Washington Weekly – June 6, 2014

June 6, 2014 

The Senate passed S 2270, the Insurance Capital Standards Clarification Act of 2014, a bill revising Sec. 171 of the Dodd-Frank Act (also called the “Collins Amendment”). The bill clarifies that the Federal Reserve Board can apply insurance-based capital standards to the insurance portion of any insurance holding company it oversees. The Senate approved the nominations of Sylvia Mathews Burwell to be Secretary of Health and Human Services, Stefan Selig to be Under Secretary of Commerce for International Trade, and Carolyn Hessler Radelet to be Director of the Peace Corps. The Senate also approved a number of judicial nominations as well as commissioners of the Commodity Futures Trading Commission. The House was in recess.

FY2015 Appropriations

Senate Appropriations chairwoman Barbara Mikulski (D-MD) said this week that she is planning to bundle several appropriations bills together for floor consideration. While she will defer to Senate Majority Leader Harry Reid (D-NV) on how they will be brought to the floor, she is preparing “clusters” or “minibuses” for when floor time comes. Reid has previously indicated to Mikulski that appropriators could have two weeks of floor time for consideration of their bills. Sen. Richard Durbin (D-IL), Chairman of the Senate Defense Appropriations subcommittee this week reiterated his intent to mark up the FY15 Defense Appropriations bill the week of July 7.

The Senate Appropriations Committee marked up the FY15 Commerce, Justice, Science spending bill in subcommittee and full committee this week. The $51.2 billion bill (a decrease of $398 million below FY14 and an increase of $1 billion above the President’s request level) funds the Department of Commerce at $8.6 billion and the Department of Justice (DOJ) at $28 billion. The bill includes creating cybersecurity standards to protect .mil, .gov, and .com and provides an additional $722 million for DOJ to continue its cybersecurity work. NIST received $900 million, $50 million above FY14; and NSF received $7.2 billion, an increase of $83 million over FY14. The Senate also included $58.5 million for the National Instant Criminal Background Check System compared with the $78 million the House provided last week after agreeing to an amendment to increase funding for the program. The committee approved an amendment offered by Sen. Jeff Merkley (D-OR) that would prohibit federal law enforcement authorities from preventing farmers from experimenting with industrial hemp in states where it is permitted as is allowed for by the new farm bill (PL 113-79).

The Committee also marked up their FY15 Transportation HUD bill in subcommittee and full committee this week. The $54.4 billion bill provides a total of $18.1 billion in discretionary budget authority for the Department of Transportation (DOT) and $36 billion for Housing and Urban Development (HUD). Appropriators did not make significant changes to the funding levels in the markup, but did add some policy provisions including suspending existing federal rules that require truck drivers to take 34 hours off between workweeks while calling for more study on the rules. The committee report also includes language encouraging DOT to ban cell phones on planes. DOT announced in February it was taking comments on a rule banning phone calls in flight.

Next week the Senate will turn its attention to the FY15 Labor HHS Education spending bill marking it up in subcommittee on June 10 and full committee on June 12. On June 10, the House will mark up its FY15 Energy and Water spending bill in subcommittee and its FY15 Homeland Security and Defense bills in full committee.

FY2015 Appropriations Bill Status

National Defense Authorization Act

The Senate Armed Services Committee released its FY15 National Defense Authorization Act report (113-176) this week. A copy of the report can be found at: https://www.vantagepointstrat.com/?attachment_id=203.

Cybersecurity

The Homeland Security Advisory Council held a meeting on Thursday at which the National Protection and Programs Directorate (NPPD) Under Secretary Suzanne Spaulding mentioned that the NPPD is reaching out to the venture capitalist community to encourage them to put analysis of a company’s cybersecurity practices in their due diligence process. The hope is that this will drive improved cybersecurity risk management processes in the private sector. NPPD is also working with the American Bar Association to push for more attention on cybersecurity in the M&A due-diligence process.

