News & Events
The D.C. Update (Vol. IV, No. 9)
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The Week Ahead
The Senate will resume consideration of a motion to proceed to the Export-Import Bank reauthorization.
Banking & Financial Services
The Senate is set to vote early next week on ending debate on a reauthorization of the Export-Import Bank after Republicans wouldn’t go along with a plan to clear a House-passed measure. The measure sailed through the House Wednesday, May 9, by a 330-93 vote. All the “no” votes were from Republicans. Senate Minority Whip Jon Kyl (R-Ariz.) proposed a package of 5 amendments to the House-passed bill. Senate Majority Leader Harry Reid (D-Nev.) signaled Democrats would not allow debate on amendments unrelated to the bank’s activities, such as a possible GOP proposal dealing with student loans.
On Thursday, May 10, the House Armed Services Committee approved a fiscal 2013 defense policy bill that would reverse some of the Obama administration’s security policies and authorize unrequested funds for Pentagon weapons. The House could consider the measure as early as next Wednesday, committee aides said. A Senate committee plans to mark up its version behind closed doors during the week of May 21. The House bill would authorize $554 billion for the Defense Department and national security programs and $88 billion for overseas contingency operations, primarily for the war in Afghanistan..
On Thursday, May 10, Majority Leader Reid nixed a scheduled revote on a bill to prevent a student loan interest rate hike. On Tuesday, May 8, Republicans blocked cloture on the student loan bill in a 52-45 vote. Sixty votes were needed to limit debate. Both parties agree that Congress should act by the July 1 deadline to extend the current 3.4 percent interest rate on federal subsidized student loans for one year. Democrats want to pay for the patch by eliminating a tax preference for S corporations, while Republican bills in both chambers would raise the money by eliminating a preventive health care fund in the 2010 health care overhaul.
The nonpartisan Congressional Budget Office is questioning the link between increased domestic oil production and energy security, undercutting a key argument of industry and pro-drilling Republicans. The report found that disruptions related to oil production that occur anywhere in the world raise the price of oil for every consumer of oil, regardless of the amount of oil imported or exported by that consumer’s country (unless the country the consumer lives in regulates the price of oil). But the report finds that policies to reduce use of oil ultimately make consumers “less vulnerable” to price shocks by creating incentives for consumers “to use less oil or make decisions that reduced their exposure to higher oil prices in the future, such as purchasing more fuel-efficient vehicles or living closer to work.”
On Tuesday, May 8, conferees began meeting on the surface transportation authorization bill. The dispute over the Keystone XL pipeline is already looming as the biggest obstacle to a deal on a highway bill. Language in a House-passed extension would require Federal Energy Regulatory Commission approval of the pipeline within 30 days. If the agency fails to meet the deadline, the legislation would deem the project approved. The White House has threatened to veto legislation that includes that mandate.
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The House Energy and Commerce Subcommittee on Oversight and Investigations is requesting information about how the Health and Human Services Department (HHS) would respond if the Supreme Court strikes down the 2010 health care overhaul or if automatic spending cuts take effect next year. Rep. Cliff Stearns (R-Fla.), chairman of the subcommittee, said he was formally making the request at the end of a hearing Wednesday, May 9, after an HHS official’s responses in testimony did not satisfy panel Republicans.
On Wednesday, May 9, Reps. Allyson Y. Schwartz (D-Pa.) and Joe Heck (R-Nev.) introduced draft legislation in the House that they hope will create a path toward solving the nagging problem of how to pay physicians who treat Medicare patients. Their bill would repeal the sustainable growth rate (SGR) formula, which dictates how much Medicare reimburses physicians. It would set up a five-year transition period, during which the Centers for Medicare and Medicaid Services would develop and test new payment models to replace the formula.
It has been reported that Alaska, Connecticut and Mississippi have joined Nebraska in indicating their intent to withdraw from the Nonadmitted Insurance Multi-State Agreement (NIMA). NIMA provides a mechanism for states to allocate and distribute surplus lines tax revenues as permitted by the Non-admitted and Reinsurance Reform Act (NRRA). The NRRA is part of the Dodd-Frank Wall Street Reform legislation that allows only the home state of the insured to require premium tax payments for non-admitted insurance in the absence of an agreement among states. However, the NRRA allows states to enter into agreements, such as NIMA, to allocate surplus lines tax revenue among the states. While NIMA is supported by the National Association of Insurance Commissioners (NAIC), there is a competing agreement, known as SLIMPACT, that has been endorsed by other states.
On Wednesday, May 16, the House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled, “The Impact of the Dodd-Frank Act: What it Means to be a Systemically Important Financial Institution.” Douglas J. Elliott of The Brookings Institution testified that there are probably several Systemically Important Financial Institutions (SIFIs) among the largest life insurers and no part of the financial industry should receive an automatic exclusion from SIFI designation. William J. Wheeler, President of the Americas Division of MetLife, testified that regulated insurance activities generally do not pose systemic risk.
