Window on Washington – March 28, 2022, Vol. 6, Issue 12

Outlook for This Week in the Nation’s Capital

Congress. The House and Senate are both in session this week. The House is expected to vote on the MORE Act (H.R. 3617), which would legalize and tax marijuana at the federal level.  The House will also vote on a handful of Judiciary, Transportation, and Ways and Means bills. Meanwhile, the Senate will vote this week to send USICA/America COMPETES back to the House in order for the two chambers to start formal conference negotiations on what will now be called the Bipartisan Innovation Act. The Senate also plans to focus on the House-passed Russia sanctions bill. Separately, bipartisan talks on the next COVID-19 relief package are making progress and the two parties are exchanging proposals with one another.  The House expects to have a relief bill ready to vote on next week. Hearings for the week include examining nominations, space situational awareness, the 2022 Farm Bill, drinking water infrastructure, wildlife-borne disease surveillance, workforce development, legacy pollution clean-up programs, and domestic critical minerals mining.

Budget and Appropriations. The President’s FY23 Budget Request is expected to be released sometime today, though agency budget justifications will be released over the coming weeks. The White House is advertising its budget as a reflection of the Administration’s priorities.  Their early line:  “The President’s budget will reflect three important values: fiscal responsibility, safety and security at home and abroad, and a commitment to building a better America. The budget will show how the strongest economic growth in nearly 40 years, powered by the American Rescue Plan, has put the deficit on track to drop by more than $1.3 trillion this year – the largest-ever one-year decline.” (Punchbowl News)  Given how long it took for the FY22 process to conclude – largely due to partisan disagreements as to how much should be allocated between defense and nondefense programs – appropriators are aiming to begin FY23 work immediately in order to wrap up the process before the end of the calendar year. Early reporting indicates that the White House will submit an $813 billion request for defense spending (4% higher than FY22 enacted levels); however, since Congress exceeded the budget request for FY22 defense spending, it is possible there will be partisan fights about defense versus nondefense spending levels again this year. The top four House and Senate appropriators plan to meet shortly after President Biden’s budget is released, but it is not clear what the timeline looks like for them to agree to a bipartisan spending deal. Separately, the Senate Appropriations Committee will hold a hearing to examine the Defense Health Program, and the House Appropriations Committee will hold hearings on FY23 funding for the U.S. Capitol Police and the Department of Health and Human Services (HHS). The House Budget Committee will hold a hearing with OMB Director Shalanda Young tomorrow on the President’s FY23 budget request.

Reconciliation. Sen. Joe Manchin (D-WV) has indicated that the April and May work period may be the window of opportunity for Democrats to revive their reconciliation package that includes pieces of the Build Back Better (BBB) bill. Topics expected to be addressed for the bill include the national debt, prescription drugs, clean energy, and taxes.

Supreme Court. Judge Ketanji Brown Jackson’s multi-day confirmation hearings wrapped up last week, and the Senate Judiciary Committee plans to vote on sending her nomination to the Senate floor on April 4. With Sen. Joe Manchin stating that he will support her nomination, Judge Jackson now has the support of all 50 Democratic senators which essentially guarantees that she will be confirmed. It is not yet clear if Judge Jackson will have any Republican votes, so the current plan is for Vice President Kamala Harris to cast the tiebreaking vote.

Biden Administration. President Joe Biden will meet with Prime Minister Lee Hsien Loong of Singapore at the White House tomorrow. Separately, the Biden administration is considering further sanctions that would target companies that provide goods and services to Russia’s military and intelligence services.

2022 Election. During the Republican retreat in Florida last week, House Minority Leader Kevin McCarthy (R-CA) shared that if Republicans win the House majority, the first set of bills they will focus on include legislation on energy independence, a parents Bill of Rights, border security, and the reduction of how much fentanyl enters the U.S. The House GOP also plans to end proxy voting on the floor.