Cybersecurity was also a topic of discussion at the Bloomberg Cybersecurity: Getting to Business conference earlier this week. Senator Saxby Chambliss (R-GA), Ranking Republican on the Senate Intelligence Committee and speaker at the conference said that he and Sen. Feinstein (D-CA), Chair of the Senate Intelligence Committee, have been working on cyber legislation and are down to a couple of outstanding provisions: 1) liability protection and 2) how a private sector entity reports an incident. The bill will create a DHS portal and private entities will report activity to the portal in real time. Under the bill, companies would have immunity from liability if they shared the information through the portal. They would not have immunity outside of the portal. Chambliss said that they are at the point of counting votes, but Sen. Feinstein is sensitive to the concerns of privacy advocates. Chambliss also said that he thought the Executive Order was playing out pretty well, that the framework is working, and that NIST is doing a good job of engaging with the private sector. He is concerned that if they don’t get a bill done this year, with his retirement and Rep. Rogers retirement there will be a whole new set of members with potentially new priorities next year.

NSA Director Adm. Mike Rogers was also a speaker at the conference. Adm. Rogers, when not getting besieged with questions about Edward Snowden, emphasized the need for maximizing detection capabilities and said, “I believe [cybersecurity] legislation is necessary. We tried to do this on a voluntary basis but there is still a big delta. Coming together in a partnership is where we can really gain advantages.”

Veterans Affairs

The Senate reached a bipartisan compromise this week on a bill that will allow veterans to see private doctors if they experience long wait times or live more than 40 miles from a VA facility. The measure would also fund the construction of more than 25 new VA medical facilities in 18 states. And it incorporates provisions from legislation introduced in the Senate by Sen. Marco Rubio (R-FL) making it easier to fire VA officials on the spot without pay. While there was tentative agreement on the measure, fiscal conservatives in the Senate may call for offsets for the $2 billion in emergency funding authorized in the bill. Democrats and moderate Republicans argue that the 2011 debt limit law allows for budget caps to be waived in the event of an emergency. While the bill’s sponsor, Sen. Bernie Sanders (D-VT) said that they are open to amendments, he also urged his colleagues to not delay passage of the bill with extraneous amendments.

Political Updates

With neither side clinching 50% of the vote, the GOP Senate primary in Mississippi will now go to a runoff on June 24. Sen. Thad Cochran (R-MS), a six-term incumbent, received 48.8% while his tea party challenger state Sen. Chris McDaniel received 49.6%. Sen. Cochran is the ranking Republican on the Senate Appropriations Committee and also holds seats on the Agriculture and Rules Committees.

Secretary of Defense Hagel announced this week that Robert Cardillo will be the next director of the National Geospatial-Intelligence Agency (NGA). He will replace Letitia Long who is retiring later this year after four years at the helm of NGA. Cardillo is currently serving as the deputy director for national intelligence for intelligence integration, and previously served as the deputy director of the defense intelligence agency (DIA), the deputy director for analysis at DIA, and the director of analysis and production at NGA. Cardillo will formally succeed Long in October 2014.

Defense Secretary Hagel chose General Joseph Dunford, the commander of the International Security Assistance Force in Afghanistan, to be the next commandant of the Marine Corps. The nomination is subject to confirmation by the Senate. Dunford will replace Gen. James Amos, who is retiring. Amos has led the Marine Corps since October 2010. Dunford is an infantry officer, the branch the Marines traditionally tap for their commandants. He is a graduate of St. Michael’s College and holds a Master of Arts degree from Georgetown University. He was commissioned in the Marine Corps in 1977.

The President nominated Navy Rear Admiral Walter Carter Jr. for appointment to the rank of vice admiral and for assignment as superintendent of the US Naval Academy in Annapolis, Maryland. Carter is currently serving as president of the Naval War College in Newport, Rhode Island.

Next Week

The House will consider the FY15 Transportation HUD spending bill. The Senate will begin consideration of S 2422, a bill to improve the access of veterans to medical services from the Department of Veterans Affairs. The Senate may also begin consideration of the Bank on Students Emergency Loan Refinancing Act (S 2432).