September 19, 2014

Both the House and Senate passed a continuing resolution (CR) funding the federal government through December 11. The CR included language authorizing President Obama to train and equip Syrian rebels to fight the Islamic State in Iraq and the Levant. The House also passed HR 2, the American Energy Solutions for Lower Costs and More American Jobs Act (a 13-bill energy package) and HR 4, the Jobs for America Act (a 14-bill jobs package). The President issued Statements of Administration Policy on HR 2 and HR 4 threatening to veto them in their current form. The Senate took up S 2199, the Paycheck Fairness Act, but failed to garner the 60 votes needed to invoke cloture. The Senate did pass S 2651, the DHS OIG Mandates Revision Act of 2014 as well as S 2141, the Sunscreen Innovation Act. The Senate also passed by voice vote the Border Patrol Agent Pay Reform Act of 2014 (S 1691) and the Preventing Conflicts of Interest with Contractors Act (S 2061), and passed by unanimous consent HR 4994, the IMPACT Act of 2014; HR 5404, the Department of Veterans Affairs Expiring Authorities Act of 2014; S 1611, the Federal Data Center Consolidation Act of 2013; and S 2583, the E-LABEL Act (S. 2583), among others. And on Thursday, Petro Poroshenko, the President of Ukraine, appeared before a joint session of Congress and appealed to members to provide more assistance, including military equipment, to aid his government’s fight against Russian-backed separatists.

Appropriations

The House and Senate passed a continuing resolution (CR) funding the federal government through December 11. The House passed the CR by a vote of 319 to 108, while the Senate passed it by a vote of 78 to 22. The CR funds federal agencies at the current annual spending rate of $1.012 trillion.

The CR included authorization language providing President Obama the authority to train and equip Syrian rebels to fight the Islamic State in Iraq and the Levant (ISIS). A separate vote in the House on the amendment made it easier for members to vote against the ISIS language but not the CR. The House passed the amendment by a vote of 273 to 156. The administration’s authority to train those fighters will run out on Dec. 11. A copy of the amendment can be found at:

http://amendments-rules.house.gov/amendments/MCKEON021915141612381238.pdf

Sen. Ted Cruz (R-TX) argued for a longer CR funding the government into the 114^th Congress assuming that the Senate would have a greater number of Republicans in the next Congress. While he wasn’t successful now, it is a possibility that if Republicans make gains in the November election they will push to punt spending decisions into next year. The White House and Appropriators would oppose those efforts and instead support passage of an omnibus spending bill in the lame duck session.

The Defense Department on Tuesday submitted a reprogramming request to Congress seeking permission to shift $500 million to efforts to fight the Ebola outbreak in Africa, including plans related to the construction of 17 treatment centers for those infected by the deadly virus. The funds would come from unobligated funds from the Overseas Contingency Operations account. The $500 million would be in addition to $88 million in new funding sought in the continuing resolution that would go largely to domestic agencies.

Cybersecurity

The Senate Armed Services Committee (SASC) released an unclassified version of their “Inquiry into Cyber Intrusions Affecting U.S. Transportation Command Contractors” report this week. The committee unanimously approved the classified version of the report this spring. After a year-long investigation, SASC staff found that in a 12-month period (6/1/12-5/31/13) there were about 50 intrusions or other cyber events into the computer networks of US Transportation Command contractors. Of those 50, 20 can be attributed to hackers associated with the Chinese government, but TRANSCOM was only aware of two of those intrusions. They also found gaps in reporting requirements and a lack of information sharing among government entities that left the command largely unaware of computer compromises by China of contractors that are key to the mobilization and deployment of military forces.

In response to the investigation’s findings, the committee included a provision in its version of the FY15 National Defense Authorization Act directed at addressing reporting gaps and improving the way in which the Department disseminates information about cyber intrusions into the computer networks of operationally critical contractors. Specifically, the provision directs the Secretary of Defense to establish procedures for designating companies as ‘‘operationally critical contractors’’ and tightening requirements that those contractors report successful cyber penetrations by known or suspected government actors. It also requires DoD to establish new procedures to assist contractors in detecting and mitigating cyber threats while ensuring protections for trade secrets, commercial or financial information. The provision requires the Secretary to assess existing reporting requirements and DoD policies and systems for sharing information on cyber intrusions. It also requires the Secretary to designate a single DoD component to receive intrusion reports from contractors and other government agencies and to issue guidance ensuring that intrusion-related information is shared with appropriate DoD components.

