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Debt ceiling debate ends

On Tuesday night, the House of Representatives passed a "clean" bill to increase the nation's borrowing authority. The House voted 221 to 201 to raise the debt ceiling, with just 28 Republicans joining 193 Democrats in moving the legislation. 

Leadership had wanted to extract something out of raising the debt ceiling and Speaker John Boehner (R-OH) had floated several different proposals—tying the legislation to Keystone, Obamacare changes and tax reform among other ideas—but eventually settled on rolling back the $6 billion on cost-of-living cuts to military pensions. In the end, however, these efforts did not garner the 218 votes needed. Democrats had long insisted they won't give anything in return for raising the debt ceiling, and any GOP plan would have relied on support from a good number of Democrats, since many conservatives will vote against raising the debt ceiling regardless of what's attached.

With an impending snowstorm bearing down on Washington, D.C., the Senate moved quickly to follow the House on Wednesday—but it was far from an easy lift. Tea Party favorite Senator Ted Cruz (R-TX) vowed to filibuster the bill, which required Republican leadership to find Senate Republicans willing to join Democrats in moving the legislation forward. 

Republican leadership worked the floor as they searched for votes. Finally, several Republican leaders exited the cloakroom and changed their votes, as if to say "let's all hold hands and jump together." First, Senate Minority Leader Mitch McConnell and Minority Whip John Cornyn cast yes votes, with the latter having initially voted no.

Then, one by one, John Barrasso, John McCain, John Thune, Orrin Hatch, and Jeff Flake changed their votes to yes. The final vote on cloture was 67-31, with 12 Republicans joining Democrats to end debate. 

Military cuts restored

This week, in a rare show of bipartisanship, both chambers overwhelmingly passed legislation to restore the $6 billion in cuts to veterans' benefits that were included in last year's budget deal. The Senate voted 95 to 3 after the House voted 326 to 90 in favor of the legislation.

The conclusion of the congressional battle to unwind the cuts culminates several days of flip-flops from Democrats and Republicans. Lawmakers ultimately concluded it was shrewder to put to rest a rising political vulnerability with veterans than continue petty-looking squabbles over offsets that are lost on the public at large.

The legislation that now heads to President Obama's desk for his signature, would pay for restoring a 1-percentage-point adjustment to cost-of-living increases in military retirees' pensions by extending the mandatory sequester cuts an additional year. 
 
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Employer mandate delayed again

The Obama administration had previously delayed implementation of the Affordable Care Act requirement that large employers—those with more than 50 full-time employees—either provide health insurance to their workers or pay a penalty until 2015. This week, the administration announced it was delaying the employer mandate even further.

Businesses with 50 to 99 full-time workers—people working at least 30 hours per week—don't have to comply with the mandate until 2016, under final regulations the Treasury Department released Monday.

Larger employers aren't getting an outright delay but will have more time to fully comply with the mandate. Employers with more than 100 full-time workers must offer coverage to 70 percent of their full-time employees this year, and 95 percent after that, to avoid paying a penalty.

Monday's regulations also clarify that volunteers—for example, volunteer firefighters—aren't counted as full-time employees, and they give employers more flexibility when counting workers' hours.

President Obama signs minimum wage executive order

This week, President Obama made good on a promise he included in his State of the Union address by signing an executive order raising the minimum wage for the employees of federal contractors from $7.25 to $10.10. 

According to the administration, President Obama's executive order, which will go into effect Jan. 1, 2015, will not cost the federal government money because its contractors will have become more efficient employees if they are paid more. Government agencies will not increase funds allocated to contracts to absorb higher wages, according to the Department of Labor, because the contractors will see better productivity from their workers to cover the costs. 

Wyden says extenders is top priority

New Senate Finance Committee Chairman Ron Wyden (D-OR) said this week that extending tax credits and deductions set to expire are a top priority for his committee. While extenders will be a top priority, broader tax reform, however, looks increasingly unlikely. Wyden said that it was unlikely that comprehensive tax reform could take place before the 2014 mid-term elections.

Changes in tax rules surrounding 501(c)4 organizations also will be a priority for Wyden. Wyden and Senator Lisa Murkowski (R-AK) are co-sponsoring legislation aimed at requiring all groups spending money on politics—even 501(c)4 organizations—to disclose their donors.

EPA weighs in on fracking

The Environmental Protection Agency on Tuesday released guidelines for the use of diesel fuel in fracking operations—a move that was greeted warmly by environmentalists but will likely be challenged by those in the natural gas industry.

According to the EPA, the guidance will inform how the agency writes permits aimed at protecting underground stores of drinking water under the Safe Drinking Water Act. The law requires that any driller using diesel fuel to frack a well must obtain a permit from the agency.

The Interior Department's Bureau of Land Management, meanwhile, is separately working to finalize regulations for fracking on public lands.

Transportation in Focus

A new feature in our This Week in Washington briefing is a section called Transportation in Focus. Every week this section will share news and information relevant to the issues surrounding transportation and infrastructure.

Shuster favors miles tax over gas tax

House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) said this week that he favored user fees, including a vehicle miles tax over raising the gas tax to pay for long term highway construction.

