McDonald Hopkins Government Strategies Advisory: This Week in Washington -- June 12, 2015

Fast track fight continues

BREAKING NEWS UPDATE: Moments before this advisory was released, the House finalized their vote to overwhelmingly reject the TAA program (302 to 126). House leadership then moved forward with the TPA fast-track authority vote, which narrowly passed by a margin of 219 to 211. Immediately after the vote, Speaker Boehner moved to reconsider the TAA legislation next week-- ostensibly giving President Obama time to rally Democrats who abandoned him on the vote today.

Early Friday morning, it was still unclear whether President Barack Obama’s fast-track trade bill would actually move forward in the House.

Hope remains for free trade supporters after a tense, late afternoon House vote on Thursday that narrowly kept Obama's trade agenda alive. The showdown expected later today features two diverse coalitions for and against the measure and inter-party fighting on both sides of the partisan aisle.

Thursday afternoon, eight Democrats sided with House Republicans to squeak through a rule vote on trade, which kept hopes alive for the measure. Generally, rule votes are strictly partisan affairs, but Speaker John Boehner (R-Ohio) once again had to count on a handful of Democrats to move forward.

Now, trade proponents on the right and left will have to find the votes for a pair of contentious measures, both of which have met resistance from progressives and conservatives even as the White House teamed up with Republican leaders for an unusually intense lobbying campaign –Obama even made a surprise visit to the Congressional baseball game on Thursday night at Nationals Park to stump for his trade bills. First, the House will take up Trade Adjustment Assistance (TAA), a program to help workers hurt by the impact of trade. Without its passage, the larger Trade Promotion Authority (TPA) bill coveted by the White House and House GOP leaders can't come up for a vote.

TAA was expected to pass with mostly Democratic support, but it has quickly become a flashpoint for progressives who argue it's paid for with a cut to Medicare—even though House leaders say they have a fix in place that will find the revenue elsewhere.

That's not good enough for some progressives.

If TAA does end up passing today, it will quickly be followed by TPA, which would set negotiating parameters on a pending Pacific trade deal but strip Congress' ability to amend or filibuster the deal. The centerpiece of the trade package, TPA has the support of roughly 25 Democrats and close to 200 Republicans. Its backers think it can pass, but it won't get a chance unless TAA finds a way to get through first.

That uncertain support sets up a repeat of Thursday's drama, where several Democrats swooped in to save a rule vote that was tied at 206. A Democratic aide said GOP Whip Steve Scalise (R-La.) approached pro-trade Democrats before the vote, knowing Republicans were unlikely to push it through on their own.

By one count, more than 70 Democrats are set to vote against TAA, meaning Republicans likely will have to provide more votes than they anticipated. Leaders were urging members Thursday to back the measure, calling it integral to the trade package supported by most of the GOP.

Organizations such as the AFL-CIO and MoveOn have mounted a furious lobbying campaign to stop the trade deal, and recent salvos have accused Democratic backers of supporting Medicare cuts. While the progressives say their opposition to TAA is based solely on the merits, others see them as willing to kill an important program just to block TPA.

Conservatives have mounted plenty of their own opposition against TPA – including some outside groups like Heritage Action, setting up a dramatic showdown for today. Whether the vote will result in a landmark victory for Obama or defeat – in part at the hands of his own party - remains to be seen.

EPA sets sights on airlines

The Environmental Protection Agency has been aggressive in its efforts to limit greenhouse-gas emissions, and this week the agency got a new target: the aviation industry.

On Wednesday the EPA said that greenhouse-gas emissions from the airline industry pose a threat to public health, and the agency opened the door to regulating the industry for the first time.

According to the agency's draft endangerment finding, the emissions from commercial aircraft contribute to climate change, "endangering the health and welfare of Americans." That opens the door for further action, similar to the regulations EPA has imposed on light-duty cars and trucks, although the agency did not propose such action on Wednesday. The finding also paves the way for the U.S. to adopt and enforce international standards on airline emissions.

Airline emissions contribute about 2 percent of the world's greenhouse-gas emissions. U.S. airlines account for about 3 percent of the country's total greenhouse-gas emissions and 11 percent of the country's emissions from the transportation sector. According to the EPA, U.S. aircraft make up 29 percent of the world's airline emissions.

The regulations come amid international action on airline emissions from the International Civil Aviation Organization (ICAO), which has been slowly looking at a global emissions strategy. ICAO is scheduled to release its own CO2 standard for aircraft in February 2016 for public comment, with adoption later that year.

An airline industry official told Reuters that ICAO is weighing either a market-based system that would allow airlines to buy carbon offsets to balance emissions, or a global emission standard for aircraft.

