McDonald Hopkins Government Strategies Advisory: This Week in Washington -- July 31, 2015

The latest on the Transportation Bill

On Wednesday, the House officially called the Senate's bluff. The lower chamber voted, by a 385 to 34 margin, for a three-month extension of the federal transportation funding, an extension that will buy Congress until the end of October to reach a new deal. After voting for the extension, the House promptly adjourned for the August recess, essentially leaving the Senate no choice but to accept the three-month extension to avoid an interruption in the nation's infrastructure spending during the busy summer construction season.

Before accepting the House's short-term extension, however, the Senate passed a six-year, $350 billion long-term transportation bill. The more than 1,000-page bill was passed by a vote of 65 to 34.

The Senate followed that vote up with a 91 to 4 vote in favor of the three-month extension passed by the House on Wednesday.

The Senate bill would create a multibillion-dollar program to fund freight programs, while setting new policy to prioritize repair grants for high-risk projects. It would make efforts to shorten the timeline of some environmental reviews for major infrastructure projects, a major industry priority, and offers more money to transit and rail projects.

But it also contains a number of trouble spots to navigate. The Senate bill includes language to reauthorize the currently expired Export-Import Bank, a provision that is supported by majorities in both chambers but strongly opposed by conservatives, including House GOP leaders.

Another major problem is how to pay for the bill. The Senate's bill has provided only about three years of funding, adding to its primary source, the 18.4-cent federal gas tax, in part by reducing the dividend rate the Federal Reserve pays to big banks and selling off the government's crude-oil reserves. Some senators agree with their skeptical House colleagues that the pay-fors, some of which raise revenue over 10 years for a three-year fix, are inadequate.

The battle over Planned Parenthood funding

While how Congress will grapple with funding for the highway bill dominated much of the week here in DC, another funding question captured a great deal more attention across the country. Senate Republicans are making a push to end federal funding for Planned Parenthood after a series of undercover videos that purport to show officials from the organization discussing the selling of fetal tissue from abortions for use in medical research.

Republicans are pushing a bill that would take the more than $500 million per year in federal dollars that are received by Planned Parenthood, and instead distribute them amongst other organizations that provide women’s health services.

The decision to reallocate the funding rather than simply eliminate it is designed to blunt attacks from Democrats eager to paint the move to defund Planned Parenthood as an effort to cut women’s healthcare options. The leading bill to defund Planned Parenthood in the House, which has 148 co-sponsors as of Wednesday, would not reallocate the funding.

The Senate vote is expected to take place Monday, three weeks after the first undercover video surfaced. Congressional investigations into the videos, ordered by House GOP leaders, have just begun.

Not all Republicans, however, support the effort. Embattled Sen. Mark Kirk (R-IL), the most vulnerable Senate Republican up for reelection next year, signaled Wednesday that he would oppose the legislation, citing the preventive health services that Planned Parenthood provides.

A second Republican, Sen. Susan Collins (R-ME), also indicated she would likely oppose the measure, citing the lack of alternative health providers in her state.

Additionally, pro-life Democrats aren’t yet lining up behind the bill either. Democratic Sens. Bob Casey Jr. (D-PA) and Joe Manchin (D-WV), both abortion opponents, signaled their opposition to the effort.

Indeed, Collins and Manchin are floating their own compromise proposal. They are hoping to find a middle ground between taking away all of the money allocated to Planned Parenthood and ensuring that women's healthcare, from birth-control consultations to routine checkups, is still covered.

A Collins-Manchin compromise may further muddy the water for supporters of defunding Planned Parenthood, and make it even harder for Republicans to get the 60 votes they need to move forward.

In the House, Speaker John Boehner (R-OH) has taken a more cautious approach over a Planned Parenthood vote. While stressing that he supports defunding the group, his office said this week that he would wait for congressional investigations to conclude before pursuing legislative action.

Supporters of Planned Parenthood stress that the group is banned under the Hyde Amendment from using federal funding for abortions, except in limited cases, and note the organization’s larger role in the healthcare system.

Even if all Republicans supported the bill, Democrats are nearly certain to filibuster it.

