Window on Washington - Vol. 1, Issue 39

by Clark Hill PLC
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Outlook for This Week in the Nation's Capital

Tax Vote This Week: After Senators Corker and Rubio announced their support of the tax bill on Friday afternoon, both Chambers announced their plans to move forward with voting on the compromise tax package this week. The House will vote on Tuesday and while the Senate plans to vote by mid-week, the timing is a little more uncertain as Senator McCain is back home in Arizona, and Senator Cochran is currently in the hospital. The Republicans can lose only one more vote and Vice President Pence would break the tie. This timeline would allow President Trump to sign the bill into law by Christmas and most of the legislation would take effect on January 1.

Shutdown Countdown: 4 Days: On “Fox News Sunday” yesterday, Secretary Mnuchin said he could not imagine the government shutting down days before Christmas, but he also could not rule out the possibility it could occur. The House and Senate have still not come to an agreement on how to fund the government after December 22. The House spending plan, which was released last week, is not passable in the Senate and would need to be rewritten. Another short-term continuing resolution is possible to fund the government through the holiday season to give the House and Senate more time to reach a longer-term agreement.

Infrastructure Package Up Next?: With tax reform nearing the finish line, the White House plans to release its outline for an infrastructure package in early January.  The package is expected to be split into four categories: incentives for cities and states that raise their revenue streams, block grants for rural areas, money for transformational projects and infrastructure financing programs. While infrastructure was originally seen as an area that could receive bipartisan support, it remains to be seen if this is still the case. 

Window on Washington - Last Week in the Nation's Capital

Congress

Tax Reform

Republicans Unveil Final Version of Tax Bill: Republicans late Friday afternoon unveiled the final text of their bill to rewrite the tax code, which they are racing to send to President Trump’s desk before Christmas. Like the bills that came before it, the legislation produced by the House-Senate conference committee would result in massive changes to the tax system, cutting rates for many individuals and businesses while placing new limitations on tax breaks. (The Hill)

The Winners and Losers in the GOP Tax Plan: The tax overhaul Republicans are poised to pass this week would usher in once-in-a-generation changes in how everyone from the biggest multinational corporations like Apple to middle-class workers are taxed, upending the long-established order on who pays more and who pays less. The tradeoffs, lobbying and special interests have allowed the bill to create a new set of haves and have-nots when it comes to the tax code. Here’s a look at who comes out ahead — and who loses out — now that the ink is drying on the details. (Politico)

The GOP is Betting that its Fix for the U.S. Economy will Defy Warnings: Congress is expected to vote this week on the bill, the most far-reaching rewrite of the U.S. tax code since 1986. It puts its faith in the prospect that lower taxes will make corporate America turn more generous and spend more expansively.  But economists and nonpartisan analysts warn that the bill will likely escalate federal debt, intensify pressure to cut social programs and further widen income inequality. (CNBC)

Budget

GOP Leaders in House, Senate Endorse Conflicting Shutdown Strategies: Republican leaders in both houses of Congress face a sticky situation this week as they try to avert a government shutdown: Each side has promised its members things that will not fly in the other chamber. Senate Majority Leader Mitch McConnell told moderate Sen. Susan Collins he'd support passage of legislation by the end of the year to prop up Obamacare insurance markets — so long as she votes for tax reform. That addition, however, puts Speaker Paul Ryan in a pickle: His members are loath to be seen as bailing out a health care law they hate. (Politico)

Senate Will Not Follow House Plans for Next Continuing Resolution: House Republicans introduced their continuing resolution last week and the bill includes the FY18 Defense Appropriations bill while only extending funding for all other government programs through January 19. It also includes the House’s CHIP bill. The Senate plans to remove the Defense Appropriations and CHIP bills from its legislation as these are both non-starters with Senate Democrats. The length of the Senate’s continuing resolution may also change and it could also include increases to the Budget Control Act spending caps. (Roll Call)

Disaster Aid Package Could Be Part of Spending Deal: Lawmakers from disaster-ravaged states like Florida and Texas are holding firm that they won’t support a stopgap bill to keep the government funded past Dec. 22 unless they can secure help for their constituents. A supplemental disaster aid package could be included as part of the continuing resolution or passed as a stand-alone bill. (The Hill)

Banking/Housing

Senate Bill to Ease Dodd-Frank Rules Gets Chilly Reception in House: Bipartisan legislation in the Senate to roll back parts of the Dodd-Frank financial reform law is running into trouble in the House, due to its narrow scope that does not address the CFPB. The Senate Banking Committee last week advanced a bill that would scale back Dodd-Frank rules for small and mid-sized banks. Sponsored by Banking Committee Chairman Mike Crapo (R-Idaho), the legislation has enough support among Democrats to avoid a filibuster, largely because it focuses on scaling back federal oversight of banks without touching other portions of Dodd-Frank that Democrats are determined to protect. (The Hill)

