Window on Washington – October 17, 2022, Vol. 6, Issue 39

Outlook for This Week in the Nation’s Capital 

Congress.  Congress is in recess to campaign for the upcoming midterms. Senate Majority Whip Dick Durbin (D-IL) on Wednesday said the Senate will focus on judicial nominations and the National Defense Authorization Act when it returns on Nov. 14. Sen. Patrick Leahy (D-VT) was discharged from the hospital Friday, following an “uneventful night” of “tests and observation,” according to a statement from his office. He was previously hospitalized earlier this year for a broken hip.

CBO Budget Review. The Congressional Budget Office last week released its latest budget review which found the federal budget deficit in FY22 was $1.4T, about half of FY21’s $2.8T deficit. The CBO cites higher revenues and lower spending, as pandemic-related spending programs expired, as the key reason for the lower deficit.

FY23 Appropriations.  The House and Senate Appropriations Committees continue to work on a Fiscal Year 23 appropriations deal. As mentioned in last week’s Window, the tenor of the negotiations will likely depend on the result of the election. In recent days, some Democrats have begun calling for an emergency supplemental appropriations package to help Puerto Rico recover from Hurricane Fiona. Like a potential Hurricane Ian supplemental, any emergency supplemental likely won’t take shape until after the election. Last week, Senator Marco Rubio (R-FL) proposed $33B to help Hurricane Ian recovery. As reported last week, Congress will need to include a Pay-As-You-Go (PAYGO) waiver in an end-of-year Omnibus spending deal to avoid an automatic sequestration of more than $120B, pursuant to Pay-As-You-Go Act of 2010 (P.L.111-139). Without action, many programs including Medicare payments, veterans military retirement fund, farm price support, and U.S. Citizenship and Immigration Services application processing funding, among many others, could lose billions in funding.

Defense Authorizations.  The Senate met last week to begin processing the National Defense Authorization Act (NDAA). While no votes were held, Armed Services Chairman Jack Reed (D-RI) released a manager’s package of 75 amendments accepted including reauthorizations for the State Department, Coast Guard, intelligence agencies, and the Water Resources Development Act. According to Reed, the Senate likely will not decide on if there will be additional amendments considered on the floor until after the election.

November Elections.  The midterm elections are in 21 days. Candidates for Senate in Ohio, Utah, and Colorado will debate this week. The latest update to CBS News-YouGov polling found that for the House, the Democrat’s momentum has stalled likely as Americans have growing concerns related to the economy and as a result, their House tracker was updated to reflect a Republican lead at 224 seats to the Democrats’ 211. Unlike Presidents Obama and Trump, Biden faces a declining stock market as he approaches Election Day, compounding voter anxiety about the future direction of the country.  (Axios) In comments last week to the media as he traveled throughout the Midwest, House Republican Leader Kevin McCarthy sounded increasingly bullish on House Republican prospects and the likelihood that he would be the next Speaker.  (Punchbowl News)

Biden Administration.  President Biden is traveling to many targeted locations to aid Democrats with fundraising and to rally the Democratic base to vote.  He is set to headline an event Thursday, Oct. 20 in Philadelphia for John Fetterman, the Democratic Senate nominee. He is also scheduled to make another campaign stop in western Pennsylvania earlier that day.  He is also now scheduled to go to Miami to aid Democrat Charlie Crist in early November.

Last Week in the Nation’s Capital

CONGRESS

Budget & Appropriations

Rubio Wants $33B in Disaster Aid for Hurricane Ian Recovery: Sen. Marco Rubio (R-FL) is asking for $33 billion in disaster relief to help with Hurricane Ian recovery in Florida, noting the figure could change as federal and state officials tally the damage caused by the historic storm. (Politico)

Collins Set for Top GOP Spot on Defense Appropriations Panel: In the next Congress, Susan Collins (R-ME) is expected to be the top Republican on the Senate Appropriations Committee’s powerful Defense panel, sources say. Collins has been considered a lock for the top GOP slot on the full Appropriations Committee, but it was not previously clear who would lead Republicans on the Defense panel. (Roll Call)

