General Legislative

Today, January 21, 2013, the House will meet at 10:00 am for the Inauguration of Barack Obama as the 44th President of the United States. No votes are expected in the House. On Tuesday, January 22, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business, to consider H.R. 307 – Pandemic and All-Hazards Preparedness Reauthorization Act of 2013. On Wednesday, the House will meet at 9:00 am to consider Legislation Conditioning an Increase in the Nation’s Debt Limit Upon Congress Passing a Budget. No votes are expected on Thursday or Friday. 

 

The Senate will meet today at 11:30 am for a Joint Session for the Inaugural Ceremonies.


Agriculture & Food

Legislative Activity

  • Energy Drinks. On Thursday, January 17, Representative Edward Markey (D-MA) and Senators Richard Durbin (D-IL) and Richard Blumenthal (D-CT) sent letters to 14 companies that manufacture energy drinks requesting studies, data, and/or information on advertising claims for each company’s products, how each company markets its products, specific labeling information (such as milligrams of caffeine, stimulant ingredients), and whether each company considers its energy drink products to be supplements. 

    Last November, the Food and Drug Administration (FDA) announced that it would likely seek advice from outside experts to examine the health effects and risks of energy drinks, especially when consumed by teenagers and people with other health conditions. Last month, Senators Durbin and Blumenthal met with FDA Commissioner Margaret Hamburg to discuss the possible health effects of energy drinks and to gain a clearer understanding of the dangers of certain levels of caffeine to specific populations, including young people and pregnant women.
  • Upcoming Hearings. On Wednesday, January 23, the House Agriculture Committee will hold a full committee business meeting to consider organizational matters for the 113th Congress.

Regulatory Activity

  • Supplemental Nutrition Assistance Program (SNAP). On Thursday, January 17, the Institute of Medicine (IOM) released “Supplemental Nutrition Assistance Program: Examining the Evidence to Define Benefit Adequacy.”   The Department of Agriculture (USDA) asked IOM and the National Research Council to assess the definition of an adequate SNAP benefit that supports participants’ efforts to meet the program’s goals of food security and access to a healthy diet. The USDA requested such a review because of the growing number of SNAP participants-- the program has increased from less than 20 million to 46 million over the last ten years-- and the Department wanted to ensure that it can properly serve all of its SNAP participants. 
  • The IOM Committee found that USDA’s formula to calculate food costs assumes that participants purchase basic, inexpensive unprocessed ingredients that require significant time to prepare, especially for single parents. The Committee also found that food prices vary widely by geographic region and access to food outlets is a significant contributing factor to achieving healthy diets in SNAP participants

Firm Event

  • Congressional Outlook 2013 Event. On Tuesday, February 5, Patton Boggs will host “Congressional Outlook 2013: Agriculture, Food Safety and Trade,” to discuss topics including the new food safety rules, the future of the Farm Bill, impact of the U.S. Commodities Futures Trading Commission (CFTC), the Trans-Pacific Partnership, the United States-European Union Free Trade Negotiations, and the trade preference program. The event will take place from 9:30 to 11:00 am.  To RSVP, please contact Katie Iobst at kiobst@pattonboggs.com or 202.457.5681.
  • 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 dweekes@pattonboggs.com.

Budget, Appropriations

Legislative Activity

  • Supplemental Appropriations for Disaster Aid. When the Senate convenes on Tuesday, it will take up the $50.6 billion emergency disaster appropriations package (H.R. 152) approved by the House on January 15. Combined with the measure enacted earlier this month, which provided $9.7 billion for the National Flood Insurance Program (H.R. 41), the total amount of supplemental disaster funding is nearly equal to that requested by the President and approved by the Senate late last year. It is possible the Senate will approve the measure passed by the House, but with notable line item differences between the House bill and the bill approved by the Senate in December 2012, it is unlikely the Senate will accept the House measure without amendments. If this occurs, appropriators are optimistic that the differences could easily be reconciled in an expedited conference.
  • Temporary Debt Ceiling Solution Proposed by House Republican Leadership. It appears House Republicans are choosing to delay a spending showdown with the President and Congressional Democrats until the scheduled implementation of the $85 billion sequestration and the expiration of the current FY 2013 Continuing Resolution on March 1 and March 27, respectively. As early as Wednesday, the House is expected to vote on a three-month extension of the nation’s borrowing authority on the condition that the Senate agrees to pass an FY 2014 budget resolution before April 15. Renewing the “no budget, no pay” principle favored by House Republicans, the lack of a budget resolution would result in the withholding of Congressional Member paychecks. The short-term debt ceiling increase received the backing of conservative House Republicans after their leaders agreed to move forward in the fiscal debate pushing for a topline discretionary spending cap at the sequestration amount – meaning that sequestration can only be avoided through an equal amount of spending cuts – and work towards a balanced federal budget within ten years. If Congress fails to extend the borrowing authority, Treasury Secretary Timothy Geithner warned the government will default on its loans as early as mid-February.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Pam Welsh at 202-457-6493 or pwelsh@pattonboggs.com.


