Window On Washington - Vol. 2, Issue 19

by Clark Hill PLC

Outlook for This Week in the Nation's Capital

Farm Bill. The House is trying to move its bill to reauthorize farm programs this week but it’s unclear at this point if it will have the votes to pass. The bill would require those that receive food stamps to either participate in a training program or be employed. This work requirement is opposed by Democrats as well as some moderate Republicans. On the other hand, members of the House Freedom Caucus don’t think the proposed reforms to the food stamp program go far enough. The House Agriculture Committee Chairman planned on spending the weekend getting more of the Republican caucus to yes on the bill by clearing up concerns and promising votes on amendments. Senate Republican leadership has already said that the work requirement is a nonstarter in its current form as it cannot get the votes to pass on the Senate floor.

No August Recess? President Trump tweeted his support of an idea raised by a group of Republican Senators to cancel August recess in order to complete work on the FY19 appropriations process and continue working through the backlog of nominations. The Senate is unlikely to finish its work on the appropriations bill before August recess given the limited amount of time left on the calendar, but the Senate is also unlikely to cancel the August recess given the upcoming mid-term elections and the need for Senators to be in their districts.    

Last Week in the Nation's Capital



GOP Senators Express Willingness to Skip August Recess, Bundle Spending Bills: A group of 16 Republican senators has announced a willingness to work through August if that’s what it takes to complete spending bills. In addition to potential weekend sessions and truncating the August recess, the senators floated the interesting idea for handling regular fiscal 2019 spending bills ahead of August by bundling some of appropriations bills into “minibuses.” (Roll Call)

House Continues Marking Up Its Appropriations Bills: The House Appropriations Committee is holding a full committee markup on Wednesday of its Energy and Water and Agriculture appropriations bills. Additionally, the Committee is moving its Interior and Transportation and HUD appropriations bills on the subcommittee level. (House Appropriations Committee)

Trump Requests $15.4B Spending Clawback: The White House officially asked Congress to rescind $15.4 billion in spending from previously approved funds, the largest single such request from a White House and the first in nearly two decades. Congress has 45 days to approve the request in a measure that is not subject to a Senate filibuster. The White House says the clawback is mostly aimed at unobligated funds, such as those leftovers in accounts for defunct programs. Scrapping unobligated funds does not reduce the deficit. (The Hill)

Tax Reform

Nancy Pelosi Keeps Giving the GOP Talking Points – This Time on Taxes:  Nancy Pelosi clearly wants to be speaker again, and she's on the cusp of reclaiming that perch. But someone may be standing in her way: Nancy Pelosi.  First it was her repeated admonitions that the GOP's tax cuts amounted to “crumbs” for the middle class — a talking point that has clearly given her Democratic colleagues agita because of its elitist overtones. Then last Tuesday at a public event she appeared to confirm she would try to raise taxes if Democrats win back the majority. (The Washington Post)

Impact of Tax Reform on Compensation Structures and Popular Fringe Benefits:   US tax reform is changing the game with respect to many of the popular benefits employers have traditionally provided to their employees. These new rules have produced a great deal of questions. However, while the Internal Revenue Service (IRS) is formulating guidance, employers are left to navigate these changes on their own in order to determine the impact on both themselves and their employees. Employers are also reevaluating their benefit offerings in light of the new rules. (The National Law Review)


House Panel Advances 25 Opioid Bills: The House Energy and Commerce Committee advanced 25 bills tackling the opioid crisis to the full House for a vote. The bills focus on different facets of the opioid crisis. One of the bills aims to give pharmacists educational materials to help them detect fraudulent prescriptions of opioids and another would help support establishing Comprehensive Opioid Recovery Centers that offer treatment options. (Washington Examiner)

Senate Continues Oversight Work on 340B Drug Program: The Senate Health, Education, Labor and Pensions Committee will hold another hearing this week on the 340B program called “Examining Oversight Reports on the 340B Drug Pricing Program.” Witnesses are from the Office of the Inspector General at HHS and the Government Accountability Office. Both of these offices have been critical of how the 340B discount drug program is managed. (Senate HELP Committee)

Labor & Workforce

Democrats Lean Into Labor Issues:  Senator Bernie Sanders and a group of potential Democratic presidential contenders including Kamala Harris, Elizabeth Warren, and Kirsten Gillibrand are introducing the Workplace Democracy Act, a major labor bill updating the 1935 National Labor Relations Act with new provisions on organizing rights and the gig economy.  There’s no chance whatsoever that the bill will be considered with Republican control of the White House in Congress. But its introduction is a signal that the party may be leaning into labor issues for elections to come, and with good reason. The Democratic lead over Republicans in the union vote dipped by 10 points from the 2012 election to 2016, and Donald Trump won the most union votes of any Republican candidate since Ronald Reagan in 1984. (Slate)