Watch the latest Washington Business Brief video, Congress Wraps Up a Busy July.

Cybersecurity Bill stalls

The Senate had planned on turning to a debate over the Cybersecurity Information Sharing Act (CISA) after it ended consideration of the highway bill. Unfortunately for supporters of the cybersecurity legislation, the transportation bill debate has dragged on longer than expected, and a new effort to defund Planned Parenthood is also likely to eat into floor time. The result is that moving to CISA could be delayed until after the August recess.

Extra time, however, could actually help to get the bill out of the Senate. The cybersecurity bill has numerous political hurdles to clear that may not be easily negotiated during the first week of August, when senators' minds turn to recess. Many senators also hope to have time to propose further amendments to the bill, which may not be possible during a rushed August schedule.

Here's a rundown of the problems facing the cyber bill:

Outstanding privacy concerns

The information-sharing bill has long been opposed by privacy advocates, who say it would effectively broaden the government's powers to spy on Americans.

A letter sent Monday from a coalition of security experts, civil-society organizations, and privacy groups urges President Barack Obama to issue a veto threat, arguing that CISA would result in Americans' private information being shared with the government, and criticizing it for allowing the information gathered from private companies to be used for purposes other than cybersecurity.

Conflict with House bills

There are currently two bills in the House that complement the Senate's cybersecurity legislation, but reconciling the House bills and then squaring the result with the Senate version may prove to be very difficult.

The two House bills originated from different committees: One came from the House Homeland Security Committee, and the other from the House Intelligence Committee. Although they are similar in many ways, they differ on some key points, including on liability protection and privacy provisions.

What's more, neither currently lines up with the legislation under consideration in the Senate, which trades fewer privacy protections for more security provisions.

Unclear White House support

Although President Obama strongly supports information-sharing legislation and has proposed his own model bills, the White House has not stated a specific position on Senate cybersecurity bill.

The administration publicly came out in support of the two House bills in April, but has in the past issued veto threats against an information-sharing bill it said did not go far enough to protect Americans' privacy.

Questions about effectiveness

In addition to raising privacy concerns, some security experts say information-sharing legislation would do little to improve cybersecurity.

The sheer volume of information that would be disseminated under the bill would overwhelm law enforcement and intelligence entities that would have to pick through it, they say, and finding the needle in the haystack would be very difficult.

Congressman files bill to oust Boehner

Conservatives in the House have long grumbled about their unhappiness with Speaker John Boehner (R-OH). One House conservative is doing more than just grumbling – he is seeking to have the Speaker removed.

After his motion to remove Boehner from Congress's highest office was shot down on the House floor Tuesday and sent to the Rules Committee to languish, Representative Mark Meadows' (R-NC) office said he would try a new route. The North Carolina Republican will attempt to circumvent the committee process with a discharge petition that, if signed by a majority of House members, will force a vote to vacate Boehner from the speakership.

"The next step will likely be to file for a discharge petition. This wasn't something that Mr. Meadows took lightly; he wanted to allow time and consideration for other members," Meadows spokeswoman Alyssa Farah said.

It is an unlikely scenario that has worked rarely in modern Congresses, and for this particular issue, Meadows would need to band with Democrats and enough conservatives to reach the threshold. Regardless, his unexpected move on the House floor highlights the continued unrest between Boehner and far-right conservatives in his conference.

The resolution to "vacate the chair," as it is known, would have forced a vote to strip Boehner of the gavel, which would then have set up a vote to install a new speaker or reelect Boehner. But GOP leadership aides said it was filed as a nonprivileged resolution, which means that rather than triggering an immediate vote on the House floor it was referred to the Rules Committee, which is packed with Boehner allies.

Meadows' resolution says Boehner has "endeavored to consolidate power and centralize decision-making, bypassing the majority" and has "caused the power of Congress to atrophy," among other charges. It also says the House "requires the service of a Speaker who will endeavor to follow an orderly and inclusive process without imposing his or her will upon any Member thereof."

A cadre of conservatives has long complained about the way Boehner and his fellow leaders have run the conference, and Meadows has a particular grievance: the leadership pushed for Meadows to lose an Oversight and Government Reform subcommittee gavel after he voted against an important rule for debate on the floor.

