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Window on Washington - September 24, 2018 Vol. 2, Issue 38

Sep 24, 2018

Outlook for This Week in the Nation's Capital

Kavanaugh Hearing. The Senate Judiciary Committee has agreed to hold a public hearing on Thursday at which Dr. Christine Blasey Ford and Supreme Court nominee Kavanaugh will testify separately about Dr. Ford’s accusation that Kavanaugh sexually assaulted her when they were teenagers. It is unclear at this time if either Republican staffers or senators would be asking questions of Dr. Ford. Additionally, another woman came forward over the weekend with a new sexual allegation against Kavanaugh that occurred while he was in college. Senate Judiciary Ranking Member Feinstein has called for a postponement of Thursday’s hearing in order for the FBI to investigate the new development. 

Labor-HHS, Defense Appropriations. The House is scheduled to vote on the minibus appropriations bill that continues funding for Labor-HHS and Defense and contains a continuing resolution for the parts of the government not yet funded by spending bills including Homeland Security and Commerce-Justice-Science. House Conservatives have expressed their opposition to the bill but have realized they are unlikely to keep it from passing. The Senate passed the bill last week.

Election Outlook.  A new NBC News/Wall Street Journal poll is reporting that Democrats hold a 12-point lead in congressional preference among registered voters. A version of the same poll only reported an 8-point lead last month.   

 

Last Week in the Nation's Capital

CONGRESS

Budget

Trump Signs First 'Minibus' Spending Package for 2019: President Trump signed into law a package of three spending bills for 2019, temporarily setting aside a veto threat that could have shut down the government. The $147 billion package covered military construction and veterans affairs, the legislative branch, and energy and water. Those bills made up a quarter of the 12 planned total funding bills, but just a small fraction of the overall spending total. (The Hill)

Trump Criticizes 'Ridiculous' Spending Deal as Shutdown Deadline Looms: President Trump last week renewed calls for Congress to increase funding for his proposed wall along the U.S.-Mexico border. Although he did not reiterate his threat to trigger a shutdown of federal agencies, Trump called into question an agreement struck by Democratic and Republican lawmakers last week to maintain spending government-wide after appropriations expire on September 30. (Government Executive)

Health

A Gap Between Opioid Bills Has an Easy Fix in Existing Medicaid Waivers: As the House and Senate attempt to reconcile their respective packages of bills addressing the nation’s opioid crisis, the chambers find themselves at an impasse over a provision to lift restrictions on using Medicaid funds for people receiving in-patient treatment for substance use disorders. But some health experts say the conflict over the provision is unnecessary, not only because states already have ways to fund this care using Medicaid, but because the provision would ultimately do little to combat the opioid crisis. (Morning Consult)

GOP Plays Defense on ObamaCare’s Pre-existing Conditions: Republicans in tough reelection races are scrambling to show that they support protections for people with pre-existing conditions in the face of a wave of Democratic attacks on the issue. But the argument they are making has been complicated by their party’s repeated efforts to repeal ObamaCare, as well as a lawsuit supported by the Trump administration that seeks to overturn protections under the law for people with pre-existing health conditions. (The Hill)

New Bill Would Hold HHS Feet to Fire for Unaccompanied Minors: A bipartisan group of senators have introduced a bill designed to ensure that the Department of Health and Human Services takes full responsibility for, and keeps better track of, unaccompanied children who come to the border seeking entry to the United States and then are placed with U.S. sponsors. The legislation follows a new report that revealed that the government could not determine the whereabouts of nearly 1,500 children that HHS had placed with sponsors this year. (Roll Call)

Tax Reform

After Pushback, IRS Will Hold Big Withholding Form Changes Until 2020 Tax Year:  The Tax Cuts and Jobs Act of 2017 (TCJA) is nearly a year old, and the Internal Revenue Service (IRS) is still struggling to figure out how to assist taxpayers with their withholding under the new law - an updated form W-4, Employee’s Withholding Allowance Certificate, to reflect changes in the new tax law still needs additional work and won’t be ready by year end/for the 2019 tax year. The push from Congress to make things “simple” means that many taxpayers might not be withholding enough - and that may not change any time soon.  In the meantime, the IRS advises taxpayers to take advantage of the new Withholding Calculator which reflects changes under the new tax law. (Forbes)

