All the action on Capitol Hill last week was in the Senate, as the House took a brief recess. Notable developments include:

  • On June 8, the Senate rejected an amendment that would have delayed implementation of a controversial provision contained in last year’s Dodd-Frank financial reform legislation. With 60 votes necessary to move forward, the Senate rejected by a vote of 54-45 an amendment that would have delayed for one year a rule that places new restrictions on the fees that banks charge retailers for debit card transactions. By turning back this amendment, the new “swipe fee” rule is set to take effect on July 21; and  
  • The Senate Armed Services Committee held a confirmation hearing on June 9 on the nomination of current CIA Director Leon Panetta to be the next Secretary of Defense. As expected, questions focused largely on the defense budget, Afghanistan and Libya.  

Before their break, the House moved forward on the annual appropriations process. Last week lawmakers continued to focus on the ongoing budget and deficit reduction debate (see below for details). Other recent news from the House includes:

  • The House took up two resolutions related to Libya on June 3. The first, offered by Speaker John Boehner (R-OH), was adopted 268-145 and requires the Obama Administration to justify its strategy on Libya within two weeks. However, it does not call for the Administration to end its participation in the NATO-led operation. The second, offered by Rep. Dennis Kucinich (D-OH), called for an immediate troop withdrawal and was rejected 148-265;  
  • On June 11 -- nearly a week after he held the press conference during which he admitted that he lied about a Twitter indiscretion and after numerous other online indiscretions were revealed -- Congressman Anthony Weiner (D-NY) announced he is taking a leave of absence to seek professional treatment. The announcement comes in response to a growing chorus of calls for the embattled congressman to resign, including from House Minority Leader Nancy Pelosi (D-NY) and other top Democrats. The House returns to session today for the first time since Rep. Weiner's admission and is sure to continue to be a distraction in the coming days; and  
  • The House’s newest Representative, Kathy Hochul (D-NY), was sworn in on June 1, following her special election victory in New York’s 26th congressional district. Hochul defeated her Republican opponent in the historically conservative district, in an election that many saw as a referendum on the House Republican budget plan that would overhaul the Medicare program.  

HOUSE PICKS UP STEAM ON FY 2012 APPROPRIATIONS

In an effort to complete the annual appropriations process on time before the end of the current 2011 fiscal year on September 30, House Appropriations Chairman Hal Rogers (R-KY) recently set an ambitious schedule that would see all 12 of the appropriations bills for Fiscal Year (FY) 2012 approved by the full Appropriations Committee and nine passed by the House -- all before the August recess.

As a start, the first FY 2012 bill – Homeland Security – was approved on the House floor on June 2. The Homeland Security bill – H.R. 2017 – would provide $40.6 billion in regular discretionary spending authority for the Department of Homeland Security, which amounts to a 2.6 percent reduction from the FY 2011 level and is 6.8 percent less than the President’s budget request. The legislation also includes $258 million to support the global war on terrorism and $1 billion in emergency disaster relief spending that would assist those affected by the recent tornados and Mississippi River flooding.

Additionally, floor consideration began on the Military Construction-Veterans Affairs bill – H.R. 2055. Further debate and votes will be taken up this week.

At the Appropriations Committee level, the Agriculture-Rural Development-Food and Drug Administration bill has been approved by the full committee and now awaits floor consideration, while two others – Defense and Energy and Water Development – have been approved at the subcommittee level and await action by the full committee in the coming week.

Other upcoming committee action includes subcommittee markups of the Legislative Branch and Financial Services appropriations bills.

BIPARTISAN DEBT REDUCTION TALKS CONTINUE

Negotiations on a plan to reduce the federal debt continued over the past two weeks, as the President invited House Republicans to the White House on June 1 to discuss the matter. Republicans continue to assert that any efforts to increase taxes in order to raise revenue are a non-starter, asserting that cuts to federal programs and the resulting growth in business activities are sufficient. The Treasury Department has indicated that Congress has until August 2 to do so, lest the federal government default on its loans.

On June 2, House Democrats and the President met to discuss their positions on deficit reduction. Democrats continue to state that, in addition to trimming the size of government, increased revenues are necessary in order to curb the rapidly growing debt, particularly given their opposition to other options, such as making cost-saving reforms to the Medicare program – a proposal that Republicans support.

While both parties agree that a deal should be reached swiftly in order to avoid the economic uncertainty that could come with a last-minute showdown leading up to the identified August 2 default deadline, how to reach such an agreement remains elusive. (August 2 is the date at which the Treasury Department has determined that without a debt limit increase, the federal government would default on some of its obligations.)

In related debt/deficit news, the House recently rejected a bill – H.R. 1954 – that would have raised the debt limit to $16.7 trillion (up from $14.3 trillion) without any accompanying proposals to cut spending. No Republican supported the bill, which failed by a vote of 97-318, with 82 Democrats also voting against it. Republican Leadership brought the bill to the floor in order to gain leverage in the ongoing debt reduction negotiations, highlighting the lack of House support for raising the federal debt limit without making corresponding spending cuts. The Senate may hold a similar test vote in the coming days.

The next round of bipartisan, bicameral talks occurred on June 9. Despite pleas from Speaker Boehner for President Obama to be more directly involved in such negotiations, the President has largely deferred to the House-Senate group that has been led by Vice President Biden. The group is scheduled to meet three times this week – a sign that negotiators may be striving to strike a deal by the end of the month.