capital thinking ~ july 22, 2013

Patton Boggs Capital Thinking Weekly Update | July 22, 2013 1 of 21

July 22, 2013


Capital Thinking: Contents General Legislative ......................................................................................................... 3

Agriculture and Food ...................................................................................................... 3

Budget and Appropriations ........................................................................................... 4

Cybersecurity .................................................................................................................. 5

Defense ............................................................................................................................ 6

Education ......................................................................................................................... 8

Energy .............................................................................................................................. 9

Environment .................................................................................................................. 10

Financial Services ......................................................................................................... 12

Health Care .................................................................................................................... 14

Homeland Security ....................................................................................................... 15

International .................................................................................................................. 16

Technology and Communications .............................................................................. 19

Transportation and Infrastructure ............................................................................... 21


General Legislative

The Senate will convene at 10:00 am on Tuesday, July 23. Senate Majority Leader Harry Reid (D-NV) is

expected to renew his motion to proceed on the FY 2014 Transportation, Housing and Urban

Development and Related Agencies appropriations bill (S. 1243). The time until 12:00 pm will be equally

divided and controlled between Majority Leader Reid, Senate Minority Leader Mitch McConnell (R-KY), or

their designees. The Senate will proceed to a roll call vote on the motion to invoke cloture on the motion

to proceed to S. 1243 at 12:00 pm because cloture was filed on that motion on July 18. If cloture is

invoked, all post-cloture time will be yielded back and the Senate will proceed to vote on the motion to

proceed to S. 1243, which will likely be a voice vote. If the motion to proceed to S. 1243 is adopted, the

text of the House FY 2014 Transportation, Housing and Urban Development and Related Agencies

appropriations bill (H.R. 2610) will be deemed House-passed text. The Senate will recess from 12:30 pm

until 2:15 pm to allow for weekly caucus meetings.

On Monday, July 22, the House will meet at 12:00 pm for morning hour and 2:00 pm for legislative

business. Votes will be postponed until 6:30 pm. he following legislation will be considered under

suspension of the rules: Three Kids Mine Remediation and Reclamation Act (H.R. 697); a bill to amend

the Fish and Wildlife Act of 1956 to reauthorize the volunteer programs and community partnerships for

the benefit of national wildlife refuges and other purposes (H.R. 1300); the California Coastal National

Monument Expansion Act of 2013 (H.R. 1411); a bill to amend title 23, United States code, with respect to

the operation of vehicles on certain Wisconsin highways and other purposes (H.R. 2353); a resolution

authorizing the use of the Capitol Grounds for the District of Columbia Special Olympics law Enforcement

Torch Run (H. Con. Res. 44); and the WMD Intelligence and Information Sharing Act of 2013 (H.R. 1542).

The House will meet at 10:00 am for morning hour and 12:00 pm for legislative business on Tuesday,

July 23 and Wednesday, July 24. The House will convene at 9:00 am for legislative business on

Thursday, July 25, and the last votes are expected no later than 3:00 pm. No votes are expected on

Friday, July 26. The House is expected on the following bills by the end of this week: the Department of

Defense Appropriations Act (subject to a rule) (H.R. 2397); the Coal Residues Reuse and Management

Act of 2013 (subject to a rule) (H.R. 2218); and the Energy Consumers Relief Act of 2013 (H.R. 1582).

Agriculture and Food

LEGISLATIVE ACTIVITY

Farm Bill. On July 18, the Senate accepted a unanimous consent resolution that formally requested

the Senate to move to conference on the Farm Bill. In sending the Farm Bill to the House, the Senate

had to place its text into the shell of the House-passed bill, which the House sent to the chamber

earlier this week, because the Senate text contains finance measures that the House cannot

consider, as financing measures must originate in the House. Thus, the Senate Farm Bill will have a

new House bill number going forward. Chairwoman of the Senate Agriculture Committee Debbie


Stabenow (D-MI) also requested the appointment of Senate conferees consisting of seven Democrats

and five Republicans.

Although informal talks have been happening between the Senate and the House on conferencing

the Farm Bill, it does not appear as if the House will initiate formal steps to conference the bill until the

House passes a nutrition bill. It appears that House Majority Leader Eric Cantor (R-VA) has convened

a working group of 16-20 members, including him, to assist in drafting a nutrition bill. The members of

the working group include: Reps. Frank Lucas (R-OK); Marsha Blackburn (R-TN); Renee Ellmers (R-

NC); Bob Goodlatte (R-VA); Lynn Jenkins (R-KS); Jim Jordan (R-OH); Steve King (R-IA); Tom Marino

(R-PA); Kristi Noem (R-SD); Tom Reed (R-NY); Keith Rothfus (R-PA); Steve Scalise (R-LA); Steve

Southerland (R-FL); Marlin Stutzman (R-IN); and Todd Young (R-IN). Thus far, no Democrats have

been included in the drafting of the bill. As discussed in last week’s edition of Capital Thinking, this

nutrition bill would like to overhaul the Supplemental Nutrition Assistance Program (SNAP).

On the Democratic side, 28 Democrats, including Rep. Jim McGovern (D-MA), sent a letter on July 18

to the Republican leadership calling for a hearing on the nutrition title. Chairman Frank Lucas (R-OK)

has indicated that no such hearing has taken place.

We expect that there will be no further movement on agriculture-related legislation, including the FY

2014 Agriculture appropriations bill, until a nutrition bill has been put up for a vote on the floor. Given

the timeline of events, it is highly likely that the Farm Bill will expire on September 30, 2013.

Contact Information

For additional insights about likely policy developments, please feel free to contact the author of this

section: Dana Weekes at 202-457-6307 or [email protected].

Budget and Appropriations


House Appropriations Action. Last week, the House Appropriations Committee passed the FY

2014 Commerce-Justice-Science, Financial Services, and Legislative Branch appropriations bills.

The House was expected to debate the Defense appropriations bill (H.R. 2397) last week as well, but

disagreements over the rule process have stalled floor action. Republican leadership would like to

debate the bill under a structured rule in order to limit controversial amendments related to Egypt, the

National Security Administration, and Syria. However, rank-and-file members on both sides of the

aisle have criticized this approach. Once the Defense bill does reach the floor, the Transportation-

HUD bill (H.R. 2610) is expected to follow.

