (D-VT) amendment to allow U.S. funding for the International Criminal Court to pursue Joseph Kony, the leader of the Lord’s Resistance Army; Sudanese President Omar Al-Bashir; and Syrian President Bashar al-Assad.

Syria. U.N. Secretary-General Ban Ki-moon said last week the death toll in Syria’s civil war has now exceeded 100,000, and called for urgent talks to end the 2.5-year civil war. While tension is increasing with the U.S. and Russia over Snowden, Secretary of State John Kerry said last week that he has spoken with Russian Foreign Minister Sergey Lavrov and both countries remain committed to convening a peace conference in Geneva. Meanwhile, the Senate and House Intelligence Committees reversed course last week and declined to block the Obama Administration’s plan to arm rebels in Syria. While lawmakers are still expressing reservations, few details of their objections have publicly been aired because the Administration’s plan apparently involves covert arms shipments to the rebels. Last week a U.N. investigation team arrived in Damascus seeking full access to fully investigate the allegations of chemical weapon use in Syria. This Wednesday, July 31, the House Foreign Affairs Subcommittee on the Middle East will examine the nexus between Iran and Syria and implications for the region.

Trade. Last Thursday, July 25, the 18th round of the Trans-Pacific Partnership (TPP) concluded in Malaysia. Chief negotiators announced procedural steps for advancing the negotiations, including a “work program” to accelerate market access talks on agricultural, industrial, and textile and apparel goods. Some of the more difficult topics that remain to be advanced include chapters on rules of


origin for apparel, intellectual property rights related to pharmaceuticals, and state-owned enterprises. Meanwhile, Japan formally entered the negotiations last Tuesday, July 23, and noted it may reopen chapters already closed. Sources have shared that the TPP negotiators have the goal of closing technical work in all chapters at the end of the next round in order to provide deliverables for leaders of the Asia Pacific Economic Cooperation (APEC) Summit in October. The 19th round of TPP negotiations is scheduled for August 22-30 in Brunei. This Thursday, August 1, the House Foreign Affairs Subcommittee on Trade will hold a hearing on TPP, its outlook and opportunities.

Last week, President Obama hosted Vietnamese President Truong Tan Sang and announced the formation of a U.S.-Vietnam Comprehensive Partnership. The Partnership will provide a framework for broad discussion and cooperation on political, education, science and technology, security, environment and health, and trade matters – including TPP.

With respect to renewing Trade Promotion Authority (TPA), House Ways and Means Ranking Member Sander Levin (D-MI) signaled last week that the fast-track authority legislation is in the early stages of being drafted. The Ranking Member noted that the TPA bill will need to address two issues: (1) strengthen the role of Congress in developing trade deals in order to help build broader bipartisan support, and (2) provide for a broader legislative strategy that addresses the challenges of globalization and strengthens U.S. competitiveness. The Ranking Member also favors addressing currency manipulation by U.S. trading partners. Senate Finance Chairman Max Baucus (D-MT) has already indicated that renewal of TPA should also include renewal of Trade Adjustment Assistance (TAA). This Wednesday, July 31, the Congressional deadline for renewing the Generalized System of Preferences (GSP) program will pass.

During the August Congressional recess, the Ethiopian Government will host the 2013 AGOA Forum on August 12-13. The theme of this year’s African Growth and Opportunity Act (AGOA) Forum is “Sustainable Transformation through Trade and Technology.”

Spanish Rail Tragedy. Last Thursday, July 25, President Obama offered sympathy and condolences to the families of those 78 people, including one U.S. citizen, who lost their lives when a high-speed train derailed in Spain. The President also expressed thanks to the Government of Spain and rescue personnel for assisting the five injured U.S. citizens and offered to provide U.S. assistance.

White House Visit. This Thursday, August 1, President Obama will host Yemeni President Abdo Rabbu Mansour Hadi at the White House. The White House shared that President Obama looks forward to discussing U.S. efforts to enhance democratic governance and support economic development in Yemen, strengthening the counter-terrorism partnership, and enabling the return of Yemeni detainees at the Guantánamo Detention Center who have been designated for transfer.

Middle East Peace Talks. While Secretary Kerry announced that Middle East Peace Talks will resume soon, the State Department has yet to confirm a date for when all the parties are expected to meet in Washington.

Nominations. Last week, President Obama announced his intention to nominate the following individuals to be U.S. Ambassadors: Donald Lu (Albania); Robert Sherman (Portugal); and Caroline


Kennedy (Japan). Others nominated included: Marcel Lettre to be Principal Deputy Under Secretary of Defense for Intelligence; and Robert Simon to be the Associate Director for Energy and Environment at the Office of Science and Technology Policy. Last week, the Senate Foreign Relations Committee advanced the nomination of Samantha Power to be the U.S. Ambassador to the United Nations. This week, the Senate Committee will hold confirmation hearings for several nominees (See This Week’s Hearings below for more details).


o Tuesday, July 30: The Senate Foreign Relations Committee will hold a business meeting to consider the nomination of Joseph Yun to be the Ambassador to Malaysia.