Cybersecurity

Executive BRanch Activity

  • Secretary Napolitano. Department of Homeland Security (DHS) Secretary Janet Napolitano announced this week that she plans to continue in her role as DHS Secretary for President Obama’s second term. House Homeland Security Committee Chairman Michael McCaul (R-TX) released a statement shortly after her announcement saying that he looks forward to working with Secretary Napolitano to reform DHS in order to make it more efficient and effective. He noted in his statement that cybersecurity will be one of the top issues that DHS will face in the coming years.
  • Executive Order. Many Members of Congress have stated their intent to reintroduce cybersecurity legislation in the 113th Congress but are still waiting for the Obama Administration to release its much anticipated Executive Order (EO), given that it will likely have an effect on cybersecurity legislation in the Congress. Drafts of the EO have been circulating for many months and we expect the Administration to release its final version in the coming weeks.
  • Homeland Security Presidential Directive (HSPD) 7.  It is anticipated that the Administration will also be releasing a revised version of HSPD-7 in the same general timeframe as the cyber EO. The Presidential Directive will integrate the oversight of cyber and physical security issues for critical infrastructure.
  • DHS Cybersecurity Staff. Effective January 18, Michael Locatis, Assistant Secretary for the Office of Cybersecurity and Communications in the Department of Homeland Security, resigned from his position, just nine months after he took the job. Deputy Assistant Secretary Bobbie Stepfley will be acting in the position, a key job in DHS with daily oversight of cybersecurity issues.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Amy Davenport at 202-457-6528 or adavenport@pattonboggs.com.


Education  

Legislative Activity

  • Gun Violence Prevention and Schools. In response to the Newtown, Connecticut shooting on December 14, 2012, last week the President announced a sweeping set of recommendations and actions to curb gun violence, many of which impact schools, colleges, and universities. The 23 separate executive actions he took the same day of his announcement included the following actions:

o    Provide school officials with proper training for active shooter situations;

o    Direct the Centers for Disease Control (CDC) to research the causes and prevention of gun violence;

o    Provide incentives for schools to hire school resource officers;

o    Directive to develop model emergency response plans for schools, houses of worship and institutions of higher education; and

o    Launch a national dialogue led by Secretaries Kathleen Sebelius (HHS) and Arne Duncan (Education) on mental health.

Additionally, the President called on Congress to pass a number of other measures related to gun violence prevention, including the following actions:

o    Provide $10 million for the CDC to conduct further research on gun violence, including investigating the relationship between video games, media images, and violence;

o    Invest an additional $20 million to expand the National Violent Death Reporting System to all 50 states to inform future research and prevention strategies;

o    Provide $30 million of one-time grants to states to help school districts develop and implement emergency management plans;

o    Require states and school districts that receive school safety funding from the Department of Education to have comprehensive, up-to-date emergency plans in place for all of their schools; and

o    Provide $25 million to offer students mental health services for trauma or anxiety, conflict resolution programs, and other school-based violence prevention strategies.

  • Hearings and Events. The Senate Health, Education, Labor and Pensions Committee will hold a hearing on Thursday, January 24 at 10:00 a.m. titled "Assessing the State of America's Mental Health System," which will include a review of issues related to mental health and gun violence.  The Senate Judiciary Committee also plans to hold a hearing on gun violence issues on Wednesday, January 30. Chairman of the House Education and the Workforce Committee John Kline (R-MN) also announced he would convene a hearing related to recommendations stemming from the President’s Task Force to curb gun violence, focused on school safety efforts.

On Tuesday, January 22, the House Education and Workforce Committee will host a full committee organizational meeting to adopt the Committee rules, oversight plan, and announce subcommittee assignments.

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 abudner@pattonboggs.com; Dana Weekes at 202-457-6307 or dweekes@pattonboggs.com; and Amy Davenport at 202-457-6528 or adavenport@pattonboggs.com.