Senate Appropriations Action. The Senate Appropriations Committee approved the FY 2014

Homeland Security (S. 2217) and Commerce-Justice-Science (S. 1329) appropriations bills last

week. Senate Majority Leader Harry Reid (D-NV) announced plans to bring the Transportation-HUD

(S. 1243) bill to the floor this week; however, Budget Committee Ranking Member Jeff Sessions (R-


AL) has threatened to raise a point of order because the appropriators are working under higher

spending levels than are allowed by the Budget Control Act (Pub. L. 112-25). It is still unclear whether

Sen. Sessions can raise a point of order on the first bill, or if he must wait until the total amount

surpasses the $967 billion allowed by the Budget Control Act.

This Week’s Hearings:

o Tuesday, July 23: Financial Services – Senate subcommittee markup.

o Tuesday, July 23: State and Foreign Operations – Senate subcommittee markup.

o Tuesday, July 23: Interior and Environment – House subcommittee markup.

Contact Information

For additional insights about likely policy developments, please feel free to contact the authors of this

section: Pamela Welsh at 202-457-6493 or [email protected], and Melanie Goggins at 202-457-

5649 or [email protected].

Cybersecurity

LEGISLATIVE BRANCH ACTIVITY

Cybersecurity Legislation. The Senate Commerce, Science and Transportation Committee is

expected to mark up a bipartisan cybersecurity bill before the end of this month. A draft of the bill is

currently being circulated and contains provisions that would codify the role of the National Institute of

Standards and Technology (NIST) to continue its efforts to bring together the public and private

sectors on various issues, including cybersecurity. The draft bill also addresses cybersecurity

workforce training, education, and research and development programs. The committee plans to

focus on issues within their jurisdiction, with other critical aspects of cybersecurity left to the Senate

Homeland Security and Government Affairs Committee and the Senate Intelligence Committee.

Those committees have stated they are working on draft legislation to be released in the coming

months.


o Tuesday, July 23: At 2:00 pm, the House Foreign Affairs Subcommittee on Asia and the

Pacific will hold a hearing titled “Asia: The Cyber Security Battleground.” Phyllis Schneck,

Vice President and Chief Technology Officer at McAfee Inc., and James Lewis, Director and

Senior Fellow of the Technology and Public Policy Program at the Center for Strategic

International Studies, are scheduled to testify at the hearing.

o Thursday, July 25: The Senate Commerce, Science and Transportation Committee will hold a

hearing at 2:30 pm titled “The Partnership Between NIST and the Private Sector: Improving

Cybersecurity.” The hearing will explore NIST’s work with the private sector to develop and


promote cybersecurity standards and best practices for critical infrastructure through the

Cybersecurity Framework process required by the Exexutive Order (E.O.).

EXECUTIVE BRANCH ACTIVITY

Designation of Critical Infrastructure. As part of the E.O., the Department of Homeland Security

(DHS) was required to compile a list of the critical infrastructure that is most at risk of a catastrophic

cyber attack. DHS officials indicated that they have completed this list and are in the process of

confidentially notifying owners and operators of critical infrastructure that have been identified on the

list. Director of the DHS Integrated Task Force on Cybersecurity Robert Kolasky recently stated that

publication of this list is “under consideration,” but no decisions have been made as of now on

whether to publicly release the list.

DHS Departure. Another DHS official has announced his departure from the department after

Secretary Janet Napolitano stated last week that she plans to step down in September. Bruce

McConnell, Acting Deputy Undersecretary for Cybersecurity, announced this week that he will resign

from DHS on August 10. His replacement has not yet been identified.

Contact Information


section: Amy Davenport at 202-457-6528 or [email protected], and Norma Krayem at 202-

457-5206 or [email protected].

Defense

LEGISLATIVE AND EXECUTIVE BRANCH ACTIVITY

Defense Appropriations. Despite the House’s plans to bring the House FY 2014 Defense

appropriations bill (H.R. 2397) to the floor, the House Rules Committee abruptly ended its session on

July 18, to consider a rule governing debate of the measure. Enough Republicans reportedly were

unhappy that they would not get any votes on certain amendments, such as the National Security

Agency phone surveillance program and U.S. military aid to Egypt’s interim government and to

Syria’s rebels. While the Rules Committee indicated it may try again this week, it remains uncertain

whether the House will bring the bill to the floor for debate before the August recess. Meanwhile,

Senate Armed Services Committee Chair Carl Levin (D-MI) acknowledged there will be no movement

on the Senate FY 2014 National Defense Authorization Act until after the August recess.

Syria. Last week, Sen. John McCain (R-AZ) reportedly threatened to put a hold on the re-nomination

of the Joint Chiefs of Staff Chairman Gen. Martin Dempsey. The senator is apparently seeking

answers from the chairman on U.S. policy toward Syria.


Afghanistan. The Afghan government halted the flow of U.S. military supplies across its borders last

week, claiming Washington owes $70 million in fines for lack of proper customs paperwork for 70,000

shipping containers.

