News & Events
The D.C. Update (Vol. III, No. 23)
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The Week Ahead: December 6 - December 9
The House is expected to vote on HR 1254, the Synthetic Drug Control Act of 2011. The House could also consider a bill that would prohibit the Environmental Protection Agency (EPA) from regulating “nuisance dust,” which includes dust produced in farm operations, under the Clean Air Act.
The Senate Judiciary Committee will mark-up a bill to prevent trafficking in counterfeit drugs. The Senate Health, Education, Labor and Pensions Committee will hold hearings to examine barriers facing the long-term unemployed.
Banking & Financial Services
The Senate Banking, Housing and Urban Affairs Committee held a hearing Thursday, December 1, on relaxing some securities rules as a way to steer new capital toward smaller companies. With lawmakers sharply divided on how best to grow the economy and spur job creation, the handful of bills aimed at bringing in new investment stick out for their bipartisan support and chance of becoming law. The bills are intended to loosen some regulatory requirements — and reduce the costs of compliance — associated with registering securities for sale with the Securities and Exchange Commission (SEC). Registration can be an expensive and time-consuming process, and bill proponents say many smaller companies should be allowed to avoid it.
The House Financial Services Committee on Wednesday, November 30, approved a trio of measures that would change provisions in the 2010 financial regulatory overhaul law concerning the regulation of derivatives. The committee gave voice-vote approval to an amended version of HR 2586, the Swap Execution Facility Clarification Act, that would prohibit the Commodity Futures Trading Commission (CFTC) and SEC from imposing certain clearing, margin and collateral requirements on a swap execution facility (SEF). The committee also approved by voice vote HR 2682, the Business Risk Mitigation and Price Stabilization Act of 2011 that would exempt non-financial companies that use derivatives to hedge their risk from having to meet the margin requirements in the Dodd-Frank law. By a vote of 53-0, the committee approved a third measure that would exempt inter-affiliate swaps from clearing, margin and collateral requirements put in place by the Dodd-Frank act.
On Tuesday, November 14, the Senate attempted a second “minibus” bill; however, it was blocked due to various objections. One such objection came when Sen. Robert Menendez (D-N.J.) objected to a bid to relax rules on trade with Cuba. And when Senate Majority Leader Harry Reid (D-Nev.) moved to effectively strike the Cuba language, its author, Sen. Jerry Moran (R-Kan.) objected.
On Friday, December 2, General Electric Co. and Rolls-Royce, makers of the F136 engine for the F-35 Joint Strike Fighter plane, announced they would no longer continue development of the propulsion system. The announcement marked either a major break for taxpayers or a major mistake by lawmakers, depending on one’s viewpoint. The Pentagon began the alternative engines program more than 15 years ago and Congress funded it until fiscal 2011. But the George W. Bush administration decided in 2006 that developing two engines cost too much and sought to discontinue the GE/Rolls-Royce effort. The Obama administration has concurred. Congress overruled the executive branch until April 2011, when lawmakers cleared and President Obama signed a fiscal 2011 spending law that cut off funding for the second engine.
On Thursday, December 1, the Senate passed an amended version of HR 1540, the National Defense Authorization Act for Fiscal Year 2012. President Obama is still threatening to veto the legislation over language he believes would restrict the administration’s handling of suspected terrorists. Shortly before the final vote, Senate opponents who charged that the measure would expose U.S. citizens accused of terrorist activities to the military’s control — with no limit on the time they could be held and interrogated — struck a last-minute compromise with Armed Services Committee leaders on one of the provisions. The House-passed version of the bill, meanwhile, includes even more stringent language on detainees that would require military commission trials for all accused terrorists. The House and Senate Armed Services committees will get to work soon on negotiations to resolve the differences in the bill, with the detainee provisions expected to be the biggest hurdle to agreement.