In January, at the start of the 114th Congress, 25 Republican members declined to support Boehner for Speaker, the most to oppose a sitting Speaker since 1923 and more than twice as many as opposed Boehner at the start of the previous Congress.

Senate GOP eyes reconciliation for next assault on the Affordable Care Act

Republicans have been debating how best to use reconciliation for weeks if not months. Some wanted to use it to roll back President Obama’s executive orders on immigration, others hoped to use it to push through comprehensive tax reform, while others urged using the procedural tool to take another swing at the Affordable Care Act. After much debate, it appears Senate Republicans at least have decided to use reconciliation to go after the president’s signature healthcare law. But, they didn’t say whether that’s the only thing they will try to accomplish through reconciliation.

In a statement released this week, Senate Majority Leader Mitch McConnell (R-KY) made it clear that Senate Republicans would use the budgetary tool to attempt to fully repeal the Affordable Care Act. He did not, however, say that reconciliation would only be used on the healthcare front, and Republicans made it clear that they were at least open to trying to accomplish more than just Obamacare repeal. Majority Whip John Cornyn (R-TX) was more direct about what reconciliation will be used for: "Obamacare and anything else we can shoo on in there."

The rules of reconciliation allow it to be used on a bill that covers a wide variety of subjects, as long as they fall into the jurisdiction of certain committees. The rules do not require the bill to do only one thing, although GOP leadership is very clear that repealing Obamacare is its primary objective. (The tool allows a bill to pass through the Senate with only 51 votes instead of the 60 needed to break a filibuster.)

The budget resolution passed earlier this year instructed certain committees in both the House and the Senate to find $1 billion in deficit savings. There were also nonbinding instructions for the House saying reconciliation was to be used for repealing the Affordable Care Act.

But as long as the committees hit the target savings and the legislation proposed falls into their jurisdiction, they are in compliance with the rule. The committees are:

• House Ways and Means
• House Energy and Commerce
• House Education and Workforce
• Senate Finance
• Senate Health, Education, Labor, and Pensions

Obviously, President Obama would veto any legislation that repeals the Affordable Care Act. As we head into the 2016 election season, however, Republicans believe that sending a bill that repeals Obamacare to the president is an important message to send to voters, even if it is destined to be vetoed.

In addition to sending a message to voters, using reconciliation to attempt to repeal the Affordable Care Act would serve to placate conservatives in both chambers, as well as outside conservative interest groups who have been clamoring for Congress to do something on healthcare.

It remains unclear when reconciliation may be used, as it has no expiration date. The committees' deadline for submitting their recommendations to the Budget Committee came and went with no action taken, although this doesn't matter. Reconciliation becomes unusable only if a new budget resolution with new instructions is passed.

Historically, it is not unusual for there to be a long lag between when a budget resolution is passed and when action is taken on reconciliation. A budget with reconciliation was passed in April 2009 and action was finally taken in March 2010. In 2008, the budget was passed in May and action was taken in September. And prior to that, a budget was passed in April 2005, but action was taken on reconciliation in December 2005 and then again in May 2006, as there were separate instructions on revenue and deficit.

Democratic congressman indicted

This week, the Justice Department announced a 29-count indictment against Rep. Chaka Fattah (D-PA) and four of his associates. The indictment includes charges of accepting illegal contributions, bribery, creating sham contracts, and misappropriating campaign funds to pay off Fattah's son's college loans.

Fattah denied any wrongdoing, but announced he was temporarily stepping down as ranking member of the Appropriations Subcommittee on Commerce, Science, and Justice – the panel that actually determines funding levels for the FBI and the prosecutors who have indicted Fattah.

According to the indictment, Fattah and several alleged coconspirators received an illegal $1 million contribution from a rich donor. The congressman allegedly returned $400,000, and "funneled" the remaining $600,000 debt repayment through his nonprofit Educational Advancement Alliance. He had the nonprofit repay the funds "using charitable and federal grant funds that passed through two other companies," the indictment reads. Defendants created sham contracts and "false entries" in financial statements to cover up the scheme.