Regulatory Update. On July 16, the Small Business Administration issued a Final Rule requiring

prime contractors to provide the government a more detailed accounting of their dealings with small

business subcontractors. The final rule requires that small business subcontracting be reported on an

“order-by-order” basis when connected to multi-agency, Federal Supply Schedule, Multiple Award

Schedule, or government-wide acquisition indefinite delivery/indefinite quantity contracts. The rule

implements the requirement in the JOBS Act (Pub. L. No. 111-240) for large prime contractors to

represent that they will make good-faith efforts to award subcontracts to small businesses at the

same percentage as indicated in the subcontracting plans submitted as part of their contract

proposals. If the percentages are not met, prime contractors must provide a written justification and

explanation to the contracting officer. The final rule also makes clear that, in addition to considering

subcontracting plan compliance under a past performance factor, a contracting officer also can create

an evaluation factor or sub-factor specifically for purposes of considering subcontracting plan past

performance. The final rule becomes effective August 15.


o Tuesday, July 23: The House Armed Services Committee will hold a hearing on “Rebalancing to

the Asia-Pacific Region and Implications for U.S. National Security.”

o Tuesday, July 23: The House Armed Services Subcommittee on Military Personnel will hold a

hearing on “Women in Service Reviews.”

o Wednesday, July 24: The House Armed Services Subcommittee on Seapower and Projection

Forces will hold a hearing on “Acquisition and Development Challenges Associated with the

Littoral Combat Ship.”

o Thursday, July 25: The Senate Armed Services Committee will hold a confirmation hearing for the

following Defense Department nominees: Stephen Preston to be General Counsel; Jon Rymer to

be Inspector General; Susan Rabern to be Assistant Secretary of the Navy for Financial

Management and Comptroller; and Dennis McGinn to be Assistant Secretary of the Navy for

Energy, Installations, and Environment.

Contact Information


section: Stacy Swanson at 202-457-5627 or [email protected], and John Sharp at 303-894-

6183 or [email protected].


Education


Student Loan Interest Rates. A bipartisan group of senators, led Majority Whip Dick Durbin (D-IL),

announced another agreement on student loan interest rates last week. The deal, which represents a

new scheme that shifts to market-driven variable interest rates, was announced after Sen. Tom

Harkin (D-IA) ultimately agreed to support it. According to reports, the latest proposal would peg

interest rates to the 10-year Treasury note. For both the subsidized and unsubsidized undergraduate

loans, the proposed measure would add 2.05 percent and cap interest rates at 8.5 percent. For

graduate loans, the proposal would add 3.6 percent and cap interest rates at 9.5 percent, while PLUS

loans would be given a 4.6 percent plus up and a 10.5 percent cap. Additionally, the Congressional

Budget Office scored the proposal as providing a savings of $715 million over 10 years, which should

help garner other Republican support, particularly in the House.

Both Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH) have

indicated that they support the proposal, which means votes on the measure will likely occur this

week, even as early as Tuesday, July 23. There may be votes on alternatives that seem certain to fail

(again), as Senate Democratic leaders have not yet indicated that they have support from a majority

of their caucus. Several Democratic lawmakers not entirely happy with the agreement have noted

they intend to re-examine the issue again as part of the reauthorization process for the Higher

Education Act this fall.

Elementary and Secondary Education Act (ESEA) Reauthorization. On July 19, the House

passed the Student Success Act (H.R. 5) by a vote of 221-207. There were no Democrats who voted

for the bill, and 12 Republicans broke with the party to vote against the bill. Of the over 70

amendments filed, 26 amendments were considered and primarily addressed issues related to the

role of the federal government in education, teacher standards, minorities and students with

disabilities, and spending.

One of the bill’s major themes was reducing federal mandates and granting states considerable

flexibility in making educational decisions. Democrats, however, criticized the bill for failing to include

guaranteed standards and eliminating the Average Yearly Progress accountability system without

replacing it. The White House also issued a veto threat against H.R. 5 based on similar reasons

voiced by House Democrats.

In addition to the administration, there is a broad range of organizations who oppose the bill, including

the National Education Association, the American Federation of Teachers, Education Trust, the

National Council of La Raza, and the U.S. Chamber of Commerce. On July 18, the Chamber sent out

a key vote letter expressing concerns that the bill would not require states to adopt college- and

career-ready standards and assessments.


We do not expect any further movement on the Student Success Act unless the Senate is able to

pass its version of the bill, which would likely initiate conferencing. In June, the Senate Health,

Education, Labor and Pensions Committee approved its bill (S. 1094), which aligns more closely with

House Democrats’ substitute amendment. While Senate leaders have informally slated floor debate

on S. 1094 to occur this fall, that timeline is likely to slip.

Comments on Higher Education Act Reauthorization. The deadline to submit comments to the

House Education and the Workforce Committee on the Higher Education Act reauthorization is

August 2.

Veterans Education. On July 18, the House Veterans Affairs Subcommittee on Economic

Opportunity advanced a bill (H.R. 2327) that would establish a Veterans Economic Opportunity

Administration in the Department of Veterans Affairs. The office would carry out education assistance,

vocational, housing, and small-business programs. The committee also approved a bill (H.R. 2210)

that would extend educational assistance under the Post-9/11 Educational Assistance Program to

children of servicemembers who pass away due to combat-related wounds after a medical discharge.


o Tuesday, July 23: The Senate Homeland Security and Governmental Affairs Committee will hold

a hearing titled, “Improving Educational Outcomes for our Military and Veterans.”

o Wednesday, July 24: The House Science, Space and Technology Subcommittee on Research

and Technology will hold a hearing titled, “Technology Transfers at Research Institutes.”

o Wednesday, July 24: The House Education and the Workforce Committee will mark up the

Supporting Academic Freedom through Regulatory Relief Act (H.R. 2637).

Contact Information


section: Amy Davenport, at 202-457-6528 or [email protected], Amy Budner Smith at 202-

457-6154 or [email protected], and Dana Weekes at 202-457-6307 or

[email protected].

Energy



o Tuesday, July 23: The Senate Energy and Natural Resources Committee will hold a hearing on

the FAIR Act of 2013 (S. 1273), a bill to provide for additional federal-state royalty revenue

sharing from energy development. The House Natural Resources Committee will hold an


oversight hearing on the status of the Stream Buffer Zone Rule and the economic impacts on 22

coal-producing states.

o Tuesday, July 23 through Wednesday, July 24: The House Energy and Commerce Subcommittee

on Energy and Power will hold oversight hearings to solicit stakeholder input on the Renewable

Fuels Standard.

o Wednesday, July 24: House Science Subcommittees will host a joint hearing on “Lessons

Learned: EPA’s Investigations of Hydraulic Fracturing.” A House Energy and Commerce

Subcommittee will hold a hearing on “Department of Energy Oversight: What Is Necessary to

Improve Project Management and Mission Performance?”

