March 13, 2015
The House was in recess this week. The Senate was expected to take up S 625, the Iran Nuclear Agreement Review Act of 2015, but Senate Majority Leader Mitch McConnell (R-KY) tabled the measure. Senate Democrats threatened to filibuster it saying that they wouldn’t vote for a bill about congressional approval of a potential Iran nuclear deal until after the key March 24 negotiation date has passed. The Senate instead turned to S 178, the Justice for Victims of Trafficking Act of 2015. This too was set aside after Democrats learned that the measure included a provision expanding the reach of the Hyde Amendment barring federal funds from being used to pay for abortions. The Senate did approve the nominations of Christopher Hart to be Chairman of the National Transportation Safety Board (NTSB), Tho Dinh-Zarr to be a member of the NTSB, Daniel Henry Marti to be the White House’s Intellectual Property Enforcement Coordinator, Michelle Lee to be Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, and Jeffrey Hall and Dallas Tonsager to be members of the Farm Credit Administration Board.
Congressional Budget Office Score of President’s FY16 Budget Request
The Congressional Budget Office (CBO) released its updated 10-year baseline projection of spending, revenue, and deficits on Monday. According to CBO, the President’s FY16 budget request would shrink the deficit in FY16 to $380B, but deficits would grow from FY17-FY25 reaching $801B in FY25. The decrease in the deficit in FY16 would come from revenue increases including increased income tax receipts, comprehensive immigration reform, as well as spending reductions from lower Medicare and war spending. CBO also estimates that mandatory spending will be about 13% of GDP through FY21 and then rise to 14.1% by FY25. This is in contrast to the average of 9.3% of GDP over the past 50 years. Armed with CBO’s analysis, House Republicans continued their criticism of the President’s FY16 budget saying that the President wasn’t serious about solving the nation’s fiscal and economic problems.
In related news, the Treasury Department announced this week that the deficit has reached $386.5B so far in FY15, which is $10B more than at this time last year. Treasury is forecasting a $582.5B deficit for FY15 and $474.2B for FY16 compared to $483B in FY14.
White House TechHire Initiative
President Obama announced a new initiative this week aimed at training more people for well-paying jobs in the technology sector, including in cybersecurity, software development, and network administration. The initiative will empower Americans with the skills they need, through universities and community colleges but also nontraditional approaches like “coding bootcamps,” and online courses that can rapidly train workers. Key elements of the initiative include: Public/Private partnerships between communities and national employers, $100M in new federal investments for the Department of Labor H-1B grant program to support innovative approaches to providing lower skilled workers with training and employment opportunities, and commitments from private sector leaders to provide the tools and resources to scale continued innovation in technology training, with a focus on reaching underserved populations.
Debt Ceiling
Last February Congress passed the Temporary Debt Limit Extension Act, suspending the statutory debt limit through March 15, 2015. Beginning on Monday 3/16, the Treasury Department will take extraordinary measures to continue financing the government. Secretary Jack Lew sent a letter to Congressional leadership last Friday urging them to raise the debt limit as soon as possible. Lew also informed Congress that as of today “Treasury will suspend, until further notice, the issuance of State and Local Government Series (SLGS) securities. SLGS are special-purpose Treasury securities issued to states and municipalities to assist them in conforming to certain tax rules. When Treasury issues SLGS, they count against the debt limit.” CBO has estimated that the Treasury Department will exhaust its extraordinary measures by October or November. That could bring a debt ceiling showdown around the same time that the FY16 spending bills are due on Oct. 1.
Congress has voted three times since 2013 to suspend the debt limit. Senate Majority Leader Mitch McConnell (R-KY) has indicated that Senate Republicans may use a vote to raise the debt limit as an opportunity to pass other legislation. McConnell has also said that the debt limit will be handled over a period of months and vowed to avoid another debt limit crisis. The nation’s debt currently stands at $18.3T.
A copy of Secretary Lew’s letter to Congress can be found at:
http://www.treasury.gov/initiatives/Documents/Treasury%20Letter%20to%20Congress%20030615.pdf
FY16 Budget Resolution
The Senate Budget Committee is expected to unveil and markup its FY16 budget resolution next Wednesday and Thursday. The Republican resolution will balance the budget within 10 years and maintain the FY16 caps on defense and non-defense spending that were set in the 2011 Budget Control Act. Floor consideration may take place the week of March 23 before Congress adjourns for the Easter recess. Senate Budget Committee Ranking Member Bernie Sanders (I-VT) will not offer an alternative Democratic budget resolution, and will instead focus on promoting their fiscal priorities (ending sequestration, investing in job creation, and increasing the minimum wage) through amendments to the Republican budget during committee markup and floor consideration.