A copy of the report can be found at:

http://www.armed-services.senate.gov/download/sasc_cyberreport_09-17-14

FY15 National Defense Authorization Act

While the Senate has not passed its annual defense authorization bill this year, the House and Senate Armed Services Committees (HASC and SASC) started an informal conference committee process this week. Members of the HASC and SASC had a chance this week to discuss their defense authorization priorities with House Armed Services Chairman Buck McKeon (R-CA) and Senate Armed Services Chairman Carl Levin (D-MI) this week. The closed, pre-conference general policy panel meeting is being done now as the House and Senate will have little time to reconcile their differences in a final measure when they return for the lame duck session November 12.

Defense

Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics, released a draft of DOD’s Better Buying Power (BBP) 3.0 at the Center for Strategic and International Studies (CSIS) this morning. The BBP initiative seeks to improve the Department of Defense’s procurement process by providing more incentives for contractors to meet cost and schedule goals, remove some barriers to buying commercial products, incorporate more input from the intelligence community into requirements for future weapons, expanding the Superior Supplier Incentive Program, and getting draft requirements out earlier and incorporating industry feedback into final solicitations. Kendall said that after receiving feedback on the draft he expects to release a final version of BBP 3.0 in January.

A copy of the interim release of BBP 3.0 can be found at:

https://www.vantagepointstrat.com/?attachment_id=268

Lame Duck Schedule

Senate Majority Leader Harry Reid (D-NV) announced this week that following the conclusion of the current work period, the Senate is expected to return to session on Wednesday, November 12, 2014. Orientation and Leadership elections will be conducted November 12 through 14 and Senators should expect votes starting November 12. The House calendar released at the beginning of this year has the House also reconvening on November 12 and remaining in session through December 12.

Political Updates

The Kansas Supreme Court on Thursday sided with Democrats attempting to remove their candidate, Chad Taylor from the ballot in Kansas’ Senate race. Taylor’s withdrawal from the race clears a path for Independent candidate Greg Orman to challenge the incumbent Sen. Pat Roberts (R-KS) making this a potentially competitive race.

President Obama nominated Robert Sher to be Assistant Secretary of Defense for Strategy, Plans, and Capabilities at the Department of Defense. Sher is currently the Deputy Assistant Secretary of Defense for Plans in the Office of the Under Secretary of Defense for Policy, a position he has held since 2012. Scher has also served as the Deputy Assistant Secretary of Defense for South and Southeast Asia, the Chief of Staff to the Deputy Under Secretary of Defense, Asia and Pacific, and as a member of the Policy Planning Staff at the Department of State. He began his career in public service as a Presidential Management Intern in 1992, serving as a Special Assistant to an Assistant Secretary of Defense. If confirmed, Sher would succeed Madelyn Creedon who left the post this summer to be principal deputy administrator for the National Nuclear Security Administration.

The Senate voted to confirm the nominations of Linda Schwartz to be Assistant Secretary of Veterans Affairs for Policy and Planning, Gordon Tanner to be General Counsel of the Department of the Air Force, Debra Wada to be an Assistant Secretary of the Army, Elizabeth Sherwood-Randall to be Deputy Secretary of Energy, Robert Holleyman to be a Deputy United States Trade Representative, Eric Rosenbach to be an Assistant Secretary of Defense for Homeland Defense, Nathan Sheets to be an Under Secretary of the Treasury, Charles Fulghum to be Chief Financial Officer at the Department of Homeland Security, Alfonso Lenhardt to be Deputy Administrator of the United States Agency for International Development, and Thomas Frieden to be US Representative to the World Health Organization.

Federal Chief Information Officer Steven VanRoekel announced that he is departing his post at the White House to join the US Agency for International Developments Ebola response team. In his new role as USAID chief innovation officer, VanRoekel will be responsible for advising the agency on using technology and data in its response to the epidemic. VanRoekel has served as the federal CIO since August 2011. Lisa Schlosser, one of VanRoekel’s deputies, will oversee the Office of E-Government and Information Technology until the White House names a permanent replacement.

