Outlook for This Week in the Nation's Capital

Minibus on Senate Floor. The Senate is expected to take up a four-bill spending package next week. The minibus would contain the Interior, Financial Services, Agriculture, and Transportation and HUD appropriations bills.  While the House passed its Interior and Financial Services appropriations bills last week, the Senate versions do not contain the same partisan policy riders as the House bills.

Infrastructure Proposal. House Transportation and Infrastructure Committee Chairman Shuster is planning to introduce a new infrastructure package this week. The package will include ways to pay for the legislation which have previously been a sticking point for lawmakers. Shuster has said that he understands that enacting the legislation in the second half of an election year will be difficult.

Last Week in the Nation's Capital

CONGRESS

Budget

• House Completes First Half of 2019 Spending Bills: The House passed a package of two 2019 appropriations bills, marking the halfway point in its quest to pass the 12 annual spending bills needed to fund the government. Totaling $58.7 billion, the Financial Services bill and the Interior and Environment bills fund agencies including the IRS and various financial regulators, as well as the Environmental Protection Agency (EPA), the Interior Department and a series of popular arts programs. The bill passed mostly along party lines, in a vote of 217-199. (The Hill)
• House Homeland Security Subcommittee Marks Up Its Bill: The legislation directs $51.4 billion in discretionary funding for DHS, an increase of $3.7 billion above the fiscal year 2018 enacted level. In addition, the bill includes $6.7 billion – the same as the President’s request – for major disaster relief and emergency response activities through the Federal Emergency Management Agency. The legislation also includes $5 billion for physical barriers and associated technology along the U.S. southern border. This amount provides for over 200 miles of new physical barrier construction. Additionally, the bill includes $223 million for 140 new Customs and Border Protection canine teams to initiate a five-year strategy towards achieving 100 percent scanning on the southern border. (House Appropriations Committee)

Tax Reform

• Four States Sue IRS, Treasury to Strike Down SALT Cap Under New Tax Law: In the days following tax reform, leaders in some states complained loudly about feeling targeted by deduction caps imposed on state and local taxes (SALT).  Now they've taken action.  Four states (Connecticut, Maryland, New Jersey, and New York) filed a lawsuit in federal court to strike down the cap on SALT deductions under the new tax law.  The plaintiffs (states) are seeking "declaratory and injunctive relief" to eliminate the cap, meaning they are asking the courts to declare that the cap will not be enforceable; there is no separate request for money or other damages. (Forbes)
• Senators Introduce Bipartisan Bill to Improve IRS, Considers Trump Nominee: A bipartisan group of lawmakers on the Senate Finance Committee offered legislation on Thursday to make improvements to the IRS, as the panel voted along party lines to advance President Trump's pick to lead the agency. The bill, from Finance Committee Chairman Orrin Hatch (R-Utah), ranking member Ron Wyden (D-Ore.) and others on the panel, aims to strengthen taxpayers' rights and prevent taxpayers from having their identities stolen. (The Hill)

DOE

• Energy Storage Gets Its Day in Congress: The House Energy and Commerce Committee invited experts to testify on what federal storage policy should look like. The committee members of both parties generally expressed support for energy storage as a nationally valuable asset to allow better control of the supply and demand of electricity, to avoid more expensive traditional grid upgrades and to provide resilience after cataclysmic events. No unified federal storage policy currently exists, although the oft-cited FERC Order 841 is pushing grid operators to systematically value storage’s unique attributes and allow it to compete in wholesale markets. For a young industry that typically talks in state-level goals, but is largely focused in only a handful of states, the event marked a maturation in ambition. The goal: to clarify what a federal energy storage policy should look like. (GreenTechMedia)

Defense

• House Votes Champion Stable Military Spending, but Gridlock Looms: Fearful a budgeting logjam could spiral into a long-term continuing resolution, pro-defense lawmakers quarterbacked a series of scathing but symbolic resolutions through the House condemning the havoc that budget gridlock plays with military readiness. The current impasse now threatens the future of not just the Pentagon’s budget plan, but that of energy programs, legislative branch operations and military construction all included in the legislative package. Committee officials have not released a timetable for when the conference negotiations may resume. (Defense News)

Health

• Dems Pressure GOP to Take Legal Action Supporting Pre-existing Conditions: Senate Democrats are targeting Republicans on health care, urging them to sign on to a resolution that would allow the Senate to intervene in a lawsuit challenging the legality of ObamaCare. The resolution would allow the Office of Senate Legal Counsel to intervene in a case brought by Republican attorneys general that argues ObamaCare is now unconstitutional since Congress repealed the 2010 law's individual mandate last year. (The Hill)
• House Moves to Block DC's Penalty on the Uninsured: The District of Columbia would be blocked from fining people who do not have health insurance under a bill passed in the House. The House voted 217-199 to block the nation's capital from imposing an "individual mandate," a portion of Obamacare that carries a fine that will be zeroed out beginning in 2019. (The Washington Examiner)