REGULATORY ACTIVITY

Offshore Drilling. The Bureau of Ocean Energy Management will prepare a Supplemental

Environmental Impact Statement for future lease sales in the Gulf of Mexico’s Western Planning

Area, for Lease Sale 238 (off Texas and Louisiana in 2014), Lease Sale 246 (in 2015), and Lease

Sale 248 (in 2016). Public scoping meetings will be held in Galveston, Texas on August 6 and in New

Orleans, Louisiana on August 8.

TRIA. Comments on the President’s Working Group on Financial Markets report to Congress on the

long-term availability and affordability of insurance for terrorism risk are due by September 16.

FERC/California. The Federal Energy Regulatory Commission will host a staff technical conference

in Sacramento on July 31 regarding the California Independent System Operator Corporation’s

proposal to implement an interim flexible capacity and local reliability resource retention mechanism

in the State’s wholesale electrical market.

Contact Information


section: Tanya DeRivi at 202-457-6504 or [email protected].

Environment


EPA Confirmation Hearings. On Thursday, July 18, Gina McCarthy was confirmed as U.S.

Environmental Protection Agency (EPA) Administrator in a 59-40 Senate vote. Hearings will be held

this week on Wednesday, July 24, by the Senate Environment and Public Works Committee to

examine the nominations for additional positions at the EPA including Kenneth Kopocis, of Virginia, to

be an Assistant Administrator for the Office of Water; James Jones, of the District of Columbia, to be

Assistant Administrator for Toxic Substances; and Avi Garbow, of Virginia, to be General Counsel of

the EPA.



o Monday, July 22: The Senate Environment and Public Works Committee will hold a full committee

hearing to examine “Oversight of Army Corps of Engineers Water Management in the

Apalachicola-Chattahoochee-Flint (ACF) and Alabama-Coosa-Tallapoosa (ACT) River Systems.”

o Tuesday, July 23: The House Natural Resources Subcommittee on Energy and Mineral

Resources will hold an oversight hearing concerning the stream buffer zone rule in relation to

surface mining.

o Tuesday, July 23 through Wednesday, July 24: The House Energy and Commerce Subcommittee

on Energy and Power will hold a two-day hearing to examine the renewable fuel standard.

o Tuesday, July 23: The Senate Commerce, Science, and Transportation Subcommittee on

Oceans, Atmosphere, Fisheries and Coast Guard will hold a hearing to examine New England

and Mid-Atlantic perspectives on Magnuson-Stevens Act reauthorization. The Magnuson-Stevens

Act governs fisheries management in the United States.

o Thursday, July 25: The Senate Energy and Natural Resources Committee will hold a full

committee hearing to address funding the National Park System for the next century.

o Thursday, July 25: The Senate Energy and Natural Resources Subcommittee on Water and

Power will hold a hearing to address aging water resource infrastructure in the United States.

REGULATORY ACTIVITY

Border 2020 U.S.-Mexico Environmental Program. The EPA has announced $884,000 in grants

available for the U.S.-Mexico border region in Texas and New Mexico. Projects may include

improving air quality monitoring networks; developing applications for reusing water; developing

bilingual outreach campaigns to prevent illegal dumping; updating sister city plans; improving

understanding of each country’s compliance and enforcement roles; and other projects that may fulfill

the goals of the Border 2020 initiative. Eligibility is open to U.S. and Mexican non-governmental

organizations; local and state government agencies; industry associations; universities; and U.S.

tribes and Mexican indigenous communities. Proposal applications can be accessed via the EPA

Border 2020 website. All proposals must be submitted by August 29.

PCBs. The EPA is seeking nominations from individuals who represent small businesses, small

governments, and small not-for-profit organizations to provide input to a federal panel that will explore

changes to existing uses of polychlorinated biphenyls (PCBs). This panel will focus on the agency’s

development of a proposed rule to revise or end the existing authorized uses of PCBs as appropriate

if the conditions under which they were authorized more than 30 years ago have changed. This

rulemaking may address existing liquid-filled PCB use authorizations, PCBs in fluorescent light

ballasts, PCBs in natural gas pipelines, and regulatory language clarifications. Nominations may be

submitted via http://www.epa.gov/rfa/pcb.html by July 29.

Contact Information



section: Sarah Vilms, at 202-457-5248 or [email protected].

Financial Services


Senate Banking Committee Approves SEC, FHFA, CEA, and NCUA Nominees. On July 18, the

Senate Banking committee approved via voice vote the nominations of Ms. Kara Stein and Dr.

Michael Piwowar to be Commissioners of Securities and Exchange Commission (SEC), of Mr.

Richard Metsger to be a Member of the National Credit Union Association (NCUA), and of Dr. Jason

Furman to serve as Chairman of the Council of Economic Advisors (CEA). The Committee also

approved by voice vote an extension of current SEC Chairman Mary Jo White’s term into 2019. The

only nomination that required a roll call vote was that of Rep. Mel Watt (D-NC) to be Director of the

Federal Housing Finance Administration (FHFA). His nomination was narrowly approved by a 12-10

party line vote. All nominees will now be reported favorably to the Senate for consideration.