o Tuesday, July 30: The Senate Foreign Relations Committee will hold a confirmation hearing for Steve Linick to be Inspector General of the State Department and Daniel Sepulveda to be Deputy Assistant Secretary of State for International Communications and Information Policy. The hearing will include the following nominees to be U.S. Ambassadors: David Hale (Lebanon); Matthew Winthrop Barzun (United Kingdom); Liliana Ayalde (Brazil); and Kirk W.B. Wagar (Singapore).

o Wednesday, July 31: The Senate Foreign Relations Subcommittee on European Affairs will hold a hearing to examine “Where is Turkey Headed? Gezi Park, Taksim Square, and the Future of the Turkish Model.” The Administration is not scheduled to testify.

o Wednesday, July 31: The House Foreign Affairs Subcommittee on the Middle East will hold a hearing on “The Iran-Syria Nexus and its Implications for the Region.” The Administration is not scheduled to testify.

o Thursday, August 1: The House Foreign Affairs Subcommittee on Trade will hold a hearing on “The Trans-Pacific Partnership: Outlook and Opportunities.” The Administration is not scheduled to testify.

o Thursday, August 1: The House Foreign Affairs Subcommittees on the Middle East and the Western Hemisphere will hold a joint hearing on “Examining the State Department’s Report on Iranian Presence in the Western Hemisphere 19 Years after the Asociación Mutual Israelita Argentina (AMIA) Attack.” The Administration is not scheduled to testify.

o Thursday, August 1: The House Foreign Affairs Subcommittee on Global Health will examine “The Impact of U.S. Water Programs on Global Health.” Testifying from the Administration is Global Water Coordinator Christian Holmes from USAID, and Special Coordinator for Water Resources Aaron Salzberg from the State Department.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Stacy Swanson at 202-457-5627 or [email protected].



Tax LEGISLATIVE ACTIVITY

Senators Submit Tax Reform Letters to Finance Committee; Promised 50 Year Secrecy on Tax Expenditure Submissions. Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) asked their Senate colleagues on June 27 to provide proposals in response to a “blank-slate” approach (i.e., assuming elimination of all tax expenditures from the Code) by last Friday, July 26. The Chairman and Ranking Member requested input from members on what expenditures and other provisions should be maintained, repealed, or added to a reformed Code. To encourage submissions, the Senate Finance Committee staff promised that submissions will not be released until December 31, 2064, given concerns that the letters could become public.

One senator, though, Sen. Jeff Flake (R-AZ), has already publicly released his submission, which does not address specific expenditures. Instead, Sen. Flake’s letter makes the case for the elimination of “tax earmarks” and unproductive provisions of the Code, coupled with lower individual and business income tax rates, the construction of a competitive international tax system, simplification of the Code, and elimination of double taxation, including the “death tax.”

A number of other senators have submitted letters to the committee as well, though many will choose to keep their letters private.

Senate Majority Leader Reid: Tax Reform Must Raise at Least $975 Billion. Commenting on the tax reform effort led by Chairman Baucus and House Ways and Means Committee Chairman Dave Camp (R-MI), Senate Majority Leader Harry Reid (D-NV) indicated that any tax rewrite should produce at least $975 billion in revenue, equal to the amount called for in the Senate-passed budget resolution earlier this year. Majority Leader Reid surmised that tax reform “can’t be even close to [revenue] neutral.”

Senate Republican Leadership and Finance Committee Republicans: Tax Reform Must Be Revenue Neutral. A group of 14 Senate Leadership and Finance Committee Republicans submitted a letter asserting that tax reform must be revenue neutral. The letter calls for lower rates and elimination of distortions in the Code to create jobs, boost income, and improve America’s long-term fiscal health.

Ways and Means Democrats Discussing Options with Chairman Camp. Last Tuesday, July 23, the 16 Democrats on the House Ways and Means Committee sent a letter to Chairman Camp requesting a pre-August recess meeting to discuss a bipartisan plan for moving comprehensive tax reform. The letter indicates that the committee’s Democrats are “hopeful that the bipartisan groundwork that has been laid this year can result in bipartisan tax reform legislation from this Committee.” In response to the request, the committee is scheduled to meet this Wednesday, July 31 to discuss the path for developing a bipartisan tax reform measure.

http://www.flake.senate.gov/public/_cache/files/da8b2198-0464-4ca7-b6aa-88f13f56e276/Sen.%20Flake%20tax%20reform%20letter%20to%20Sens.%20Baucus%20and%20Hatch.pdf



o Wednesday, July 31: The Senate Finance Subcommittee on Energy, Natural Resources, and Infrastructure will hold a hearing titled “Powering Our Future: Principles for Energy Tax Reform.”

o Thursday, August 1: The House Ways and Means Committee will hold a hearing on the current status of the Obama’s Administration’s efforts to implement the Affordable Care Act.

REGULATORY ACTIVITY

FATCA Delayed. On July 12, the Internal Revenue Service (IRS) issued Notice 2013-43, extending timelines and other guidance regarding the implementation of the Foreign Account Tax Compliance Act (FATCA). Withholding will begin on July 1, 2014, rather than January 1, 2014, along with other extensions. The delay is an attempt by the IRS to provide financial institutions and foreign governments additional time to set up their information technology structures necessary for the reporting. The extension will also allow the U.S. Treasury additional time to conclude more intergovernmental agreements with other governments.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Joseph Urso at 202-457-5349 or [email protected].