Health

House Version of the Continuing Resolution Includes CHIP Reauthorization: House Republicans proposed that a five-year reauthorization for the Children’s Health Insurance Program (CHIP) be included in the next short-term continuing resolution likely scheduled to be taken up next week. The bill includes the CHIP language approved by the House Energy and Commerce Committee which was opposed by Democrats because it paid for CHIP with controversial cuts, such as to the ACA Prevention and Public Health Fund. Without changes, it stands little chance of getting through a filibuster by Senate Democrats. (Washington Examiner)

Obamacare Mandate Repeal Included in Final Tax Bill: The compromise tax bill will end the health law’s requirement that all individuals buy insurance or pay a fine. Many believe that will jeopardize the already-shaky insurance marketplaces by reducing the number of healthier people who sign up for insurance. (Bloomberg)

Senators Concerned over Allocation of Opioid Epidemic Funding: In a hearing last week, Senators from states hardest hit by the opioid crisis expressed their concerns that funding to address that crisis was not being targeted fairly at those states. Senators also expressed frustration over lack of assessment being conducted on the efficacy of treatment programs. (Medpage Today)

Energy

Final Tax Bill Includes Alaska Drilling Provision: Senate Majority Leader McConnell announced that the provision on opening the Arctic National Wildlife Refuge (ANWR) will be included in the final tax package. It would allow for the drilling lease sales in a corner of the 19 million-acre ANWR within the next decade, with the federal and Alaskan governments splitting the revenues. (The Hill)

Executive Branch

EPA

A $25K Cone of Silence for Pruitt's Office? Probe is Coming:  U.S. Environmental Protection Agency Administrator Scott Pruitt's alleged decision to spend $25,000 on a soundproof communication booth for his office will be reviewed by the agency's inspector general. (Law 360)

FCC

FCC Overturns Net Neutrality Rules: As anticipated, the Federal Communications Commission voted Thursday to overturn Obama-era net neutrality rules mandating that internet service providers treat all online content equally, handing industry groups a win and offering ISPs leeway to try out “fast” and “slow” lanes for web traffic. (Law 360)

 Labor

Labor Department Extends Comment Period for Tip Pooling Rule Amid Backlash:  The Labor Department announced it’s giving the public more time to comment on its proposal to roll back an Obama-era rule that bans employers from pooling workers’ tips, following requests from House Democrats and worker advocates. The agency said on its website it’s extending the comment period from 30 to 60 days to give the public more time to comment on its proposal to change the Fair Labor Standards Act and allow employers to pool the tips of workers who make at least the federal minimum wage, which is $7.25 an hour. (The Hill)

 DOJ

DOJ Said Early Release of Text Messages Was Not Authorized: The Department of Justice acknowledged that copies of private text messages exchanged between two former special-counsel investigators were disclosed to certain members of the media before they were given to Congress, even though those disclosures were not authorized. The text messages between the two investigators expressed dislike for then-candidate Trump and are part of an inspector general’s investigation on how the FBI handled the inquiry on the use of Clinton’s private e-mail server. (Business Insider)

Rosenstein Continues to Support Special Counsel Mueller: In a Congressional hearing last week, Deputy Attorney General Rosenstein reiterated his support for Special Counsel Mueller even as Republicans have continued to raise concerns regarding the potential bias of some investigators within the Special Counsel’s office. (Fox News)

Trade

NAFTA May be on Track for an Unhappy New Year: The U.S., Mexico, and Canada are heading into 2018 with no clear plan for saving the North American Free Trade Agreement. While officials made headway on issues such as telecommunications and e-commerce this week, according to people familiar with the talks, the parties haven’t finalized agreements on even minor issues since October. The lack of progress makes the goal of reaching a deal by March seem increasingly unrealistic. (Bloomberg)

HHS

Clinical Labs Sue CMS over Planned Reimbursement Cut: CMS is changing the reimbursement rule so that it will pay the same rates for lab tests as private payers. Clinical labs believe that the way CMS collected data on private payer rates was flawed and as such, they expect to lose $670 million next year. (Modern Healthcare)

FDA Releases Draft Guidance for More Efficient Development of Targeted Therapies: On Friday, FDA released a draft guidance related to finding treatments that address the underlying molecular changes and another draft guidance related to the use of an in vitro diagnostic device in a therapeutic product study. (FDA Statement)

IRS/Nonprofit

Senate Parliamentarian Strikes Language Allowing Churches to Endorse Candidates from Tax Bill: The Senate parliamentarian has blocked language repealing the Johnson Amendment and allowing churches and 501(c)(3) nonprofits to endorse candidates and engage in partisan politics from inclusion in the tax bill. (The Hill)

