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House GOP CR would extend Ex-Im bank

House Republicans on Tuesday unveiled details of a stopgap spending bill to keep the government operating through Dec. 11. The temporary solution includes money to fight the Ebola outbreak, reauthorizes the controversial Export-Import Bank through the end of June 2015, and extends the moratorium on taxing the Internet.

The Export-Import bank's current authorization is set to expire on Oct. 1. And though generally supported by Democrats, conservatives led by Financial Services Committee Chairman Jeb Hensarling (R-TX) have opposed its renewal. Critics say it is a form of "crony capitalism," that it interferes with the free market, and that it puts taxpayers on the hook for loans.

Even new Majority Leader Kevin McCarthy (R-CA) had said in June, shortly after his leadership election, that he intended to let the bank's charter expire. And internal party counts have had as much as half of the entire House Republican conference opposed to renewal.

But the prospect of shuttering the bank was upsetting many business leaders. Speaker John Boehner (R-OH) and others were able to convince Hensarling and others to go along with the temporary extension through June 30, to allow more time for deciding what to do on a more permanent basis.

The decision to move forward with an Ex-Im renewal—even a short-term one—prompted criticism from the conservative Heritage Action for America, which has said it will score the vote on Ex-Im as a key vote for lawmakers in its ratings.

Democrats, meanwhile, have lobbied Republicans to extend the Ex-Im Bank for at least five years, and it's unclear how many votes the minority party will contribute when the measure hits the House floor.

The CR continues the level of government spending at the current fiscal 2014 annual rate of $1.012 trillion. Along with the Ex-Im reauthorization and funding to fight the Ebola crisis, Rogers said that the CR will also include some other changes to existing law:

  • A provision to extend the Internet Tax Freedom Act through Dec. 11;
  • A provision to extend expiring Department of Defense activities, including counter-drug operations and rewards for assistance in battling terrorism;
  • A provision to continue the surge in funding for State Department programs to counter regional terrorism against Ukraine and other former Soviet Union countries;
  • Several items regarding continued oversight of the Department of Veterans Affairs;
  • Additional flexibility for Customs and Border Protection and Immigration and Customs Enforcement to maintain staffing levels and border-security operations, detention space, and immigration enforcement activities;
  • A provision to allow funding flexibility to maintain weather-satellite programs;
  • A continuation of current funding for the Temporary Assistance for Needy Families program;
  • Added funds to offset food-price increases in the Commodity Supplemental Food Program.

Obama doesn't act on Immigration

President Barack Obama had promised he would take executive action on immigration when Congress returned from the August recess.  However, the President reversed course and announced he wouldn't take any executive action until after the November midterms.  

Immigration reform advocates expressed disappointment with the President's decision and accused him of playing politics.  Red state Senate Democrats at risk of losing their seats in the November elections pressed the White House to hold off any executive order.

Immigration advocates had been expecting the White House to ease deportations of undocumented immigrants, while wary Senate Democrats were concerned that any executive action by the President could cause them to lose control of the upper chamber in November.

The Senate last year passed a comprehensive immigration reform bill that would have provided a path to citizenship for the 11 million undocumented immigrants in the U.S. but that bill went nowhere in the Republican controlled House.  

In an interview with NBC's "Meet the Press," President Obama said he would still take executive action but would work to build public support before doing so. 

Click here to view the Washington Business Brief video, “They’re Back!  Congress Returns.”

FCC may include cell service in net neutrality rules

The Federal Communications Commission is considering expanding net-neutrality rules to cover cell phone service.  FCC Chair Tom Wheeler said this week that “[i]nternet access on smartphones is a ‘key component’ of the investment and innovation that net-neutrality regulations are intended to protect.”

In 2010, the FCC enacted net-neutrality regulations that barred home broadband providers like Comcast from blocking or "unreasonably" discriminating against any Internet traffic. But the rules were much weaker for Internet service on smartphones.

Wireless providers like Verizon and AT&T couldn't outright block websites, but they were free to speed up or slow down certain services or exempt others from monthly data caps.

A federal court struck the rules down earlier this year, and the FCC is now trying to come up with new regulations that can survive future court challenges.

Wheeler reiterated his criticism of cell phone service providers for throttling Internet speeds for customers with unlimited data plans in certain circumstances. He also said the providers may have misled the customers by promising them unlimited data.

He argued that just because consumers have more choices for cell phone service than their home Internet connection doesn't mean that the cellular providers won't restrict online freedom.