Last Week in the Nation’s Capital

CONGRESS

Banking & Housing

Hagerty Tells SEC Chair Proposed Climate Change Disclosure Requirements Subject to Congressional Review: United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, sent a letter to Securities & Exchange Commission (SEC) Chair Gary Gensler to confirm that the SEC’s proposed rule requiring American businesses to calculate and disclose their greenhouse gas emissions, as well as the emissions generated by their suppliers and partners, will be submitted to Congress, as required under the Congressional Review Act (CRA). (Clark Hill Insight)

Democrats Seek SEC Action on Foreign Influence in Elections: The Securities and Exchange Commission should adopt regulations to identify foreign-owned companies that spend corporate funds to influence elections, Maryland Rep. Jamie Raskin (D-MD) and 15 other House Democrats say in a letter they sent Thursday. The letter cites Russia’s invasion of Ukraine to underscore the urgent need for the action. (Roll Call)

Crypto/Blockchain

Gillibrand, Lummis Plan New Regulatory Framework for Crypto: Sens. Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WO) are working together legislation on a broad-based regulatory framework for how the crypto industry should potentially be regulated in the future. If Gillibrand and Lummis succeed in hammering out the details, it would mark the first major bipartisan attempt to create a comprehensive framework for the U.S.’s regulation of crypto markets and other digital assets. (Politico)

Transportation

Senate Committee Approves Ocean Shipping Reform Act: A U.S. Senate panel easily approved legislation meant to facilitate the flow of freight at the country’s ports. The Commerce Committee on March 22 advanced by a voice vote the Ocean Shipping Reform Act. The legislation now awaits full Senate consideration. (Transport Topics)

Trade

Ocean Shipping Reform Act May See the Resolute Desk: The Senate Commerce Committee last Tuesday passed the Ocean Shipping Reform Act (OSRA), establishing Senate committee support for shipping supply chain challenges. In December 2021, the House passed OSRA under the America COMPETES Act. Given prior House support and now Senate Commerce’s support, OSRA will likely be included in the bipartisan conference bill for USICA/COMPETES. (Drovers)

Homeland Security & Immigration

Democrats Emphasize Border Security as Midterms Loom: Just weeks ago, President Joe Biden signaled a messaging shift on immigration that reflects the rhetoric many moderate Democrats have been using for months. “If we are to advance liberty and justice, we need to secure the border and fix the immigration system,” he told Congress during his State of the Union. “We can do both.” (Roll Call)

Lankford Gives CBP Ability to Repair Southern Border Ports: Senator James Lankford (R-OK), lead Republican on the Senate Homeland Security and Governmental Affairs Subcommittee on Government Operations and Border Management, introduced a bill to give the Commissioner of Customs and Border Protection (CBP) the authority to repair ports at the southern border. The bill cuts red tape by allowing CBP to repair these ports without involving the General Services Administration (GSA), unless the project is valued at more than $300,000. The GSA serves as the federal government’s landlord and buildings superintendent. Removing them from low-cost projects at CBP would help streamline the process for repairs and updates at facilities along the southern border and allows GSA to focus on larger projects. (Clark Hill Insight)

Competition Bill Could Carry High-Skilled Immigration Changes: Following the advancement of legislation to shore up U.S. global competitiveness, senators expressed optimism the bill could serve as a bipartisan vehicle for long-awaited changes to the legal immigration system. The Senate voted Wednesday to move forward with resolving differences between its bill and the House-passed version. Both measures would provide funds to boost American manufacturing and scientific research to better compete with China and other global powers. (Roll Call)

Judiciary/Justice

Legislation Seeks to Block Lengthy Gag Orders on Tech Firms after Government Surveillance: Government agencies would no longer be able to indefinitely conceal their secret seizure of email records under legislation introduced Tuesday that takes aim at gag orders. The Government Surveillance Transparency Act, sponsored by a bipartisan group of lawmakers from both chambers, puts limitations on gag orders that seek to block tech companies from altering users whose data has been seized. It targets a practice brought into the spotlight after journalists from CNN, The New York Times and The Washington Post all had their records seized by the Department of Justice (DOJ). (The Hill)

Cyber

The Long, Bumpy Road to Cyber Incident Reporting Legislation — and the One Still Ahead:  President Joe Biden last week signed into law some of the most celebrated cybersecurity legislation Congress has passed yet — but it didn’t end up looking like what everyone wanted, and there’s a long way to go from his signature to a final regulation. Mmany of the specifics about how the law will work in practice have yet to be decided, such as the definition of a “significant incident” that triggers the mandate for a company to disclose it to CISA. Those issues might not be settled until late 2024, under the timeline the bill sets for DHS to fully implement the law.  (Cyber Scoop)