Transportation

Democrats Cool to Trump’s Infrastructure Pitch: The White House is preparing to unveil its long-awaited $1 trillion infrastructure plan soon after President Trump signs the GOP tax overhaul, hoping to begin 2018 with another big legislative win — but its approach is already drawing resistance from Democrats who are in no mood to cooperate. The plan set for release in January, is expected to call for as much as $200 billion in federal spending over the next decade, with the rest coming from private investment, state or local funding and cuts to other federal programs. An administration official added new details this week, stating that a wide variety of projects — from bridges to broadband — would have to compete for federal assistance, while showing they're prepared to put their own money on the table. (Politico)

White House Still Eyeing Gas Tax Hike to Pay for Infrastructure Plan:  The White House is still considering raising the federal gasoline tax to pay for President Trump’s $1 trillion infrastructure package, despite resistance from Republicans, according to the Republican chairman of a House subcommittee. This would be a politically risky move that hasn’t been done in more than 20 years, in part because influential conservative groups and many Republicans remain staunchly opposed to any increase. (The Hill)

Energy

Energy Department Improperly Withheld Research Funding: The Government Accountability Office found the Department of Energy (DoE) violated federal spending laws when it did not allocate $91 million in appropriated funding this year for the Advanced Research Projects Agency-Energy (ARPA-E). The DoE directed ARPA-E to withhold the funding after the FY18 budget request proposed greatly reducing the funding for the agency. After DoE learned of the investigation, it directed ARPA-E to allocate the funding. (The Hill)

New Offshore Wind Research Project Announced: The Department of Energy announced $18.5 million in new funding for an offshore wind research and development consortium that will conduct U.S.-specific research aimed at reducing the cost of offshore wind. The consortium will include members of the offshore wind industry who will contribute funds to the consortium and use the research findings to further advance technologies. (Maritime Executive)

NASA

Trump Formally Establishes Lunar Landing Goal, But Without Details:  President Trump signed an order Dec. 11 formally directing NASA to send humans back to the moon, but provided no information on schedules or budgets for such an initiative. Trump signed what the administration is calling Space Policy Directive 1, which enacts a recommendation made at the National Space Council meeting in October to make a return to the moon a step towards eventual human missions to Mars. (Space News)

Former NASA Flight Director Says A Return to the Moon is Necessary Before Heading to Mars:  George W.S. Abbey, a former director of NASA's Johnson Space Center, said international cooperation is a key to future missions and a return to the moon is necessary before NASA can get to Mars. Abbey was named director of flight operations in 1976 and helped develop strategies for future moon and Mars missions. (IB Times)

RS-25 Engine Test Proving 3-D Printing Techniques:  NASA recently completed hot-fire testing of an RS-25 rocket engine containing its largest additively manufactured component to date. Additive manufacturing, commonly known as 3-D printing, will help lower the cost of future missions of NASA’s powerful Space Launch System heavy-lift rocket. (Space Ref)

Russian Investigation

Conaway Says He'll Keep Running Russia Probe Even with Nunes Cleared by Ethics Inquiry: Rep. Mike Conaway (TX-11) said Monday that he would continue running the House's Russia investigation even though the chairman of the House Intelligence Committee has been cleared by an ethics inquiry that had prevented him from running the probe. (CNN)

Education

Trump Picks Bush Ally Frank Brogan to be Assistant Secretary of Education: President Trump has named Frank Brogan, one of closest allies of his campaign rival Jeb Bush, to be the assistant secretary of education for elementary and secondary education. (Tampa Bay Times)

DeVos to Testify Before House Committee Next Week: Education Secretary Betsy DeVos is scheduled to take the hot seat before the House Education Committee on Dec. 20, just days before lawmakers are expected to leave town for their holiday recess. Committee Democrats are likely to grill DeVos over her recent decision to roll back Obama-era guidelines on how colleges and universities should handle allegations of sexual assault on campus. (The Hill)

Immigration

Illegal Immigration on Border Surges Back to Obama Levels: Illegal immigration across the Southwest border has surged back to Obama-era levels, according to the latest data released Friday, that suggests the gains President Trump made early in his tenure have worn off. Nearly 40,000 illegal immigrants were nabbed attempting to jump the border in November, which was up about 12 percent compared to October, and more than twice the monthly numbers from March and April, when President Trump touted his early accomplishments. (The Washington Times)

White House

Behind Trump’s Plan to Target the Federal Safety Net: The Trump Administration and Republicans in Congress are hoping to make the most sweeping changes to federal safety net programs in a generation, using legislation and executive actions to target recipients of food stamps, Medicaid and housing benefits. The White House is quietly preparing a sweeping executive order that would mandate a top-to-bottom review of the federal programs on which millions of poor Americans rely, and GOP lawmakers are crafting legislation that could make it more difficult to qualify for those programs. (Politico)

 

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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