Outlook for This Week in the Nation's Capital

Farm Bill Re-vote? Last week’s vote on the farm bill failed after the Freedom Caucus refused to support the measure. A roll call vote on the motion to reconsider was postponed and could come up this week but House Republican leadership isn’t likely to bring the bill up again unless the outcome will be different. One possibility for future action is the extension of the current farm bill while another less likely possibility is opening bipartisan negotiations on the bill. The lead House Agriculture Democrat is open to negotiations and if the unfavorable food stamp provisions are changed, Democrats are likely to vote for the legislation. The Senate Agriculture Committee continues to work a bipartisan fam bill and is planning on marking up the legislation the first week in June.    

Rescission Package. House Leadership originally planned to vote on the Administration’s rescission package this week but in light on the failed farm bill, it is likely to get pushed until after the Memorial Day recess. During this delay, opposition to the $15 billion rescission package is likely to grow. Moderate House Republicans are increasingly opposed to the package as they believe it would be used against them in the upcoming midterm elections.

Publishing Note. Next week’s Window on Washington will publish on Tuesday. Clark Hill wishes you a safe and happy Memorial Day.

Last Week in the Nation's Capital

CONGRESS

Budget

House Lawmakers Vote to Give Modest Budget Cuts to EPA, Interior: The bipartisan bill voted out of committee by the House Appropriations Subcommittee on Interior, Environment and Related Agencies provides the Interior Department with $13 billion and the EPA with $8 billion for fiscal 2019. It gives $35.2 billion in total to fund Interior, EPA and other similar agencies. Agencies and programs in the bill weathered far fewer cuts to its budget than originally suggested by the White House budget proposed in February — with the overall budget level landing at $7 billion more than requested. The budget for the Interior Department was more than $1 billion higher than the White House’s proposed $11.7 billion budget. (The Hill)

Appropriations Committee Approves FY19 Energy and Water Appropriations Bill: The House Appropriations Committee today approved the fiscal year 2019 Energy and Water Development and Related Agencies Appropriations bill on a vote of 29-20.  The legislation provides annual funding for national defense nuclear weapons activities, the Army Corps of Engineers, various programs under the Department of Energy, and other related agencies. (House Appropriations Committee)

Senate Releases Committee Markup Schedule: This week the Agriculture and Energy and Water appropriations bills will be marked up beginning the Senate Appropriations Committee’s movement of its annual appropriations bills. The Committee is scheduled to be finished marking up all 12 of its bill on the subcommittee level by the end of June. (Senate Appropriations Committee)

House Continues Its Full Committee Markups: The House is scheduled to mark up its Interior and Transportation, Housing and Urban Development bills this week in full committee. The Committee is also scheduled to unveil its FY19 302(b) allocations, which dictate the funding level for each of the 12 appropriations bills. Last week, the House Appropriations Committee announced a new committee member, Rep. Rutherford (R-FL) and changes to the subcommittee chairman in response to the recent retirement of Rep. Dent (R-PA). (House Appropriations Committee)

Tax Reform

Federal Tax Cuts Leave States in a Bind:  The federal tax overhaul cut taxes for millions of American families and businesses. But the law also had an unintended effect: raising the state-tax bite in nearly every state that has an income tax.  Now, governors and state legislators are contending with how to adjust their own tax codes to shield their residents from paying more or, in some cases, whether to apply any of the unexpected revenue windfall to other priorities instead. (CNBC)

Health

Senate Committee Turns 340B Spotlight on Drugmakers: In a hearing last week, members of the Senate health committee asked government watchdogs why the Trump administration has delayed for the fifth time a rule that would set ceiling prices and why 340B hospitals don't know what they ought to be paying for the discounted drugs. Although the Government Accountability Office and HHS' Office of Inspector General urged senators to clarify 340B's intent to improve oversight, the tone marked a shift from the committee's March hearing where hospitals were on the hot seat for how they spend the funds they save thanks to 340B. (Modern Healthcare)

House Panel Advances Dozens of Opioid Bills: The House Energy and Commerce Committee approved dozens of bills that would help the FDA intercept drugs at ports, expand addiction treatment and otherwise combat the opioid epidemic, clearing the way for final passage by early summer. Thirty-two measures cleared the panel, on top of 25 bills green-lighted last week. (The Washington Times)

NIH Funding Needs to Keep Rising, Senators Say: Federal funding for the National Institutes of Health (NIH) needs to continue going up, Sen. Roy Blunt, chairman of the Senate committee that reviews the agency's funding. The hearing was not entirely a love-fest, however. Sen. Patty Murray, the committee's ranking member, said that she supported increased funding, but that "it was particularly troubling that questions have been raised about the impartiality of a study to assess the health benefits of moderate alcohol consumption." In response, NIH Director Francis Collins told the committee that the study was halted. (MedPage Today)