Senate Confirms Richard Cordray as Director of Consumer Financial Protection Bureau

(CFPB). Under threat of using the “nuclear” option by Senate Majority Leader Harry Reid (D-NV), the

Senate was able to reach an agreement that would allow Mr. Cordray’s nomination to be Director of

the CFPB to come up for a vote. Previously, Senate Republicans vowed to block any of President

Obama’s nominees, and the administration was forced to surreptitiously appoint Mr. Cordray as

Director during a Congressional recess in January 2012. The validity of this recess appointment, and

therefore the actions of the CFPB, were in dispute until July 16, when Mr. Cordray’s nomination was

officially confirmed in the Senate by a vote of 66-34.


o Tuesday, July 23: The Senate Banking Subcommittee on Financial Institutions and Consumer

Protection will hold a hearing titled, “Examining Financial Holding Companies: Should Banks

Control Power Plants, Warehouses, and Oil Refineries?”

o Tuesday, July 23: The Senate Banking Subcommittee on Securities, Insurance, and Investment

will hold a hearing titled, “Creating a Housing Finance System Built to Last: Ensuring Access for

Community Institutions.”

o Tuesday, July 23: The House Agriculture Subcommittee on General Farm Commodities and Risk

Management will hold the second in a series of hearings on reauthorization of the CFTC titled,

“Future of the CFTC: Commission Perspectives.” CFTC Commissioners Mark Wetjen and Scott

O’Malia will testify.

o Tuesday, July 23: The House Financial Services Committee will hold a markup of the Protecting

American Taxpayers and Homeowners (PATH) Act of 2013.


o Wednesday, July 24: The Senate Banking Committee will hold a hearing on The Federal Housing

Administration (FHA) Solvency Act of 2013. Department of Housing and Urban Development

Assistant Secretary Carol Galante will testify.

o Wednesday, July 24: The Senate Special Aging Committee will hold a hearing titled, “Payday

Loans: Short-term Solution or Long-term Problem?”

o Wednesday, July 24: The House Agriculture Subcommittee on General Farm Commodities and

Risk Management will hold the third in a series of hearings on CFTC reauthorization titled,

“Future of the CFTC: End User Perspectives.”


SEC to Hold Meeting of Dodd-Frank Investor Advisory Committee. On Thursday, July 25, the

SEC will hold a meeting of the Dodd-Frank Investor Advisory Committee. The agenda for the meeting

includes: Investor as Owner Subcommittee recommendation regarding data tagging; Investor as

Owner Subcommittee recommendation regarding the use of universal proxy ballots; and

subcommittee reports.

Federal Reserve Chairman Ben Bernanke Testifies Before House and Senate Committees. On

July 17 and July 18, Federal Reserve Chairman Ben Bernanke testified before the House Financial

Services Committee and the Senate Banking Committee to deliver the Federal Reserve’s Semi-

Annual Monetary Report to Congress. During his testimony he made several remarks of note.

Chairman Bernanke repeatedly cited spending cuts and tax increases as a near-term drag on

economic growth and warned that another debt-ceiling showdown could kill the economy’s fragile

growth momentum. The chairman also stated that new measures, including legislation, may merit

consideration if concerns about “too big to fail” banks are not adequately addressed by the end of

2014. He also stated that the Federal Reserve was considering plans to disclose details to borrowers

whose foreclosure files were examined as part the independent foreclosure review that was nixed

earlier this year in favor of a $9.3 billion settlement with banks.

FSOC Designates Systemically Important Institutions. Last week, the Financial Stability Oversight

Council (FSOC) designated AIG, GE Capital, and Prudential as “systemically important financial

institutions” (SIFIs), making them subject to greater oversight by the Federal Reserve. AIG and GE

Capital accepted the designation, but Prudential plans to appeal it. On July 16, MetLife announced it

was in the final stages of consideration for SIFI designation by the FSOC and decried the possible

designation as inappropriate.

FSB Designates G-SIIs and IAIS Releases Policy Measures for Designated Companies. On July

17, the FSB released its initial designations for systemically important insurers (G-SIIs). The insurers

designated are: Prudential Insurance, MetLife, AIG, Allianz SE, Assicurazioni Generali S.p.A., Aviva

plc, AXA S.A., Inc., Ping An Insurance Group Company of China, Ltd., and Prudential Financial, Inc.

Additionally, the International Association of Insurance Supervisors released proposed final policy

measures and assessment methodologies for G-SIIs.

Contact Information



section: Caroline Cauley at 202-457-6625 or [email protected], Mara Giorgio at 202-457-6522

or [email protected], and Matt Kulkin at 202-457-6056 or [email protected].

Health Care


Energy and Commerce and SGR Reform. Last week, the House Committee on Energy and

Commerce released updated draft legislation that addresses physician payments under Medicare and

reforms the sustainable growth rate. While Republicans Chairman Fred Upton (R-MI), Health

Subcommittee Chairman Joe Pitts (R-PA), and Michael Burgess (R-TX) have been active in the

drafting process, the draft now claims bipartisan status with the support of Ranking Member Henry

Waxman (D-CA), Health Subcommittee Ranking Member Frank Pallone (D-NJ), and the Dean of the

House, Cong. John Dingell (D-MI). The draft would update physician payments by 0.5 percent during

a transition phase to a new enhanced fee-for-service system, with updates based on performance

and quality. The Congressional Budget Office (CBO) has previously scored SGR repeal at $139

billion over ten years, but this draft does not currently include a full offset.


o Monday, July 22: The House Committee on Energy and Commerce Health Subcommittee will

hold a markup of the committee print to amend title XVIII of the Social Security Act to reform the

sustainable growth rate and Medicare payment for physicians’ services.

o Tuesday, July 23: The House Committee on Energy and Commerce will continue its markup of

the sustainable growth rate reform committee print. The House Committee on Education and the

Workforce Subcommittee on Health, Education, Labor and Pensions and the Subcommittee on

Workforce Protections will hold a joint hearing on “The Employer Mandate: Examining the Delay

and its Effect on Workplaces.” The Senate Judiciary Committee will hold a hearing on “Pay-for-

Delay Deals: Limiting Competition and Costing Consumers.” The House Veterans’ Affairs

Committee will also hold a Health Subcommittee markup of pending health legislation.

o Wednesday, July 24: The Senate Committee on Finance will hold a hearing on “Health

Information Technology: Using it to Improve Care.” The Senate Committee on Small Business

and Entrepreneurship will hold a hearing on small business concerns regarding implementation of

the Affordable Care Act (ACA).