Agriculture

• House Moves to Send Farm Bill to Conference Committee, Appoints Conferees: Last week, the House of Representatives moved to send the 2018 Farm Bill to conference committee. As soon as the Senate moves their Farm Bill legislation to conference, committee members will be announced. (Committee on Agriculture Press Release)

EXECUTIVE BRANCH

DOE

• 95 Grants Will Advance National and Energy Security: The U.S. Department of Energy (DOE) announced that it will award 95 grants totaling $95 million to 80 small businesses in 26 states. Funded through DOE’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Small businesses that demonstrated technical feasibility for innovations during their Phase I grants competed for funding for prototype or processes development during Phase II. Efforts include High Efficiency Klystrons for Accelerator Applications, Novel Low-Cost Medical Accelerator Designs for Use in Challenging Environments, among other initiatives. (DoE News)

HHS

• Trump Battle over Drug Prices Heats Up: The Trump administration is taking credit for a series of announcements by drug companies to freeze drug prices for the remainder of 2018, arguing it is proof that the president’s tough talk is leading to results. Amid a pressure campaign led by President Trump himself, five drug companies have said they will not increase prices this year, while one announced decreases for some medicines. (The Hill)
• Trump Administration to Explore Drug Imports to Counter Price Hikes: The Trump administration is cracking open the door to using prescription drugs imported from overseas — ones that have not been approved by the Food and Drug Administration — to combat high drug prices in limited circumstances. The FDA said that it plans to create a working group to examine how to safely import drugs in a specific situation: when there's a sharp price increase for an off-patent drug produced by a single manufacturer. (The Washington Post)
• FDA Slams Drug Makers for Stalling Release of Biosimilars: Food and Drug Administration Commissioner Scott Gottlieb accused drug makers who manufacture pricey biologic medicines of using “unacceptable” anti-competitive tactics to keep competitors off the market, costing Americans billions. The tactics — some of which Gottlieb will refer to as a “toxin” — have prevented other drug makers from launching biosimilar medicines, highly similar versions of the same drugs. (STAT)
• Women Maintain NIH Funding Similar to Men: While searching for reasons why women faculty members are underrepresented in the life sciences, researchers have looked at factors affecting the retention of female faculty, such as the ability to sustain funding. A new analysis finds that keeping the money rolling in doesn’t appear to be a factor. Of nearly 35,000 researchers who received funding from the National Institutes of Health between 1991 and 2010, men and women maintain funding at roughly the same rates. (The Scientist)

Labor & Workforce

• Trump Promotes Job Training as Employers Search for Workers: Promoting a robust economy, President Donald Trump pressed U.S. companies and trade associations on Thursday to enhance their job training programs as employers search for qualified skilled workers to fill vacancies.  At an event in the East Room, Trump told corporate leaders and workers that the nation's students and workers need more opportunities to attain apprenticeships, vocational opportunities and job training. The president said nearly two dozen companies and trade organizations had agreed to sign a pledge to provide the training for their workforce during the next five years. (Fox Business)

Banking & Housing

• Trump Claims FED Rate Hikes Hinder US Economy: President Trump ramped up his criticism of the Federal Reserve on Friday, ripping the central bank for raising interest rates as financial tensions between the U.S. and key economic partners increase.  Trump claimed Friday on Twitter that Fed rate hikes would put the U.S. at a competitive disadvantage to China and the European Union, which he accused of manipulating their currencies and abusing trade laws.  The president also claimed that interest rate hikes would hinder his efforts to force China into fairer trade terms with the U.S. (The Hill)

Defense

• Pentagon Wants to Move Some Cyber Defense Operations to the Cloud: The Defense Department wants to move some of its defensive cyber operations to the cloud, according to a contracting document. The proposed contract would create a cloud-based expansion of the Pentagon’s Acropolis program, which collects terabytes of cybersecurity data from the Defense Department’s own computers and external systems, processes and analyzes that data and delivers the result to subscribers inside and outside the Pentagon. The contractor must rely on a specialized Defense Department system for transporting data in and out of its cloud and must encrypt that data with a Pentagon-owned encryption device, according to the notice. (NextGov)
• Revealed: The New structure for the Pentagon’s tech and acquisition offices: Pentagon leaders, already worried about the emerging technologies that will shape the next generation of war, have reorganized their leadership structure to emphasize quantum science, artificial intelligence and directed energy, The new effort is a major restructuring for the two Pentagon offices that determine how the Department of Defense buys and develops weapon systems. Deputy Secretary of Defense Patrick Shanahan approved the changes in a July 13 memo, obtained by Defense News. The 17-page document lays out the organizational charts the offices of the Undersecretary of Defense for Acquisition and Sustainment and the Undersecretary of Defense for Research and Engineering, as well their responsibilities. The two offices were created Feb. 1, when Congress required the former Acquisition, Technology and Logistics office to be divided. A potential organization chart was published in August, but the new document features significant changes, particularly on the R&E side. (Defense News)

