After a month-long recess, the House of Representatives returned to session last week (the Senate returns today). The landscape confronting members of Congress is in many ways similar to the one they left, as one of the first issues it must address is a resolution of the payroll tax cut extension. Before adjourning in December, the House agreed to a two-month extension, contingent upon the creation of a House-Senate conference committee that would develop a year-long bill. That committee is set to convene this week.
In other news, the Speaker announced last week that the House will consider a five-year transportation bill by the end of February, while in the Senate, aides say that Senate Majority Leader Reid is very close to releasing his long-awaited comprehensive cybersecurity measure.
Below is information on those bills and other significant policy issues in Washington.
Speaker Promises Passage of Transportation Funding Bill By President’s Day
Federal surface transportation programs have operated under short term extensions since 2009, when the last authorization bill expired. With the current extension set to expire in March 2012, Speaker Boehner announced this week that the House will pass a long term authorization bill before President’s day as a means to spur job growth.
While legislation is not publicly available, sources say that the bill will extend current funding levels for five (5) years. Should this bare true, it would be a significant victory for the transportation industry, which was facing a 17 percent reduction in funding under previous proposals circulated by House Transportation and Infrastructure Chairman John L. Mica (R-FL).
A key detail will be how the legislation will satisfy House rules that require any legislation authorizing new spending to be fully offset by spending reductions. In the past, Speaker Boehner has proposed funding the bill by expanding oil and gas drilling permits in federal waters and on public lands, and then using the royalties to subsidize the discrepancy between the bill’s infrastructure spending needs and the Highway Trust Fund. Using such means would not create issues in the House. The usual approach would almost certainly be strongly opposed in the Senate, where Democrats would raise environmental objections.
While appearing on “Meet the Press,” Majority Leader Reid said that passing a new surface transportation bill is a top priority. A bipartisan bill already exists in the Senate that would fund highway programs for two (2) years, and the expectation is that this bill will be expanded to include transit programs as well.
Cybersecurity Legislation Appears Close
As previously reported (insert link), Senator Majority Leader Harry Reid instructed his staff last summer to develop comprehensive legislation modernizing the nation’s capacity to protect itself from a cyber attack. According to aides, this legislation is finally nearing completion and could be introduced as early as next week. Furthermore, it appears likely that the Senate will consider the legislation within a month of introduction.
The Obama Administration has provided Congress with legislative text it believed should be the basis for a comprehensive cybersecurity bill (an analysis of the proposal can be found here). In addition, members of both chambers have introduced numerous bills dealing with different aspects of cybersecurity reform.
While certain of these bills have been moving through the committee process, it became clear by the end of last year that the vehicle for cybersecurity legislation would be a new bill that would be authored at least in part by the House and Senate leadership. It is widely believed that Senator Reid’s bill will mirror in large part the President’s proposal, including a mandatory data breach notification standard as well as the creation of an office of Cybersecurity within the Executive Office of the President. The House bill is expected to be based upon the product developed by the Speaker Boehner appointed Cybersecurity …
Payroll Tax Rate
The House version of the bill would keep the Social Security payroll tax rate for employees at 4.2 percent, the same as in 2011. Had Congress not acted, rates would have returned to 6.2 percent.
Also set to expire had the House not agreed to a short-term extension was unemployment insurance. The bill passed in the House would renew benefits for the long-term unemployed through January 31, 2013, but would reduce the maximum period of benefits to 59 weeks from the current 99 weeks while also setting new eligibility requirements for those seeking benefits. Thus far, Congressional Democrats have opposed both changes.
Medicare Reimbursement for Physicians
A long standing issue for physicians is the formula that mandates a reduction of 27% in Medicare reimbursement rates for physicians. Unable to agree on a long-term solution, Congress has avoided this cut through short-term measures. The House bill would block automatic reductions in Medicare reimbursements to physicians for two years, providing instead a 1 percent increase for both 2012 and 2013. Senate Democrats have only proposed 12-month extensions.
Obama Administration Rejects Keystone Pipeline Permit
Last Wednesday, the State Department announced that it was denying an application to build a controversial pipeline that would carry crude oil from Canada to the Gulf. In rejecting the plan, the Administration did not weigh-in directly on the issues argued for the pipeline, mainly that it would create jobs and lower energy prices, or the those against, namely environmental concerns, but instead blamed Congress for having attached a provision to the payroll tax extension bill that forced the Administration to make a determination within 60 days.
The President said his decision to oppose was due to the “arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people.” The President did extend an invitation to TransCanada, the potential owner of the pipeline, to make a new application for further consideration. As expected, the decision was hailed by environmental organizations and Democrats in Washington, while Republican members of Congress and the oil and gas industry reacted harshly to the news.