Falls Prevention Trial. The National Institute on Aging is “seeking applications from researchers for

a clinical trial to prevent serious injuries resulting from falls in older people. The request, part of an

initiative by the new Falls Injuries Prevention Partnership between NIA and the Patient Centered

Outcomes Research Institute (PCORI), represents a unique collaboration joining scientists with


clinicians and patients in pursuit of an effective strategy. PCORI will commit up to $30 million to the

effort, and NIA will administer the project, including the application process and peer review.”

Open Payments Mobile Apps. The Centers for Medicare & Medicaid Services (CMS) introduced

“two free mobile device applications (apps) to help physicians and health care industry users to track

their payments and other financial transfers the industry will report under the OPEN PAYMENTS

program (Physician Payments Sunshine Act).” Created by a provision of the ACA, “OPEN

PAYMENTS creates greater public transparency about the financial transactions between doctors,

teaching hospitals, drug and device manufacturers, and other health care businesses.”

CMS: Data Demonstrates EHR Success. CMS released new data demonstrating that “doctors and

hospitals are using electronic health records (EHRs) to provide more information securely to patients

and are using that information to help manage their patients’ care.” CMS states that “approximately

80 percent of eligible hospitals and more than 50 percent of eligible professionals have adopted

EHRs and received incentive payments from Medicare or Medicaid.”

Contact Information


section: Eugenia Edwards, at 202-457-5622 or [email protected].

Homeland Security


Secretary of Homeland Security. After Secretary of Homeland Security Janet Napolitano’s

announcement last week that she will be stepping down from her position, it remains unclear who will

be chosen to replace her as the head of the Department of Homeland Security (DHS). Several names

have been mentioned in connection with a possible nomination, including New York City Police

Commissioner Ray Kelly, Acting DHS Deputy Secretary and Director of the National Protection and

Programs Directorate (NPPD) Rand Beers, and former Coast Guard Commandant Thad Allen.

Homeland Security Appropriations. Last week, the Senate Appropriations Committee approved its

FY 2014 Homeland Security appropriations bill, which would provide $46.4 billion in total for DHS and

its related programs. The Senate and House discretionary funding levels in their respective Homeland

Security appropriations measures are only $200 million apart, unlike many other FY 2014

appropriations bills, which have seen major differences in overall funding levels. The Senate bill

would provide $7.4 billion for the Transportation Security Administration, $12.4 billion for Customs

and Border Protection, and $5.4 billion for Immigration and Customs Enforcement. The bill also

includes an increase in funding for the NPPD’s Infrastructure Protection and Information Security

Program, providing $803.8 million for FY 2014. The Senate has not announced when it plans to take

up its FY 2014 Homeland Security appropriations bill on the floor.



o Tuesday, July 23: At 10:00 am, the House Homeland Security Subcommittee on Border and

Maritime Security will hold a hearing titled, “A Study in Contrasts: House and Senate Approaches

to Border Security.”

o Thursday, July 25: At 11:00 am, the Senate Homeland Security and Governmental Affairs

Committee will hold a confirmation hearing for Alejandro Mayorkas to be Deputy Secretary of

Homeland Security.

Contact Information


section: Amy Davenport at 202-457-6528 or [email protected], and Norma Krayem, at 202-


International

EXECUTIVE AND LEGISLATIVE BRANCH ACTIVITY Egypt. The State Department continues to call for an end to perceived arbitrary arrests in Egypt.

Despite reported calls in Egypt by Islamists and the opposition for U.S. Ambassador Ann Patterson to

leave Cairo, the State Department maintains its support for the embattled veteran Foreign Service

officer. Meanwhile, Deputy Secretary of State Bill Burns stopped in Egypt early last week to meet with

interim government officials.

Syria. Last week, Sen. John McCain (R-AZ) reportedly threatened to put a hold on the re-nomination

of the Joint Chiefs of Staff Chairman Gen. Martin Dempsey. The senator is apparently seeking

answers from the chairman on U.S. policy toward Syria. Meanwhile, the media reports the fractured

Syrian opposition is losing momentum to Assad forces, noting there is increased fighting among the

various rebel groups.

Middle East Peace Talks. Last week, Secretary of State John Kerry, accompanied by U.S.

Ambassador to Syria Robert Ford, travelled to Jordan to discuss the situation in Syria. While in

Amman, the secretary participated in the Arab League Peace Initiative Meeting; met with Jordanian

Foreign Minister Nasser Judeh and King Abdullah II; and separately met with Palestinian Chief

Negotiator Saeb Erekat to revive the peace talks with Israel. Secretary Kerry delayed his return to

Washington and next travelled to Ramallah to meet with Palestinian President Mahmoud Abbas. Also

last week, President Obama called Israeli Prime Minister Benjamin Netanyahu to urge him to resume

negotiations with the Palestinians “as soon as possible.”

Vice Presidential Trip. On Monday, July 22, Vice President Biden arrives in India. His week-long trip

includes a stop in Singapore.

Russia. The White House signaled last week that President Obama may scrap planned bilateral talks

with Russian President Vladimir Putin ahead of the September G-20 Summit in St. Petersburg,


Russia, if Edward Snowden is granted asylum by Russia. The United States continues to press for

Snowden’s return to face judicial proceedings for leaking top-secret classified information.

Appropriations. On July 19, the House Appropriations Committee marked up its $40.6 billion FY

2014 State-Foreign Operations appropriations bill for the State Department. The House bill will

provide approximately $8 billion less in discretionary funding than the administration requested.

Significant cuts were made to the economic and development assistance funds, and the bill also

denies the administration’s requests for a new fund to address the political and economic

circumstances in the Middle East and North Africa. However, the House Appropriations Committee

noted that “programs that support global health and humanitarian assistance are prioritized, such as

State Department and USAID international HIV/AIDS programs, which are funded at the requested

level of $6 billion.” The committee also maintained funding levels for U.S. Embassy security.