Shuster rejected the idea of raising the nation’s 18.4 cents-per-gallon gasoline tax, now the primary method of paying for road, bridge and mass transit projects. Besides a mileage tax, he said other funding methods include higher taxes on energy exploration and bringing back corporate profits earned overseas.

Shuster also said he wants a long-term, i.e., 5 or 6-year bill, rather than a short term bill.

DOT to mandate technology allowing cars to communicate with each other

On Monday, the Obama administration announced that it plans to require new cars to include technology that would allow them to communicate with each other—a move that could ultimately lead to preventing tens of thousands of crashes per year according to supporters of the effort.

The technology, which would also allow cars to communicate with infrastructure-like stop signs and traffic lights, is not yet ready—but the Transportation Secretary Anthony Foxx said they would propose a final rule before President Obama leaves office in January of 2017.

It is estimated that the technology would only add about $100 to $300 to the total cost of a car and most major automakers seem on board with the idea. It won’t, however, be completely smooth sailing for this effort. Privacy advocates worry about the safety and security of the installed technology and those concerns have been echoed by lawmakers in both parties on Capitol Hill.

Long term highway bill envisioned

The Senate Environment and Public Works Committee plans to mark up a 5 or 6-year highway bill in April. The Highway Trust Fund is facing a $172 billion shortfall over the next decade.

Environment and Public Works Chair Barbara Boxer (D-CA) hopes that by seeking a longer term highway bill it will encourage Finance Committee Chair Ron Wyden (D-OR) and ranking member Orrin Hatch (R-UT) to find a way to raise the revenue necessary for the highway trust fund.

The next battleground for infrastructure spending: The ballot box

With the Congressional Budget Office projecting a $13 billion shortfall in the highway trust fund by the end of September, states are likely going to have to find their own ways to make infrastructure improvements.

This will mean that the next battleground in infrastructure spending is likely to come at the ballot box, as states and localities turn to voters for whether to spend taxpayer dollars on bridges, roads and transit. The results have been mixed at the ballot box for increased infrastructure spending.

Los Angeles residents approved an infrastructure initiative in 2008—and city officials are mulling another initiative that would raise the sales tax by a half a cent to fund commuter trains.

While the effort was successful in Los Angeles, voters in Atlanta in 2012 rejected a 1 cent sales tax hike that would have paid for roads, bike paths, public transit, and sidewalks.

Last year, 86 percent of ballot initiatives were approved to raise taxes or otherwise increase funding for infrastructure, and in 2012, the number approved was 68 percent.

Political bits

House

California 31st Congressional District: Rep. Gary Miller (R-CA) announced that he would not run for re-election this fall. Miller's district is likely to be one of the most highly contested open seat races in the country.

California 52nd Congressional District: Openly gay candidate Carl DeMaio (R-CA) released an ad this week featuring his same-sex partner. This is apparently the first time a candidate in either party ran an ad featuring their same-sex partner.

Florida 13th Congressional District Special: A new poll shows Democrat Alex Sink leading Republican David Jolly by seven points, 42 to 35 percent.

Nebraska 2nd Congressional District: State Senator Brad Ashford (D-NE) announced this week that he plans on challenging Rep. Lee Terry (R-NE) this fall.

Virginia 10th Congressional District: Delegate Robert Marshall (R-VA), a favorite of social conservatives, announced that he would join the race to replace retiring Rep. Frank Wolf (R-VA). Marshall's announcement complicates efforts to coalesce around State Senator Barbara Comstock (R-VA)—Comstock is seen as the most electable Republican in this swing district.

Washington 4th Congressional District: Rep. Doc Hastings (R-WA) announced that he would retire at the end of this year. Republicans are likely to hold this district, which was carried by Mitt Romney in 2012 by almost 60 percent.
          
Senate            

Michigan: A new poll shows Terri Lynn Land (R-MI) leading Gary Peters (D-MI) 41 to 38 percent. In reliably blue Michigan, this poll coupled with others, gives Republicans hope for a rare pickup.

Tennessee: Incumbent Senator Lamar Alexander (R-TN) is leading his primary opponent, State Rep. Joe Carr (R-TN), by a wide-margin 47 to 7 percent according to a new poll.        
      
A look ahead

The House and Senate are in recess next week.

Washington by the numbers                        

46,000 – The number of Chinese millionaires who planned to move to Canada but couldn’t, after Canada ended its “Immigrant Investor Program.”

5 – The number of consecutive years North Dakota has led the country in Gallup’s job-creation index.

They said what?

“I believe that I am a sensible central banker, and these are very unusual times.” – Federal Reserve Board Chairwoman Janet Yellen, on the Fed’s use of unusual policy tools like the bond-buying program (Los Angeles Times)

Washington humor

"Norway currently leads the medal count with 12, followed by the Netherlands and Canada, followed then by white-sylvania and albino-stan. The Winter Games are really the only games that to do well, you have to look exactly like the surface you're competing on." – Jon Stewart       

  

 Steven C. LaTourette, President | 202.559.2600

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