At press time, it was not clear whether TransCanada will reapply with added information requested by the Obama Administration.
House Passes Bill Disapproving Debt Limit Increase
In a vote that was mainly along party lines, the House of Representatives voted last week against President Obama’s request for the third installment of increased borrowing authority authorized by the debt ceiling agreement in August.
In a 239-176 vote conducted last Wednesday, the House passed a joint resolution to block a $1.2 trillion increase in the $15.2 trillion debt ceiling. The measure would “resolve that Congress disapproves of the president’s exercise of authority to increase the debt limit.” House passage of the measure was expected and amounts to little more than a symbolic act, considering that the Senate is controlled by Democrats and is expected to oppose any legislation disapproving the President’s request.
Furthermore, even if both bodies were to back the resolution, President Obama would almost certainly veto it, which would require a two-thirds majority of both chambers to override. Assuming no disapproval resolution is enacted, the debt ceiling will increase on January 27.
President Seeks to Reorganize Federal Agencies
While speaking before small business owners at the White House two weeks ago, President Obama sent Congress a formal request asking for the authority to “streamline and reform” the executive branch. In his proposal, six (6) federal departments and agencies, all of whom focus on business and trade, including the Commerce Department, the Small Business Administration and the Office of the U.S. Trade representative, would merge into one department. In releasing his plan, the President referred to the current structure as “redundant and inefficient,” and said he would move to reorganize the agencies into “one department with one website, one phone number and one mission.”
The White House has estimated the plan would eliminate between 1,000 and 2,000 jobs and save $3 billion over 10 years. The reduction in employees would be implemented through attrition and would be focused in administrative support fields.
In addition to the consolidation plan, the President also announced his intention to elevate the Small Business Administration (SBA) to a Cabinet-level agency — a move that would “make sure that small-business owners have their own seat at the table.”
Recess Appointments Rile GOP, Placing other Nominees in Jeopardy
Following a successful Senate filibuster in December, Republicans adjourned for the holidays feeling confident that President Obama’s nomination of Richard Cordray to head the Consumer Financial Protection Bureau (“CFPB”) had been defeated. Instead, President Obama defied Congress and, on January 4th, installed Cordray as CFPB’s Director by using his authority to make a recess appointment. In announcing the decision, Obama justified the appointment saying that Republicans in Congress were blocking Cordray’s nomination in order to cripple the nascent agency.
While the President’s decision is final and Cordray may stay in office for the remainder of the year, it has placed in jeopardy the nomination of more than 70 other administration positions, including several that are high profile. For example, the Federal Deposit Insurance Corporation has two nominees awaiting Senate confirmation to fill their five-person board.
The Federal Communications Commission (“FCC”) is another government agency that could be directly impacted by the President’s appointment of Cordray. The Obama Administration has placed two attorneys, Jessica Rosenworcel and Ajit Varadaraj Pai, under nomination to become Commissioners at the FCC. But following Cordray’s appointment, Republicans have called for retaliation recess appointments. "The Senate will need to take action to check and balance President Obama's blatant attempt to circumvent the Senate and the Constitution, a claim of presidential power that the Bush administration refused to make," said Senator Charles Grassley (R-IA) who is Ranking Member of the Senate Judiciary Committee.
In addition to the filibuster, each Senator has the authority to place a hold, other publicly or anonymously, on any nominee, effectively blocking the Senate’s ability to hold a confirmation vote.
Plans to Move Legislation Addressing Online Piracy Thwarted, At Least Temporally
Just a few weeks ago, passage of legislation intended to protect industry from online piracy appeared to be all but certain; the House's Stop Online Piracy Act (“SOPA”) and the Senate's Protect Intellectual Property Act (“PIPA”) were considered non-controversial and had the backing of industry heavy weights like the Chamber of Commerce and the Motion Picture Association. But in a stunning turn of events, both bills have been shelved at least for the time-being, after an impressive act of coordinated grass-roots lobbying by popular websites including Google and Wikipedia.
According to Google and others in the coalition opposing the bills, the legislation is overly broad and would create unintended consequences that could harm innovation, limit free speech, increase the risk of cyber-attacks and undermine how the Internet is used by the public. To demonstrate their strong opposition, several websites, including Wikipedia, went completely dark Wednesday, while others like Google continued operations with a black banner covering their logo.
In the wake of this successful campaign, Senate Majority Leader Reid, announced that the chamber would not consider PIPA this week as planned, while House Judiciary Committee Chairman Lamar Smith (R-TX) announced that his Committee would postpone consideration as well. Advocates for the bill, like former Senator Chris Dodd (D-CT) of the Motion Picture Association immediately responded by urging Congress to continue working on the issue and urged them to reach out to the opposition on a compromise saying that the stakes of inaction are too high.