Energy

Legislative Activity

  • Congressional Hearings. The House Energy and Commerce Committee will hold its organizational meeting on Tuesday, January 22; the Natural Resources Committee will hold its on Wednesday, January 23. The Senate Commerce, Science, and Transportation Committee will hold a field hearing regarding pipeline safety on January 28 in Charleston, West Virginia. 

Regulatory Activity

  • Hybrid/EVs. The National Highway Traffic Safety Administration has issued a draft environmental assessment and begun work to set minimum sound requirements for hybrid and electric vehicles.
  • Critical Materials Institute. The Department of Energy is establishing a new research center to develop solutions to domestic shortages of rare earth metals and other critical materials necessary for manufacturing wind turbines, advanced batteries, electric vehicles, and other energy technologies.  The institute will be headquartered at the Ames Laboratory in Iowa.
  • Wind Turbines. The International Trade Commission met on Friday to vote on final investigations regarding utility scale wind towers from China and Vietnam. The Commission is scheduled to transmit its determinations and Commissioners’ opinions to the Commerce Secretary by January 30.
  • RE&EEAC. The International Trade Administration’s Renewable Energy and Energy Efficiency Advisory Committee will hold its inaugural meeting on February 20 to begin developing recommendations on improving the competitiveness of U.S. renewable energy and energy efficiency exports.
  • Appliance Labels. The Federal Trade Commission rule to streamline data reporting requirements for manufacturers, to clarify testing requirements and enforcement provisions, and to improve online energy label disclosures for major household appliances will become effective on February 15 (with few exceptions).
  • Hydraulic Fracturing. The Environmental Protection Agency has again extended the public comment period for the draft research report, “Investigation of Ground Water Contamination near Pavillion, Wyoming,” to September 30 (from January 15).
  • PCAST Meeting. The President’s Council of Advisors on Science and Technology will hold an open teleconference on Wednesday, January 24 to discuss its Climate and Energy Letter Report.
  • Nuclear Waste. The Administration has called for the creation of a permanent repository by 2048 to store the nation’s nuclear waste, beginning with a pilot interim facility being created by 2021.
  • Fusion Energy. The Fusion Energy Sciences Advisory Committee will meet in Gaithersburg, Maryland on January 31 to further assess magnetic fusion energy science program priorities.

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 tderivi@pattonboggs.com.


Environment

Legislative Activity 

  • New Environment Subcommittee Created.  Chairman Lamar Smith (R-TX-21) of the House Science, Space and Technology Committee has announced the creation of a sixth subcommittee by splitting the former Subcommittee on Energy and Environment.  The new Subcommittee on Energy will be chaired by Congresswoman Cynthia Lummis (R-WY- At Large), and the new Subcommittee on Environment will be chaired by Congressman Andy Harris (R-MD-1) – who chaired the former Subcommittee on Energy and Environment.
  • New Subcommittee on Public Lands and Environmental Regulation Established.  House Natural Resources Committee Chairman Doc Hastings (R-WA-04) has announced the creation of a new Subcommittee on Public Lands and Environmental Regulation.  The Subcommittee will have jurisdiction over matters related to the National Environmental Policy Act (NEPA) and public lands, including the National Park System, U.S. Forests, Bureau of Land Management lands, and national monuments. The Natural Resources Committee has primary jurisdiction over NEPA in the House of Representatives and oversight and legislative efforts regarding NEPA were previously handled by the full committee. According to Chairman Hastings, the establishment of the subcommittee is intended to allow this authority to be exercised in a more focused manner.

Regulatory Activity

  • E. Coli.  The U.S. Environmental Protection Agency (EPA) has updated the rule for pathogens in drinking water, including setting a limit for the bacteria E. coli.  The Revised Total Coliform Rule is intended to ensure that all of the 155,000 public water systems in the United States, which provide drinking water to more than 310 million people, take steps to prevent exposure to E. coli and similar pathogens. Under the revised rule, public drinking water systems are required to notify the public if a test exceeds the maximum contaminant level (MCL) for E. coli in drinking water. If E. coli or other indications of drinking water contamination are detected above a certain level, drinking water facilities must assess the system and fix potential sources and pathways of contamination. Under the revised rule, high-risk drinking water systems with a history of non-compliance must perform more frequent monitoring. The rule also includes incentives for small drinking water systems that consistently meet measures of water quality and system performance. 