Given the global nature of the industry, airlines say they'd like to see one international standard rather than individual standards for each country.

In a statement, the EPA said it was working with ICAO and that the agency's action would "lay the necessary foundation for the development and implementation of a domestic aircraft standard, in accordance with U.S. law and the ICAO process."

Return of the online sales tax

Rep. Jason Chaffetz (R-Utah), who chairs the House Oversight Committee, is preparing to introduce online sales tax legislation on Monday that would expand the power of states to collect taxes from purchases made from out-of-state Internet vendors such as eBay.

The legislation builds on a long-stalled Senate measure that has failed to gain traction in the House—and it's being touted by some of its retail supporters as a "thread-the-needle compromise" that could address lingering concerns raised by tax-phobic conservatives.

Drafts of Chaffetz's bill, dubbed the Remote Transaction Parity Act, have been circulating for months.

But it's not clear that Chaffetz's proposal will be acceptable to House Judiciary Committee Chairman Bob Goodlatte (R-Va.), a key player in Congress's enduring fight over Internet taxes. Goodlatte has favored more limited online sales tax legislation, expressing concern about the complexity of a bill that could force Internet vendors to comply with the tax codes of several states and localities.

Goodlatte earned leverage in the online sales tax debate Tuesday, as the House passed by voice vote his bill that would make an expiring ban on federal, state, and local taxes on Internet access permanent. In addition to barring governments from extracting those taxes, the bill would prohibit levying discriminatory Internet-specific taxes on things such as email or bandwidth.

A ban on Internet access taxes is noncontroversial among most lawmakers in both parties, and has been around since 1998, when it was enacted to protect businesses that relied on the then-nascent World Wide Web.

But by having the House approve a permanent ban, as it did last year, Goodlatte is short-circuiting efforts by a handful of bipartisan senators to combine the access-tax moratorium with more controversial and complicated online sales tax legislation.

Those senators, including Minority Whip Dick Durbin (D-Ill.) and Republican Sen. Michael Enzi (R-Wyo.), view the access tax moratorium as a vehicle to adopt their long-stalled Marketplace Fairness Act, which would empower states to tax purchases made from out-of-state online retailers with annual sales over $1 million. Boosters of the legislation say it would close an unfair loophole that favors online behemoths over brick-and-mortar retailers, and supply states with additional tax revenue. Its anti-tax opponents say it could kill jobs and stifle Internet freedom.

Efforts to pair the online-sales and access tax together failed last year, but senators supporting the Marketplace Fairness Act intend to try again.

Though the measure passed the Senate 69-27 in 2013, House leadership balked, as many of the chamber's tea-party conservatives are squeamish about supporting anything that sounds like a tax hike.

The impasse forced Speaker John Boehner (R-Ohio) to promise to revisit the online sales tax this year in order to corral support for a one-year access tax extension passed in December. But the punt doesn't appear to have changed Boehner's calculus, and Tuesday's passage of another permanent access tax ban has set the two chambers on another collision course with little room for compromise. Still, despite having renewed it four times, Congress has failed to agree to a permanent moratorium, and the current ban will lift October 1.

New war authority against ISIS unlikely

Following the terrorist attacks of September 11, 2001, Congress gave the White House the authority to fight al-Qaeda. Almost 14 years later, that authority is still being used in the fight against ISIS.

In the 10-month, $2.6 billion war against Islamic militants in Iraq and Syria, Congress' efforts to pass a bill authorizing the use of military force have failed to gain traction, despite some legal experts' claims that the White House shouldn't continue to function under the prior legal authority granted to fight al-Qaeda.

Some top Democrats want to use the debate to tie Obama's hands more than he would like, and many top Republicans think he already has the authority to do what he's doing. Few want to weigh in and take ownership of the bloody and complex conflict.

That’s not stopping Senators Tim Kaine (D-Va.) and Jeff Flake (R-Ariz.) from introducing a bill that would provide new legal authority for the White House to wage war against ISIS.

Citing the Pentagon's announcement of deepening U.S. involvement in Iraq, the two Senate Foreign Relations Committee members pushed Wednesday for their bill, which would explicitly provide legal justification for the war and put lawmakers on record about the administration's strategy.

Their bill faces a steep climb in Congress. On Tuesday, Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.) only agreed to convene a meeting of committee members to discuss if there's a way forward. And Sen. Ben Cardin (D-Md.), Corker's Democratic counterpart on the committee, said that he doesn't know if the Flake/Kaine bill will even get a vote within the panel.