The House Oversight and Government Reform Committee will continue pressing the Obama administration, the EPA and California’s Air Resources Board about the process that led to stricter fuel efficiency standards for automakers. Chairman Darrell Issa (R-Calif.) has launched a multipronged assault on the proposed regulation, questioning the nature of the negotiations and process that brought about the new rule, which requires automotive manufacturers to increase their average fleetwide fuel economy to 54.5 miles per gallon by 2025. Industry officials peg the cost of compliance at about $2,000 per vehicle, but the EPA estimates that drivers will save more than $4,000 on fuel over a vehicle’s life.
Speaker John A. Boehner (R-Ohio) announced on Friday, December 2, a plan to expedite approval of the Keystone XL oil pipeline project from Canada by folding the measure into the chamber’s extension of unemployment insurance and payroll tax breaks that will be voted on later this month.
Sen. Tom Coburn (R-Okla.) is vowing to block a bill that would earmark 80 percent of whatever civil penalties are eventually collected for recovery projects in Louisiana, Mississippi, Alabama, Georgia and Florida. Coburn would prefer to use the penalty money to help pay for a pending two-year highway reauthorization. But two other GOP conservatives, Sens. Jeff Sessions (R-Ala.) and Richard C. Shelby (R-Ala.), back the proposal to redirect a large chunk of the yet-to-be-determined penalties from the existing trust fund for oil spill response to a new Gulf Coast Restoration Trust Fund for conservation, infrastructure and other projects to restore the damage from the 2010 spill.
The Obama administration is signaling that later this month it will finalize a rule limiting mercury emissions from power plants as planned, rebuffing mounting pressure from lawmakers and the industry to delay the standards. Regina McCarthy, the EPA’s top air quality official, said Thursday, December 1, that the agency will finalize the so-called utility MACT rule on or before a court-ordered December 16, deadline, despite a growing chorus of complaints that the combined effect of several major air rules will force the widespread closure of power plants.
Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) said Wednesday, November 30, that he plans to introduce legislation in early 2012 to promulgate a national clean-energy standard, calling a policy analysis by the Energy Information Administration (EIA) “thorough and thoughtful.” A clean-energy standard would compel electricity retailers to ensure that a percentage of the power they sell be produced from renewable energy sources. The policy considered by EIA assumes utilities would earn credits for generating clean power, which they could trade with other utilities. The scenarios Bingaman asked EIA to analyze included nuclear power, “clean” coal and natural gas — three energy sources that President Obama especially called for including in his proposal earlier this year to derive 80 percent of U.S. power from clean sources by 2035.
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House Republicans plan to block pending cuts to Medicare physician payments in a year-end legislative package that would extend several expiring tax and benefit provisions. It was unclear whether the patch would last for one year, like the current “doc fix,” or two years. Rep. Phil Gingrey (R-Ga.) said Friday, December 2, the GOP Doctors Caucus had persuaded Republican leaders to include a two-year patch during a meeting the day before.
The House Energy and Commerce Committee approved 33-17 a bill that would repeal the Community Living Assistance Services and Supports (CLASS) program. A key feature of the health care law, the program was designed to allow workers to pay into a fund that would provide a $50 daily cash benefit for long-term care services. The Department of Health and Human Services (HHS) worked for 19 months to put into place a program that meets the law’s requirements of being voluntary, self-sustaining and fiscally sound over 75 years before announcing October 14 that it did not see a way forward. Democrats have advocated using the existing framework to build a sustainable program and have maintained that repealing the program without a replacement is irresponsible. But Republicans argued Wednesday, November 30, that the secretary could face legal challenges if the program is not formally repealed, citing a November 15 Congressional Research Service memo to the Energy and Commerce panel.
Rep. Luis V. Gutierrez (D-Ill.) plans to urge the Obama administration this week to stress to Alabama authorities that it will exercise discretion in deciding whether to deport illegal immigrants detained under a new state law. He said Friday, December 2, that he will ask Homeland Security Secretary Janet Napolitano to ensure that federal immigration enforcement officers are communicating to local authorities that they will not pursue removal proceedings against illegal immigrants detained under the new law if they pose no threat to the community. Napolitano is scheduled to speak with Gutierrez and other members of the Congressional Hispanic Caucus at their Thursday, December 8, business meeting, according to the Homeland Security Department and a caucus aide.