    Public water systems and state and local agencies that oversee them must comply with the requirements of the Revised Total Coliform Rule beginning April 1, 2016. Until then, public water systems and primacy agencies must continue to comply with the 1989 version of the rule.
  • National Ambient Air Quality Standards for Particulate Matter.  EPA has issued a final rule for National Ambient Air Quality Standards for Particulate Matter. In the final rule, EPA has made revisions to tighten the suite of standards for particulate matter (PM). Most notably, with regard to primary health-based standards for fine particles (particles less than or equal to 2.5 micrometers in diameter, PM2.5), the EPA is revising the annual PM2.5 standard by lowering the level to 12.0 micrograms per cubic meter. This rulemaking was executed pursuant the Clean Air Act (Sections 108 and 109), which govern the establishment, review, and revision of the national ambient air quality standards. Estimated cost to industry from the rule is approximately $350 million a year; projected annual health benefits, according to the EPA, are expected to be $9.1 billion.  The final rule will become effective on March 18, 2013.

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 svilms@pattonboggs.com.


Financial Services

Legislative Activity

  • House Financial Services Committee Democrats Elect Subcommittee Ranking Members. The House Financial Services Committee Democratic caucus elected its Ranking Members for the new Congressional Session. The elected Members are: Congressman Michael Capuano (MA) – Insurance, Housing and Opportunity; Congressman Lacy Clay (MO) – Domestic and International Monetary Policy; Congressman Al Green (TX) – Oversight and Investigations Congresswoman Carolyn Maloney (NY) – Capital Markets and Government Sponsored Enterprises; and Congressman Gregory Meeks (NY) – Financial Institutions and Commercial Credit.
  • Congressman Ander Crenshaw to Chair House Appropriations Subcommittee on Financial Services.  Due to the upcoming retirement of Congresswoman Jo Ann Emerson (R-MO), Congressman Ander Crenshaw (R-FL) will assume the Chairmanship of the appropriations subcommittee with jurisdiction over the U.S. Department of the Treasury, the Internal Revenue Service, and the Securities and Exchange Commission.

Regulatory Activity

  • Consumer Financial Protection Bureau Issues “Qualified Mortgage” Rule. On Thursday, January 10, the Consumer Financial Protection Bureau (CFPB) released its final rule on the ability-to-repay requirements, including the definition of “Qualified Mortgage,” which was mandated by the Truth-in-Lending Act, as amended by the Dodd-Frank Act. The rule requires lenders to consider and evaluate whether prospective borrowers have the ability to repay their mortgage loans over the long term and seeks to prohibit what the CFPB has identified as “risky lending practices” that contributed to the 2008 housing crisis. The type of mortgage loans covered by the new rule includes traditional residential mortgages and any consumer credit transaction that is secured by a dwelling, subject to certain enumerated exceptions. In addition, the CFPB has proposed an amendment to this rule that would add other exemptions from the ability-to-repay requirements. The rule will become effective on January 10, 2014.
  • CFPB Completes Mortgage Servicing Final Rules. On Thursday, January 17, the CFPB issued final rules implementing provisions of the Dodd-Frank Act regarding mortgage loan servicing. The rules specifically address servicers’ obligations to correct errors asserted by mortgage loan borrowers; to provide certain information requested by such borrowers; and to provide protections to such borrowers in connection with force-placed insurance. Additionally, this final rule addresses servicers’ obligations to establish reasonable policies and procedures to achieve certain delineated objectives; to provide information about mortgage loss mitigation options to delinquent borrowers; to establish policies and procedures for providing delinquent borrowers with continuity of contact with servicer personnel capable of performing certain functions; and to evaluate borrowers’ applications for available loss mitigation options.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Matthew Kulkin at 202-457-6056 or mkulkin@pattonboggs.com.


Health Care

Legislative Activity 

  • House Energy and Commerce Hearing. The House Committee on Energy and Commerce will meet on Tuesday January 22 to hold an organizational meeting for the 113th Congress.  The Committee will then mark up a number of bills including H.R 297, to amend the Public Health Service Act to reauthorize support for graduate medical education programs in children’s hospitals, H.R. 225, the National Pediatric Research Network Act of 2013, and H.R. 235, the Veteran Emergency Medical Technician Support Act of 2013.
  • House Ways and Means Hearing. The House Committee on Ways and Means has scheduled a hearing on January 22 on the Debt Limit. The hearing will examine the history of the debt limit, how past Congresses and Presidents have negotiated and raised the limit, and whether the Constitution provides options to the Executive Branch when the debt limit is reached. 
  • Senate HELP Hearing.  The Senate Committee on Health, Education, Labor and Pensions will hold a hearing on Thursday January 24, titled “Assessing the State of America’s Mental Health System.”  Witnesses include Pamela Hyde, Administrator of the Substance Abuse and Mental Health Services Administration (SAMHSA), Dr. Thomas Insel, Director of the National Institute of Mental Health at the National Institutes of Health (NIH), and additional witnesses to be announced. 

