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President Obama releases his budget

This week, President Obama released his budget. While the president's budget, which is required by law to be submitted to Congress yearly, is unlikely to move on the Hill, it is a snapshot of the administration's priorities.

Here are some of the highlights: 

Defense

  • Increases overall defense spending by additional $28 billion in FY 2015 
  • Decreases number of active-duty Army personnel; retires weapons systems, including A-10 attack aircraft

Education

  • Makes permanent tax credits for higher education
  • Provides federal financing for pre-K programs

Energy

  • Boosts spending on basic research
  • Increases funds to maintain the nation's nuclear weapons stockpile

Entitlements

  • Removes a proposal to link Social Security benefits to chained CPI
  • Does not include plans to reform Medicare or Social Security programs

Healthcare

  • Maintains funding for the Affordable Care Act

Infrastructure

  • Provides $302 billion over four years to boost infrastructure spending

Welfare

  • Increases Earned Income Tax Credit for parents of young children, expands eligibility for childless workers
  • Extends benefits for long-term unemployed 

Taxes

  • Taxes carried interest as personal income rather than capital gains
  • Proposes closing several corporate tax expenditures to raise revenue 

More delays for the president's healthcare law

The Obama administration announced new delays for the president's healthcare law this week. On Wednesday, the administration announced that insurers can wait until 2016 before canceling plans that don't comply with law.

The administration released a host of final regulations that, among other things, ease reporting requirements for businesses and allow insurers to keep selling individual policies that don't meet the law's requirements. Those plans, which the White House first uncanceled in November, can now last until 2016 or, in some cases, 2017.

Amid an uproar from congressional Democrats, President Obama first announced in November that he would let states and insurers decide whether they wanted to uncancel plans that don't cover everything the Affordable Care Act requires. But that one-year transition set up another round of cancellation notices for this October—just before the midterm elections.

Under the additional extension announced Wednesday, those cancellation notices will come in October 2016, although plans that offer early renewals could be extended into 2017. The administration doesn't expect many people to be affected at that point.

The new rules also formalize a delay in next year's open-enrollment window and extend that window by a month. Enrollment will begin Nov. 15 and run through Feb. 15. The delays push the beginning of the enrollment window—when people will get a look at their premiums—past the November midterms, and the extended window gives the administration more time to try to bring in more people.

Click here to view the Washington Business Brief, Obama's Budget and Controversy on the Hill

House passes flood insurance legislation

On Tuesday, the House passed legislation aimed at curbing premium increases in the nation's flood insurance program by a vote of 306 to 91. The legislation, sponsored by Representatives Michael Grimm (R-NY) and Maxine Waters (D-CA), reverses some of the changes to the National Flood Insurance Program under the Biggert-Waters Flood Insurance Reform Act of 2012.

The Senate passed its version of flood insurance legislation in January. While the bill passed by the Senate was more aggressive in delaying reforms from the Biggert-Waters legislation, it is expected that the Senate will accept the bill passed by the House.

The House bill would provide retroactive refunds for people who have had large flood insurance rate increases due to the sale or purchase of a home, cap average annual premium increases at 15 to 18 percent and allow subsidies for insurance rates that are based on current flood maps.

The House bill also requires FEMA, which administers the flood program, to notify communities and members of Congress of remapping as well as models used in the mapping process. And it includes assessments on property owners to build up an National Flood Insurance Program (NFIP) reserve fund.

Senate Republicans offer their own unemployment benefits plan

On Thursday night, a group of Senate Republicans released their own legislation to extend unemployment insurance benefits, undercutting a separate effort offered by Sen. Jack Reed that has the support of Democratic leadership.

The Republican plan would extend the benefits, which kick in after an individual has been unemployed for at least 26 weeks, for five months including retroactive benefits. If passed immediately by both chambers, the new benefits would expire again for all beneficiaries in late May while Congress works to find a longer-term solution.

Significantly, the proposal would require beneficiaries to accept any offer of "suitable work" or any position recommended to them by a state employment agency.

The new proposal is cosponsored by the same Republican Senators that Democrats have been lobbying to support their own bill, potentially putting Reed's six-month extension in jeopardy.

The Republican plan would pay for the five-month extension by extending customs user fees through 2024, preventing beneficiaries from also receiving Social Security Disability Insurance and extending pension smoothing (which would allow employers to contribute less to their employees' pension plans).

The bill would also reform the overall program, requiring state and federal agencies involved to identify why an applicant is unemployed and "identify steps" that person should take "to improve employment prospects." It would also prevent "millionaires and billionaires" from receiving the benefits, according to a release.

Senate rejects the president's DOJ selection

The Democratic-controlled Senate rejected President Obama's nomination of Depo Adegbile to lead the Justice Department's Civil Rights Division.

Seven Senate Democrats joined a Republican-led effort to defeat the nomination of Adegbile that came under fire from conservatives and law enforcement organizations for his previous work at the NAACP representing convicted cop killer Mumia Abu-Jamal.

Transportation in focus

EPA unveils sulfur emissions rule

This week, EPA unveiled a new rule forcing oil refiners to strip out sulfur from American gasoline blends.

When burned in gasoline, sulfur blocks pollution-control equipment in vehicle engines, which increases tailpipe emissions linked to lung disease, asthma, emphysema, chronic bronchitis, aggravated heart disease, and premature births and deaths.

The EPA estimates the new rule will drastically reduce soot and smog in the United States, and thus lower rates of diseases associated with those pollutants, while slightly raising the price of both gasoline and cars. The rule will require oil refiners to install expensive new equipment to clean sulfur out of gasoline and force automakers to install new, cleaner-burning engine technology.