Sen. Chuck Grassley (R-Iowa) placed a hold last week on a Republican-sponsored immigration bill favored by the House GOP and championed by a Senate Democratic leader. The bill would eliminate country-based caps on the number of employment visas issued annually and boost similar limits for immigrants sponsored by a spouse or relative in the United States. Supporters say the measure, which has been hailed as a major bipartisan breakthrough on immigration policy, would spur economic growth by helping U.S. businesses hire highly skilled legal immigrants. The House passed the measure 389-15 on November 29. But Grassley said that he has concerns about the impact of this bill on future immigration flows, and worries that it does nothing to better protect Americans at home who seek high-skilled jobs.
On Wednesday, November 16, the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity held a hearing to discuss insurance oversight and three legislative proposals: 1) To prohibit the Federal Insurance Office and other financial regulators from collecting data directly from insurers; 2) To exclude insurance companies from the FDIC "orderly liquidation authority;" and 3) To exclude insurance companies from the Federal Reserve’s leverage capital requirements, risk-based capital requirements and accounting standards.
On Thursday, November 17, Congress passed legislation extending the National Flood Insurance Program (NFIP) until December 16, 2011. The extension was part of a spending bill that included a continuing resolution to fund the federal government through December 16. On Thursday December 1, Sen. David Vitter (R-La.) sent a letter to Majority Leader Reid urging him to allow a one-year extension of the NFIP to pass the Senate by unanimous consent. Sen. Vitter has introduced legislation to extend the NFIP through September 30, 2012.
On Tuesday, November 22, the National Association of Insurance Commissioners (NAIC) passed a resolution urging the HHS to take whatever immediate actions are available to the HHS to mitigate the adverse effects the medical loss ratio rule is having on health insurance agents. Twenty-six states voted in favor of the resolution and 20 states voted against it. In a six-page letter sent to NAIC President Elect Commissioner Kevin McCarty before the vote, Sen. John Rockefeller (D-W.Va.) voiced his opposition to the resolution and reiterated his view that the medical loss ratio law will save billions of dollars over the next few years through lower health care premiums and rebates. On Friday, December 2, HHS released its final rule on medical loss ratio requirements under the healthcare reform bill. The final rule does not exempt health insurance agent commissions from the medical loss ratio calculations.
On Monday, November 28, the U.S. Department of Agriculture’s Risk Management Agency (RMA) announced that it will update the methodology to set crop insurance premiums, leading to lower insurance premium rates for many corn and soybean producers in the 2012 crop year. The rate adjustment is based on findings of an independent study and peer review process. The study is part of RMA’s ongoing effort to improve the methodology of determining premium rates for crop insurance.
It has been reported that the Treasury Department will hold a hearing on Friday, December 9, to bring together regulators, federal government officials, consumer organizations and insurance industry representatives to have an exchange on potential areas for insurance regulatory reform.
Labor, Pensions & Retirement
Senate Democrats have narrowed the list of options for extending the expiring payroll tax cut by rejecting a Republican plan that would continue the tax break while curtailing the pay and size of the federal workforce. On Thursday, December 1, Senate Republicans formally embraced an extension of the year-old Social Security payroll tax cut, but a day later Democrats said that the GOP proposal, while welcome, contained little of substance that might be adopted in an eventual compromise. Democrats plan to present a proposal on Monday, December 5, to extend the payroll tax cut and to pay for it.
House Transportation and Infrastructure (HTI) Chairman John L. Mica (R-Fla.) unveiled a proposal Thursday, December 1, for stand-alone legislation that would affirm a 2009 National Mediation Board ruling that made it easier for airline and rail employees to unionize — but also would apply the same standard to union decertification votes. The board’s 2009 ruling changed the standard for deciding union representation elections from a majority of all eligible members of the bargaining group to a simple majority of those casting votes.
