Washington Weekly – April 4, 2014

April 4, 2014

The House passed bills providing economic assistance to Ukraine and imposing sanctions against Russia, which were then signed into law by the President. The House also passed HR 2575, the Save American Workers Act, a bill redefining “full-time employee” from 30 hours to 40 hours a week in the 2010 Affordable Care Act (Obamacare). And, later today, the House is expected to pass HR 1874, the Pro-Growth Budgeting Act of 2013, a bill requiring the Congressional Budget Office to use dynamic scoring for major legislation (except appropriations). The Senate passed and the President signed into law a year-long extension of the “doc fix,” a bill to prevent cuts to Medicare payment rates. The Senate also continued debate on a five-month extension to emergency unemployment compensation.

FY2015 Budget

Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee introduced his FY15 budget resolution this week. The resolution proposes to cut $5.1 trillion in spending over 10 years and calls for dramatic changes to Medicare, Medicaid, food stamps, and the tax code. It also repeals most of the 2010 Affordable Care Act (Obamacare), enacts welfare reforms, and rolls back energy and financial sector regulations.

The nonbinding budget resolution, marked up in committee this week, adheres to the $1.014 trillion discretionary budget cap for FY15 that was agreed to in the Bipartisan Budget Act (BBA) passed by Congress last December (P.L. 113-67). While it proposes significant cuts in order to balance the budget within 10 years, defense spending is boosted by $273 billion over the level in the President’s proposed FY15 budget. Although it makes no recommendations for scaling back military pay and benefits, Ryan does say that serious consideration should be given to the recommendations due early next year from the Military Compensation and Retirement Modernization Commission.

During the markup, Democrats offered and requested votes on several amendments that they will use in the upcoming elections to demonstrate the parties’ differing priorities. The defeated amendments include immigration overhaul, raising the minimum wage, and extending unemployment insurance offset by reducing tax subsidies for oil companies and increasing the income tax on millionaires. Democrats also criticize the budget for the use of dynamic scoring, which they assert overstates the economic impact of the proposal.

The budget resolution will be considered on the House floor next week. Passage of the budget resolution in the House may be difficult, as Republicans will need 217 votes. Out of the 233 Republicans in the House, 62 voted against the BBA in December. Ryan’s FY14 budget resolution also passed by a slim margin last year. Senate Budget Committee Chair Patty Murray (D-WA) has said that her committee will not write a budget since the BBA already set the FY15 discretionary spending limit.

FY2015 Appropriations

The House Appropriations Committee officially kicked off the FY15 appropriations process with two subcommittee markups this week – Military Construction/Veterans Affairs and Legislative Branch. These are considered the two least controversial of the 12 annual spending bills. The FY15 DHS appropriations bill may be up next on the docket. These markups were held prior to the committee releasing their 302(b) allocations. It is unclear when those allocations would be made, but they will need to be set before the more controversial spending bills are considered. Chairman Hal Rogers (R-KY) said he aims to have all 12 bills through the full committee by July 4, and he would like to have all 12 pass the House before the August recess. Rogers also called for budget process reform that would move up the April 15 deadline for the House Budget Committee to set discretionary spending levels for appropriators in its annual budget resolution as it would give appropriators more time and a better chance of getting their bills done.

The FY15 Military Construction/Veterans Affairs (MilCon/VA) appropriations bill proposes $71.5 billion in discretionary spending, a decrease of $1.8 billion from FY14 with most of the cuts coming from the MilCon accounts. The bill includes $158.2 billion in both discretionary and mandatory funding for the VA ($10.3 billion over FY14, but $5.7 billion less than the President’s budget request) and $6.6 billion for military construction (compared to $9.8 billion in FY14). Similar to previous years, the bill prohibits any funds from being used to construct facilities in the US for housing Guantánamo Bay detainees. The bill provides $344 million for modernization of the VA’s electronic health record system, but as in the previous year’s spending measure, it would free up only 25 percent of those funds until the VA provides cost estimates for the program as well as status updates on efforts to achieve full interoperability with the Defense Department’s own records. The bill also provides $173 million for the paperless claims processing system and an increase of $20 million above the President’s request for digital scanning of health records, centralized mail, and overtime to end the backlog in disability compensation claims by 2015.

The FY15 Legislative Branch spending bill provides $3.3 billion, which is the same as the FY14 funding level but $122.5 million less than what the President requested. If enacted, the Government Accountability Office (+$14.2M), the Government Printing Office (+$3.2M), and the Library of Congress (+$15.9M) would receive modest increases. The bill contains $1.2 billion to fund the operations of the House – the same as FY14, and continues restrictions on Representatives and Senators from receiving a pay increase in FY15. The Capitol Police would receive $347 million, about $9.5 million more than current spending, but still below their $356 million request.

As a reminder, the deadlines for members of Congress to submit their programmatic and language requests for the FY15 appropriations process are as follows:

Cybersecurity

The Department of Defense (DoD) announced that it officially adopted the IT security standards in the National Institute of Standards and Technology’s (NIST) Risk Management Framework (RMF) in lieu of the military specific DOD Information Assurance Certification and Accreditation Process (DIACAP). DoD will move all IT systems used by its organizational entities to the NIST government-wide set of IT security accreditation standards. DOD released a memo (https://www.vantagepointstrat.com/?p=160) instructing DoD program managers, security personnel, and components on how to implement the new policy.

