June 25, 2010
J.R. Reskovac
Sarah Strup
Appropriations- Homeland Security
The House on Thursday kicked off the FY11 appropriations process by unveiling the Homeland Security spending bill, which received subcommittee approval.
The Homeland Security Appropriations Subcommittee approved, by voice vote, a draft measure that would provide $43.9 billion in discretionary spending for the Department of Homeland Security. The measure is the first of the 12 annual spending bills to be considered by appropriators. The bill’s discretionary total is $1.1 billion more than in FY10 and $300 million more than President Obama’s FY11 request.
Amid the controversial debate over immigration, The Transportation Security Administration (TSA) would get a six percent increase in funding, the largest for any agency within the Homeland Security Department, which among other things would provide for the acquisition of more than 500 advanced imaging passenger screening machines and the employment of 5,355 new screeners to operate the equipment. The Coast Guard also would see a funding increase, with appropriators rejecting presidential proposals to cut Coast Guard personnel, decommission two vessels and retire five helicopters. Coast Guard oil rig inspection and spill response activities would also receive more than the administration initially requested.
Republicans said the bill spends too much, but were unsuccessful in an attempt to cut $100 million from a variety of administrative and other accounts. Democrats said they had already cut the bill’s administrative and management accounts and that some proposed GOP cuts, such as a $25 million reduction in funding toward building the Coast Guard’s new headquarters at St. Elizabeths Hospital in D.C. Overall, Republicans offered a half-dozen amendments to the bill, with several being adopted by voice vote.
Defense
On Thursday, the House and Senate adopted a conference report on sanctions legislation, involving the penalization of foreign companies doing business with Iran. The final legislation — adopted, 99-0, in the Senate and 408-8 in the House — relies heavily on the White House and the State Department to enforce its provisions, something no administration has done under the sanctions law from 1996 (PL 104-172).
Members from both parties have questioned whether the Obama administration will carry out the new law, and they have said they are prepared to keep the pressure on the White House and the State Department.
Economy/Finance
After forging a compromise on derivatives trades by banks early this morning, House and Senate negotiators agreed to the most profound financial overhaul in more than a generation.Top of FormBottom of Form The legislation (HR 4173), would impose new restrictions on risky financial instruments; create a special agency to look out for consumers and force banks and other financial institutions to hold more capital to protect against future financial turmoil.
Under the derivatives compromise, banks will be able to keep their business in derivatives tied to interest rate swaps, which represent a huge portion of the market.
Banks would also be permitted to continue to trade in derivatives related to foreign exchange swaps, credit, gold and silver, investment-grade credit default swaps and any transaction used to hedge risk. Financial institutions will need to divert derivatives related to commodities, energy, metals, agriculture, equities and below-investment-grade credit default swaps into a separately capitalized entity walled off from federally insured deposits. Any credit default swaps — a type of derivative linked to the meltdown of insurance giant AIG — remaining in the bank would go through a central clearinghouse. A clearinghouse acts as a neutral third-party that guarantees a derivatives trade.
As the committee prepared to issue its final approval of the bill at dawn on Friday, the legislation was renamed the Dodd-Frank Act in honor of the bill managers Barney Frank (D-MA), and Christopher Dodd (D-CT).
Environment
The House passed legislation Wednesday that would add influence to the presidential commission investigating the Gulf Coast oil spill by giving it subpoena power. The measure (HR 5481) passed 420-1, under suspension of the rules, a process that allows for quick consideration and requires a two-thirds vote to pass.
Under the bill, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling would be allowed to issue subpoenas to require the attendance and testimony of witnesses, and the release of books, records, correspondence, memorandums or other documents related to the oil spill investigation.
Created by executive order following the explosion at BP’s Deepwater Horizon offshore platform in the Gulf of Mexico on April 20, the commission is tasked with providing recommendations on how the country can prevent future oil spills.
Taxes/ Jobs Bill
Senate Democrats’ efforts to pass a package of tax cut extensions and unemployment benefits collapsed Thursday night amid partisan accusations. Senate Majority Leader Harry Reid (D-NV) said he would pull the bill (HR 4213) from the floor after the Senate failed for the third time to garner 60 votes for a motion to invoke cloture, or end debate, on the $109 billion version of the legislation released June 23.
Finance Chairman Max Baucus (D-MT) has spent weeks modifying tax hike provisions, cutting spending and adding offsets to convince three moderates — Republicans Susan Collins and Olympia Snowe of Maine, and Democrat Ben Nelson of Nebraska. But in the end, they did not budge.
Transportation
The Senate Banking, Housing and Urban Affairs Committee said Tuesday that it will take up bi-partisan legislation in the coming weeks, to create national safety standards for transit systems. This announcement was made exactly one year after nine people were killed, and fifty were injured, in a train collision on Washington’s Metro system.
The proposal would require the Transportation Department to establish and enforce minimum federal safety standards for federally funded transit systems. It also would create a safety certification program that would allow states to carry out their own safety program as long as they met certain criteria. Otherwise, the Federal Transit Administration would enforce safety standards in those states. The agency currently has no authority to directly regulate public transit systems.
Washington Outlook
Next week in Congress, the House is likely to take up a war spending bill while the Senate is expected to consider a small-business jobs package. A House-Senate conference committee approved the financial regulation bill (HR 4173) early this morning, and the compromise bill will now move to the full House and Senate next week.
The Senate will also debate the Small Business Lending Fund Act of 2010 (HR 5297) which would create a fund for small businesses administered by the Treasury Department. Senate Majority Leader Harry Reid (D-NV) on Thursday filed a cloture motion seeking to proceed to the bill, setting up a procedural vote for Monday evening. The House passed its version last week. It is probable Senators will replace the House language with a substitute amendment incorporating language from the Finance Committee and the Small Business and Entrepreneurship Committee. Finance Chairman Max Baucus (D-MT) did not reveal details of the tax portion of the package Thursday evening.
The Small Business panel’s portion would increase small-business lending limits, and it is also likely to include small-business contracting overhauls for government purchasing. Reid stated that he anticipates a proposal to amend the measure to include an overhaul of the estate tax. While the amendment could set up a contrast between Democratic and Republican priorities, some Democrats, led by Agriculture, Nutrition and Forestry Chairwoman Blanche Lincoln of Arkansas, are expected to back the effort.
House Majority Leader Hoyer has said he hopes lawmakers will pass a budget proposal next week that includes a deeming resolution setting discretionary spending for FY11 before the break. House Budget Chairman John Spratt said it would likely be included the pending emergency supplemental spending package (HR 4899), which includes funding for the wars in Afghanistan and Iraq. House Speaker Nancy Pelosi (D-CA) said Thursday that she wants the House to pass the supplemental next week before the July Fourth recess.
Defense officials, who initially requested the money for war-related expenses by Memorial Day, say the military would soon begin to feel the budgetary impact of inaction if the supplemental is not soon completed.
The Senate passed its $59 billion version of the supplemental in late May. But it did not include the $23 billion included in an initial $84 billion House version to prevent teacher layoffs, an amount House leaders are looking to scale back. They also are looking to split the bill into two parts, allowing anti-war Democrats to vote against the war funding but for emergency spending such as the teacher money. House Democratic leaders are still trying to figure out how to respond to a Senate move last week to pass a six-month fix to cover Medicare physician payments.
Pelosi has also given chairman of key House committees until the end of next week to submit proposed legislation dealing with the Gulf of Mexico oil spill and votes will be scheduled when Congress returns from the break.