Cybersecurity

• White House Names Grant Schneider to Top Cyber Post: The Office of Management and Budget announced July 19 that the current acting chief information security officer, Grant Schneider, would be officially taking on the role. Schneider is also currently the senior director for cybersecurity policy at the National Security Council. (Federal Times)

DOT

• Transportation Department Announces $659.8 Million in Infrastructure Grants to 390 Airports: U.S. Department of Transportation Secretary Elaine L. Chao today announced the Federal Aviation Administration will award $659.8 million in airport infrastructure grants, as part of $3.18 billion in Airport Improvement Program funding for airports across the United States. This second increment of funding provides 450 grants that will fund 664 infrastructure projects including runways, taxiways, aprons, terminals, aircraft rescue and firefighting vehicles, and snow removal equipment. (FAA)
• Chao Comments on Infrastructure Plan: President Donald Trump pledged to spend some $1 trillion on infrastructure while on the 2016 campaign trail. But such a promise has yet to materialize, with attempts to revive talks on the issue repeatedly stalling in Washington. When addressing why it is taking so long to address the issue, Department of Transportation Secretary Elaine Chao said the delays stem from disagreements about how to pay for an $1.5 trillion infrastructure proposal using $200 billion from the federal government. (Fortune)

IRS

• Donor Reporting Requirement Eliminated for These Tax-Exempt Groups: The Internal Revenue Service (IRS) will no longer collect the personally identifiable information of donors to certain tax-exempt organizations, as it seeks to both reduce burdensome requirements for those groups and protect taxpayer privacy. “Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” Treasury Secretary Steven Mnuchin said in a statement, adding that the changes will not reduce transparency. (Fox Business)

Space, NASA & NOAA

• Advocates Cite Morhard’s Senate Experience as Key Strength for NASA Post: The White House formally submitted the nomination of James Morhard as NASA deputy administrator to the Senate July 17. The Senate has yet to schedule a confirmation hearing for his nomination. Morhard’s nomination surprised many in the space community because of his lack of space experience. Morhard is currently the deputy sergeant-at-arms for the Senate, overseeing administrative matters regarding the legislative body. His previous positions include serving as a staff director and chief of staff of the Senate Appropriations Committee. (Space News)
• NASA to Unveil First Commercial Astronaut Crew: NASA on Aug. 3 will announce the first class of astronauts under its Commercial Crew Program, the first-of-its-kind public-private partnership to send astronauts to the International Space Station.  SpaceX and Boeing are building the capsules — the Dragon and the CST-100 Starliner — and the maiden voyage is expected in 2020. (Politico)

DOJ

• GAO Report: Preliminary Observations on DOJ's DNA Capacity Enhancement and Backlog Reduction Grant Program: GAO's preliminary analysis found that, among the Department of Justice's (DOJ) DNA Capacity Enhancement and Backlog Reduction Program (CEBR) grantees (state and local entities with forensic crime labs), the reported aggregated backlog of crime scene DNA analysis requests has increased by 77 percent from 2011-2016. The growth in this reported aggregate backlog is the result of labs receiving more requests than they were able to complete, although they were receiving and completing more requests, as shown in the figure below. Click here for the report. (GAO)

EEOC

• As the ADEA Turns 50, the EEOC Offers Advice for Employers to Prevent Age Discrimination: In recognition of the fiftieth anniversary of the Age Discrimination in Employment Act, the Equal Employment Opportunity Commission released a report on the state of the law and potential strategies employers may utilize to prevent age discrimination, such as including older workers in diversity and inclusion programs and being mindful of the age of members of hiring panels. In its report, the EEOC determines the ADEA has eliminated overt age discrimination, but stereotypes and false assumptions about older workers remain, particularly regarding the diversity, education, and work ethic of the older generation. (Clark Hill Insight)

DHS

• TSA Testing 3D Screening of Carry-on Bags with American at JFK: The Transportation Security Administration announced that it will soon begin testing a 3D scanner for carry-on bags with American Airlines at New York’s JFK airport. TSA has been testing "computed tomography" (CT) machines at airports in Phoenix Terminal 4 and Boston Terminal E since June 2017. The test at JFK is expected to begin in late July with a ConneCT scanner from Analogic Corp. TSA has already used the technology on checked luggage for years, but the machines were too big and heavy to install at many checkpoints. As the size has become more manageable, TSA expects the technology to improve security while hastening checkpoint lines because TSA officers won’t have to search cluttered bags by hand as often. (USA Today)