Expanding net-neutrality regulations to cell phone service would outrage the wireless providers. In a filing to the FCC, wireless lobbying group CTIA warned that applying the rules to wireless networks would risk stifling the industry's growth.

Wireless Internet is different, the group wrote, because of constraints on how much data the networks can handle.

Democrats unveil legislation to prevent tax inversions

This week, two of the Senate's top Democrats introduced legislation that would deter the surge in U.S. overseas inversion deals by deterring a practice known as earnings stripping.  One of the main incentives driving a surge in U.S. corporations' tax-driven overseas inversion deals would be pared back under a plan unveiled on Wednesday by two top Senate Democrats.

Earnings stripping is the process by which U.S. companies avoid paying U.S. taxes by shifting their U.S. profits to jurisdictions with lower tax rates - like Canada.

The Schumer-Durbin bill came as at least nine U.S. companies were in the final stages of inversions, which involve buying a smaller foreign company in a lower-tax country and then reincorporating the combined operation there.

Schumer and Durbin said they would work with top Senate tax-writers to include their proposal in a package of reforms aimed at inversions, which they said could help push Congress toward enacting broader corporate tax legislation.

Their proposal would reduce the amount of interest deductions a company can claim to 25 percent from 50 percent of income, even for companies that inverted years ago. It also would eliminate a rule that lets less-leveraged companies avoid interest deduction limits.

Currently, companies that cannot use a tax deduction because they have hit the annual limit may apply the benefit the next year. The Schumer-Durbin bill would eliminate that as well.

Republicans have criticized Democratic inversion proposals as election-year gimmicks and said lawmakers should instead focus on lowering corporate tax rates.

Transportation in focus 

Train shortage?

A Surface Transportation Board hearing last week raised concerns about railcar shortages and service delays in rural areas of the country.

The BNSF Railway Company and the Canadian Pacific Railway Company move commodities from the northern tier of states stretching from Minnesota through the Dakotas and Montana to the ports in Washington state and to processing facilities elsewhere. But if the carriers do not provide cars to ship wheat, corn, soybeans, and other commodities this fall, farmers and agribusiness risk losing billions of dollars and the U.S. reputation as a reliable supplier of agricultural products will be tarnished, a wide range of witnesses testified at last week's hearing.

Citing a study showing that North Dakotans have already lost almost $67 million due to rail delays and could lose another $95.4 million, North Dakota Republican Gov. Jack Dalrymple told the board the situation "is about the individual elevators and farmers out there who have no place to go—they have no power, no influence over the situation except for you."

The problems began last winter when BNSF (formerly the Burlington Northern Santa Fe) and Canadian Pacific fell way behind schedule in providing railcars to ship the 2013 crop and there were fears that the rails would not provide fertilizer before spring planting. The railroad executives have blamed last winter's severe weather and congestion at rail yards in Minneapolis-St. Paul and Chicago, but the farm leaders say the railroads are favoring the growing energy industry in the Bakken area of western North Dakota, or at least have made more promises of service than they can deliver.

At the end of the nine-hour hearing, BNSF and Canadian Pacific officials promised to provide more cars and speedier service, but it was unclear whether the STB would take any further action. Elliott noted that the STB has broad powers to act in the case of emergency, but said he does not want to take actions that could make the situation worse. He said in a brief interview that the STB will continue to require the reports on commodity rail shipments and the backlog "until we get significant improvement."

The harvest months should determine whether the combination of congressional pressure and regulatory action can indeed force the railroads to move the commodities to ports and processing—or whether the hearing was only an opportunity for the farmers and others to get their complaints off their chests.

 

Political bits            

House

Massachusetts 6th Congressional District:  Marine veteran Seth Moulton (D-MA), defeated Democratic incumbent John Tierney (D-MA), 49 to 41 percent.  Experts believe Moulton will have a better chance to fend off former State Sen. Richard Tisei (R-MA) in November.

New Hampshire 1st Congressional District:  Former Rep. Frank Guinta (R-NH) defeated University of NH professor Dan Innis (R-NH), 49 to 41 percent, and will face Rep. Carol Shea Porter (D-NH) in November.

New Hampshire 2nd Congressional District:  State Rep. Marilinda Garcia (R-NH) won the GOP nomination with 50 percent of the vote and will take on Rep. Ann Kuster (D-NH) in November.  

Senate

New Hampshire:  Former Senator Scott Brown (R-NH) defeated former Senator Bob Smith (R-NH) for the right to take on Senator Jeanne Shaheen (D-NH) in November.

