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Cantor’s loss sets up leadership shuffle in House

On Tuesday night, House Majority Leader Eric Cantor (R-VA) lost his primary to an unknown and underfunded economics professor. Cantor’s loss was equivalent to a political earthquake in D.C.

On Wednesday, Cantor announced he would resign his leadership position and the jockeying to move up or into leadership began in earnest. Rep. Jeb Hensarling (R-TX) and Rep. Pete Sessions (R-TX) both said they were considering a run to replace Cantor, but both announced on Thursday they would not run. House Majority Whip Kevin McCarthy (R-CA), the number three ranking Republican in the House, is considered the prohibitive favorite. House Republicans will vote next Thursday to fill the vacant leadership positions.

This shake up comes as tensions are growing on the Hill between conservatives and members of Republican leadership. Many conservatives took Cantor’s loss as a referendum, not just on Cantor, but on the House's current leadership as a whole.

As Majority Leader, Cantor is the number two ranking Republican and his technical duties as leader include scheduling what bills go to the floor, along with the key role of devising and meshing the conference's overall political and legislative strategy.

Senate passes VA reform bill

On Wednesday, the Senate passed legislation aimed at responding to the healthcare crisis at the Veterans Affairs Department. The legislation passed by a margin of 93 to 3.

The legislation, crafted by Senator Bernie Sanders (I-VT) and Senator John McCain (R-AZ), would make it easier to fire incompetent senior leaders, reprimand those who falsified healthcare wait-time records, hire additional VA doctors and nurses, and open additional medical facilities. The legislation would allow veterans who are more than 40 miles from a VA healthcare facility to seek private care.

The Senate agreed to waive budget pass-as-you-go rules, 75 to 19, to pave the way for a provision in the bill to use what sums of money are necessary in fiscal years 2014, 2015, and 2016 to carry out the reforms.

The House has passed similar legislation, but the two chambers need to work out minor differences in committee to send a bill to the president's desk.

The Senate bill includes a provision to provide additional funding for doctors that is not in the House legislation. The House bill would also allow the VA to fire officials without an appeal, a provision that is not in the Senate bill.

The two chambers are expected to work out the differences quickly, given the enormous political pressure to respond to the VA scandal. It is expected the chambers will work out their differences before the July 4 recess.

Click here to view the Washington Business Brief video, "Political Earthquake in D.C. this Week."

Federal Government cracks down on cheese

That headline isn’t a typo. The Food and Drug Administration (FDA) is concerned about the public health safety of using wooden boards to age or ripen cheese. The agency recently cited several New York state cheese makers for using the boards in a recent inspection, saying the "unsanitary" practice was a violation of FDA regulations for safe food manufacturing. But New York has allowed the practice—which is common in artisanal cheese production—for years, and asked the FDA for answers.

Jeanne Carpenter, a Wisconsin cheese-industry advocate, posted the FDA's response on her blog, Cheese Underground:

Wooden shelves or boards cannot be adequately cleaned and sanitized. The porous structure of wood enables it to absorb and retain bacteria, therefore bacteria generally colonize not only the surface but also the inside layers of wood. The shelves or boards used for aging make direct contact with finished products; hence they could be a potential source of pathogenic microorganisms in the finished products.

Cheese industry experts took the response to mean the FDA was banning the use of wooden boards for U.S. cheesemakers. That's not the case, according to the FDA. "The FDA does not have a new policy banning the use of wooden shelves in cheese-making," a spokeswoman said in a statement on Tuesday.

But the FDA is still keeping an eye on the practice. "Historically, the FDA has expressed concern about whether wood meets this requirement and has noted these concerns in inspectional findings," she said. "The FDA will engage with the artisanal cheese-making community to determine whether certain types of cheeses can safely be made by aging them on wooden shelving."

The FDA says this ban is a clarification of existing policy, Carpenter explains, found within the Food Safety Modernization Act, a landmark 2011 bill that shifted the focus from responding to food contamination to preventing it altogether. It also gave the agency more power to conduct inspections of cheese-making facilities, something it had previously left up to the states.

Student loan bill dies in Senate

A Democratic-authored plan to let Americans refinance their existing student loan debt failed to advance in the Senate on Wednesday. In the end, the bill from Sen. Elizabeth Warren (D-MA) went down 56 to 38, not meeting the 60-vote threshold needed to advance to a final vote. Three Republicans—Susan Collins (R-ME), Bob Corker (R-TN), and Lisa Murkowski (R-AK)—joined Democrats in voting for the measure. Senate Majority Leader Harry Reid was the only Democrat to vote against the bill, after changing his vote for procedural reasons.

The bill was part of Democrats' "Fair Shot Agenda," their 2014 election-year legislative plan to highlight economic issues that especially affect young people and women, in an effort to motivate voters to back them in November.