Regulatory Activity

  • HHS HIPAA HITECH Final Rule Released. The Department of Health and Human Services (HHS) issued a final rule to: Modify the Health Insurance Portability and Accountability Act (HIPAA) Privacy, Security, and Enforcement Rules to implement statutory amendments under the Health Information Technology for Economic and Clinical Health Act (“the HITECH Act” or “the Act”) to strengthen the privacy and security protection for individuals’ health information; modify the rule for Breach Notification for Unsecured Protected Health Information (Breach Notification Rule) under the HITECH Act to address public comment received on the interim final rule; modify the HIPAA Privacy Rule to strengthen the privacy protections for genetic information by implementing section 105 of Title I of the Genetic Information Nondiscrimination Act of 2008 (GINA); and make certain other modifications to the HIPAA Privacy, Security, Breach Notification, and Enforcement Rules (the HIPAA Rules) to improve their workability and effectiveness and to increase flexibility for and decrease burden on the regulated entities.

    This final rule is comprised of four final rules, which have been combined to reduce the impact and number of times certain compliance activities need to be undertaken by the regulated entities.  It is effective on March 26, 2013.
  • CMS Guidance on Mental Health Parity and Addiction Equity Act. The Centers for Medicare & Medicaid Services (CMS) released a State Health Official letter on the application of the Mental Health Parity and Addiction Equity Act to Medicaid managed care organizations, the Children’s Health Insurance Program, and alternative benefit (benchmark) plans.
  • Hospital Readiness for EHR Reporting. CMS has extended the comment period for the Request for Information on Hospital and Vendor Readiness for Electronic Health Records Hospital Inpatient Quality Data Reporting (posted January 3, 2013). The comment period for the RFI, which would have ended on January 22, is extended to February 1.
  • HHS Exchange Grants. Health and Human Services (HHS) Secretary Kathleen Sebelius today announced $1.5 billion in new Exchange Establishment Grants to California, Delaware, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, and Vermont, to ensure these states have the resources necessary to build a marketplace that meets the needs of their residents.
  • Upcoming Regs. The Obama Administration is expected to release the Essential Health Benefits final rule next month that will provide guidance on what are essential health benefits that must be covered by qualified health plans beginning in 2014.  The rule will also require all new health plans cover mental health services to the same degree that medical and surgical services are covered.  The Administration has also committed to finalize regulations stemming from a 2008 mental health parity law for large-group plans.
  • Health care stakeholders are also awaiting final regulations regarding the Physician Sunshine Payment rule that will provide guidance on how drug and device manufacturers will report payments to physicians.  The rule has been under review at the Office of Management and Budget (OMB) since November 28, 2012, and reporting was set to begin January 1, 2013.
  • HHS’ Minimum Essential Coverage Exemptions (CMS-9958-P) proposed rule is also under review at OMB.

Other Health News

  • IOM Report.  The Institute of Medicine (IOM) released a report on the Supplemental Nutrition Assistance Program (SNAP).  The USDA asked the IOM and the National Research Council to consider whether it is feasible to objectively define the adequacy of SNAP allotments that meet the program goals and, if so, to outline the data and analyses needed to support an evidence-based assessment of SNAP allotment adequacy. The committee concluded the adequacy of the allotments can be defined, but doing so requires identifying the factors that affect SNAP participants’ ability to meeting the program goals. The committee recommends individual, household, and environmental factors and program characteristics that USDA should consider in defining the adequacy of SNAP allotments and ways to approach monitoring the ability of participants to meet program goals with their allotment.

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 eedwards@pattonboggs.com.


