March 27, 2015
The House and Senate both passed their FY16 budget resolutions this week. The House also passed HR 2, the Medicare Access and CHIP Reauthorization Act of 2015. The Senate passed S 535, the Energy Efficiency Improvement Act and confirmed William Doyle to be a Federal Maritime Commissioner.
FY16 Budget Resolution
The House and Senate approved their FY16 budget resolutions this week setting up a conference committee on the measures when they return from recess the week of April 13. If they can come to agreement on a conference report, they can then start work on the FY16 appropriations bills as well as the reconciliation process. The last time Congress agreed on a budget resolution was in 2009.
House FY16 Budget Resolution
The House passed its FY16 budget resolution on Wednesday by a vote of 228 to 199, with 17 Republicans voting in opposition. The House utilized a “Queen of the Hill” or “winner takes all” approach when considering six budget resolutions on the floor, meaning that they would adopt the resolution that got the most votes out of those that got a simple majority. The winning budget resolution offered by House Budget Committee Chairman Tom Price (R-GA) keeps defense and nondefense spending at $523 billion and $493 billion, respectively, in line with the 2011 Budget Control Act (BCA); but it increases by $38 billion the limit on the Overseas Contingency Operations (OCO) account to $96 billion and removes a requirement that any of this increase be offset.
Senate FY16 Budget Resolution
The Senate passed their FY16 budget resolution by a vote of 52 to 46 in the wee hours Friday morning. The Senate resolution also adheres to the spending caps set in the 2011 BCA and includes $96 billion in OCO funding. However, the resolution also includes a budgetary point of order against spending more than $58 billion in the OCO account. A budgetary point of order requires 60 votes to waive. Senate Armed Services Committee Chairman John McCain (R-AZ) had intended to offer an amendment to raise the point of order threshold from $58 billion to $96 billion, but in the end decided not to because of opposition from fiscal hawks in his own party. This budgetary point of order could complicate the FY16 defense appropriations process later this year as any FY16 defense spending bill that funds the OCO account above $58 billion would require 60 votes to overcome the budgetary point of order.
Medicare Physician Payment Formula – “Doc Fix”
The current payment patch for the Medicare physician payment formula expires on March 31, causing a 21% cut in physicians’ reimbursement rates. The House passed HR 2, the Medicare Access and CHIP Reauthorization Act of 2015 this week, which provides a permanent fix for the Medicare doctor payments dictated by the sustainable growth rate (SGR) formula, and extends the Children’s Health Insurance Program (CHIP). Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Harry Reid (D-NV) said that the Senate would take up the legislation after they return from their two-week recess. Senate Democrats were requesting votes on a limited number of amendments including a four-year extension of the CHIP instead of the two-year extension included in the House-passed bill. While the current “doc fix” patch expires during the recess, the Centers for Medicare and Medicaid Services could hold off on processing claims for two weeks giving the Senate time to act when it returns the week of April 13. The agency has done this in the past, but has not yet announced its intentions for this expiration date.
Cybersecurity
The House Permanent Select Committee on Intelligence marked up and passed out of committee by voice vote HR 1560, the Protecting Cyber Networks Act (PCNA) (http://intelligence.house.gov/ProtectingCyberNetworksAct). A manager’s amendment making technical changes to the bill was adopted by voice vote prior to final passage in committee this week. The bill would increase the sharing of cyberthreat indicators between the government and the private sector. To allay privacy concerns, the bill specifies that private companies must make reasonable attempts to scrub any personally identifiable information from the data before they share it with the government. The civilian agency receiving the data must do another round of scrubbing private data before it can be shared with NSA or DoD. And the bill specifically prohibits the use of data collected for any government surveillance purposes.
The Senate Intelligence Committee has also passed a similar cybersecurity bill, S 754, the Cybersecurity Information Sharing Act (CISA) (https://www.vantagepointstrat.com/?p=369). Both Intelligence Committee bills are expected to be considered in their respective chamber’s floors after the two-week recess, with the Senate likely to go first.
The House Homeland Security Committee has also released a draft information sharing bill, the National Cybersecurity Protection Advancement Act (https://www.vantagepointstrat.com/?p=372), which provides a path for companies to share cyberthreat data with the Department of Homeland Security. The committee hopes to mark up that bill after the return from the two-week recess.
Defense Acquisition Reform
House Armed Services Committee (HASC) Chairman Mac Thornberry (R-TX) and Ranking Member Adam Smith (D-WA) released a draft acquisition reform bill (HR 1597) this week that focuses on a set of reform measures to be included in the FY16 National Defense Authorization Act. According to Thornberry, these measures are just the first step in a multiyear, incremental reform program for the Department of Defense, based on a guiding principle of “first do no harm,” and built upon the notion that a successful acquisition system is proactive, agile, transparent, and innovative.
The draft acquisition reform bill focuses on the following four areas:
People
- Removes the barriers that discourage the best uniformed personnel from pursuing an acquisition profession including by ensuring they receive appropriate credit for joint duty – a vital requirement for officers who hope to attain senior ranks.