In response, the State Department expressed concern over the 41 percent cut to the economic and

development assistance account. The agency emphasized such a cut “would dramatically reduce our

assistance to countries like Afghanistan, Pakistan, Mexico, Colombia, South Sudan, Somalia, and

Burma. It would also force us to scale back the Feed the Future program, setting back progress to

reduce poverty in Africa by improving agricultural productivity.” This Tuesday, the Senate

Appropriations State and Foreign Operations Subcommittee will hold a markup of the Senate’s FY

2014 State-Foreign Operations Appropriations bill. The Senate draft bill should be released this week.

Trade. On Thursday, July 25, President Obama will host Vietnamese President Truong Tan Sang.

Topics of discussion are expected to include the Trans-Pacific Partnership (TPP) negotiations, and

Vietnam’s desire to see increased market access for its textiles and apparel. The United States, in

turn, seeks to level the playing field in competing with Vietnam’s state-owned enterprises and wants

more intellectual property rights protections. The 18th round of TPP negotiations will conclude this

Friday in Kota Kinabalu, Malaysia. After Canada announced it could not host the next full negotiating

round, the 19th session is now expected to be held in Brunei. The negotiators also moved up the next

round of negotiations to August 2014.

On July 18, U.S. Trade Representative (USTR) Michael Froman testified before the House Ways and

Means Committee on President Obama’s trade policy agenda. He affirmed the administration’s

commitment toward renewing the Generalized System of Preferences, which expires July 31, and the

“seamless renewal” of the African Growth & Opportunity Act before it expires in 2015. USTR Froman

also testified that lack of funding is hamstringing U.S. negotiators and impacting enforcement

activities. Furthermore, USTR Froman issued a statement of disappointment following the suspension

of negotiations in Geneva, Switzerland, toward an expanded Information Technology Agreement at

the World Trade Organization.

Nominations & Confirmations. Last week, President Obama announced his intention to nominate

the following individuals: Nisha Desai Biswal to be Assistant Secretary of State for South and Central

Asian Affairs; Beth Robinson to be Under Secretary of Energy; Julia Frifield to be Assistant Secretary

of State for Legislative Affairs; Tim Broas to be U.S. Ambassador to the Netherlands; and Adam

Scheinman to be the Special Representative of the President for Nuclear Nonproliferation at the State

Department. On Tuesday and Wednesday, the Senate Foreign Relations Committee will hold


confirmation hearings for multiple U.S. Ambassador nominees and also Ambassador Linda Thomas-

Greenfield to be Assistant Secretary of State for African Affairs.


o Tuesday, July 23: The Senate Foreign Relations Committee will hold a confirmation hearing for

the following to be U.S. Ambassadors: Joseph Yun (Malaysia); Daniel Clune (Laos); and Morrell

John Berry (Australia).

o Tuesday, July 23: The Senate Foreign Relations Committee will hold a business meeting to

consider S. Res. 156 and the following nominations: Victoria Nuland to be Assistant Secretary of

State for European and Eurasian Affairs; Douglas Lute to be U.S. Permanent Representative on

the Council of the North Atlantic Treaty Organization; and Daniel Baer to be U.S. Representative

to the Organization for Security and Cooperation in Europe.

o Tuesday, July 23: The Senate Appropriations State and Foreign Operations Subcommittee will

hold a markup of the Senate FY 2014 State-Foreign Operations Appropriations bill.

o Tuesday, July 23: The House Foreign Affairs Subcommittee on Asia and the Pacific will hold a

hearing on “The Cyber Security Battleground.”

o Wednesday, July 24: The Senate Foreign Relations Committee will hold a confirmation hearing

for Ambassador Linda Thomas-Greenfield to be Assistant Secretary of State for African Affairs,

and the following to be U.S. Ambassadors: James Entwistle (Nigeria); Patricia Haslach (Ethiopia);

Stephanie Sanders Sullivan (Republic of the Congo); and Patrick Gaspard (South Africa).

o Wednesday, July 24: The Senate Foreign Relations Committee will hold another hearing on the

“Rebalance to Asia III: Protecting the Environment and Ensuring Food and Water Security in East

Asia and the Pacific.”

o Wednesday, July 24: The Senate Judiciary Subcommittee on the Constitution, Civil Rights and

Human Rights will hold a hearing on “Closing Guántanamo: The National Security, Fiscal, and

Human Rights Implications.”

o Wednesday, July 24: The House Foreign Affairs Committee will mark up the following bills: H.R.

2449, to authorize the president to extend the term of the Agreement for Cooperation between

the United States and the Republic of Korea concerning civil uses of nuclear energy; H.R. 1409,

the Export Promotion Reform Act; and H.R. 1926, the State Trade Coordination Act.

o Wednesday, July 24: The House Foreign Affairs Subcommittee on the Western Hemisphere will

hold a hearing to examine the “Challenges to Democracy in the Western Hemisphere.”

o Thursday, July 25: The House Foreign Affairs Subcommittee will hold a hearing on the “Emerging

Threat of Resource Wars.”

Contact Information



section: Stacy Swanson at 202-457-5627 or [email protected].

Technology and Communications LEGISLATIVE AND REGULATORY ACTIVITY

E-rate Modernization. The FCC adopted a notice of proposed rulemaking (NPRM) during its Open

Meeting on July 19, seeking comment on rules to update and modernize the E-rate program in order

to support high-speed broadband for digital educational technology in classrooms and libraries. FCC

staff indicated that they have three goals in the proceeding: (1) to ensure that schools and libraries

have affordable and robust broadband access that supports digital learning; (2) to maximize the cost

effectiveness of E-rate purchases; and (3) to streamline the E-rate Program.

E-rate Hearing. Last week the Senate Commerce Committee held a hearing on the E-rate Program,

which was originally authored by Committee Chairman Jay Rockefeller (D-WV) and championed by

new Sen. Ed Markey (D-MA) while he was in the House. Republicans criticized, and Democrats

supported, the E-rate Program. Ranking Member John Thune (R-SD) expressed support for FCC

Commissioner Ajit Pai’s recently announced student-centered E-rate proposal due to its cost-

matching requirement, but warned that the President’s ConnectED Initiative could exclude many

students in rural areas. Sen. Kelly Ayotte (R-NH) complained that her state benefits the least from

USF funding relative to its contributions, and Sen. Ron Johnson (R-WI) argued that it is “not working

all that well.” Sen. Richard Blumenthal (D-CT) called the E-rate Program “a real American success

story” and Chairman Rockefeller called its impact “nothing short of extraordinary.”