The idea of including a reserve fund in the budget resolution is being considered by Senate Budget Committee Republicans who are trying to balance the demands of both defense and fiscal hawks. Fiscal hawks support the lower level sequestration funding caps, while defense hawks have threatened to oppose any budget that limits defense spending. A reserve fund could allow limits on discretionary defense and non-defense spending to rise above sequestration levels as long as the higher spending was offset with spending cuts or revenue increases. Five (Ayotte, Wicker, Kaine, King, and Graham) of six senators who serve on both Senate Armed Services Committee (SASC) and Budget Committee are considering this new reserve fund. SASC Chairman John McCain (R-AZ) said this week that he is considering drafting an FY16 defense authorization bill that exceeds the sequestration caps.
On the House side, no date has been set yet for markup in the Budget Committee, but it is expected to take place next week. Ranking Democrat Chris Van Hollen (D-MD) said that he plans to introduce an alternative Democratic budget resolution.
Cybersecurity
The Senate Intelligence Committee approved their Cybersecurity Information Sharing Act (CISA) in a closed-door meeting yesterday by a vote of 14 to 1. Sen. Ron Wyden (D-OR) was the only member of the committee to oppose the measure citing concerns that it was a surveillance bill just by another name. The bill provides expanded legal liability to companies so that they can more easily share information with the government. Since the original draft was circulated a few weeks ago, some changes were made to the bill prior to markup to strengthen privacy protections. Senate Intelligence Committee Chairman Richard Burr (R-NC) hopes to bring the bill to the Senate floor in mid-April.
On the House side, both the Homeland Security and Intelligence Committees have been working on cybersecurity legislation and drafts could be out by the end of the month. The Homeland Security Committee’s bill will be limited by the committee’s jurisdiction and will likely focus on establishing a DHS information-sharing portal. The Intelligence Committee’s bill will be more in line with the Senate CISA bill. The House Judiciary Committee is providing the liability language for both bills. House Leadership is hoping to bring these cyber bills to the floor the third week of April, but it isn’t clear if they would be voted on individually or as amendments to each other.
Senate Homeland Security Agenda
In a speech before the US Chamber of Commerce this week, Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson (R-WI) talked about his agenda for the committee for 2015. Johnson said he is focused on advancing bills that can get at least 60 votes, which includes a permit-streamlining bill cosponsored by Sens. Portman (R-OH) and McCaskill (D-MO). He is also planning on holding several hearings on border security and other immigration issues. And since cybersecurity is a priority, he said that he is open to having his committee consider some sort of compromise bill, as he believes the Senate Intelligence Committee’s CISA bill may be too ambitious. The compromise would fall somewhere between what the Administration proposed earlier this year and the CISA bill. Johnson said another priority is to untangle the web of congressional oversight for DHS, consolidating the number of Senate Committees with jurisdiction over the agency. Finally, Johnson encouraged US Chamber of Commerce members to bring up their proposals for individual regulatory changes they would like to see enacted. He cautioned that smaller, piecemeal bills would be more practical than any big regulatory overhaul bill.
Political Updates
Rep. Donna Edwards (D-MD) announced that she would run for the Senate seat being vacated by Sen. Mikulski (D-MD) when she retires at the end of 2016. Rep. Chris Van Hollen (D-MD) announced his intention to run for the seat last week.
Terry Halvorsen, who became the Defense Department’s acting chief information officer (CIO) almost a year ago, has assumed duties as its permanent CIO as of March 8.
Next Week
The House may take up HR 1029, the EPA Science Advisory Reform Act of 2015 and HR 1030, the Secret Science Reform Act of 2015 after returning from a recess week. The Senate may consider the nomination of Loretta Lynch for attorney general. Lynch has been waiting several weeks for a floor vote facing opposition from Senate Republicans who disagree with Lynch on the President’s immigration actions. The Senate will also vote on the nominations of Carlos Monje to be Assistant Secretary for Transportation Policy at the Department of Transportation and Manson Brown to be an Assistant Secretary at the Commerce Department. And the Senate will hold a cloture vote on Tuesday morning on S 178, the anti-human trafficking bill.