Obama announced airstrikes against ISIS in August and sent Congress a two-and-a-half page draft for a new authorization for use of military force (AUMF) in February, when he pledged to work with lawmakers to repeal the 2001 authorization used to fight ISIS. Last month, House Speaker John Boehner (R-Ohio) said Obama needed to withdraw his AUMF and "start over." The White House says that it has done its part and it is now up to Congress to craft and pass a new one.

Flake and Kaine's bill differs in some aspects but is largely the same as the one put forward by the White House. Both are time-limited to three years and would repeal the 2002 AUMF for the invasion of Iraq. But their bill would rebut the use of "significant" ground troops and supplant the 2001 AUMF as the sole authority for the campaign against ISIS. It also would clarify a bit how the troops would be used: for the protection of the lives of U.S. citizens and to provide "military support" to partners to defeat ISIS. Obama's bill doesn't authorize "enduring offensive ground combat operations," a new term that hasn't been defined.

Above all, both bills wouldn't change what's happening on the ground right now and neither repeals the 2001 AUMF that the administration uses to fight terrorist groups. But Kaine and Flake believe that their bill would show Congress hasn't abdicated its responsibilities during wartime.

White House blames Congress for security breach

A security breach exposed the personal information of roughly four million current and former federal employees. The White House, however, says that Congress is in part responsible for failure to pass cybersecurity legislation.

The Office of Personnel Management said in a statement Thursday that the breach of its computer systems was detected in April. The intrusion occurred in December. OPM stores personal information, such as addresses and Social Security numbers, and general employee information, including performance ratings.

According to media reports, federal authorities believe China is behind the cyberattack, marking the second intrusion into the government agency by Chinese hackers over the past year. A spokesman for the Chinese foreign ministry called the allegation "irresponsible."

White House Secretary Josh Earnest pointed the finger at the Republican Congress. Last month, the House passed legislation that seeks to expand information sharing of cyberthreat data between the government and the private sector. The Senate has not voted on the measure.

"We need Congress to come out of the dark ages and join us in the 21st century to make sure we have the kinds of defenses necessary to protect a modern computer system," Earnest said.

OPM said Thursday that it will notify those whose information may have been compromised. The agency is offering credit monitoring services to employees to "mitigate the risk of fraud and identity theft."

The FBI is investigating the hack.

The latest on the Ex-Im Bank

Opposing reauthorization of the Export-Import Bank has become a cause célèbre for many conservative members and organizations. The future of the bank remains murky but this week, an Ex-Im amendment to a defense bill got 65 votes in the Senate – giving supporters new hope.

Senate Democrats and a substantial number of Republicans believe they can save the 81 year-old U.S. government bank, despite almost united opposition from GOP leadership in both chambers of Congress, particularly after this key test vote showing that they have near-filibuster proof support.

Ex-Im opponents have claimed the upper hand in negotiations, pointing out that there are few ways in which the supporters could force a vote by June 30 when the bank’s charter expires, as nearly every member of the GOP leadership that controls the floor oppose the bank.

The bank's supporters, which include the U.S. Chamber of Commerce, claim that a historically noncontroversial issue has been taken over by right-wing, Koch brothers-backed ideologues. They see the bank as a deficit-reducing, economic booster that supports small U.S. businesses by guaranteeing loans to foreign buyers. They also note that dozens of other competing countries have similar export credit agencies.

But opponents point out that Ex-Im provides billions to its top beneficiary, the giant aerospace and defense firm Boeing, and that the Main Street advantages are overstated.

After proving their strong numbers, Ex-Im supporters now are searching for a real vote to extend its charter before it expires. Sen. Heidi Heitkamp (D-N.D.) said Wednesday that Senate Majority Leader Mitch McConnell (R-Ky.) promised Ex-Im supporters during the trade promotion authority talks that such a vote would happen.

But Don Stewart, a McConnell spokesperson, responded that the deal was a vote in June and that happened.

"He did not pledge to hold multiple votes or guarantee any outcomes," he added. "But there's nothing stopping anyone from offering amendments to upcoming bills."

The best option for the bank's supporters appears to be attaching the vote to the major infrastructure package expected to move in July. While the charter would temporarily expire, House Republicans—many of whom oppose Ex-Im—would be forced to think twice before blocking a must-pass bill over a relatively minor issue.

House GOP proposes 9 percent cut to EPA budget

While the EPA is aggressively trying to limit greenhouse gas emissions, House Republicans are moving to limit EPA’s funding and its ability to implement new rules.

The fiscal year 2016 spending bill for the EPA, the Interior Department, and other agencies also carries riders that would bar EPA's controversial redefinition of its Clean Water Act authority, prevent the administration from increasing oil and gas inspection fees, and block the listing of the greater sage grouse as an endangered species.