Energy

Manchin Outlines Energy Policy Objectives: Sen. Joe Manchin (D-WV), a key swing vote in the Senate, on Wednesday laid out some energy policies he supports. During a meeting of the International Energy Agency (IEA) in Paris, Manchin touted a tax credit for clean energy manufacturing, known as 48C, and legislation that would replace fossil fuel generation with advanced nuclear power. (The Hill)

EXECUTIVE BRANCH 

Budget & Appropriations

Biden to Ask for $813B in Defense, National Security Spending: President Biden is expected to ask for $813.3 billion in defense and national security spending for FY23. The request would represent a $31 billion increase over the $782 billion in defense spending included in the government funding bill Biden signed into law earlier this month. (The Hill)

White House Says New Funds Needed for Boosters, Existing Money Difficult to Repurpose: The White House said last Monday that it has about $300 billion in unspent COVID-19 funding but only about $60 billion that is unallocated as it warned lawmakers that it doesn’t have enough money for additional vaccination efforts unless Congress provides more relief. The administration again requested that Congress provide $22.5 billion in supplemental COVID-19 aid without offsets. It said it would be difficult and controversial to repurpose the $60 billion. (Roll Call)

Health/HHS/NIH

Pressure Builds on White House To End Divisive Health-Border Policy: Pressure is increasing for the Biden administration to end a Trump-era public health order being used to turn away migrants at the U.S. border, as Covid-19 cases drop and pandemic restrictions relax across the country. Congressional lawmakers, public health experts and immigration advocates say the expulsions are not being used to keep Covid-19 out of America but to stop migrants from coming in — and in the process denying people fleeing violence and persecution the chance to seek asylum. (Politico)

CDC Updates Covid-19 Guidance to Allow Patients Wear N95s: The Centers for Disease Control and Prevention on Thursday updated its guidance so that people visiting health care facilities are allowed to wear highly protective masks such as N95s. The change comes after a POLITICO report last week found that hospitals around the country routinely ask patients and visitors to wear a surgical mask instead of their own N95. (Politico)

Banking & Housing/HUD

SEC Proposes Landmark Climate Rule: Companies would be required to disclose their greenhouse gas emissions and be held to account for their climate promises under a proposal published Monday by the Securities and Exchange Commission. (Politico)

Powell says Fed ‘Widely Underestimated’ Rise in Inflation: Federal Reserve Chair Jerome H. Powell said the inflation outlook had deteriorated significantly even before the adverse economic impacts of Russia’s invasion of Ukraine, defying forecasters’ predictions. (Roll Call)

U.S. Plan Aims to End Racial, Ethnic Bias in Home Appraisals: Vice President Kamala Harris announced a plan Wednesday intended to end racial and ethnic discrimination in the appraisal of home values, part of a broader federal effort to address a wealth gap that systemic inequality has perpetuated. (AP)

Tax Reform/IRS

Biden To Propose 20% Tax Aimed at Billionaires, Unrealized Gains: President Joe Biden will propose a minimum 20% tax rate that would hit both the income and unrealized capital gains of U.S. households worth more than $100 million as part of his budget proposal to be released on Monday. The plan — called the “Billionaire Minimum Income Tax” by the White House — represents the most aggressive proposal by the administration yet in Biden’s efforts to increase taxation on the wealthiest Americans. (Bloomberg)

Trade

U.S., U.K. Reach Deal to End Steel Tariff Dispute: The United States and the United Kingdom last Tuesday reached an agreement that will lead to the partial removal of tariffs that former President Donald Trump imposed on British steel and aluminum. (Politico)

Space/NASA & NOAA

NASA to Support Development of Second Artemis Lunar Lander:  NASA announced March 23 that it will support development of a second lander to transport astronauts to and from the lunar surface to provide competition with SpaceX for the later “sustainable” phase of the Artemis program.  The agency said it will soon kick off a competition for what it calls Sustaining Lunar Development, which will back work on a second lander separate from the existing Human Landing System (HLS) award made to SpaceX in April 2021. The award will include both an uncrewed demonstration landing and a crewed landing, much like SpaceX’s HLS Option A contract.  (Space News)

