McDonald Hopkins Government Strategies Advisory: This Week in Washington -- January 16, 2015

Congressional Republican retreat

The State of the Union address gets all the attention, but the annual Republican and Democratic Congressional retreats are unquestionably more important to the day-to-day policy work in Washington.

This week, House and Senate Republicans met in Hershey, Pennsylvania, for their 3-day retreat, where Congressional Republicans will be hashing out their strategy for the weeks and months ahead.

Congressional Republicans will hear from pollster Frank Luntz, Peggy Noonan of The Wall Street Journal, and political prognosticator Charlie Cook, among others.

In addition to hearing from pollsters and talking heads, the retreat will have a heavy focus on policy. There will be panels on everything, from how the budget reconciliation process works to immigration and healthcare.

There are also panels featuring both House and Senate leadership. The group will hear from former British Prime Minister Tony Blair and comedian Jay Leno.

The retreat will close on Friday after the Senate leaves, with House Republicans holding an open mic session to hear from the rank and file – a discussion that promises to be lively, given the current divisions among House GOPers.

House GOP pushes back on immigration

This week, House GOPers took their first aggressive steps to push back against President Obama’s executive action on immigration. In an effort to placate disgruntled House conservatives, Republicans voted to dismantle a series of White House immigration actions ranging back to Obama's first term. Among them are measures from 2012 that defers deportation for undocumented immigrants brought to the country at a young age, and Obama's executive action from last year that will grant temporary work status and deportation deferrals to millions more immigrants.

These measures were tacked on to a bill funding the Department of Homeland Security through the end of the fiscal year, setting up a showdown both Republicans and Democrats hope to exploit. Each side has already cautioned the other about endangering national security for political gain, some pointing to the terror attack against a magazine in Paris as reason enough to quickly fund DHS.

On Wednesday, the House voted 236 to 191 to move the bill on to the Senate.

The legislation, which enjoyed broad support from the House Republican Conference but from few Democrats, did prompt resistance from some moderates who were concerned that the legislation goes too far.

The issue that was most controversial was an amendment from Rep. Marsha Blackburn (R-TN) that would end the Deferred Action for Childhood Arrivals program. The 2012 directive has stopped some 600,000 young undocumented immigrants from being deported and allowed them to work legally.

Ultimately, 26 House Republicans voted against the measure killing DACA — mostly moderates on immigration that represent states with significant Latino populations, such as California, Florida, Nevada, and New York. The amendment passed narrowly, by a vote of 218-209.

Meanwhile, while the House acted, Senate Republicans are taking a wait-and-see approach, with many Republicans keeping their powder dry.

Senate Democrats are less reticent. Two senior Senate Democratic aides said that the House's plan would not pass the upper chamber, where Republicans will need to cull at least six Democratic votes for passage.

For now, both Democrats and Republicans in the Senate say they will not use the immigration bill to shut down DHS. They say the department will be funded by February 28, one way or another.

More than 85 percent of DHS employees, particularly those dealing with security and border protection, are considered essential and would show up to work, albeit largely without pay, even if the funding lapses when the short-term bill runs out at the end of February.

Even if the Senate manages to pass the House bill, it is certain Obama won't sign it if it defunds his new program, one of which immigration advocates and Democrats heavily approve. This sets up yet another showdown between the legislative branch and Obama, who has threatened to use his veto power to thwart Republican bills.

Click here to view the Washington Business Brief video, “Immigration, Dodd-Frank and Romney 3.0.”

Obama will continue effort to re-shape judiciary

Despite facing the new political realities of a GOP-controlled Senate, President Barack Obama plans to continue his efforts to re-shape the judiciary, an effort that could be one of the most significant and long-lasting of his Presidency.

This week, the White House said they hoped the new Senate would confirm roughly 75 or so of President Obama’s nominees over the next two years. To date, Obama has appointed 303 judges to the district and appellate courts.

At the same point in their presidencies, Republican George W. Bush had appointed 253 judges and Democrat Bill Clinton 298.

According to the Federal Judicial Center, in their final two years, Bush appointed 68 judges and Clinton 72. Ronald Reagan, a Republican who left office in 1989, appointed 83 in his final two years. Like Obama, all faced a Senate held by the opposition.

Republicans see the numbers differently. A spokeswoman for Senator Charles Grassley, the new chairman of the Senate Judiciary Committee, said that by the senator's count, Obama already had 11 nominees confirmed in the new Congress because Democrats, acting against tradition, pushed them through during a "lame duck" session last month.