Uncertainty Swirls Around Earmarks for Departed Lawmakers: When former Rep. Antonio Delgado (D-NY) resigned his seat in May, he was lucky in one respect: The central New York Democrat had been tapped to become his home state’s lieutenant governor. But his constituents weren’t quite so fortunate, as none of the earmarks Delgado sought earlier in the spring ended up in the fiscal 2023 spending bills released by House appropriators in June. (Roll Call) 

Health

Democrats Try to Break Through on Drug Pricing Message: Much of the public appears to be largely in the dark about Democrats’ signature effort to let Medicare negotiate drug prices, a potentially troubling sign ahead of next month’s midterm elections. The inclusion of a provision allowing those negotiations in the Inflation Reduction Act marked the culmination of an at least 20-year push by Democrats and was touted as a major win over Big Pharma. (The Hill) 

Banking & Housing  

Rep. McHenry, Committee Republicans Ask OCC To Clarify Position On Fintechs: U.S. Rep. Patrick McHenry (R-NC) and his Republican colleagues on the House Financial Services Committee’s Task Force on Financial Technology are urging the Office of the Comptroller of the Currency (OCC) to clarify its position on partnerships between banks and financial technology firms. (Financial Regulation News) 

Crypto/Blockchain

Sen. Elizabeth Warren Demands Details on Texas Crypto Mining Energy Consumption: Democrats are pressing Texas energy regulators to disclose how much energy crypto mining companies consume from the state’s vulnerable power grid nearly a year after it failed during an extreme winter storm. (The Verge)

Hickenlooper Calls For Crypto Securities Rules From SEC: Sen. John Hickenlooper (D-CO) is urging the Securities and Exchanges Commission (SEC) to issue regulations for digital asset securities through a transparent notice-and-comment regulatory process. (The Hill)

Defense

Lawmakers Bring Senate Version of Defense Bill to the Floor: Senate lawmakers last Tuesday formally began floor debate on the upper chamber’s version of the massive annual defense policy bill. (The Hill)

Blumenthal, Khanna Introduce Bill to Halt U.S. Arm Sales to Saudi Arabia for One Year: Sen. Richard Blumenthal (D-CT) and Rep. Ro Khanna (D-CA)) introduced a bill on Tuesday that would suspend all U.S. arm sales to Saudi Arabia for one year. Blumenthal and Khanna proposed the legislation in response to the decision by OPEC+, of which Saudi Arabia is a leading member, to cut oil production by 2 million barrels per day. (The Hill)

Senate NDAA Debate Could Have Something for Everyone: Several weeks from now, the National Defense Authorization Act will probably become law for the 62nd straight fiscal year, and that makes it the ultimate magnet for unrelated legislation in search of a ride home to enactment. That is the case every year — and this time around is no exception. Already the Senate measure, to be taken up after the elections, has attracted more than 900 amendments — covering everything from authorizing State Department programs to ensuring the Pentagon and intelligence agencies buy and use only computers that block pornography. (Roll Call)

Judiciary/Justice 

Senate Includes Judicial Privacy Measure in Must-pass Defense Bill: The Senate appears closer to passing a measure that would allow federal judges to scrub their personal information from the internet, a push that has stalled for years over whether it should also include members of Congress. (Roll Call)

Dems’ Real Midterm Prize is Command of the Judicial Wars: The Senate took up one of the biggest prizes of the 2022 elections this week in a sleepy committee room during a lengthy recess. In the Judiciary Committee on Wednesday, Democrats held a mid-October hearing for six of President Joe Biden’s picks for lifetime judicial appointments. Only two senators physically attended, and a big question hung over the proceedings: Will Biden’s party have two more months to approve his judges — or two more years? (Politico)

How Democrats’ Big Plans for Big Tech Shrunk to Tiny Steps: Democrats talked a big game about reining in Big Tech, but after nearly two years of controlling the agenda in Washington, they’ve got little to show for it. Pledges to tackle data surveillance practices, harm to children’s mental health, and tech giants’ power over wide swaths of the economy haven’t yet translated into passing new laws, and the clock is running out. (Axios)