Banking & Housing

Bankshot What Happens to Banking Policy if Democrats Win Both Chambers of Congress?: With some Republican strongholds suddenly looking like tossups, there is recent coverage suggesting that the GOP is worried about holding the Senate, in addition to staring down potential defeat in the House. If such concerns became a reality, it would rewrite the script in Washington on financial policy. The implications of a Democratic sweep of both houses would be far-reaching: Likely nailing the coffin shut on further regulatory relief legislation, the opposition party having more influence in the Trump administration’s remaining picks to run regulatory agencies, and the Democrats having a larger role in housing finance reform and other initiatives. (American Banker)

Justice

Carlos Curbelo Calls on Jeff Sessions, DOJ to Get Out of the Way of Medical Marijuana Research:  U.S. Rep. Carlos Curbelo, R-Fla., is calling on U.S. Attorney General Jeff Sessions to allow more companies to research how Cannabidiol (CBD) and Tetrahydrocannabinol (THC) can be used for medicinal purposes. Noting that the federal Drug Enforcement Agency had approved plans for Tilray, a company based out of British Columbia, to import CBD and THC for studies on how to treat nerve pain, Curbelo called on the U.S. Department of Justice to get out of the way of domestic companies trying to do the same thing. (Sunshine State News)

Agriculture

Looming Farm Bill Expiration Yields Uncertainty Over Funding: The 2014 farm bill is set to expire in one week, raising concerns about disruptions in a number of programs, including one of the largest conservation programs as well as much smaller programs that help commodity groups open overseas markets.  Congressional negotiators had hoped to reach agreement on a new farm bill in time to have it enacted by Sept. 30, when the 2014 law expires, but the talks remain bogged down this week over a range of policy and funding disagreements. (Agri Pulse)

Transportation

Congress Allows Airlines to Continue Passenger Fees that Cost $4.6B Last Year: Congress protected the $4.6 billion in fees that U.S. airlines charge for baggage, seat assignment and flight changes as part of a late-night action to continue funding for the Federal Aviation Administration. The fees would have come under scrutiny by the U.S. Department of Transportation if a House-Senate committee had agreed to the language in the bill. But the legislation removed a provision that would have allowed the DOT to decide whether airline fees were “unreasonable” or out of line with the cost of providing the service in question. (The Washington Post)

Data Privacy

Big Tech Preps for Senate Showdown: Some of the biggest tech and telecom companies are preparing for members of the Senate Commerce Committee to grill them over their data practices this week. Why it matters: Industry players are trying to shape the debate as Congress considers passing its own privacy rules. Apple will pledge its support for "comprehensive" federal privacy regulations during the Senate hearing, according to an executive's prepared testimony obtained by Axios. It'll be the first time Apple has made this explicit to Congress. (Axios)

EXECUTIVE BRANCH

HHS

Trump Puts HHS in Charge of Defense against Biological Threats: President Donald issued a national biodefense strategy that repeals Bush and Obama administration policies and installs an HHS-led committee to survey gaps in responding to biological threats. The committee includes officials from the Pentagon, Agriculture and Homeland Security departments and will review capabilities across the intelligence community and 15 executive branch agencies. (Politico)

HHS Awards over $1B in Grants to Fight Opioid Epidemic: The Department of Health and Human Services awarded more than $1 billion in grants to states, communities and organizations fighting the opioid crisis. The vast majority of that funding — $930 million — is intended to support states' efforts to provide treatment and prevention services to combat opioid abuse. Another $352 million was awarded to 1,232 community health centers to increase access to services for substance use disorder and mental health needs. (The Hill)

FDA Expands Strategies for Safer Opioid Prescribing: The U.S. Food and Drug Administration took new steps as part of its broader efforts to address the opioid crisis by approving the final Opioid Analgesic Risk Evaluation and Mitigation Strategy. This new plan includes several measures to help better communicate the serious risks about the use of opioid pain medications to patients and health care professionals. (FDA News Release)

Defense

Wilson: $13 billion Space Force Cost Estimate is ‘Conservative’: Air Force Secretary Heather Wilson said her initial $13 billion cost estimate to stand up a Space Force and sustain it for five years is likely to be revised upward as more data is crunched. In a detailed memo to Deputy Defense Secretary Patrick Shanahan, Wilson provided the first glimpse into the potential cost, size and makeup of a military branch for space. The $13 billion projected cost over five years is based on a force of 13,000 people, including a headquarters of about 2,400. (Space News)