Obama budget a boon for DC area transit

President Obama’s budget was viewed as a win for advocates of increased transportation and infrastructure funding. While transportation in general was viewed as a winner, the DC metro area in particular received a boost from the Obama budget.

The Obama budget recommends $100 million in federal funds be applied to the building of the Purple Line, a proposed light-rail service in suburban Maryland, that would link many of the existing Metro lines in the area. Additionally, Obama’s budget also includes $102 million in fiscal 2015 for construction of Metro’s new Silver Line in Northern Virginia, an amount already determined in that project’s federal funding agreement. An additional $150 million would be allotted to Metro as annual federal matching funds for a 10-year, $3 billion program to improve Metrorail’s safety and reliability.

Nearby Baltimore also found itself in the president’s budget with $100 million allocated to help build a planned 14-mile light-rail Red Line in Baltimore. That project is estimated to cost $2.6 billion.

Wyden seeks “fresh thinking”

Newly minted Senate Finance Chair Ron Wyden (D-OR) weighed in on infrastructure spending and the highway trust fund this week in a budget hearing with Treasury Secretary Jack Lew. In remarks at the hearing, Chairman Wyden said:

Fourth, you can’t have big-league economic growth with little-league infrastructure. The committee is now working to provide fresh thinking that can pull some of the billions of dollars of private-sector capital off the sidelines and into infrastructure investments that spark new job growth.

And America will soon need a solution to keep the Highway Trust Fund solvent. We are going to go prospecting, colleagues, for bipartisan ideas in both areas.

Bipartisan airfare transparency bill introduced

A bipartisan airfare transparency bill, whose co-sponsors include House Transportation and Infrastructure Chairman Bill Shuster (R-PA) and Ranking Member Peter DeFazio (D-OR), was introduced in the House this week.

The bill, which is supported by the airline industry, would allow airlines to show the cost of government taxes and fees that are a part of fares.

Political bits

House

California 35th Congressional District: EMILY'S List endorsed State Senator Norma Torres (D-CA) in the primary to replace retiring U.S. Rep. Gloria Negrete McLeod (D-CA).

Pennsylvania 9th Congressional District: Rep. Bill Shuster (R-PA), facing a primary challenge from fellow Republican Art Halvorson, is launching a month-long $400,000 ad buy.

Texas 4th Congressional District: 90-year old Rep. Ralph Hall (R-TX) will be forced to face Republican challenger John Ratcliffe in a run-off after failing to receive 50 percent of the vote on Tuesday's GOP primary.

Texas 32nd Congressional District: Tea Party activists in Texas were delivered a defeat on Tuesday when Rep. Pete Sessions (R-TX) easily defeated Tea Party supported challenger, Katrina Pearson on Tuesday.

Senate

Iowa: 2012 Republican Presidential nominee Mitt Romney endorsed State Senator Joni Ernst who is seeking the GOP nomination for U.S. Senate to replace Senator Tom Harkin (D-IA) in November.

Michigan: Rep. Gary Peters (D-MI) hired a new campaign manager this week. Peter's campaign has underperformed in this traditionally blue state against Republican Secretary of State Terri Lynn Land.

New Hampshire: Senator Jeanne Shaheen (D-NH) leads former Senator Scott Brown (R-MA) by 13 points in a hypothetical November matchup. Brown has not yet announced his intention to run for the seat.

North Carolina: Senator Mike Lee (R-UT), a Tea Party favorite, endorsed Greg Bannon in the Republican Senate primary.

Texas: Senator John Cornyn (R-TX) easily defeated Rep. Steve Stockman (R-TX), a Tea Party favorite, in the Republican primary.

      
A look ahead

House

No Hearings Listed

Senate

Monday, March 10 — The Senate Health, Education, Labor, and Pensions Committee will hold a hearing on Doing What's Right: Preparing Iowa's Children for Success in School and Beyond at 9:00 a.m. at 111 Porter Ave. in Des Moines, Iowa.

Tuesday, March 11 — The Senate Judiciary Committee will hold a hearing on Open Government and Freedom of Information: Reinvigorating the Freedom of Information Act for the Digital Age at 10:15 a.m. in 226 Dirksen.

Tuesday, March 11 — The Senate Armed Services Committee will hold a hearing on the nominations of Air Force Gen. Paul Selva for reappointment to the grade of general and to be commander of the U.S. Transportation Command, and Navy Vice Adm. Michael Rogers to be admiral and director of the National Security Agency, chief of Central Security Services, and commander of the U.S. Cyber Command.

Thursday, March 13 – The Senate Banking Committee will hold a hearing on the nominations of Dr. Stanley Fischer to serve as vice chairman of the Federal Reserve, and of Jerome Powell and Lael Brainard to serve as governors.

Washington by the numbers                        

$3.9 trillionAmount of federal spending proposed in President Obama’s FY 2015 budget.

191 - Number of television ads aired per day in Florida’s 13th Congressional District special election.  

They said what?

“They sit there across the pond as if in a lab running all kinds of experiments on the rats. Why would they do it? No one can explain it.” -- Russian President Vladimir Putin, on the U.S.’s role in the conflict in Ukraine (Washington Post)

Washington humor

"President Obama has unveiled his budget for 2015. He's referring to it as a road map for creating jobs. And young people said, 'A what for creating what? Road map? Job? I've never had either of those things.'" –Jimmy Fallon      

  

 Steven C. LaTourette, President | 202.559.2600

McDonald Hopkins Government Strategies LLC
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