This is the first time defense and civilian agencies have identical security standards. In addition to all DoD organizational entities, the RMF will apply to weapons, space systems, vehicles, aircraft, and medical devices. The transition timeline calls for ending DIACAP within six months and fully transitioning to RMF within 3 ½ years.

Homeland Security

The House Homeland Security committee Cybersecurity, Infrastructure Protection and Security Technologies subcommittee marked up HR 4007, the Chemical Facility Anti-Terrorism Standards (CFATS) Program Authorization and Accountability Act of 2014. CFATS was originally authorized by Congress in 2007 with the mission of developing a set of vulnerability assessment standards for chemical plants and implementing a corresponding set of regulations to protect the highest risk facilities from intentional physical attacks. CFATS requires covered chemical facilities to prepare security vulnerability assessments and to develop and implement site security plans based on those assessments. Subcommittee chairman Patrick Meehan (R-PA) said that CFATS has struggled in its seven-year history, hence the need for a two year reauthorization bill that would make the site security plan approval process more efficient and the compliance process better coordinated. The bill enjoys bipartisan support as well as the support of the Administration. Meehan worked with Energy and Commerce Committee to resolve jurisdictional referral issues.

Tax Extenders

Sen. Ron Wyden (D-OR), the new chair of the Senate Finance Committee held a mark up this week on a package (EXPIRE Act) that would extend for two years popular business tax preferences such as the credit for research and exploration, individual breaks for mortgage interest and mortgage debt relief, credits for public transit and parking, and biofuel and renewable energy provisions. But only 45 of the 55 breaks that expired Dec. 31 made it into the bill. A description of the Chairman’s modification to the EXPIRE Act can be found at:

http://www.finance.senate.gov/imo/media/doc/Chairman’s%20Modification%20EXPIRE%20Act.pdf

At the markup, Wyden said that this would be the last tax extenders bill the committee takes up as long as he is chairman. “That’s why the bill is called the EXPIRE Act. It is meant to expire.” The committee in a bipartisan voice vote approved the bill. Wyden plans on holding hearings starting next week that focus on reforming the tax code.

Political Updates

House Ways and Means Chairman Rep. Dave Camp (R-MI) announced this week that he would not run for reelection in November. Camp was first elected in 1990. Because of Republican leadership term limits, he is in his last year as chair of the powerful committee whose jurisdiction includes the tax code, Social Security, Medicare, and trade policy. Camp introduced a long-awaited tax-reform package earlier this year that was not embraced by GOP leadership. Camp is the fourth House committee chair to announce his retirement this year. Four Senate committee chairs have also announced their retirements this year. Rep. Paul Ryan (R-WI), Chair of the House Budget Committee, and Rep. Kevin Brady (R-TX) have both indicated an interest in succeeding Camp as Chair of the Ways and Means Committee. Camp’s retirement opens up a potentially competitive district as President Obama narrowly carried the district in 2008.

Rep. Tulsi Gabbard (D-HI), an Iraq Veteran, was named to the House Armed Services Committee filling the seat left open by the resignation of Rep. Rob Andrews (D-NJ). Gabbard, a captain in the Hawaii Army National Guard, said that she would continue to work on bipartisan efforts to reform the military justice system to end the epidemic of military sexual assault.

The Supreme Court ruled 5-4 this week that caps on the total amount of money an individual can give to political campaigns and PACs in an election cycle are unconstitutional violating the First Amendment. Before the ruling, a single donor could contribute up to $5,200 to every House and Senate candidate up to a limit of $48,600. Now, if a single donor gives $5,200 to every House and Senate candidate of one party in a 468-race election cycle, the total would be $2,433,600. Contributions to party committees are capped as well. Before they were limited to $74,600 total. Now, a single donor can give $32,400 to each of the three federal party committees each year and $10,000 to each of the party’s 50 state committees for up to $1,194,400 in donations in a two-year election cycle. And finally, before contributions to Political Action Committees (PACs) were limited to a total of $74,600 in increments of up to $5,000. Post ruling, a single donor can give up to $5,000 to each PAC aligned with his or her political interest. If a donor spent $5,000 on each of the 2757 PACs in the 2012 election cycle, that would equal $13.7 million.

The Senate confirmed Christopher Lu to be Deputy Secretary of Labor. Lu has served as Assistant to the President and Cabinet Secretary for President Obama, and as co-chair of the White House Initiative on Asian Americans and Pacific Islanders. Lu was a classmate of President Obama’s at Harvard Law School and worked for Obama when he was in the Senate.

Next Week

The House will vote on their FY15 budget resolution as well as consider two budget process reform bills – one (HR 1871) would scrap the baseline budget assumption that discretionary spending grows each year with inflation and the other (HR 1872) would account for the costs of market risks in federal credit programs. The Senate will vote on final passage of a five-month extension to emergency unemployment compensation and may begin consideration of S 2198, the Emergency Drought Relief Act of 2014 and S 2199, the Paycheck Fairness Act.