Air Force Busts Out Credit Cards To Buy High Tech Gear: The Pentagon has been trying for years to replicate the speed of Silicon Valley-style startup culture, with only sporadic — and limited — success. But the Air Force says it’s doubling down on the effort, and is looking to start using government credit cards to buy small amounts of gear from tech firms that don’t have much interest in forming long-term relationships with the government. The Air Force can be an “angel investor” for some startups, said Will Roper, the service’s top acquisition official (and former head of the Pentagon’s Strategic Capabilities Office). (Breaking Defense)

Labor & Workforce

Eighty Percent of Contractors Report Difficulty Finding Qualified Craft Workers to Hire as Association Calls for Measures to Rebuild Workforce:  Eighty percent of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce, according to the results of an industry-wide survey released recently by Autodesk and the Associated General Contractors of America.  Association officials said shortages pose a significant risk to future economic growth and they released a new workforce development plan to solve the growing problem. (Agc.org)

Labor Dept. to Visit Federal Contractors in the Coming Months: Hundreds of government contractors should expect a visit from the Labor Department’s Office of Federal Contract Compliance Programs in the coming months.  Labor’s OFCCP sent letters to 445 vendors alerting them about an upcoming review. Among the areas Labor will review is how contractors are meeting requirements to take affirmative action and not discriminate on the basis of race, color, sex, sexual orientation, gender identity, religion, national origin, disability, or status as a protected veteran. (Department of Labor)

DOE

Department of Energy Announces $120 Million for Battery Innovation Hub: The U.S. Department of Energy (DOE) announced plans to provide $120 million over five years to renew the Joint Center for Energy Storage Research (JCESR), a DOE Energy Innovation Hub devoted to advancing battery science and technology, led by Argonne National Laboratory. Future efforts at JCESR will focus on developing new battery materials “from the bottom up” using principles rooted in a detailed understanding of matter at the atomic and molecular levels.  Emphasis will be on the development of multivalent battery designs, capable of significantly higher energy capacity than today’s lithium-ion batteries, as well as on new concepts for so-called flow batteries for the electric grid. (DoE Press Releases)

Cybersecurity

FBI Issues Public Service Announcement of Cyber Threats Related to Student Use of Educational Technologies: On September 13th, the Federal Bureau of Investigation (FBI) released a public service announcement in an effort to increase awareness of the vulnerability of K-12 students to the threat of cyber-attacks. According to the FBI, the rapid growth of U.S. schools using educational technologies and digital tools, particularly those connected to networked devices or directly connected to the internet, provide increased opportunities for “cyber-actors to access devices collecting data monitoring children within educational and home environments.” In particular, mobile devices, laptops, and tablets all may be improperly secured and pose additional avenues for exploitation by cybercriminals. The FBI warns that the improper use of sensitive personal data could result in social engineering, bullying, tracking, identity theft, or other means for targeting children. (Clark Hill Insight)

Trump’s National Cyber Strategy Praised by Experts: After months of criticism for lacking a cohesive federal approach to cybersecurity, President Trump’s new national cybersecurity strategy, released Sept. 20, has been largely met with praise from former government officials, business executives and political opponents. The strategy calls for more offensive cyber attacks and attempts to bolster America’s digital defenses by creating new norms online. On Twitter, Michael Daniel, the Obama administration cyber czar and president of the Cyber Threat Alliance, praised the plan. He cast Trump’s strategy as an evolution of U.S. policy from previous eras.(Fifth Domain

Banking

Bank Regulators' "Clarifying" Statement on Enforcing Supervisory Guidance: The prudential regulators, including the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency (prudential regulators) along with the Bureau of Consumer Financial Protection (agencies) recently issued an Interagency Statement Clarifying the Role of Supervisory Guidance (See here) to explain the role of supervisory guidance and the agencies approach to it. In summary, the agencies are clarifying their position that they “do not take enforcement actions based on supervisory guidance.”  Will banks and thrifts be free to avoid compliance with supervisory guidance, assured they will suffer no consequences?  Don’t bet on it. (Clark Hill Insight)