Governor

Massachusetts:  Attorney General Martha Coakley (D-MA) captured the Democratic nomination this week, surviving a surprisingly close primary against state Treasurer Steve Grossman.  Coakley captured 42 percent to Grossman's 36 percent.

New York:  Governor Andrew Cuomo (D-NY) won a closer than expected race against Fordham University law professor Zephyr Teachout (D-NY).  Cuomo won 62 to 34 percent.

Rhode Island:  State Treasurer Gina Raimondo (D-RI) won the Democratic nomination for Governor by defeating Providence Mayor Angel Taveras (D-RI) and Education Department official Clay Pell (D-RI).  Raimondo captured 42 percent to Taveras' 29 percent and Pell's 27 percent. 

A look ahead

House

Tuesday, Sept. 16 at  2:30 p.m. –  House Foreign Affairs Committee - Hearing Full committee hearing on The ISIS Threat: Weighing the Obama Administration's Response.

Wednesday, Sept. 17 at TBD – House Judiciary Committee - Hearing Full committee hearing on Chapter 12 of Title 17.

Senate

Monday, Sept. 15 – Senate Homeland Security and Governmental Affairs Committee - Hearing Full committee hearing on Equality for the District of Columbia: Discussing the Implications of S.132, the 'New Columbia Admission Act of 2013.'

Tuesday, Sept. 16

9:30 a.m. – Senate Armed Services Committee - Hearing Full committee hearing on U.S. policy towards Iraq and Syria and the threat posed by the Islamic State of Iraq and the Levant (ISIL).

10:00 a.m. – Senate Banking, Housing and Urban Affairs Committee - Hearing
Full committee hearing on Examining the State of Small Depository Institutions.

10:00 a.m. – Senate Finance Committee - Hearing Full committee hearing on Retirement Savings 2.0: Updating Savings Policy for the Modern Economy.

2:00 p.m. – Senate (Special Committee on) Aging - Hearing Full committee hearing on Harnessing the Power of Telehealth: Promise and Challenges.

2:30 p.m. – Senate Health, Education, Labor and Pensions Committee and Senate Appropriations Committee - Hearing Senate Health, Education, Labor and Pensions Committee and Senate Appropriations Committee Labor, Health and Human Services, Education and Related Agencies Subcommittee joint hearing on Ebola in West Africa: A Global Challenge and Public Health Threat.

2:30 p.m. – Senate Commerce, Science and Transportation Committee - Hearing Consumer Protection, Product Safety, and Insurance Subcommittee hearing on Oversight of and Policy Considerations for the National Highway Traffic Safety Administration.

2:30 p.m. – Senate Finance Committee - Hearing Health Care Subcommittee hearing on The Children's Health Insurance Program: Protecting America's Children and Families.

2:30 p.m. – Senate (Select) Intelligence Committee - Meeting Full committee closed roundtable meeting on intelligence matters.

3:15 p.m. – Senate Foreign Relations Committee - Hearing Near Eastern and South and Central Asian Affairs Subcommittee hearing on "Terrorism Trends in South Asia: Threats To Regional Stability and U.S. Interests."

Wednesday, September 17

10:00 a.m. – Senate Foreign Relations Committee - Hearing Full committee hearing on the nominations of Robert Cekuta to be ambassador to Azerbaijan; Richard Mills Jr. to be ambassador to Armenia; Jess Baily to be ambassador to Macedonia; and Margaret Ann Uyehara to be ambassador to Montenegro.

10:00 a.m. – Senate Homeland Security and Governmental Affairs Committee - Hearing Full committee hearing on the nominations of Sarah Saldana to be assistant Homeland Security secretary for immigration and customs enforcement; Russell Deyo to be Homeland Security undersecretary for management; and Mickey Barnett to be a governor of the U.S. Postal Service.

10:00 a.m. – Senate Health, Education, Labor and Pensions Committee - Markup Full committee markup of S.2141, the Sunscreen Innovation Act; H.R.4366, the Strengthening Education through Research Act; and vote on the nomination of Sharon Block to serve as a member of the National Labor Relations Board.

10:00 a.m. – Senate Judiciary Committee - Hearing Full committee hearing on pending judicial nominations.

10:15 a.m. – Senate Finance Committee - Hearing Full committee hearing on Reforming America's Outdated Energy Tax Code.

10:30 a.m. – Senate Judiciary Committee - Hearing Full committee hearing on Why Net Neutrality Matters: Protecting Consumers and Competition Through Meaningful Open Internet Rules.

