June 18, 2010
J.R. Reskovac
Sarah Strup
Click here for the updated 2010 Legislative Calendar.
Appropriations- War Supplemental
There is now new military pressure on House Democrats to move the supplemental appropriations package, warning that unless the military gets the requested $33.5 billion in war funding soon, service members may start missing paychecks.
Top of FormTop of FormHouse action on the FY10 supplemental (HR 4899) has been delayed by Democrats hoping to use it to provide funds to states to prevent teacher layoffs. Appropriations Chairman David Obey (D-WI), has proposed an $84 billion version including $23 billion for schools and $1.7 billion to retain and hire police officers and firefighters, spending he said would have the added benefit of boosting local economies. But other lawmakers are increasingly concerned about adding to the budget deficit.
The version of the supplemental passed by the Senate last month, is a smaller $58.8 billion measure narrowly focused on the wars in the Middle East, aid to veterans and disaster relief. Yet, it will likely be difficult for Democratic leaders to get Obey, who is not seeking re-election this fall, to accept a war supplemental without aid for schools.
Defense
Republicans continue to express doubts about whether a new arms treaty would hinder U.S. missile defense plans. Bottom of FormThree Cabinet officials and one four-star admiral repeatedly asserted to the Senate Armed Services Committee on Thursday that nothing in the new Strategic Arms Reduction Treaty (START, Treaty Doc. 111-5) prevents deployment of a missile shield as the United States currently envisions.
This was the subject predominantly raised by Republicans, at three separate hearings this week. However, they also addressed several other concerns regarding verification procedures and modernization of the nuclear arsenal. With 67 Senate votes needed to guarantee ratification, GOP skepticism could be a major impediment to the Obama administration pushing through a START deal. There are more hearings to come, however.
Economy/Finance
On Thursday, House and Senate conferees made little progress on sections of a financial overhaul bill (Restoring American Financial Stability Act of 2010: HR 4173) that would establish new rules for dismantling failing financial firms and provide new oversight of risks that could threaten the entire financial system.
One of the bill’s core provisions would allow the federal government to step in and dismantle a financial firm rather than letting a disorderly collapse of the company threaten the economy. The Senate preferred language that would require the financial industry to pay for a collapse after one occurs.
Financial Services Chairman Barney Frank (D-MA) proposed that the final bill include language creating a $150 billion fund paid for in advance by large banks. Derided by Republicans as a bailout, but hailed by many Democrats as a buffer protecting taxpayers, the so-called resolution fund was a very heavily contested provision of the bill in both chambers. The Senate initially considered a version of the fund that was a third of the size of the House provision. But senators ultimately abandoned the idea on the floor in the face of solid GOP opposition and reluctance among some Democrats. Furthermore, the Senate did not officially send to the House its counteroffer on language in the bill to create a council that would guard against systemic risks in the financial sector, but an early draft of its expected proposal showed House and Senate negotiators have a long way to go to find agreement.
In other legislative news regarding the economy, on Thursday the House passed legislation to boost lending to small businesses. Bottom of FormBottom of FormThe bill (HR 5297) passed 241-182, and would establish a $30 billion lending fund to invest in financial institutions, such as community banks, in hopes of expanding the availability of credit to small businesses. The fund would be administered by the Treasury Department.
The bill’s cost would be paid for by a companion $3.6 billion small-business tax incentives bill (HR 5486), which the House passed Tuesday. Under the rule governing both bills, the tax incentives bill was added to the small-business lending fund measure, which will now be sent over to the Senate.
Environment
Democrats attempted Thursday to create unlimited liability for oil companies, and for the fourth time since the Gulf crisis began, Republicans objected. Senator Robert Menendez (D-NJ) asked for a voice vote to pass a bill that would hold oil companies accountable for all damages they create, a significant leap from the $75 million cap set by current law. Senator Jim Inhofe (R-OK), ranking member of the Environmental and Public Works Committee, rejected the request.