Agriculture

House Farm Bill Fails As Conservatives Revolt Over Immigration: The House rejected a $867 billion farm bill last week — after spending days negotiating with key conservatives in an attempt to pass the bill without the support of Democrats. The vote was 198-213. Every Democrat voted against the measure, as did 30 Republicans. Many of the GOP lawmakers are members of the House Freedom Caucus and voted no after failing to get concessions on spending and a future vote on immigration in exchange for their support. The future of the bill is uncertain. Republican leaders are discussing ways to bring it up again. (NPR)

Defense

Analysis: What Matters Most in the NDAA: The massive defense authorization bill approved by the House Armed Services panel on May 10 is a consequential measure — but not for the reasons most people think. The $708.1 billion bill, which the House plans to debate the week of May 21, would endorse the largest budget for defense since World War II, adjusting for inflation and when war spending is taken out of the equation. The parts of the sweeping authorization bill that will, in reality, have the most impact are its often obscure policy prescriptions. In some cases, the story is the omission of policy. But the measure does not actually provide a single penny. That is the job of appropriators, though they generally follow the authorizers’ suit. (Roll Call)

Justice

House Panel Votes to Keep Blocking DOJ from State Medical Marijuana Law Meddling: The Marijuana Policy Project in a statement praised the House Appropriation Committee’s voice vote in favor of blocking the Department of Justice from interfering with such laws. The amendment prohibits the DOJ from using funds to interfere in the implementation of state laws allowing the cultivation, distribution and use of marijuana for medical purposes. The provision has been in effect since 2014, but Thursday’s vote marks the first time it has gotten added to the base CJS Appropriations bill in committee. (WJLA)

Transportation

House Transportation Committee Releases Bipartisan Water Infrastructure Bill: The House Transportation and Infrastructure Committee introduced its biennial water resources legislation, setting up potential action on infrastructure at a time when President Trump’s broader rebuilding package appears to have hit a dead end. The Committee plans to mark up the bill on Wednesday. The legislation comes a week after the Senate unveiled its own bipartisan version of a water reauthorization bill that aims to localize the budget for the Army Corps of Engineers. The upper chamber also plans to mark up its legislation this week. (The Hill)

GOP Chairman Calls Infrastructure Meeting as Trump Plan Remains on Hold:  The chairman of the House Transportation and Infrastructure Committee held a meeting for Republican members of the Committee last Friday on infrastructure, to discuss how to move forward as President Trump’s rebuilding plan has been put on ice.  Lawmakers were asked to bring their ideas and priorities, which could be used to start putting together a potential rebuilding package.  The meeting, which comes the same day that the panel is supposed to unveil a water infrastructure bill, could be an effort to kick-start rebuilding efforts on Capitol Hill. (The Hill)

Banking & Housing

House Expected to Vote on Senate Bill Rolling Back Some Bank Rules This Week:  The House expects to vote on Tuesday on a Senate-passed bill that would roll back some regulations on banks, but the day of the vote could change.  The legislation would mark the biggest rewrite of financial laws since the Dodd-Frank reform act passed after the global financial crisis. It cleared the Senate with bipartisan support in a 67 to 31 vote. (CNBC)

EXECUTIVE BRANCH

Labor & Workforce

Labor Department Sues Home Care Companies:  The Labor Department filed a handful of lawsuits against home care providers for wage-and-hour violations, signaling that the DOL isn’t likely to soon revisit an Obama era rule that entitles domestic service workers to minimum wages and overtime pay.  Each of the lawsuits cites a regulation enacted in 2015 that extended wage-and-hour protections under the Fair Labor Standards Act to a majority of the roughly 3 million home health and personal service aides working across the country. Critics of the rule said the DOL overstepped its authority by extending the law to “companionship services” workers because Congress meant to exempt them. (Bloomberg BNA)

CFPB

Mulvaney Vows to 'Bring Sanity' to Qualified Mortgage Rule:  One of the most significant regulations to come out of the financial crisis — the Qualified Mortgage rule — could face significant changes under new leadership at the Consumer Financial Protection Bureau. CFPB Acting Director Mick Mulvaney indicated Tuesday during a real estate convention that the rule, which took effect in 2013, painted all institutions with the same brush and needed to be reworked. The industry has long argued the rule was written assuming all mortgages were the same without taking into account the different types of lenders and mortgage products. (American Banker)