2:00 p.m. – Senate Rules and Administration Committee - Markup Full committee markup of S.2017, the Lines Interfere with National Elections (LINE) Act 2014; S.85, the Louis L. Redding Fair, Accurate, Secure, and Timely (FAST) Voting Act of 2013; and to vote on the nominations of Matthew Masterson and Christy McCormick to be members of the Election Assistance Commission.

2:30 p.m. – Senate Foreign Relations Committee - Hearing Full committee hearing on United States Strategy to Defeat the Islamic State in Iraq and the Levant.

2:30 p.m. – Senate Indian Affairs Committee - Hearing Full committee hearing on S.2670, the Keep the Promise Act of 2014,  to prohibit gaming activities on certain Indian land in Arizona until the expiration of certain gaming compacts.

2:30 p.m. – Senate Banking, Housing and Urban Affairs Committee - Hearing Economic Policy Subcommittee hearing on Who is the Economy Working For? The Impact of Rising Inequality on the American Economy.

2:30 p.m. – Senate Commerce, Science and Transportation Committee - Markup Full committee markup of pending calendar business.

Thursday, September 18

9:30 a.m. – Senate Health, Education, Labor and Pensions Committee - Hearing Full committee hearing on Fulfilling the Promise: Overcoming Persistent Barriers to Economic Self-Sufficiency for People with Disabilities.

11:00 a.m. – Senate Banking, Housing and Urban Affairs Committee - Hearing Full committee hearing on Assessing and Enhancing Protections in Consumer Financial Services.

11:00 a.m. – Senate Judiciary Committee - Markup Full committee markup of S.1690, the "Second Chance Reauthorization Act of 2013" and S.2646, the "Runaway and Homeless Youth and Trafficking Prevention Act"; and vote on the nominations of Madeline Arleo to be U.S. district judge for the District of New Jersey; Wendy Beetlestone to be U.S. district judge for the Eastern District of Pennsylvania; Victor Bolden to be U.S. district judge for the District of Connecticut; Armando Bonilla to be a judge of the U.S.Court of Federal Claims; Stephen Bough to be U.S. district judge for the Western District of Missouri; David Hale to be U.S. district judge for the Western District of Kentucky; Mark Kearney to be U.S. district judge for the Eastern District of Pennsylvania; Joseph Leeson Jr. to be U.S. district judge for the Eastern District of Pennsylvania; Gerald Pappert to be U.S. district judge for the Eastern District of Pennsylvania; Gregory Stivers to be U.S. district judge for the Western District of Kentucky.

2:30 p.m. –Senate (Select) Intelligence Committee - Briefing Full committee closed briefing on intelligence matters.

2:30 p.m. – Senate Homeland Security and Governmental Affairs Committee - Hearing Investigations Subcommittee hearing on Tax Audits of Large Partnerships.


Washington by the numbers

$1 million – Price of an underground parking space at a forthcoming condo development in New York’s SoHo.

$90 million – Purchase price offered for the shuttered Revel Casino, which opened in Atlantic City in 2012 and was previously valued at $2.4 billion.

They said what?

“A lot of people would like to stay on the sideline and say, ‘just bomb the place and tell us about it later.’ It’s an election year. A lot of Democrats don’t know how it would play in their party, and Republicans don’t want to change anything. We like the path we’re on now. We can denounce it if it goes bad, and praise it if it goes well and ask what took him so long.” – Rep. Jack Kingston, R-Ga., on what House Republicans want President Obama to do about ISIS (New York Times)

Washington humor

"Reportedly the identity of Jack the Ripper, who killed five people in London, finally has been revealed.  After hearing about it, the commissioner of the NFL suspended him for two games." - Conan O'Brien

      

  

 Steven C. LaTourette, President | 202.559.2600

McDonald Hopkins Government Strategies LLC
101 Constitution Avenue NW, Suite 600 East, Washington, D.C. 20001 

www.mcdonaldhopkinsgs.com

IMPORTANT NOTICE:

Although McDonald Hopkins Government Strategies LLC is owned by the law firm McDonald Hopkins LLC, McDonald Hopkins Government Strategies is not a law firm and does not provide legal services. Accordingly, the retention of McDonald Hopkins Government Strategies does not create a client-lawyer relationship and the protections of the client-lawyer relationship, such as attorney-client privilege and the ethics rules pertaining to conduct by lawyers, do not apply.

 

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