The Department of Defense appointed retired Lt. Gen. Frances C. Wilson, US Marine Corps, to serve as the chairperson of the Defense Advisory Committee on Women in the Services (DACOWITS). Wilson spent nearly 37 years in the U.S. Marine Corps, and served as the president of National Defense University and as the commandant, Industrial College of the Armed Forces. Since retiring in 2009, she has been part of various organizations in the Virginia Tidewater area, serving as an appointed member of the City of Virginia Beach Mayor’s Military Economic Development Advisory Committee, and as the chair, board of directors, Hampton Roads and Central Virginia USO. She was appointed by the Virginia governor as a member of the board of trustees, Fort Monroe Authority, and board of visitors, Virginia Military Institute. Wilson has also been a DACOWITS member since June 2012. She succeeds Holly Hemphill of Alexandria, Virginia.

Next Week

The House and Senate are in recess until November 12.

September 12, 2014

The House and Senate returned from their August recess this week. The House passed HR 5078, the Waters of the United States Regulatory Overreach Protection Act; HR 3522, the Employee Health Care Protection Act of 2013, a bill that would allow Americans to retain their health care policies until 2018 even if their plans do not meet federal rules set under the 2010 Affordable Care Act; and HR 5161, the E-LABEL Act. The Senate voted on a proposed constitutional amendment to let Congress limit campaign contributions and expenditures, but failed to reach the 2/3 vote needed for a constitutional amendment (vote 54 to 42). The Senate did pass HR 4197, the All Circuit Review Extension Act and S 2258, the Veterans’ Compensation Cost-of-Living Adjustment Act of 2014.

Appropriations

House Appropriations Chairman Hal Rogers (R-KY) introduced a continuing resolution (CR) earlier this week to fund the government into the new fiscal year starting on Oct. 1. The House had intended to begin consideration of the bill this week, but delayed action until next week in order to consider including authorization language for administration action against the Islamic State terrorist group (ISIS). Instead, the House will begin consideration of the CR next Tuesday with a vote on the measure most likely on Wednesday. It isn’t clear at this point whether the authorization language will be tacked on to the CR or considered as separate legislation. If the strategy is to include the language in the CR, the House would bring up the CR on the floor and then add the language as an amendment, allowing for a separate vote on the issue. Senate Majority Leader Harry Reid (D-NV) has said that his chamber will follow the House’s lead and decide whether to concur or make changes after they have received it.

The $1.012T CR introduced earlier this week funds non-defense-related programs at an annualized level of $494.548B, $2B above the FY15 cap in last year’s budget agreement making it a potential target for procedural objections in the Senate. The CR funds the government at current levels through December 11, 2014. While the CR was considered relatively “clean” and free of policy riders, it did include a number of provisions for expiring programs such as DOD activities, including counter-drug operations, support to the Office of Security Cooperation in Iraq, and rewards for assistance in combatting terrorism, and a provision to continue a surge in funding for State Department programs to counter regional aggression toward Ukraine and other former Soviet Union countries. The CR also includes several provisions related to the treatment of veterans and continued oversight of the Department of Veterans Affairs, as well as extending the operating authority for the Export-Import Bank through June 30, 2015 and extending the Internet Tax Freedom Act through December 11, 2014. And, finally, the CR includes provisions allowing funding flexibility for Customs and Border Protection and Immigration and Customs Enforcement to maintain staffing levels, border security operations, detention space, and immigration enforcement activities; addressing the recent Ebola crisis; additional funds to offset food price increases in the Commodity Supplemental Food Program; funding flexibility to maintain weather satellite programs; and the continuation of current funding for the Temporary Assistance to Needy Families (TANF) program.

Appropriators say that they are still working toward a year-end omnibus that would include most, if not all of the FY15 spending bills. This could change if Republicans win control of the Senate in the November elections. In that scenario, Republicans might opt for a short-term CR extending funding into the new Congress giving them a chance to write new bills that are more to their liking in the new Congress.