- Makes permanent the Defense Acquisition Workforce Development Fund (DAWDF), a temporary pool of money Congress established in 2009 to boost hiring and professional development within DoD. The DAWDF pilot program is currently set to expire in 2018.
- Requires all DoD acquisition personnel receive mandatory acquisition ethics training as well as training on commercial markets and commercial market research.
- Requires training on the commercial market including commercial market research to help close the gap between government and industry.
Acquisition Strategy
- Requires every program to have an upfront, written acquisition strategy, which will include things like what type of contract vehicle is best suited for the program objectives and the level of program risk, whether multi-year is appropriate, risk mitigation strategies, incentives (such as shared savings on services), etc. This would eliminate six different bureaucratic requirements. The strategy would be updated as needed throughout the life of the program.
- Reverses Pentagon procurement rules that give preference to fixed-price contracts that require contractors to pick up the tab if projects go over budget. The draft bill would make it easier for program managers to choose other contract types, including cost-plus deals in which contractors and the government share in paying for cost overruns.
- Encourages shared savings through the use of value engineering in which contractors identify ways to reduce the cost of performance on existing contracts and shares with the government any savings produced.
Streamline the Chain of Command for Acquisition Decisions
- Reduces extensive, non-productive legal reviews and certifications that DoD has to make at key acquisition decision points and instead converts them into simpler go-or-no-go management decisions.
- Streamlines the acquisition strategy approval process, including by raising the dollar threshold for simplified acquisition procedures.
- Clarifies that the roll of the testing community is to just test, not to manage the program or make acquisition decisions. Allows those close to the program to make the determination for moving from development to acquisition stages.
- Eliminates a rule that mandates that competitive prototyping be used in acquisition programs unless program managers get a waiver.
Thin Out Regulations and Paperwork
- Eliminates some reporting requirements for program managers.
- Eliminates dozens of reports Congress currently requires DoD to draft and deliver each year.
The committee also released draft report language that lays the groundwork for reform in future years. For example, the report language requests DoD to provide additional data on service contracts, which have been experiencing significant problems. While Thornberry would like to address this issue this year, the committee lacks sufficient information to draft a legislative solution right now. Thornberry said that he is trying to avoid creating new regulations and therefore more bureaucracy with this legislation.
Thornberry intends to use the FY16 National Defense Authorization Act (NDAA) as the vehicle for this acquisition reform bill. The NDAA will be marked up in the HASC full committee on April 29.
A copy of the draft bill can be found at:
http://armedservices.house.gov/index.cfm?a=Files.Serve&File_id=0536B323-C097-4A25-979E-983AB6210B13
A copy of the report language can be found at:
http://armedservices.house.gov/index.cfm?a=Files.Serve&File_id=71F8382B-D158-4358-9171-85B688F18BE3
The HASC Defense Reform Fact Sheet can be found at:
http://armedservices.house.gov/index.cfm?a=Files.Serve&File_id=6BA52738-8917-46EB-8777-84B1E6A704C4
Chairman Thornberry’s remarks can be found at:
http://armedservices.house.gov/index.cfm?a=Files.Serve&File_id=8D259E50-DF11-441B-880B-4E008B65E396
FTC Bureau of Consumer Protection Creates Office of Technology Research and Innovation
This week the Federal Trade Commission’s (FTC) Bureau of Consumer Protection announced that it had formed an Office of Technology Research and Investigation (OTRI). The FTC is tasked with protecting consumers from deceptive and unfair practices involving new technologies. The new OTRI succeeds the FTC’s Mobile Technology Unit in its role of protecting consumers in emerging marketplaces. However, OTRI will have a broader mandate looking beyond the technology just surrounding mobile devices. The new office will focus on investigative research on technology issues involving all facets of the FTC’s consumer protection mission, including privacy, data security, connected cars, smart homes, algorithmic transparency, emerging payment methods, big data, and the Internet of Things.
House Appropriations Subcommittee Assignments
House Appropriations Committee Chairman Hal Rogers (R-KY) announced updated Republican rosters for the 12 Appropriations subcommittees for the 114th Congress. The changes were prompted by the addition of Rep. Steven Palazzo (R-MS) joining the Appropriations Committee.