Space, NASA & NOAA

Three Companies Win NOAA Commercial Weather Data Pilot Contracts:  The National Oceanic and Atmospheric Administration (NOAA) awarded more than $8 million in contracts last week to three companies in the second round of a commercial satellite weather data pilot program. In the announcement, NOAA said it was issuing contracts to GeoOptics, PlanetIQ and Spire to provide GPS radio occultation weather data from satellites currently in orbit or planned for launch in the coming months..The awards represent round two of NOAA’s Commercial Weather Data Pilot program, an effort by the agency to experiment with buying data from commercial providers to determine its usefulness, as well as to examine various technical and programmatic issues with such data buys. (Space News)

New Small Satellite Peers Inside Hurricane Florence:  A new experimental weather satellite no bigger than a cereal box got an inside look at Hurricane Florence in a test of technology that could influence the future of storm monitoring from space. The satellite took its first images of Hurricane Florence on Tuesday, Sept. 11, just hours after its instrument was turned on. TEMPEST-D, which deployed into low-Earth orbit from the International Space Station in July, carries a state-of-the-art miniaturized microwave radiometer, an instrument that sees through the thick clouds to reveal the hidden interior of storms, just like a security scanner can see inside luggage at the airport. (Space Ref)

Bezos Touts Investments in Rockets, Launch Facilities:  Amazon.com founder and CEO Jeff Bezos said he plans to invest a billion dollars next year in his rocket company Blue Origin to further the development of New Glenn, a heavy lift launch vehicle that is anticipated to fly in late 2020. Bezos took the stage at the Air Force Association’s annual symposium in a fireside chat with AFA CEO Larry Spencer, and did not take questions from the audience.  One of Bezos’ messages to a room packed with Air Force officers, Pentagon officials and contractors is that he will continue to put financial firepower behind New Glenn and space launch facilities. (Space News)

Trade

Despite New Tariffs, China Still Not Budging on Trade Tactics, White House Says: The Trump administration is not aiming to “cleve off” the U.S. economy from China’s, but it intends to continue pressuring the Asian giant even though tough moves like repeated rounds of tariffs have yet to bring the fundamental changes President Donald Trump is demanding. “Our goal is not to totally divorce our economies from each other,” said a senior official who briefed reporters Friday at the White House about trade matters. “Our goal is for China to stop behaving unfairly.” And the official also gave no indication that talks with Canada are any closer than where they were weeks ago to bring Ottawa into a preliminary U.S.-Mexico deal that might replace the North American Free Trade Agreement. (Roll Call)

DHS

Trump Administration Proposal Would Deny Green Cards to Immigrants Using Welfare, Food Stamps: Department of Homeland Security (DHS) officials, who announced the proposal late Saturday, claim it would save federal taxpayers $2.7 billion annually by deterring immigrants from applying for benefits they would otherwise be qualified for. It would affect about 380,000 people annually, federal officials said, and is designed to ensure the immigrants can support themselves. “Under longstanding federal law, those seeking to immigrate to the United States must show they can support themselves financially,” said DHS Secretary Kirstjen Nielsen. "This proposed rule will implement a law passed by Congress intended to promote immigrant self-sufficiency and protect finite resources by ensuring that they are not likely to become burdens on American taxpayers.” (USA Today)

DOT

DOT Announces Competition for Two New University Transportation Research Centers: The U.S. Department of Transportation published a Notice of Funding Opportunity for $15 million to fund two new University Transportation Centers. One center will focus on “Congestion Relief,” while the other will focus on “Improving the Durability and Extending the Life of Transportation Infrastructure.” (DoT News)

FEC

SCOTUS Refuses to Stay Order on Campaign Finance Disclosure on Eve of Midterms: Last week, the Supreme Court decided it would not intercede in a ruling by a federal judge to eliminate a Federal Election Commission (FEC) regulation that allows donor money to be kept secret. CREW, which brought the case, called it “a great day for democracy.” The original ruling will be appealed, but this will take time, and probably won’t happen before midterms. The ruling closes a 40-year-old loophole that let individual donors to aggressive political ad campaigns remain anonymous. This means, according to FEC Chair Caroline Hunter, that for the first time in decades large donors to political campaigns through 501c4s (social welfare nonprofits) and 501c6s (association-based nonprofits) will need to be disclosed. (Nonprofit Quarterly)