The bill would block EPA rules limiting emissions from new and existing power plants, set to be finalized this summer. Republicans have long blasted the proposal as an executive overreach that will kill jobs, and they have tried to block it in previous spending bills.

The measure was made public just minutes before a panel of federal judges rejected an attempt by conservative states and the coal industry to block the new EPA rules before they were finalized.

The Obama administration has gone full force into the climate plan in its budget request, spending billions across the EPA, the Energy Department, and other agencies to advance clean-energy and climate-change regulations. Republicans have vowed to take an axe to such programs. The House energy spending bill slashed funding for renewable programs in favor of fossil fuels, while the spending bill for the State Department zeroed out funding for an international climate-change fund.

Overall, the $30.17 billion bill would cut the EPA's budget by $718 million, or 9 percent, from the fiscal 2015 enacted level. The $7.4 billion spending level for the agency is well below Obama's request of $8.6 billion.

To keep the EPA in check, the bill would also cut $69 million from the agency's regulatory programs ($206 million below the budget request) and hold staffing levels to 15,000, the lowest level since 1989. The move was made, the committee said, to "focus its activities on core duties, rather than unnecessary regulatory expansion."

The bill also blocks the EPA's Waters of the United States rule, which provides clarity over what waterways the EPA could regulate. Republicans say the redefinition gives the EPA more authority than it had in the past and would overstep on the agricultural and construction industry. Similar language was included in the House-passed energy and water appropriations bill and in a separate bill passed just days later.

Other agencies covered in the bill would also face spending cuts. The Fish and Wildlife Service, for example, is funded at $1.4 billion, $8 million below the fiscal 2015 level. The bill also extends a delay on any Endangered Species Act rule-making for the sage grouse, whose habitat is on western land rich in oil and gas.

Last year's spending bill also prevented the Interior Department from moving forward on rule-making related to a listing for the bird, although Interior Secretary Sally Jewell said last year the rider did not prevent them from deciding whether a listing was warranted, nor did it prevent spending for state conservation plans.

The bill would also block EPA from changing rules on what waste material coal companies can dump into streams, or "fill material," as well as stopping the agency from regulating lead ammunition and fishing tackle. Environmental groups have said that lead bullets pose a risk to wildlife, although a federal appeals court in December ruled that EPA could not regulate lead bullets.

Ahead of what's expected to be an intense wildfire season, the bill adds $52 million to wildland-firefighting and fire-prevention programs for a $3.6 billion total spending level, including fully funding the 10-year average for wildland fire-suppression costs at Interior and the Forest Service.

The National Parks Service would also receive $2.7 billion, an increase of $53 million from fiscal 2015. The Office of Surface Mining also gets a $30 million boost to $180 million, with new funding going to a $30 million program to accelerate reclamation of abandoned mine lands.

Transportation in Focus

Bill introduced to end gas tax

While many transportation advocates are urging an increase in the federal gas tax, a bill filed this week by Sen. Mike Lee (R-Utah) and Rep. Ron DeSantis (R-Fla.) would do the exact opposite. Indeed, their bill, known as the Transportation Empowerment Act, would gradually eliminate the federal gas tax altogether.

Over a five-year period, the Lee-DeSantis bill would transfer authority over most federal highway and transit programs to the states and would lower the gas tax from 18.4 cents per gallon to 3.7 cents per gallon. Under their bill, Congress would block grant funding to states who would decide what projects would be undertaken and which would not.

Conservatives have long been a fan of the approach taken in the bill, which is more commonly known as devolution.

This is not the first time Lee has offered legislation like this, but there has been little interest in the issue from Republican leadership in either chamber and Democrats overwhelmingly oppose devolution.

Opponents of the proposal to eliminate the federal gas tax typically argue that the federal government is best suited to handle transportation infrastructure that runs between states, like highways.

Lee, however, calls the current system “antiquated” and referred to the federal government’s role in the process as that of a wasteful “bureaucratic middle man.” By devolving the program to the states, Lee aims to remove that middle man completely.

The current transportation funding legislation expires on July 31 and the trust fund is facing a shortfall over roughly $16 billion a year.
The current 18.4 cents per gallon federal gas tax hasn’t been increased since 1993, and it generates only $34 billion a year in revenue. Despite shortfalls in the trust fund and relatively low gas prices, there has been little enthusiasm on the Hill among lawmakers to increase the federal gas tax or index it to inflation.

 

  

 Steven C. LaTourette, President | 202.559.2600

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

www.mhgsdc.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.