In another scheme, the congressman allegedly "misappropriated funds from his mayoral and congressional campaigns to pay his son's student-loan debt," said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania at the press conference.

Between 2007 and 2011, a political consultant allegedly used those funds to make 34 loan payments totaling $23,000 on behalf of Fattah's son.

This isn't the first time the Fattah name has been linked to corruption allegations. Last year, Fattah's son Chaka Fattah Jr. was indicted on charges that he defrauded banks and the Philadelphia School District, and submitted false income-tax returns. His trial begins in September. Also last year, a former aide to the congressman pleaded guilty to charges that he misused campaign and federal funds. And back in 2012, Fattah Jr.'s home was raided by the FBI. That year, Fattah Sr. also tried to help a school where his son worked obtain a federal grant; the congressman said his son had nothing to do with his attempt to assist the school.

Treasury says we have until October 30 to avoid default

The debate over raising the debt ceiling has become one of the most contentious and divisive issues in Washington over the last couple of years, and it appears another round of debate is coming to the Capitol soon. This week, Treasury Secretary Jacob Lew says the new drop dead date for raising the debt ceiling will likely be in late October.

In a letter to House Speaker John Boehner, Lew said that the U.S. had hit its statutory debt limit on March 16 and had begun taking extraordinary measures, such as a suspension period for investments in the Civil Service Retirement Fund and the suspension of daily reinvestment of Treasury securities held by the Government Securities Investment Fund of the Federal Employees' Retirement Thrift Savings Plan.

Lew's letter said the debt-issuance-suspension period lasts until July 30, but he expected to extend the period until October 30, giving Congress more time to debate raising the debt limit.

As both chambers head into August recess, the Lew letter helps to set the table for what will likely be a very busy session for Congress once they return in September.

Once Congress does turn its attention to the debt ceiling, they will be looking at something of a moving target. The Treasury Secretary said he believes that the drop dead date for raising the debt ceiling is likely to be late October, but he also warned that there were many uncertainties in attempting to nail down an exact date, such as the unpredictability of September tax receipts and the general difficulty in forecasting payments and receipts of the government months into the future.

"Given this unavoidable uncertainty, Treasury is not able to provide a specific estimate of how long these measures will last," the letter said. "Nonetheless, we believe that the measures will not be exhausted before late October, and it is likely that they will last for at least a brief additional period of time."

Lew stressed the need for congressional action on the debt ceiling and, in what many will think is little more than wishful thinking, wrote that he hopes, "that Congress will address this matter without controversy or brinkmanship." While the exact timing of a showdown over the debt ceiling is unknown, what is known is that there is almost no chance that this debate will happen without controversy or brinkmanship, especially with a  number of sitting U.S. Senators currently running for president.

Transportation in Focus

Bill introduced to limit bag fees

A Florida Republican, Representative John Mica introduced a bill recently that would cap the amount that airlines are able to charge in bag fees. The Mica bill would limit bag fees to $4.50/bag, a far cry from the $25.00/bag that airlines charge on average right now.

The $4.50 cap on baggage fees may seem like an arbitrary number, but it is not. Representative Mica is capping at $4.50 per bag because that is the dollar figure of the current Passenger Facility Charge (PFC). The $4.50 PFC is a locally administered and locally controlled user fee that allows airports to meet critical infrastructure needs.

As Congress considers a new Federal Aviation Administration bill – the current bill expires on September 30th – airports and other groups have pushed for a modernized PFC that would allow airports to meet billions in unmet infrastructure needs. Airlines, however, have strongly opposed any effort to modernize the PFC, which has lost a great deal of buying power due to inflation.

Rep. Mica has been an outspoken supporter of increased funding for airports. In May, he released a report arguing for greater investment to increase airport capacity in runways and terminals, and warning of a “meltdown” at major airports during peak travel periods.

"What’s good for the goose is good for the gander," Mica, a former chairman of the House Transportation Committee, said Wednesday in a press release announcing his effort to tie bag fees to airport user charges.

 

  

 Steven C. LaTourette, President | 202.559.2600

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