Tax Extenders

Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Dave Camp (R-MI) are reportedly considering a post-election, lame duck deal on a potential one-year extension of approximately 60 expired tax breaks. The tax breaks expired at the end of 2013 and include tax deductions for contributions to charitable organizations directly from an individual retirement account, mortgage interest premiums, state and local sales taxes, and some higher-education expenses. The duration of the tax breaks extensions has not been decided, as well as whether or not they would be retroactive. The Joint Committee on Taxation estimated that a one-year extension package would cost about $47 billion. Earlier this summer, the House passed bills that would make the IRA charitable contribution and several other extenders permanent, but the White House threatened to veto those bills because no tax revenue was provided to pay for the extensions.

Defense

Earlier this week, the Pentagon sent a $1.9B reprogramming request to Congress. The request diverts $1.2B for 8 new F-35s to replace older aircraft destroyed in the war, $404M for 21 new Apache helicopters to replace 21 Kiowa helicopters, and $122M for a “Massive Ordnance Penetration” weapon and pays for all of them from previously appropriated funds that are no longer needed because of the drawdown in Afghanistan. Four congressional committees – House Armed Services, Senate Armed Services, House Defense Appropriations, and Senate Defense Appropriations – all have to approve the request.

A copy of the request can be found at:

https://www.vantagepointstrat.com/?p=266

Political Updates

The Senate confirmed the nominations of David Radzanowski to be Chief Financial Officer at National Aeronautics and Space Administration, Miranda Ballentine to be an Assistant Secretary of the Air Force, and Joseph Nimmich to be Deputy Administrator for the Federal Emergency Management Agency at the Department of Homeland Security.

Rep. John Tierney (D-MA) lost his primary race in Massachusetts’ 6th congressional district. Tierney was ousted by primary challenger Seth Moulton, a first-time candidate and Iraq War Veteran. Tierney held seats on the House Education and Workforce and Oversight and Government committees. Moulton will face Repubican Richard Tisei in the November election. Tisei narrowly lost to Tierney in 2012. The loss makes Tierney the fourth House incumbent to lose primaries this cycle. The others are Reps. Ralph Hall (R-TX), Kerry Bentivolio (R-MI), and Eric Cantor (R-VA), who has since resigned.

Next Week

The House and Senate will return on Monday. The House will take up the FY15 CR, but it is not clear right now if the ISIS authorization language will be packaged in with the CR or will be a separate vote. The House will also take up a 14-bill jobs package and a 13-bill energy package as well as receive the President of Ukraine on Thursday. The House is scheduled to be in session through Friday. House Majority Leader Kevin McCarthy (R-CA) also announced that as of right now there is no change to the House schedule for the last week of September (9/29-10/2) when they are scheduled to be in session. The Senate will resume consideration of S 2199, the Paycheck Fairness Act, a bill that would require employers to demonstrate that wage gaps between men and women doing the same work are the result of factors other than gender. The Senate is also scheduled to vote on two nominations to the Nuclear Regulatory Commission.

September 5, 2014 

The House and Senate were in recess this week.

September House Agenda

House Majority Leader Kevin McCarthy (R-CA) sent a memo to House Republicans this week laying out the House agenda for the short (potentially only two weeks) September work session. McCarthy wrote that the House will take up two omnibus bills – one combining 14 jobs bills (including the Permanent Internet Tax Freedom Act) and the other combining 13 energy bills. The House will also consider a bill allowing people to keep their health insurance plan if they like it. As for the FY15 appropriations bills, the memo only said that the House will also pass a continuing resolution (CR) that will continue government operations as they are on September 30th into the new fiscal year.

A copy of the memo can be found at:

https://www.vantagepointstrat.com/?attachment_id=258

Appropriations

In an interview on Fox News this week, Senate Minority Leader Mitch McConnell (R-KY) was asked about the possibility of another government shutdown at the end of FY14. McConnell responded, “The only people talking about a government shutdown are the Democrats and nobody has any interest in doing that. So I think we’ll pass a clean CR which would operate the government probably into December.”

Last week, the Office of Management and Budget (OMB) submitted requests for appropriations- and authorization-related anomalies to House and Senate Appropriators. OMB requested that appropriators grant extra flexibility to various federal agencies to manage the influx of Central American migrants at the border, and that Congress extend the operating authority of the Export-Import Bank, which expires on Sept 30. The list also includes a request to boost the number of visas for Afghan civilians who served as translators, an additional $22.9 million for the Veterans Affairs Office of Special Counsel, authority to create a new Urgent and Emerging Threat Fund within the Centers for Disease Control and Prevention, and an additional $58 million to speed the development, manufacturing, and testing of Ebola drugs and two Ebola vaccine candidates.