Technology and Communications LEGISLATIVE AND REGULATORY ACTIVITY

FCC Process Reform Legislation. In less than 10 minutes, the House Energy and Commerce Committee’s Subcommittee on Communications and Technology favorably reported the committee prints for the “FCC Process Reform Act of 2013” and “FCC Consolidated Reporting Act of 2013,” each by voice vote. Perhaps more noteworthy, however, Chairman Greg Walden (R-OR) and Ranking Member Anna Eshoo (D-CA) announced their intention to work together over the August recess to construct a bipartisan substitute for the FCC Process Reform Act, which, in its current form, remains a concern for many committee Democrats. That bill and the FCC Consolidated Reform Act appear ripe for full committee consideration in early September.

Incentive Auction Hearing. The House Energy and Commerce’s Subcommittee on Communications and Technology held an oversight hearing regarding the Federal Communications Commission’s (FCC) implementation of the incentive auction mandated by the JOBS Act. Committee members expressed their desire to ensure broadcasters are treated fairly and are properly incentivized to participate. Several fault lines emerged during the hearing, such as Republican concerns regarding proposed auction procedures that might discourage large wireless carriers from participating in the auction. In their view, such limitations would be contrary to law and would lead to a less successful auction. Democrat members largely disagreed.



Copyright Hearing. The House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet convened a hearing to explore the role of copyrights in American innovation. During the hearing, Full Committee Chairman Bob Goodlatte (R-VA) explained that copyright owners and the technology sector “have a symbiotic relationship and are responsible for significant [American] innovation.” The subcommittee will hold a second hearing to address copyright issues from the perspective of the technology sector.

Google Settles Charges With FTC. Following a public comment period, the Federal Trade Commission (FTC) approved a modified Final Order settling charges that some of Google Inc.’s business practices dealing with patents held by its subsidiary, Motorola Mobility LLC, could stifle competition among manufacturers of electronic devices. The Final Order requires Google to abide by its commitments to license its standard-essential patents on fair, reasonable, and non-discriminatory terms.

CableCARD Rulemaking. A recent court order overturned the FCC order that contained certain technical rules regarding the implementation of CableCARDs. The court concluded that the FCC exceeded its authority when it applied certain rules to digital broadcast satellite operations. In response to the court order, TiVo Inc. filed a petition for rulemaking requesting that the FCC adopt rules that clearly permit cable customers to continue to use competitive set-top boxes with CableCARDs. Comments and reply comments regarding TiVo’s petition are due by September 16 and October 9, respectively.

E-rate Form Updates. The FCC released a Public Notice announcing more proposed revisions to E-rate forms, this time to FCC Form 479 (Certification by Administrative Authority to Billed Entity of CIPA Compliance), Form 486 (Receipt of Service Confirmation and CIPA and Technology Plan Certification), and Form 500 (Funding Commitment Adjustment Request Form). The proposed changes clarify and/or update the information requests on the forms to reflect changes in the FCC’s rules and administrative procedures. Comments and reply comments concerning the revised forms are due by August 14, and August 28, respectively.


o Friday, August 2: FCC Consumer Advisory Committee Meeting.

o Friday, August 2: Annual Review of the E-rate Eligible Services List, Comment Deadline.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Jennifer Richter at 202-457-5666 or [email protected].



Transportation and Infrastructure LEGISLATIVE AND EXECUTIVE BRANCH ACTIVITY

Appropriations. Both the House (H.R. 2610) and Senate (S. 1243) Transportation-HUD appropriations bills will be considered this week. In the Senate, floor debate will continue with a vote expected by the end of the week. Roughly 70 amendments have been filed to the Senate bill, including an amendment offered by Sen. Rob Portman (R-OH) to prioritize proposed bridge funding for structurally deficient bridge projects in critical corridors, which was approved by voice vote. In the House, debate will begin under an open rule, which allows members to offer any germane amendment for consideration. It’s possible, however, that the House will not hold a vote on the bill’s final passage until after the August recess.

TIFIA. During a Senate Environment and Public Works Committee hearing last week titled “Oversight Hearing on Implementation of MAP-21’s TIFIA Program Enhancements,” Transportation Secretary Anthony Foxx stated his expectation to obligate Transportation Infrastructure Finance and Innovation Act (TIFIA) assistance for seven or more projects before the end of the 2013 calendar year – a record number for the Department of Transportation.


o Wednesday, July 31: The House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation will hold a hearing titled “How to Improve the Efficiency, Safety, and Security of Maritime Transportation: Better Use and Integration of Maritime Domain Awareness Data.”

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this section: Jared Fleisher at 202-457-6341 or [email protected], and Jessica Monahan at 202-457-6302 or [email protected].





Capital Thinking ~ July 29, 2013

News & Politics

Transcript of Capital Thinking ~ July 29, 2013