House Votes to Advance Yucca Mountain Project: The House passed a bill last week that seeks to move forward a process toward building the Yucca Mountain facility in Nevada that would store the nation’s radioactive nuclear waste. The bill received widespread support. Many lawmakers justified their votes by arguing that spent nuclear fuel stored at operating or closed power plants in their districts ought to instead be at a centrally-located facility designed for long-term storage. (The Hill)


House Panel Adopts $716 Billion Defense Authorization Plan: After 14 hours of debate, the House Committee on Armed Services passed its $716 billion dollar defense policy bill for fiscal year 2019. The bill includes a 2.6 percent pay raise for troops starting next January, the addition of almost 16,000 active-duty troops across the military, $39 billion for military aviation upgrades, $25.5 billion for equipment maintenance and replacement parts, and $18.5 billion to replace aging army equipment. It also includes plans for 77 new F-35 aircraft, two additional Virginia-class submarines and littoral combat ships, and modernization plans for almost 3,400 joint light tactical vehicles. (DefenseNews)


House Spending Bill Offers $21.5 billion for NASA in 2019, Boost of $810 Million Over Last Year:  A House appropriations bill released May 8 offers more than $21.5 billion for NASA in fiscal year 2019, a significant increase over both what the agency received in 2018 and what the White House proposed for 2019.  The bill, released by the House Appropriations Committee on the eve of its markup by the Commerce, Justice and Science (CJS) subcommittee, includes $21.546 billion for NASA.  That is an increase of more than $1.65 billion over the administration’s request and $810 million more than what NASA received in the fiscal year 2018 omnibus spending bill passed in March.  Additional details on what funding for specific programs and missions should be released later this week. (Space News)

Senate Set to Examine Future Role of the ISS: Senator Cruz, chairman of the Subcommittee on Space, Science, and Competitiveness, will convene a hearing titled “Examining the Future of the International Space Station: Administration Perspectives,” on Wednesday. The first in a series of two hearings to examine the role of the International Space Station (ISS), this hearing will provide an opportunity to discuss the value of the ISS to our national space program and the future of human space exploration. (Committee on Commerce, Science, and Transportation)



Trump Announces Plan to Lower Drug Prices: President Trump introduced his blueprint to "bring soaring drug prices back down to earth." Officials said the plan would increase competition, create incentives for drug makers to lower initial prices and slash federal rules that make it harder for private insurers to negotiate lower prices. The result would be lower pharmacy costs for patients — a key Trump campaign promise. Trump said his administration will begin work immediately, although there is no timeline for implementing his proposals. The full blueprint is available here. (CBS News)

CMS to Simplify Medicare Plan Selection: The CMS is taking steps to make it easier to sort through Medicare coverage options, after a report said its current search options were badly presented and confusing and could lead some to make poor plan selections. The CMS will tweak before open enrollment starts on Oct. 15, making changes to help beneficiaries understand their coverage options, CMS Administrator Seema Verma said during a Medicare Advantage and Prescription Drug Plan Conference. (Modern Healthcare)


Justice Department and USCIS Formalize Partnership to Protect U.S. Workers: The Department of Justice and U.S. Citizenship and Immigration Services (USCIS) announced a Memorandum of Understanding that expands their collaboration to better detect and eliminate fraud, abuse, and discrimination by employers bringing foreign visa workers to the United States. The MOU will increase the ability of the agencies to share information and help identify, investigate, and prosecute employers who may be discriminating against U.S. workers and/or violating immigration laws. (Justice Department)


DOE Seeks Info on Small Modular Coal-Based Power Plants: The U.S. Department of Energy issued a request for information for the development of small-scale, modular, coal-based "power plants of the future." These small modular coal plants are expected to be lower-cost than traditional facilities, capable of performing load-following to meet the evolving demands of the power grid, and with efficiency greater than 40 percent. (Greentech Media)

DOE Considering Cold War-era Law to Boost Coal, Nuclear Production: Energy Secretary Rick Perry confirmed that the Trump Administration is looking into using the Defense Production Act, a Cold War-era law, to prop up struggling U.S. coal and nuclear power plants. The law could allow the administration to provide help to the industries in the form of loans and loan guarantees or purchase commitments. It could also be used to help specific regions or plants. (The Hill)


Congress Scraps Consumer Bureau Rule Targeting Auto-Lending Bias: Lawmakers voted last week to reverse a Consumer Financial Protection Bureau directive that put restrictions on interest-rate markups car dealers charged for some auto loans. Majority Republicans used an obscure procedure to overturn the 2013 guidance, which they saw as an effort by then-CFPB Director Richard Cordray to bypass normal rule-making. (Bloomberg)