Energy 

Congress Eyeing ‘NOPEC’ Bill to Take on Saudi Arabia: Momentum is building in Congress in support of legislation that would take on the OPEC+ group of oil-producing nations that just announced cuts in production likely to help Russia and raise prices in the United States. (The Hill)

Barrasso Says High Prices Have Become ‘Entrenched in Our Economy’: Senate Republican Conference Chairman John Barrasso (R-WY) last Thursday warned that high prices “have become entrenched in our economy” after the Bureau of Labor Statistics reported that prices increased 0.4 percent in September, a greater jump than expected. (The Hill)

EXECUTIVE BRANCH  

Health/HHS/NIH

Health Care Inflation is Coming for Biden: Rising health care costs are poised to become the next big battle in President Joe Biden’s war against inflation. It’s unlikely he’ll be able to declare victory in time for a 2024 reelection bid. (Politico)

Battle Over Pregnancy Drug Highlights Risks of FDA Expediting Drugs to Market: The FDA will make its case this week to do something it hasn’t in over a decade — order a drug it expedited to the market to be pulled. A panel of independent expert advisers on obstetric and reproductive drugs will meet starting Monday to decide whether to recommend that Makena, an injection marketed as lowering the risk of preterm birth, remain available for at least some patients. (Politico)

Monkeypox Response Looks to Long Term: The nation’s monkeypox response is shifting from crisis mode to a more long-term approach as the Biden administration acknowledges that it will be impossible to eradicate the virus from the country anytime soon. (Roll Call)

Biden Warns GOP Will Take Away Government’s Power to Negotiate Medicare Drug Prices: President Biden last Friday warned that Republicans will take away the power that Democrats gave to Medicare to negotiate drug prices if they win control of Congress in the midterm elections next month. “If Republicans in Congress have their way, it’s going to mean the power we just gave Medicare to negotiate lower prescription drug prices and other costs over time goes away. Gone,” Biden said in remarks in Irvine, Calif. (The Hill)

New Biden Order Wants CMMI To Test Payment Models That Tackle High Drug Prices: President Biden is calling for new payment and delivery models that will lower drug prices in a new executive order.  The order released Friday calls on the Department of Health and Human Services to craft a report outlining the payment models that will test how to improve access to innovative drugs and lower costs for those in Medicare and Medicaid. While the order doesn’t grant any new authorities to HHS, it underscores the administration’s next steps in lowering drug prices. (Fierce Healthcare) 

Labor & Workforce 

Labor Proposal Could Upend Rules for Gig Workers, Companies: The Biden administration proposed new standards last Tuesday that could make it more difficult to classify millions of workers as independent contractors and deny them minimum wage and benefits. (AP) 

Department of Education

White House Unveils Application Form for Biden’s Student Debt Relief: The White House last Tuesday unveiled new details for how tens of millions of Americans will be able to apply for student loan forgiveness and outlined how it plans to prevent fraud in the relief program. Senior administration officials released a preview of the application that most borrowers will be required to fill out in order to receive debt relief that President Joe Biden announced in August. (Politico)

Banking & Housing/HUD

Why Biden’s SEC Chief is Enraging Wall Street: Wall Street’s top regulator is pursuing the biggest overhaul of the $51 trillion U.S. stock market in two decades. First, he’ll have to fend off a major industry resistance campaign. Securities and Exchange Commission Chair Gary Gensler — a former Goldman Sachs partner turned progressive icon — is set to launch a regulatory broadside in the coming weeks against brokerage and trading giants including Charles Schwab, Robinhood, and GOP megadonor Ken Griffin’s Citadel Securities. (Politico)

OCC Wants More Data on Banks’ Crypto-related Activities: The Office of the Comptroller of the Currency (OCC) is considering ways it can collect more data from banks that engage in cryptocurrency activities. Speaking at DC Fintech Week, Acting Comptroller Michael Hsu said more information regarding banks’ crypto-related activities is needed to understand the scope of crypto-asset exposure among the banks the OCC supervises. (BankingDive)