Despite this most recent failure of moving the liability bill by unanimous consent, Democrats likely will seek to attach the bill to another legislative vehicle, in the form of a proposed energy bill or another bill likely to pass the Senate.
In other environmental news, Senate Democrats emerged from a special caucus meeting in the Capitol on Thursday with no clear consensus yet on the fate of energy and climate legislation that is due on the floor before the August recess.
Majority Leader Harry Reid (D-NV) dedicated an hour-long session to a “full, frank discussion” of three competing proposals for overhauling the nation’s energy policies and trimming greenhouse gas emissions. But senators spoke for so long that they had to bump back a more detailed question-and-answer session for another meeting that is tentatively scheduled for next week.
Health Care
The Senate passed, by voice vote, an amended version of a bill (HR 3962) that would prevent a 21 percent cut in physician reimbursements under Medicare until November 30. The pay rate cut took effect June 1, but has been delayed by administrative action since then. Finance Chairman Max Baucus (D-MT) and ranking Republican Charles Grassley of Iowa want to separate the doctors’ provision from the rest of a stalled tax and benefits bill (HR 4213).
Taxes/ Jobs Bill
The debate on the American Jobs and Closing Tax Loopholes Act of 2010 HR (4213) has been extended again after a cloture vote failed last night 56-40. Senate Democratic leaders have failed in their attempt to advance a stalled tax and benefits bill, and did not commit to bringing the $118 billion measure back to the floor immediately. However, on Thursday they said this would not deter them from continuing their efforts to persuade Republicans.
Republicans, including the moderates Baucus has been targeting, said they want more of the bill’s cost to be offset with revenues, and have suggested a number of ways to do so. Options they have proposed include using unspent money from last year’s stimulus law (PL 111-5) and reducing the cost of a $24.2 billion provision to provide aid to states for Medicaid.
The ongoing stalemate continues to frustrate Democrats, who have been trying to advance the package of tax cuts, social safety-net spending as well as several other provisions. Baucus has already reduced the cost of the bill from $140 billion to $118 billion by shrinking unemployment checks and shortening a provision that would prevent a cut in Medicare reimbursement rates to doctors from 19 months to 6 months. Baucus also raised the per-barrel tax on oil and softened provisions that would affect the taxation of “carried interest” earned by real estate investors, venture capitalists and private equity managers.
Washington Outlook
Next week in Congress, the House and Senate are both prepared to continue work on several stalled measures, while the House may also take up a campaign finance bill.
Late last night, Senate Democrats could not acquire the 60 votes needed to defeat procedural obstacles to the extenders bill (HR 4213), and the House could consider an amended version of the measure depending on Senate action.
The campaign finance bill (HR 5175) could also compete for floor action in the House next week. The bill, entitled “Democracy is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Act,” would set new disclosure requirements for campaign advertisements and funding. The supplemental spending bill for the wars in Iraq and Afghanistan (HR 4899) is also awaiting passage in the house, and was approved by the Senate last month. Defense Secretary Robert Gates this week urged quick congressional action on the measure, which has been delayed in the House. Appropriations Chairman David Obey (D-WI) wants to add money for schools, police and firefighters. Other members are concerned about the bill raising the federal deficit.
The Senate next week may consider a final version of the Aviation Safety and Investment Act of 2010 (HR 1586) if negotiators can reach agreement. A Senate version of a small-business lending package could also come to the floor. The House passed the Small Business Lending Fund Act of 2010 (HR 5297) on Thursday that would establish a $30 billion lending fund to invest in financial institutions, such as community banks, in hopes of expanding the availability of credit to small businesses.
Congress may also consider any conference reports that are completed by next week. Negotiations continue on a financial regulatory overhaul bill (HR 4173). Additionally, House Majority Leader Steny Hoyer (D-MD) has said he wants a conference report for an Iran sanctions bill (HR 2194) to be brought to the floor.
There has been a floor schedule update for the week of August 2, 2010 and additional vote timing changes. Click here for the updated 2010 Legislative Calendar sent from the Majority Leader’s Office to the e-mail bearing this report.