Newly minted Senate Judiciary Chairman Charles Grassley (R-IA) has said that Obama’s nominees would get a fair consideration, but that the Senate had a responsibility to block unqualified nominees.

President Obama has made a concerted effort to nominate more women, racial minorities, and gay or lesbian individuals to the federal bench. Since August 2009, his first year in office, the percentage of active judges who were white men has fallen to 51 percent from 59 percent, according to the Brookings Institution.

Bill to permanently ban Internet sales tax introduced

A bipartisan group of House lawmakers are reviving legislation that would permanently extend a ban on taxing Internet access, signaling that efforts to pass a separate bill to widen online sales taxes may continue to face resistance in the lower chamber.

The quick reintroduction on Friday of the Permanent Internet Tax Freedom Act likely serves to set the stage for a bigger fight in Congress on whether to expand the sales tax on purchases made at online retailers. While the Senate has shown support for an online sales tax bill, it has failed to gain traction in the House where many lawmakers are reticent to endorse any new taxes.

A permanent Internet access ban, if passed cleanly, would deprive backers of online sales taxes of one of their best tools for leveraging their favored legislation. Even some retail lobbyists have conceded that an online sales tax bill may only be able to pass Congress if piggybacked to a measure extending the moratorium on Internet access taxes.

A ban on taxing Internet access has been on the books since President Clinton signed a bill into law in 1998, enacted in part to protect the growth of the then-nascent technology. It has been renewed four times since then. But, the House has shown it wants to make the ban permanent.

House Judiciary Committee Chairman Bob Goodlatte (R-VA) on Friday reintroduced the Permanent Internet Tax Freedom Act, which would enact a permanent ban on federal, state, and local taxes on Internet access. Republican Reps. Tom Marino and Steve Chabot, and Democratic Reps. Anna Eshoo and Steve Cohen, are also sponsoring the legislation. Republican Sen. John Thune and Democratic Sen. Ron Wyden have indicated they intend to reintroduce the permanent-ban proposal this year as well.

Last summer, the House passed the same measure on a voice vote, but it lost momentum in the Senate as a bipartisan cohort of senators attempted to combine it with a more controversial bill that would expand online sales taxes. That measure, dubbed the Marketplace Fairness Act, would grant states the power to tax purchases from out-of-state online retailers that boast annual sales over $1 million.

However, the combined package never moved out of the Senate in large part because House Speaker John Boehner made it clear that he would not take up online sales tax during the lame-duck session. Instead, Congress was forced to punt on the issue by extending the ban on Internet access taxes by less than a year. It is currently set to expire on October 1 of this year.

Democrats look to focus on middle class

Democrats' populist economic messaging took clearer shape this week as Rep. Chris Van Hollen (D-MD) unveiled a plan detailing middle-class tax breaks that would impose a greater burden on the wealthy.

Van Hollen's plan comes as Democrats are looking to outline an economic agenda that resonates with voters; many say their failure to do so in 2014 was the cause of the party's losses. The proposal will also give the minority an alternative opinion when House Republicans lay what is expected to be an ambitious tax plan of their own—with starkly different priorities—authored by Ways and Means Committee Chairman Paul Ryan (R-WI).

Van Hollen's proposal would put $1,000 back in the pocket of every taxpayer making less than six figures. It would also provide extra childcare credits and incentivize saving money.

Those breaks would be offset by new levies on corporations and their CEOs. One provision eliminates tax deductions on CEO pay over $1 million and another would impose fees on some market transactions.

The plan also eliminates some deductions for companies that lay off employees or keep worker pay stagnant, while prodding companies to offer stock options and incentive pay to all employees.

Transportation in focus

A bad week for metro

It was a bad week for the Washington Metro Area Transit Association. An accident on Monday left one woman dead and sent more than 80 people to the hospital. It took emergency workers almost 40 minutes to arrive on the scene, prompting outrage from many – including many on the Hill.

The National Transportation Safety Board (NTSB) will hold a briefing with area lawmakers next Wednesday, January 21, and has promised to speed up its preliminary report on the accident, according to D.C. Del. Eleanor Holmes Norton (D-DC).

Rep. Gerry Connolly (D-VA), who is set to be the ranking member of the House Oversight Committee’s government operations subcommittee said, “at the very least we know there was a communication problem, apparently between the fire department and WMATA, and within the fire department. We need to know about that.”

Questions about Metro’s safety record are not new. The system came under scrutiny after a 2009 crash of two Metro trains that killed nine people and injured 50 more. After the crash, a probe found systemic problems in the Metro system, including older rail cars and malfunctioning track signaling equipment that Metro had failed to address for years.

 

 

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