On Wednesday, May 9, Sen. David Vitter (R-La.) spoke on the Senate floor and urged the Senate to extend the National Flood Insurance Program (NFIP). The NFIP is set to expire on May 31, 2012. Vitter supports a long-term five year extension and called on Majority Leader Reid to bring the extension for a vote as soon as possible. Vitter and Sen. John Tester (D-Mont.) hosted a Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Economic Policy hearing entitled, “The National Flood Insurance Program: The Need for Long-Term Reauthorization and Reform.” Subcommittee Chairman Tester has sponsored a bipartisan measure to extend the program through the end of the year and called on his colleagues to reauthorize the program for the long-term. In hearing testimony, David A. Sampson, president and CEO of the Property Casualty Insurers Association of America, called for NFIP reauthorization on a long-term basis and NFIP reforms relating to rate structure, mapping issues, servicing issues and outdated commissions.
On Tuesday, May 1, the IRS, Employee Benefits Security Administration, Department of Labor and the Centers for Medicare and Medicaid Services, issued a request for information regarding the use of stop loss insurance by self-insured group health plans and their plan sponsors, with a focus on the prevalence and consequences of stop loss insurance at low attachment points.
On Monday, April 30, the International Association for the Study of Insurance Economics (known as the Geneva Association), sent a letter to the Federal Reserve Board regarding the Board’s proposed enhanced prudential standards and early remediation requirements applicable to significantly important financial institutions in the U.S. The Geneva Association believes that it is appropriate to subject those financial institutions that pose a threat to the financial stability of the U.S. or any other country to more stringent standards in comparison with institutions that do not pose such risks. However, any new regulation must not unnecessarily distort the insurance industry and should encourage the role of insurers in the private sector in helping individuals and institutions to mitigate their risks.
The FDIC issued a final rule on Monday, April 30, that treats a mutual insurance holding company as an insurance company for purposes of the Dodd-Frank orderly liquidation provisions. The final rule clarifies that the liquidation and rehabilitation of a covered financial company that is a mutual insurance holding company will be conducted in the same manner as an insurance company. The rule is effective May 30, 2012.
On Friday, April 27, Rep. David Reichert (R- Wash.) introduced HR 5284, the Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2012. The legislation seeks to reform the Medicare set-aside process for workers’ compensation claims. The bill was referred to the House Ways and Means Committee.
Labor, Pensions & Retirements
On Friday, May 11, Reps. George Miller (D-Calif.) and Robert E. Andrews (R-N.J.) wrote to Rep. John Kline (R-Minn.), chairman of the House Education and the Workforce Committee, asking him to schedule a hearing with the inspector general regarding reports probing the National Labor Relations Board (NLRB). In a pair of reports, the inspector general found that NLRB member Terence F. Flynn had improperly shared internal board information with outside parties in ways that could benefit them professionally, a move the inspector general said violated ethics rules for federal employees. The reports said Flynn disclosed draft NLRB decisions as well as drafts of dissenting opinions before they had been publicly released. The Justice Department is also looking into the reports for possible criminal violations.
On Wednesday, May 9, Senate Commerce, Science and Transportation Chairman John D. Rockefeller IV (R-W.Va.) acknowledged a lack of consensus on sweeping privacy legislation, but suggested that limited provisions could be added this year to cybersecurity legislation. In February, the White House issued a consumer privacy report calling for legislation to enumerate privacy rights that Internet users can expect. A Federal Trade Commission report released the following month recommended that Congress strengthen the agency’s ability to enforce such standards.
On Monday, May 7, Sen. Al Franken (D-Minn.) issued the strongest rebuke yet from Capitol Hill against a proposed $3.6 billion deal in which Comcast and other cable companies would sell spectrum to Verizon Wireless and agree to market each other’s products. In a letter to regulators, he raised doubts about whether the parties involved would comply with any stipulations placed by the federal government on the proposal. Franken accused Comcast of not complying with conditions set by the Federal Communications Commission on an earlier acquisition of NBCUniversal Media.
Transportation & Infrastructure
On Tuesday, May 8, Conference negotiations on a new highway bill opened with Republicans staking out a tough stance against the Senate’s plan to pay for a two-year, $109 billion reauthorization by supplementing the Highway Trust Fund. Senate Finance Chairman Max Baucus (D-Mont.) proposed a package that would supplement the Highway Trust Fund with a proposed $5 billion general fund transfer, as well as provisions to raise money by revoking passports of tax scofflaws and combating Medicare and Medicaid fraud. But the ranking Republican on the Finance panel, Sen. Orrin G. Hatch (R-Utah), said that the package deviates from the principle that users of the surface transportation system should pay for it.
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Shane Doucet, Douglas P. Faucette, Denise Hanna, Harriet Miers, Phil Rivers, Mark Siegel, Walter B. Smith, Jr.
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