International, Defense, and Homeland Security

Legislative and Regulatory Activity

  • Senate Foreign Relations Committee (SFRC) and State Department Developments. The SFRC faces a high-profile week ahead. Secretary of State Hillary Clinton will testify on the Benghazi, Libya attacks and their aftermath on Wednesday. New Committee Member Rand Paul (R-KY) likely will serve as the most pointed critic of the State Department and Secretary Clinton herself, already having deemed the stewardship on Benghazi of his potential 2016 White House rival “a career-ending mistake”. SFRC Democrats will not hesitate to defend the popular Secretary, and Secretary Clinton will take the opportunity to highlight the quick response of the U.S. Consulate’s security team and to stress the need for additional resources for diplomatic security. On Thursday, January 24, SFRC Chairman John Kerry (D-MA) will appear before his Committee colleagues as President Obama’s nominee to replace Secretary Clinton as Secretary of State.  Senator Robert Menendez (D-NJ), who is all-but-certain to serve as the next SFRC Chairman following Senator Kerry’s expected confirmation by the full Senate, will chair both hearings.  Senator Kerry’s hearing and ensuing confirmation process are expected to proceed smoothly.  However, interventionist SFRC Republicans such as Senator Marco Rubio (R-FL) and Senator John McCain (R-AZ) may use the hearing to set up a contrast between the relatively forward-leaning Senator Kerry and the more circumspect Secretary of Defense-designate, former Senator Chuck Hagel (R-NE) on issues like potential U.S. military involvement in Syria and Mali.
  • House Foreign Affairs Committee (HFAC) and State Department Developments. Secretary Clinton also will testify before the HFAC on Benghazi on Wednesday, January 23. New Committee Chairman Ed Royce (R-CA) may employ a slightly softer tone than his predecessor as Chair, new HFAC Middle East Subcommittee Chairwoman Ileana Ros-Lehtinen (R-FL), but both Members and other HFAC Republicans will be highly critical of the State Department’s role in failing to predict and prevent the attack. New HFAC Ranking Member Eliot Engel (D-NY), new Middle East Subcommittee Ranking Member Ted Deutch (D-FL), and Terrorism Subcommittee Ranking Member Brad Sherman (D-CA) are expected to lead the defense of Secretary Clinton in what is likely her final appearance before the Committee.
  • House Ways and Means Committee Trade and USTR Developments. This past week, Chairman Dave Camp (R-MI) and Ranking Member Sander Levin (D-MI) officially named Congressman Devin Nunes (R-CA) and Congressman Charles Rangel (D-NY) as Chairman and Ranking Member, respectively, of the Ways and Means Trade Subcommittee. Congressman Nunes is an ardent free-trader, like his predecessor as Subcommittee Chair, Congressman Kevin Brady (R-TX). Congressman Rangel is generally open to supporting trade liberalization, although he is not quite as forward-leaning on trade issues as the Subcommittee’s previous Ranking Member, Congressman Jim McDermott (D-WA). Last Tuesday, Chairman Camp, Ranking Member Levin, and Chairman Nunes were quick to praise the Office of the U.S. Trade Representative’s (USTR’s) announcement that USTR soon will enter into plurilateral negotiations to establish an International Services Agreement for tariff reductions in the service industries of participating member nations of the World Trade Organization.
  • House Homeland Security Committee (HHSC) Developments. At the HHSC organizational meeting on Wednesday, at which Subcommittee Chairs and Ranking Members will be officially chosen, new Committee Chairman Mike McCaul (R-TX) likely will mention the ongoing campaigns against Islamist militants in southern Algeria and Al Qaeda in the Islamic Maghreb in Mali. Congressman McCaul has used his perch as Chairman to highlight the threat to U.S. homeland security that he sees emerging among extremist elements in Northern Africa.
  • Senate and House Armed Services Committee (SASC and HASC) Developments. Expect SASC and HASC Committee Members, especially on the Republican side, to continue their focus on sequestration issues in the coming weeks. On the heels of their policy retreat near Williamsburg, Virginia this past week, House Republicans reportedly have made the strategic decision to concentrate more on sequestration and related spending decisions than on the debt ceiling in the weeks ahead, as they engage the White House and Senate Democrats over the approaching fiscal deadlines.  Of course, SASC Democrats and Republicans also will continue their preparations for Secretary-designate Hagel’s nomination hearing, scheduled for January 31.  The hearing is still expected to be contentious, with Ranking Member James Inhofe (R-OK), Senator Lindsey Graham (R-SC), and other Republicans detailing their opposition to Senator Hagel’s views on defense spending cuts, support for Israel, Iran sanctions policy, and other topics. However, no Member of the SASC’s Democratic Caucus, which controls the Committee by a 14-12 margin, has come out in opposition to Secretary-designate Hagel to this point.  Moreover, Senator Charles Schumer (D-NY) and Senator Barbara Boxer (D-CA), two non-SASC Members who sought clarifications of Senator Hagel’s views on Israel policy and gay rights, announced their support for President Obama’s nominee this past week.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this section: Scott Thompson at 202-457-6110 or sthompson@pattonboggs.com