Health

Trump Proposes Modified Family Planning Services with New Abortion Rule: The Trump administration moved forward with a proposal that would effectively ban Planned Parenthood and similar organizations from providing abortion and related services under the same roof as operations funded by federal family-planning grants, according to an administration official. The new rule would force entities that receive so-called Title X family-planning funding to maintain physical and financial separation between taxpayer-backed operations and any related facilities that perform abortions, support the procedures or receive referrals about them, the official said. (NBC News)

CMS Rejects Ohio's Individual Mandate Waiver: The CMS has rejected Ohio's request to become the first state to waive the Affordable Care Act individual mandate that requires residents to have health insurance. Ohio's Legislature called for a 1332 innovation waiver last summer, before Congress zeroed out the financial penalty for not having coverage in its tax bill in December. But the waivers must follow provisions of the ACA that require the number of people covered remains the same and that their benefits remain comprehensive. The CMS said Ohio did not meet those requirements. State officials also never provided a reason why they should be exempt from the individual mandate. (Modern Healthcare)

Space & NASA

NASA Administrator Bridenstine Optimistic WFIRST Will Avoid Cancellation:  As House appropriators approved a spending bill May 17 that partially restores funding for a NASA astrophysics mission slated for cancellation, the agency’s administrator said he was “90 percent” confident that the mission will continue.  Speaking at a town hall meeting at NASA Headquarters, Jim Bridenstine said that despite being targeted for cancellation in the administration’s fiscal year 2019 budget request, he expected the Wide-Field Infrared Survey Telescope (WFIRST) to win funding from Congress and continue. (SpaceNews)

Safety Panel Considers SpaceX “Load-and-Go” Fueling Approach Viable:  Members of a NASA safety panel said May 17 they believed that a SpaceX approach for fueling its Falcon 9 rockets known as “load-and-go” could be used for future commercial crew missions.  At the meeting of the Aerospace Safety Advisory Panel at the Kennedy Space Center, panel member Brent Jett said he expected NASA’s commercial crew program would soon make a decision on the sequence of loading propellants and crew for SpaceX commercial crew missions. (SpaceNews)

IRS

IRS Updates Priority Guidance Plan for New Tax Law:  The Internal Revenue Service has released an updated Priority Guidance Plan to give tax professionals and taxpayers information about the areas of the Tax Cuts and Jobs Act and other matters where it plans to provide more clarity in the near future.  In its initial implementation of the Tax Cuts and Jobs Act, the IRS plans to provide guidance in areas such as the business credit for wages paid to qualifying employees during family and medical leave, along with guidance on reportable policy sales of life insurance contracts.  The IRS also plans to release guidance on the new Section 199A, the deduction of qualified business income of pass-through entities, a murky area of the tax reform law where many practitioners have been demanding guidance. (Accounting Today)

Trade

A New NAFTA Will Probably Not Get Done this Year. Now What?: After nine months of intense negotiating rounds in all three countries, officials remain as far apart as ever on some of the biggest changes the administration has put forward, including ones related to auto manufacturing and Canada and Mexico‘s access to the U.S. government procurement market. Without major concessions from Canada and Mexico, or a willingness from the U.S. to drop its most difficult demands, top negotiators will be unable to wrap up weighty issues that remain unresolved, those close to the talks say. (Politico)

Defense

Air Force Gen. Pawlikowski: Military Satellites Will Be Smaller, More Mobile: The assumption that space is a contested battleground is driving “fundamental change” in how systems are designed and developed, said Pawlikowski. “A satellite communications systems can’t just provide great communications. It has to be able to withstand an attack.” Threats are increasing at the same time the cost of launching satellites into orbit is falling, she noted. “Those two things are driving a change in the way we architect our space. The size of satellites will change. The mobility of satellites will change.” The basic process of designing and building satellites is not going to change. But the booming commercial space market has to lead to a transformation in military systems, she added. (Space News)

Energy

Secretary Perry Announces Up to $78 Million for Bioenergy Research Funding Opportunities: Funding opportunities include $28 million for bioenergy engineering for products synthesis, $15 million for efficient carbon utilization of algal systems, $20 million for process development for advanced biofuels and biopower, and $15 million for affordable and sustainable energy crops. (DOE Press Releases)

Department of Energy strategy aims to make power systems more resilient to hacking: Citing an increase in criminal and nation-state hackers targeting the energy sector, the Department of Energy has released a five-year strategy to cut down on the risk of power-supply disruptions resulting from cyber incidents. The department is trying to change that dynamic through a strategy to boost threat-sharing with the private sector, curb supply-chain risk, and accelerate research and development to make energy systems more resilient to hacking. The strategy will serve as a roadmap for the new Office of Cybersecurity, Energy Security, and Emergency Response, for which President Donald Trump’s fiscal 2019 budget requests $96 million. (Cyber Scoop)