Republicans had decried the proposal as a partisan bill, which didn't go through a committee at the same time that the Health, Education, Labor, and Pensions Committee has been considering the reauthorization of the Higher Education Act, a massive law that deals with federal student aid.

Under the Warren proposal (which has a companion bill in the House), people with existing outstanding debt would be eligible to refinance both federal and private loans at the same interest rates that current students get when taking out new, federal loans. Under a student loan plan struck last year that means that students taking out new Stafford student loans pay 3.86 percent on undergraduate and 5.41 percent on graduate loans. Every year, the rates adjust for new loans, because the rate is tied to the market.

Letting people refinance their loans would cost $51 billion in direct spending over 10 years, but it would be paid for through the so-called Buffett Rule (the plan to make sure that millionaires are taxed at a rate of at least 30 percent). In the end, the Congressional Budget Office estimates the bill would reduce the deficit by about $22 billion over that same time period.

Transportation in Focus

Senators working on six-month patch for Highway Trust Fund

Senate Finance Chair Ron Wyden (D-OR), who has been dismissive of the House Republican plans to end Saturday postal service to pay for a temporary patch to cover the shortfall in the Highway Trust Fund, is working on a six-month extension.

While Wyden and House Republicans are focused on a short-term fix for the Highway Trust Fund, Environment and Public Works Chair Barbara Boxer (D-CA) is focused on a long-term fix. Boxer dismissed the House efforts as a "gimmick" and said she doesn't want to see "patches."


Political bits


Maine 2nd Congressional District: Democratic State Senator Emily Cain (D-ME) defeated State Senator Troy Jackson (D-ME) by a margin of 72 to 28 percent. Cain will face off against former State Treasurer Bruce Poliquin (R-ME), who defeated former State Senator Kevin Raye (R-ME), in the November general election.

Virginia 7th Congressional District: House Majority Leader Eric Cantor (R-VA) was defeated in the Republican primary by Randolph-Macon Economics Professor David Brat (R-VA). Brat, who will face off against another Randolph-Macon Professor in the general election, pulled off what some are calling the biggest upset in modern political history. Brat will be heavily favored in November in this deeply red district.

Virginia 8th Congressional District: Former Lt. Governor Don Beyer (D-VA) won an easy victory in the Democratic primary to replace retiring Rep. Jim Moran (D-VA).  Beyer won 46 percent of the vote followed by State Delegate Patrick Hope with 18 percent and State Senator Adam Ebbin at 14 percent.


Arkansas: A new poll shows Republican Rep. Tom Cotton (R-AR) leading incumbent Senator Mark Pryor (D-AR) 49 to 45 percent. This poll conflicts with other polls that have shown Pryor with a lead.

Kentucky: Senate Minority Leader Mitch McConnell (R-KY) may be facing the toughest re-elect of his long career. A new poll shows Kentucky Secretary of State Alison Lundergan Grimes (D-KY) leading McConnell by a margin of 49 percent to 46 percent.

Mississippi: The Club for Growth is up with a new round of ads in support of State Senator Chris McDaniel (R-MS), attacking Senator Thad Cochran (R-MS). Cochran and McDaniel face each other in a June 24 runoff.

South Carolina: Incumbent Senator Lindsey Graham (R-SC) avoided a runoff by taking 56 percent of the vote in the GOP primary this week. Graham's closest challenger was State Senator Lee Bright (R-SC) who finished with just 15 percent. Graham's easy re-nomination is a blow to conservatives who had targeted Graham early in this race.


Maryland: Lt. Governor Anthony Brown (D-MD) leads his opponents in the Democratic primary for Governor by a wide margin ,according to a new poll. Brown leads with 46 percent, followed by Doug Gansler with 23 percent, and Heather Mizeur with 16 percent.

Rhode Island: A new WRPI/Providence Journal poll shows former Providence Mayor Angel Tavares (D-RI) leading the pack for the Democratic nomination with 33 percent. Tavares is followed by State Treasurer Gina Raimondo (D-RI) with 29 percent and former Department of Education official Clay Pell in third with 12 percent.

A look ahead

Both the House and Senate are in session, but no hearings are scheduled yet.

Washington by the numbers                                                            

74—The number of school shootings since the Dec. 2012 massacre at Sandy Hook Elementary.

$168,000—Amount Rep. Eric Cantor's campaign spent on steak this cycle.

They said what?

"I may have had a—suffered a personal setback last night."—House Majority Leader Eric Cantor (R-VA) after losing his primary.

Washington humor                                    

"When they sent the Taliban thugs back to Qatar, they got picked up in a stretch camel."—David Letterman.


 Steven C. LaTourette, President | 202.559.2600

McDonald Hopkins Government Strategies LLC
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