Transportation/DOT

Aviation Advocates Ask FCC to Permanently Limit 5G Around Airports: A number of aviation industry groups are petitioning the US Federal Communications Commission to permanently restrict some 5G signals around airports. Currently, Verizon and AT&T aren’t broadcasting C-band 5G in areas around US airports until July 2023 as part of an agreement with the FCC. (CNET)

White House Aims to Speed-Up Pace Of Building Infrastructure: The White House hosted a summit Thursday to help speed up construction projects tied to the roughly $1 trillion infrastructure law as the Biden administration tries to improve coordination with the mayors and governors who directly account for 90% of the spending. (AP)

STB Launches Office of Passenger Rail: The Surface Transportation Board (STB) on Oct. 1 established the Office of Passenger Rail, responsible for investigating and analyzing issues regarding Amtrak on-time performance (OTP). (Railway Age)

Space/NASA & NOAA

U.S. Opts To Not Rebuild Renowned Puerto Rico Telescope: The National Science Foundation announced Thursday that it will not rebuild a renowned radio telescope in Puerto Rico, which was one of the world’s largest until it collapsed nearly two years ago. (AP)

DART Mission Successfully Shifted its Target’s Orbit:   NASA announced that its first test of a potential planetary defense system was a notable success. The Double Asteroid Redirect Test (DART) successfully smashed a spacecraft into an asteroid in late September, hoping to alter its orbit around a larger companion, and the magnitude of the orbital shift was large enough that ground-based observatories picked it up already. (Ars Technica)

Commercial Space Station Developers Seek Clarity on Regulations:  Companies working on commercial space stations intended to succeed the International Space Station say they need more clarity from the federal government on who will regulate them and how.  During panel discussions at the Beyond Earth Symposium here Oct. 13, representatives of several of the companies working on commercial space stations said they have to deal with an “alphabet soup” of agencies, none of which today have the authority to provide oversight of their operations as required under the Outer Space Treaty.  (Space News)

NASA Sets New Launch Date for Artemis:  NASA will make its next attempt to launch the Artemis I uncrewed test flight of the Space Launch System rocket and Orion spacecraft just past midnight on Nov. 14.  If the launch takes place on Nov. 14, the mission will return to Earth with a splashdown in the Pacific off San Diego on Dec. 9.  (Space Policy Online)

Defense/DOD

White House Releases Biden’s National Security Strategy: The White House on Wednesday released its national security strategy, outlining President Biden’s priorities at the start of what officials are calling a “decisive decade” for global challenges like climate change and competition among major powers. (The Hill)

Army Launches Several New Initiatives to Incorporate Small Firms’ Technologies into its Systems: The Pentagon’s prime contractors already have a lot of reasons to partner with small businesses that have been working on technologies that solve military problems. But under a new Army program, they’ll have another big one: their bids will get an explicit advantage in future procurements if they partner with those companies. (Federal News Network)

What Comes After Abrams Tanks? The Army is Working on Possibilities:  The Army is evaluating what it will need beyond the latest version of the M1 Abrams tank, according to Army leaders overseeing ground combat systems and next-generation combat vehicle development, while they await the upgraded version of the M1, which is due to be delivered to the service next spring. (Defense News)

The Ukraine War Is Teaching the US How to Move Intelligence Faster Using AI:  Ukraine’s swift counter-offensive owes much to U.S. weapons, planning, and intelligence help. But the U.S. Army is benefitting as well: by learning how to move intelligence much faster from satellites to ground units.  Part of the answer is planning: making sure satellites are available to gather data when and where commanders need it, part is new AI-assisted tools.  (Defense One)

DHS & Immigration

Treasury Department IG Probing DeSantis’ Migrant Flights: The Treasury Department is examining Florida Gov. Ron DeSantis’ migrant transports and whether the Republican governor improperly used money connected to Covid-19 aid to facilitate the flights. (Politico)