The House voted Wednesday, November 30, to build waiting periods into the union election process, hours after the National Labor Relations Board (NLRB) took a step toward approving a new rule that would have the opposite effect.The bill, passed by a 235-188 vote, would require an interval of almost two months between the time workers file petitions to hold a unionization election and when the vote occurs. But the rule approved by the NLRB on a 2-1 vote would postpone any litigation related to a unionization vote until after the vote is held, which would likely speed up the process.
The House Energy and Commerce Subcommittee on Communications and Technology endorsed a bill Thursday, December 1, that would provide 10 megahertz of electromagnetic spectrum, known as the “D block,” for use by first-responders despite Democrats’ opposition to the bill’s approach to other issues, such as whether to set aside some auctioned spectrum for unlicensed use. The bill would enable the Federal Communications Commission to auction spectrum voluntarily given up by broadcasters to mobile broadband companies. As an incentive to participate, broadcasters would receive a portion of the proceeds.
The House Intelligence Committee on Thursday, December 1, endorsed legislation to create an information exchange between spy agencies and the private sector about cybersecurity threats, including more privacy protections than were contained in the original draft. The bill would allow intelligence community leaders to grant private-sector entities security clearances on a temporary or permanent basis in order to receive threat information. It would expressly allow cybersecurity providers to identify and obtain cyber-threat information and share it with designated entities, including the federal government. Information provided would be barred from use for regulatory purposes by the federal government, and those using the information would be required to protect it from unauthorized disclosure.
Members of a bipartisan, bicameral coalition opposed to an online piracy bill are working on a competing proposal focused on the International Trade Commission (ITC). The lawmakers want to counter legislation being advanced by Senate Judiciary Chairman Patrick J. Leahy (D-Vt.) and House Judiciary Chairman Lamar Smith (R-Texas), which would give the Justice Department and intellectual property owners new tools to combat illegal music, movie and product sales on the Internet. Opponents of the Leahy and Smith bills call the legislation an overly broad response to the problem that could constrain legitimate websites. Under the alternative proposal being developed, holders of intellectual property rights would be able to petition the ITC to investigate foreign-based websites. The commission could issue cease-and-desist orders that would compel payment processors and Internet advertising services to stop doing business with infringing sites.
House Democrats are pushing new legislation that would aim to steer more federal dollars toward American manufacturers by extending “Buy America” requirements for infrastructure projects utilizing federal tax dollars. The bill would not require any new spending by itself but would clamp down on ways to circumvent existing Buy America statutes and expand its provisions to a wider variety of projects. Loans and guarantees administered under the Railroad Rehabilitation and Improvement Financing program would be among the new types of projects that would be covered under the proposal, as well as grants for short-line and regional railroads, rail line relocations and Federal Emergency Management Agency mitigation grants.
Transportation & Infrastructure
HTI Chairman Micha said Wednesday, November 30, that plans to produce a long-term surface transportation bill will be postponed until next year because the packed legislative schedule does not leave enough time before the holidays. He said there is still “plenty of time” before the current extension of surface transportation authorization expires at the end of March 2012. He said a bill might not materialize until the beginning of February 2012. Though details were sketchy, House Speaker John Boehner (R-Ohio) and Mica said they wanted a five-year bill — three years longer than legislation that the Senate Environment and Public Works Committee unanimously approved November 9.
On Thursday, November 17, the Senate cleared a conference report on a fiscal 2012 spending package, sending it for President Obama’s expected signature. The “minibus” contains three of the usual 12 annual appropriations bills: Agriculture, Commerce-Justice-Science and Transportation-HUD. The bill would provide $55.6 billion for Transportation-HUD, up $183 million from fiscal 2011.
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Shane Doucet, Douglas P. Faucette, Denise Hanna, Brian Heindl, Harriet Miers, Jim Moriarty, Phil Rivers, Mark Siegel, Walter B. Smith, Jr.
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