E-rate FCC Forms 470 and 471 Changes. On July 17, the FCC released a Public Notice seeking

comment on proposed revisions to FCC Forms 470 and 471, which are used by applicants seeking

support from the E-rate Program. The proposed changes to the forms include inquiring about

broadband connectivity based on individual funding requests and requesting additional information

about the current number of broadband connections, their type, and speeds. The FCC also proposes

consolidating funding requests for telecommunications and Internet access services into one field on

the FCC Form 470. Comments are due by August 16, 2013, and replies are due by August 30, 2013.

Improving Access to Accessible Services. The FCC adopted an order and a further NPRM setting

minimum standards for the Speech-to-Speech Relay Program and seeking comment on ways to

improve the efficiency and effectiveness of the that Program. Comments and reply comments will be

due after the further NPRM is released and published in the Federal Register. The FCC’s Consumer

and Governmental Affairs, Wireless Telecommunications, and Media Bureaus reported during the

FCC’s Open Meeting on the status of the FCC’s implementation of the 21st Century Communications

and Video Accessibility Act (CVAA).

AWS H Block. The FCC announced that the AWS H Block spectrum license auction, 1915-1920

MHz (Lower H Block) and 1995-2000 MHz (Upper H Block), will take place on January 14, 2014. The


FCC seeks comments on the proposed structure, design, and bidding procedures for the auction.

Comments are due by August 5, and reply comments are due by August 16.

Incentive Auction Hearing. The House Energy and Commerce Subcommittee on Communications

and Technology will hold an oversight hearing regarding the federal government’s efforts to

implement the incentive auction requirements under the JOBS Act. Witnesses will include Rick

Kaplan, Executive Vice President for the National Association of Broadcasters; Gary Epstein, FCC

Chair for the Incentive Auction Taskforce; Preston Padden, Executive Director for the Expanding

Opportunities for Broadcasters Coalition; Kathleen Ham, Vice President of Regulatory Affairs for T-

Mobile US; Harold Feld, Senior Vice President for Public Knowledge; and Joan Marsh, Vice President

for Federal Regulatory Affairs at AT&T.

Spectrum Legislation. Reps. Brett Guthrie (R-KY) and Doris Matsui (D-CA), the co-chairs for the

House Energy and Commerce Committee’s Spectrum Working Group, recently introduced the

Efficient Use of Government Spectrum Act, which seeks to reallocate and auction federally held

spectrum in the 1755-1780 MHz band. The legislation follows last month’s hearing held by the

Subcommittee on Communications and Technology, titled “Equipping Carriers and Agencies in the

Wireless Era,” and signals growing bipartisan interest in reallocating federally managed spectrum that

could be used for private commercial purposes.

Wireline Hearing. The Senate Commerce Subcommittee on Communications, Technology and the

Internet will hold a hearing on Thursday, July 24, on the state of wireline competition. The

subcommittee has previously held hearings on the state of the wireless and video industries. Possible

topics for the wireline hearing include: network emergency resilience, rural broadband access, and

Universal Service Fund programs.

Copyright Hearings. House Judiciary Committee Chairman Bob Goodlatte (R-VA) and

Subcommittee on Courts, Intellectual Property and the Internet Chairman Howard Coble (R-NC)

announced that the Subcommittee will hold two hearings before the August recess that examine

current copyright law.

Video Competition Report. The FCC adopted its Fifteenth Report on the status of competition in the

market for the delivery of video programming. During the FCC’s July 19 Open Meeting, the Media

Bureau reported that the deployment of digital technology is increasing consumer access to video

programming anywhere and anytime. Some consumers now have access to four different video

providers, consumers are increasingly watching online video programming on television sets, and the

number of households relying on over-the-air broadcast service remained steady at approximately

11.1 million households.

This Week’s Hearings, Meetings, and Deadlines:

o Monday, July 22: Questions from respondents regarding the 10 Requests for Information

released by the First Responders Network Authority (FirstNet) on July 10 are due.

o Wednesday, July 24: NTIA Spectrum Management Advisory Committee meeting.


o Thursday, July 25: The Senate Commerce Subcommittee on Communications, Technology and

the Internet will hold a hearing on the state of wireline competition.

o Thursday, July 25: NTIA Public Meeting on Developing a Consumer Privacy Code of Conduct for

Mobile Applications. NTIA is overseeing the multi-stakeholder development of a code of conduct

to provide transparency in how companies providing applications and interactive services for

mobile devices handle personal data.

Contact Information


section: Jennifer Richter at 202-457-5666 or [email protected].

Transportation and Infrastructure LEGISLATIVE ACTIVITY

Transportation Appropriations. Both the House (H.R. 2610) and Senate (S. 1243) Transportation-

HUD appropriations bills are poised for floor consideration before the August recess. In the House,

there has been delay in Rules Committee action and in bringing the bill to the floor, but the intention is

to consider it before the month-long August recess. In the Senate, leadership has also indicated its

intent to seek floor consideration before the break. Reflecting the differing positions on sequester and

overall domestic discretionary budget allocations, and the appropriations battle that looms ahead, the

House and Senate bills are marked by dramatically different top line numbers – more than $10 billion

apart.


o Tuesday, July 23: The House Transportation and Infrastructure Committee will hold a hearing on

“How the Financial Status of the Highway Trust Fund Impacts Surface Transportation Programs.”

o Wednesday, July 24: The Senate Environment and Public Works Committee will hold a cull

committee hearing on “Oversight on Implementation of MAP-21’s TIFIA Program Enhancements.”

Contact Information


section: Jared Fleisher at 202-457-6341 or [email protected], and Jessica Monahan at 202-


capital thinking ~ july 22, 2013

Documents

senate farm bill

senate text

house fy

wildlife act

legislative business

management act

reclamation act

capital thinking