DHS Announces New Program for Venezuelan Migrants Aimed at Easing Pressure at U.S.-Mexico Border: The Biden Administration on Wednesday announced a new parole program for qualifying Venezuelans and said it would return to Mexico those who crossed the border unlawfully, in an attempt to alleviate strain at the southern border as an increasing number of Venezuelans flee political instability and poverty. (Politico)

Judiciary/DOJ

Biden Renews Call for Assault Weapons Ban After Raleigh Shooting: President Biden last Friday called on Congress to ban assault weapons as he mourned a mass shooting in Raleigh, N.C., that killed five people and injured several others. (The Hill)

Cyber

White House Eyeing Cyber Work on Comms, Water, Healthcare Sectors: The White House is targeting the communications, water, and healthcare sectors for further regulatory attention aimed at improving cybersecurity in those critical infrastructure sectors, according to Anne Neuberger, Deputy Assistant to the President and Deputy National Security Advisor for Cyber and Emerging Technology. (MeriTalk)

NIST Considers Launching ‘Supersized’ Semiconductor Manufacturing Institute: The National Institute of Standards and Technology is considering whether to launch a single, “supersized” semiconductor manufacturing institute or a series of specialized ones. NIST issued a request for information (RFI) seeking public input on the design of any Manufacturing USA institute it launches to strengthen the semiconductor and microelectronics innovation ecosystem by addressing design, fabrication, testing, assembly, and packaging needs. (FedScoop)

4 Critical Infrastructure Sectors to Get New Cyber Rules, Per White House Official:  The Deputy National Security Advisor for Cyber and Emerging Tech, Anne Neuberger, said during an interview last week it should be up to sector-specific agencies to decide who should implement appropriate cybersecurity defenses.  Neuberger listed the critical infrastructure sectors for which the administration will be coming out with new cybersecurity requirements, starting with transportation – which is already in progress – and followed by communications, water, and healthcare.  (Next Gov)

Ongoing US Support to Ukraine Could Prompt Russian Cyber Escalation in Midterms, Experts Warn:  With Russia continuing to face setbacks in its war against Ukraine, experts warn Russian President Vladimir Putin may escalate his cyber operations in the November midterms as retaliation for U.S. involvement in the conflict.  Recent cyberattacks against U.S. state government and airport websites that Moscow-backed hackers have claimed responsibility for may have been testing grounds for such Russian efforts to interfere in the economy and/or upcoming election.  (The Hill)

Army’s $15M TMF Award Bolsters New Cyber Strategy for Securing Operational Technology:  The Army runs 23 depots, arsenals, and plants where networked systems control the machinery that churns out explosives, ammunition, weaponry, and other industrial materials critical to the ground service’s warfighting operations.  But officials are concerned the so-called “operational technology” at those facilities and other critical infrastructure locations could be susceptible to digital hacks, tampering, and other cyber incidents.  The Army is now moving forward with $15 million from the Technology Modernization Fund, awarded just last week, aimed at plugging digital holes at those industrial sites and monitoring the networks for potential cyber intrusions.  (Federal News Network) 

EPA & DOI

Biden’s National Security Strategy Focuses on Climate Change: The long-awaited Biden administration national security strategy puts climate change at the center of policymaking toward China, the Arctic, and many other parts of the globe. The strategy released Wednesday by the White House integrates global warming into national security policy to an unprecedented extent, making clear the administration views the issue as “the existential challenge of our time.” (Axios)

Department of Energy

White House Is Pushing Ahead Research to Cool Earth By Reflecting Back Sunlight: The White House is coordinating a five-year research plan to study ways of modifying the amount of sunlight that reaches the earth to temper the effects of global warming, a process sometimes called solar geoengineering or sunlight reflection. (CNBC)

EIA Raises Retail Electricity Price Forecast For This Year And Next, Signaling More Pain For Consumers: U.S consumers are billions behind on their utility bills and, according to the U.S. Energy Information Administration, there is no relief in sight, as electricity prices are expected to continue rising this year and next. (UtilityDive)