Tax

Legislative Activity

  • Short-Term Debt Ceiling Increase under Consideration by Republicans. In the face of two more looming “cliffs” – exceeding the current debt limit sometime in mid-February and implementation of $210 billion in delayed sequestration cuts in March – Republicans are discussing a short-term elevation of the debt ceiling and are expected to put legislation on the House floor this week. The measure would extend the debt ceiling for three months and, to incentivize the Senate to engage in serious spending reduction discussions, it would withhold Member paychecks if either Chamber fails to adopt a budget by April 15.  Senate Majority Leader Harry Reid’s (D-NV) office responded by indicating that the Senate would be willing to consider an increase in the debt ceiling absent conditions. Reid’s office did not address specifically how the Senate would treat the House’s proposal to tie Member pay to the passage of a budget.  However, in an interview today, Senator Chuck Schumer (D-NY) indicated that Senate Democrats will, for the first time in four years, draft a budget, suggesting that the proposal will provide instructions for fundamental tax reform and call for higher tax revenues.

    From Senate Republicans, Senate Minority Whip John Cornyn (R-TX) last week indicated that Congress would raise the debt ceiling to prevent the U.S. from defaulting on its debt.  Republican actions this week mark a shift from previous statements made by some Republicans that the party would allow a government shutdown rather than increase the debt.
  • Tax Reform on the House Agenda for 2013. On January 17, Paul Ryan emphasized the commitment of House Republicans to reforming the U.S. tax system, asserting that House Republicans intend to take on the issue of tax reform in 2013. Earlier in the week, Rep. Sander Levin (D-MI), Ranking Member of the House Ways and Means Committee, indicated that he is hopeful, but not confident, Congress will accomplish tax reform this year.
  • Tax Hearings Next Week. The following tax hearings are scheduled in the House Ways and Means and Senate Finance Committees next week:

o    Tuesday, January 22:  House Ways and Means Committee hearing on the debt limit. The hearing will focus on ways the debt limit has been handled in the past and constitutional options available to the Executive Branch when the debt limit is reached.

Regulatory Activity

  • Final FATCA Regulations Issued. On Thursday, January 17, Treasury and the IRS issued final regulations implementing information reporting and withholding provisions under FATCA.  The Foreign Account Tax Compliance Act (FATCA) contains provisions designed to prevent U.S. taxpayers from evading U.S. tax by holding funds in offshore accounts in foreign financial institutions (FFIs). The final regulations issued this week will provide greater certainty for financial institutions by finalizing the process for FATCA compliance.

    In a press release announcing the final regulations, Treasury emphasized ways the regulations clarify and streamline compliance requirements. Specifically, the regulations clarify the treatment of investment entities to better align FATCA obligations with the levels of risked posed by certain kinds of entities. The regulations further streamline registration and compliance procedures for certain groups of financial institutions including commonly managed investment funds. The regulations also clarify types of payments that are not subject to withholding, including certain grandfathered obligations and certain payments made by non-financial entities. The regulations further clarify compliance obligations for financial institutions operating in multiple jurisdictions by coordinating requirements of the regulations with those of intergovernmental agreements. Finally, the regulations phase-in over an extended period to allow financial institutions time for due diligence and to establish necessary systems. These regulatory timelines are aligned with those included in intergovernmental agreements.

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this section: Erin McGrain at 202-457-5344 or emcgrain@pattonboggs.com; Joseph Urso at 202-457-5349 or jurso@pattonboggs.com; and Libby Fallon at 202-457-5126 or efallon@pattonboggs.com.

Topics:  Air Quality Standards, Al-Qaeda, CFPB, CMS, Cybersecurity, Debt Ceiling, DHS, Disaster Aid, Energy Drinks, FATCA, Foreign Relations, Fracking, Gun Laws, HIPAA, HITECH, Nuclear Power, Qualified Mortgage Rule, Wind Power

Published In: Education Updates, Elections & Politics Updates, Finance & Banking Updates, Health Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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