NASA Reveals Europa Cost Growth and Mars Sample Return Replan:  NASA revealed significant changes to two of its flagship planetary science missions last week. The cost for Europa Clipper, which will gather data as it makes multiple swingbys of Jupiter’s moon Europa, has grown from $4.25 billion to $5 billion.  NASA and ESA are also now replanning the Mars Sample Return mission with two landers instead of one to retrieve samples from the surface of Mars and boost them into orbit for their trip back to Earth. The launches will be in 2028 instead of 2026.  (Space Policy Online)

Additional Funding Unlikely to Accelerate Commercial Space Station Projects:  Companies developing commercial space station concepts for NASA say they’re working as fast as they can and that additional funding would not speed up their work significantly amid concerns about the long-term viability of the International Space Station.  The NASA Inspector General has warned that it will be very challenging for most companies to meet NASA’s goal to be on orbit by 2028, prior to the planned 2030 end to the ISS.  (Space News)

Defense/DOD

White House to Seek $813.3 Billion National Security Budget:  President Joe Biden’s plan includes $773 billion for the Pentagon — in the federal budget he will send to Congress on Monday, according to officials familiar with the plan.  It’s an increase of $31 billion, or 4%, from approved spending for the current fiscal year and about $43 billion more than the White House budget office had projected a year ago for fiscal 2023.  (Bloomberg)

DoD Acquisition Nominee Pledges to Push Advanced Tech, Small Business Opportunities:  The nominee to be the Pentagon’s next acquisition chief has a simple message when it comes to developing advanced technologies such as hypersonics: Don’t be afraid to fail, and learn from those failures.  “A failed test is one where you don’t learn,” Bill LaPlante told the Senate Armed Services Committee in his nomination hearing to be undersecretary of defense for acquisition and sustainment last Tuesday.  (Defense News)

DHS & Immigration

Judge Blocks DHS Memo Narrowing ICE Deportation Focus: A federal judge in Ohio partially blocked the Biden administration’s mandate to U.S Immigration and Customs Enforcement (ICE) officers to prioritize those with serious criminal histories and weigh the totality of someone’s circumstances before seeking to deport them. (The Hill)

U.S. Unveils Rule to Speed Up Asylum Processing and Deportations at Border: The Biden administration last Thursday rolled out a sweeping new regulation that aims to speed up asylum processing and deportations at the U.S.-Mexico border, amid a record number of migrants seeking to enter the United States. (Reuters)

Cyber

White House ‘Driving Fast’ to Issue Software Security Guidance for Agencies:  The Office of Management and Budget plans on releasing new secure software guidance for agencies within the next eight to 12 weeks, according to Chris DeRusha, federal chief information security officer. The guidance is based on a “Secure Software Development Framework” (SSDF), as well as “Software Supply Chain Security Guidance” released by the National Institute of Standards and Technology in February.  (Federal News Network)

The Hard Truth Behind Biden’s Cyber Warnings:  The Biden administration has recently offered ominous warnings about looming Russian cyberattacks. But another reality is equally foreboding: The U.S. may have too many targets to defend them all.  The roster of potential cyber victims critical to American life includes banks, power companies, food manufacturers, drugmakers, fuel suppliers and defense contractors — all of which have fallen victim in recent years to hackers from Russia and elsewhere.  (Politico)

Agriculture/USDA

‘Too Big To Fail’: White House Careful Not To Target Food Companies As It Pressures Putin: A growing global food crisis is forcing the Biden administration to balance its crushing economic campaign against Russia with a gentler approach to major U.S. food and agribusiness companies still operating there — and contributing tax dollars to Russian President Vladimir Putin’s regime. (Politico)

Department of Energy

Granholm Says Biden Will Make Gas Exports Announcement ‘Soon,’ But Details Scarce: President Joe Biden will make an announcement “soon” in response to talks between U.S. and European leaders about increasing liquefied natural gas and oil exports to Europe, Energy Secretary Jennifer Granholm said during a press conference Thursday. “With respect to the discussions that are happening right now regarding LNG, United States, etc., I’m going to allow the president to make that announcement — and that is soon,” she said, in response to a question probing how much supply the U.S. could provide — and what details of the plan might look like. (Politico)