Since a CR is the only piece of legislation with a real shot at passing before the midterm elections, it could become a vehicle for lawmakers other pet programs – border security spending, additional funding for firefighting, an extension of the Export-Import Bank, tax inversions, and reauthorization of the Internet Tax Freedom Act and the Terrorism Risk Insurance Act. The CR is likely to fund the government through December 11 or 12.

Defense

At a conference sponsored by the Southeastern New England Defense Industry Alliance this week, Defense Secretary Chuck Hagel and Undersecretary of Defense for Acquisition, Technology and Logistics (ATL) Frank Kendall both spoke about the next phase of the Pentagon’s latest acquisition reform effort, Better Buying Power. Better Buying Power 3.0 is expected to be unveiled this month, perhaps as early as Sept. 12, and will focus on getting proven technology in the hands of soldiers faster. Better Buying Power 1.0 and 2.0 centered on business practices and decision-making, respectively.

In Better Buying Power 3.0, Secretary Hagel said that the Pentagon will expand its use of prototyping as the DOD budget continues to tighten. DOD believes that prototyping furthers technical advances in research and development and lowers lead time in the event they go forward with production. The increased use of prototyping will also allow DOD to preserve design teams during any long periods between new product development programs.

Other new acquisition improvement initiatives in Better Buying Power 3.0 include:

• More use of modular and open systems architectures.
• Providing industry with draft requirements earlier.
• Removing obstacles to procuring commercial items.
• Improving our technology search and outreach in global markets.

In addition, Undersecretary Kendall will convene a Long-Range Research & Development Planning Program aimed at assuring US technological edge through the next several decades, and Deputy Defense Secretary Robert Work is leading an effort to determine what types of new technologies could help the US military outperform adversaries of the future.

On Aug 22, DOD ATL released new “Guidelines For Creating and Maintaining a Competitive Environment for Supplies and Services in the Department of Defense.” The guidelines were developed as a result of the Better Buying Power 2.0 initiative in which seven areas were identified for achieving greater efficiency and productivity in defense spending. Area 5, entitled “Promote Effective Competition,” further identified “emphasizing competition strategies and creating and maintaining competitive environments as an opportunity for improving our competitive posture within the Department.” These guidelines are intended to complement and work in concert with the four overarching principles identified in Better Buying Power 2.0 to:1) think and not default to the “school solution;” 2) attract, train and empower acquisition professionals; 3) start with the basics – the acquisition fundamentals work; and 4) streamline decision making.

A copy of the guidelines can be found at:

https://www.vantagepointstrat.com/?p=257

Political Updates

The White House has chosen Google X Vice President Megan Smith as the next Federal Chief Technology Officer pending security clearances. Smith will replace Todd Park who announced last week that he is stepping down from the job by the end of the year. Google X is the company’s secretive research arm whose recent projects include the development of self-driving cars and a drone delivery program. As U.S. CTO, Smith will guide the Administration’s IT policy and initiatives.

The White House also announced that Alexander Macgillivray will be the Deputy US CTO. Macgillivray will focus on a portfolio of key priority areas for the Administration, including Internet policy, intellectual property policy, and the intersection of big data, technology, and privacy. Macgillivray is an internationally recognized expert in technology law and policy, most recently serving as General Counsel and Head of Public Policy at Twitter from 2009-2013.

Kansas Secretary of State Kris Kobach announced this week that the Democrat who attempted to drop out of the three-way race against Sen. Pat Roberts (R-KS) must remain on the ballot. Democratic nominee Chad Taylor had submitted a request to have his name removed from the ballot to clear a path for independent Greg Orman to challenge Roberts one-on-one. Kobach, a Republican who backs Roberts, said that Taylor failed to declare that he would be unable to perform the job if elected. Taylor said in a statement that he will challenge Kobach’s decision.

Next Week

The House and Senate return from recess next week. The House is expected to vote on a continuing resolution as well as the jobs and energy omnibus bills mentioned in the House Majority Leader’s memo. The Senate is expected to consider a number of nominations as well as take up a joint resolution proposing an amendment to the Constitution relating to contributions and expenditures intended to affect elections.