Banking & Housing

How Trump Could Break from the Fed’s Independence: President Trump does not really view the Federal Reserve as an independent agency intended to be outside his ability to control, a onetime candidate for the top job at the world’s most powerful central bank said. Kevin Warsh, a former Fed governor who was on the final short list for the top job at the Fed, said that Trump — during an hour long Oval Office interview last year — appeared to want to know exactly what Warsh would do on interest rates and seemed not to care about the Fed’s historical independence. (Politico)

Despite a Legal Setback - States Continue to Move Forward in Fintech Innovation: For more than two years, the Office of the Comptroller of the Currency (“OCC”) has studied the regulatory impacts of innovations in financial technology.  In March, 2016 it published a white paper regarding innovation in the financial services industry; in December, 2016 it went further and published another white paper describing what could be the baseline supervisory requirements of a Special Purpose National Bank (“SPNB”); and in March, 2017 it published a draft supplement to its licensing manual which suggested that non-deposit fintechs could eventually obtain a national bank charter.   The Conference of State Bank Supervisors (“CSBS”), a nationwide organization of state banking and financial services regulators, sued the OCC to prohibit it from issuing a SPNB charter.  The federal district court dismissed CSBS’s claim, but this has not halted efforts by several states to provide for greater fintech innovation within their jurisdictions. (Clark Hill Insight)


FEC Rules Candidates Can Use Campaign Cash for Child Care: The FEC ruled in favor of Liuba Grechen Shirley, who is running in New York’s 2nd District and requested an advisory opinion last month on her request to use her campaign funds to pay for child care for her young children while she was involved in campaign activities. “The Commission concludes that your authorized campaign committee may use campaign funds to pay for the childcare expenses described in your request because such expenses would not exist irrespective of your candidacy,” the commission wrote in its ruling. (Roll Call)


Pentagon Revised Obama-era Report to Remove Risks from Climate Change: Internal changes to a draft Defense Department report de-emphasized the threats climate change poses to military bases and installations, muting or removing references to climate-driven changes in the Arctic and potential risks from rising seas. The earlier version of the document, dated December 2016, contains numerous references to “climate change” that were omitted or altered to “extreme weather” or simply “climate” in the final report, which was submitted to Congress in January 2018. While the phrase “climate change” appears 23 separate times in the draft report, the final version used it just once. (Washington Post)

Defense Department Turning Over Space Traffic Management to Commerce, but Details Still Unclear: A new policy said to be on President Trump’s desk for final approval would designate the Department of Commerce as the public face of space traffic management. The job of policing space currently is performed by the Department of Defense. It involves answering queries from private citizens, corporations and foreign governments about the position of satellites on orbit, and warning agencies and commercial satellite operators of potential orbital collisions. Although there is overall agreement on the transfer of responsibilities, the specifics of who will do what may take years to sort out. DOD has deep expertise in space situational awareness whereas Commerce faces a steep learning curve. (Space News)

Space & NASA

New NASA Chief Sees Moon Missions Building a 'Railroad' to Mars: In his first major address as NASA Administrator, Jim Bridenstine defended the new agency directive to go to the moon first before voyaging to Mars. But his webcast speech at the Humans to Mars summit in Washington, D.C., last week did not disclose any new initiatives by NASA to send humans to the Red Planet. Bridenstine, the former Republican congressman from Oklahoma's 1st District, was sworn in as administrator three weeks ago after NASA went 15 months without a permanent leader. While the agency was under interim leadership, the Trump Administration tasked NASA with taking humans back to the moon before going to Mars. (


Trump Hosts Meeting with Automakers on Push to Relax Efficiency Rules:  President Trump is meeting with executives from automakers last Friday to discuss his administration’s push to relax fuel efficiency regulations.  Executives from 10 companies, including General Motors Co., Ford Motor Co. and Mercedes-Benz, joined leaders from the Auto Alliance, Global Automakers and key Trump administration officials along with the President. It was described as a productive meeting to discuss the Administration’s forthcoming rulemaking on Corporate Average Fuel Economy and greenhouse gas emission standards for automobiles. (The Hill)

Self-Driving Cars Continue to Face Little Resistance from the Federal Government: The US Department of Transportation convened a “listening session” on autonomous vehicles at its headquarters in Washington, DC, last week — and the key word here is “listening.” It was a chance for the private sector and federal and state regulators to get together to talk about the future, in which human driving becomes passé and driverless cars become the dominant form of transportation.  Most people are still highly skeptical about self-driving cars, but if the government was at all nervous about the coming revolution in driverless technology, it didn’t show. (The Verge)


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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