The subcommittee Chairs and Members are as follows:
Agriculture Subcommittee:
Chairman Robert Aderholt (R-AL)
Kevin Yoder (R-KS)
Tom Rooney (R-FL)
David Valadao (R-CA)
Andy Harris (R-MD)
David Young (R-IA)
Steven Palazzo (R-MS)
Commerce, Justice, Science Subcommittee:
Chairman John Culberson (R-TX)
Robert Aderholt (R-AL)
John Carter (R-TX)
Jaime Herrera Beutler (R-WA)
Martha Roby (R-AL)
David Jolly (R-FL)
Steven Palazzo (R-MS)
Defense Subcommittee:
Chairman Rodney Frelinghuysen (R-NJ)
Kay Granger (R-TX)
Ander Crenshaw (R-FL)
Ken Calvert (R-CA)
Tom Cole (R-OK)
Steve Womack (R-AR)
Robert Aderholt (R-AL)
John Carter (R-TX)
Mario Diaz-Balart (R-FL)
Tom Graves (R-GA)
Energy and Water Subcommittee:
Chairman Mike Simpson (R-ID)
Rodney Frelinghuysen (R-NJ)
Ken Calvert (R-CA)
Chuck Fleischmann (R-TN)
Jeff Fortenberry (R-NE)
Kay Granger (R-TX)
Jaime Herrera Beutler (R-WA)
David Valadao (R-CA)
Financial Services Subcommittee:
Chairman Ander Crenshaw (R-FL)
Tom Graves (R-GA)
Kevin Yoder (R-KS)
Steve Womack (R-AR)
Jaime Herrera Beutler (R-WA)
Mark Amodei (R-NV)
Scott Rigell (R-VA)
Homeland Security Subcommittee:
Chairman John Carter (R-TX)
John Culberson (R-TX)
Rodney Frelinghuysen (R-NJ)
Chuck Fleischmann (R-TN)
Andy Harris (R-MD)
Chris Stewart (R-UT)
David Young (R-IA)
Interior Subcommittee:
Chairman Ken Calvert (R-CA)
Mike Simpson (R-ID)
Tom Cole (R-OK)
David Joyce (R-OH)
Chris Stewart (R-UT)
Mark Amodei (R-NV)
Evan Jenkins (R-WV)
Labor, Health and Human Services Subcommittee:
Chairman Tom Cole (R-OK)
Mike Simpson (R-ID)
Steve Womack (R-AR)
Chuck Fleischmann (R-TN)
Andy Harris (R-MD)
Martha Roby (R-AL)
Charlie Dent (R-PA)
Scott Rigell (R-VA)
Legislative Branch Subcommittee:
Chairman Tom Graves (R-GA)
Mark Amodei (R-NV)
Scott Rigell (R-VA)
Evan Jenkins (R-WV)
Steven Palazzo (R-MS)
Military Construction and Veterans Affairs Subcommittee:
Chairman Charlie Dent (R-PA)
Jeff Fortenberry (R-NE)
Tom Rooney (R-FL)
Martha Roby (R-AL)
David Valadao (R-CA)
David Joyce (R-OH)
David Jolly (R-FL)
State and Foreign Operations Subcommittee:
Chairwoman Kay Granger (R-TX)
Mario Diaz-Balart (R-FL)
Charlie Dent (R-PA)
Ander Crenshaw (R-FL)
Tom Rooney (R-FL)
Jeff Fortenberry (R-NE)
Chris Stewart (R-UT)
Transportation, Housing and Urban Development Subcommittee:
Chairman Mario Diaz-Balart (R-FL)
David Joyce (R-OH)
John Culberson (R-TX)
Kevin Yoder (R-KS)
David Jolly (R-FL)
David Young (R-IA)
Evan Jenkins (R-WV)
Appropriations Members Assigned to the Budget Committee:
Tom Cole (R-OK)
Mario Diaz-Balart (R-FL)
Steve Womack (R-AR)
Political Updates
In a video announcement released this morning, Senate Minority Leader Harry Reid (D-NV) announced that he would not seek re-election in 2016. Reid said that his recent accident and eye injury in January gave him some “downtime” and “time to think,” which played a part in his decision. Sen. Chuck Schumer (D-NY) declared his bid to succeed Reid and received Reid’s endorsement as well as commitments from an overwhelming majority in the 46-member Senate Democratic caucus. As Minority Whip, Sen. Dick Durbin (D-IL) is next in line, but he instead also endorsed Schumer for the position. Reid was first elected to the Senate in 1986.
A link to Sen. Reid’s retirement announcement video:
http://www.reid.senate.gov/press_releases/thank-you
Sen. Dan Coats (R-IN) also announced this week that he would not run for reelection in 2016. Coats said that he wants to focus on his work in the Senate rather than spending the next two years campaigning for reelection. Coats served in the Senate from 1989 to1999 and then returned again in 2011.
Rep. Steve Russell (R-OK) was given a seat on the House Armed Services Committee filling Rep. Palazzo’s (R-MS) seat. Palazzo moved to the Appropriations Committee last week. Russell had a 21-year career in the US Army prior to running for office. He completed the US Army Ranger School and deployed to assignments in the Arctic, the desert, the Pacific, Europe, Kosovo, Kuwait, Afghanistan, and Iraq. Before retiring as a Lieutenant Colonel, Russell earned the Legion of Merit, Bronze Star with Valor Device, and Oak Leaf Cluster.
President Barack Obama named Shailagh Murray, a former Washington Post and Wall Street Journal reporter, to serve as his new senior adviser, and tapped Jason Goldman, a Silicon Valley veteran, to become the White House’s first-ever chief digital officer. Murray replaces Dan Pfeiffer as a member of the president’s core team of advisers, and Goldman will take over and expand Pfeiffer’s role overseeing digital outreach by heading up an amped-up Office of Digital Strategy.
President Obama also nominated Dr. Wanda Austin to be a member of the President’s Council of Advisors on Science and Technology. Austin is President and CEO of The Aerospace Corporation, a Federally Funded Research and Development Center.
Next Week
The House and Senate are in recess for the next two weeks and return the week of April 13.