Weekly Washington Report

New England Council logoThis weekly Washington, D.C. update is courtesy of our friends at The New England Council.

Upcoming in Congress

Both the House and the Senate are in session for the week ahead. Lawmakers will look to wrap-up a variety of legislative priorities and Executive Branch nominees before adjourning for the Fourth of July recess week. The Senate will begin its week on Monday afternoon with a 5:30 vote on the nomination of Kristine Svinicki to be a Member of the Nuclear Regulatory Commission (NRC). The schedule for the remainder of the week is not set, but will likely be consumed by consideration of health care legislation that was offered by Senate Majority Leader Mitch McConnell (R-KY) late last week. As always, the Senate may consider any nomination or other legislation that is cleared for action. The House will begin its session for the week on Monday with four bills scheduled for consideration from the suspension calendar, including H.R. 1726, the Coast Guard Improvement and Reform Act of 2017. On Tuesday, the House has eight bills from the suspension calendar up for consideration, and afterward the House is set to spend the remainder of the week on three bills: H.R. 1215, the Protecting Access to Care Act of 2017; H.R.3003, the No Sanctuary for Criminals Act; and H.R.3004, "Kate's Law," relating to re-entry of removed aliens. House leadership anticipates being done with the week's session by Friday afternoon.

Hearings and Markups of Interest

On Monday, the only committee action in the House will be in the House Appropriations Committee's Subcommittee on Defense as they hold a mark-up on the budget for the Department of Defense.

The Senate Armed Services Committee's Subcommittee on Airland on Monday will hold a closed mark-up on provisions which fall under the subcommittee's jurisdiction of the proposed National Defense Authorization Act.

The House Rules Committee is scheduled to hold a mark-up related to two bills on Tuesday - H.R.3003, the No Sanctuary for Criminals Act; and H.R.3004, "Kate's Law," relating to re-entry of removed aliens - in order to determine how much floor time to approve for debate and potential amendments. The House Natural Resources Committee will hold a mark-up on approximately twenty-two bills including the King Cove Road Land Exchange Act (H.R. 218) related to a controversial road that certain residents in Alaska would like to build through a wildlife refuge that will allow access to a rural hospital. In addition, the House Transportation and Infrastructure Committee will hold a mark-up on newly introduced FAA reform legislation (see Transportation below). As for hearings for the day, the Agriculture Committee will hold a hearing on derivative clearinghouses; the Financial Services Committee's Subcommittee on Capital Markets, Securities, and Investments will review the equity market structure; the Energy and Commerce Committee's Subcommittee on Digital Commerce and Consumer Protection will hold a hearing on self-driving vehicles; and the Judiciary Committee's Subcommittee on Crime, Terrorism, Homeland Security and Investigations will discuss trafficking of synthetic analogues.

On Tuesday, the Senate Foreign Relations Committee will hold a mark-up on the nomination of Mark Green to be Administrator of the United States Agency for International Development. The Armed Services Committee will hold mark-ups in each of the remaining six Subcommittees during the day in either open or closed session on provisions which fall under each Subcommittee's jurisdiction of the proposed National Defense Authorization Act. The Appropriations Committee will hold three hearings during the day in various subcommittees: the Subcommittee on Department of the Interior, Environment, and Related Agencies will discuss the fiscal year 2018 budget for the EPA; the Subcommittee on Financial Services and General Government will discuss the fiscal year 2018 budget for the SEC and the CFTC; and the Subcommittee on Departments of Labor, Health and Human Services, and Education, and Related Agencies will discuss the fiscal year 2018 budget for the Department of Labor. Further, the Judiciary Committee will hold a hearing on reauthorization of the Foreign Intelligence Surveillance Act (FISA) Amendments Act.

On Wednesday, the House Armed Services Committee will hold a mark-up on the Defense Authorization Act. The House Appropriations Committee will hold two mark-ups, the first of which relates to the budget of the U.S. Department of Agriculture in the Subcommittee on Agriculture, Rural Development, FDA, and Related Agencies while the second will occur in the full Committee related to the Energy and Water Appropriations bill. Regarding hearings, the Education and the Workforce Committee's Subcommittee on Early Childhood, Elementary and Secondary Education will discuss education research and protecting student privacy; the Financial Services Committee's Subcommittee on Monetary Policy and Trade will review the Federal Reserve's economic impacts, while the Subcommittee on Financial Institutions and Consumer Credit will look at the Bank Secrecy Act and anti-money laundering compliance; and the Science, Space and Technology Committee's Subcommittee on Research and Technology and the Subcommittee on Energy will hold a joint hearing on the future of material science.

On Wednesday, the full Senate Armed Services Committee will begin the first day of three days of closed mark-up sessions on the National Defense Authorization Act for fiscal year 2018. As for hearings, the Judiciary Committee will examine the nominations of Timothy Kelly and Trevor McFadden to be U.S. District Judges for the District of Columbia, and Jeffrey Clark and Beth Ann Williams to be Assistant Attorneys General at the Department of Justice. The Commerce, Science, and Transportation Committee will review the nominations of Steven Bradbury to be General Counsel of the Department of Transportation, and Elizabeth Walsh to be Assistant Secretary of Commerce and Director General of the United States and Foreign Commercial Service. Further, the Homeland Security and Governmental Affairs Committee will go over the nominations of Claire Grady to be Under Secretary for Management at the Department of Homeland Security, and Henry Kerner to be Special Counsel at the Office of Special Counsel. The Appropriations Committee's Subcommittee on Energy and Water Development will hold a hearing to look at the FY 18 budget estimates for the Army Corps of Engineers and the Department of the Interior's Bureau of Reclamation.

On Thursday, the House Intelligence Committee will hold a closed mark-up of pending committee business. The House Veterans' Affairs Committee's Subcommittee on Oversight and Investigations will hold a morning mark-up on several bills related to business opportunities and procurement, while the Subcommittee on Economic Opportunity will hold an afternoon mark-up on a handful of Veterans' Affairs accountability issues. For hearings, the Small Business Committee's Subcommittee on Economic Growth, Tax and Capital Access will look at the small business fixed asset loan program; the Homeland Security Committee's Subcommittee on Cybersecurity and Infrastructure Protection will review the security of chemical facilities; and the Judiciary Committee's Subcommittee on Regulatory Reform, Commercial and Antitrust Law will hold a hearing on international anti-trust enforcement trends.

On Thursday, the Armed Services Committee will continue with the second day of three days of closed mark-up sessions on the National Defense Authorization Act for fiscal year 2018. The Commerce Science and Transportation Committee will hold a mark-up on S. 1405, the Federal Aviation Administration Reauthorization Act and two other bills as well as the nomination of David Pekoske to be the next Administrator of the TSA (see Transportation below), Robert Sumwalt to be a member of the NTSB, and Derek Kan to be Undersecretary of Transportation. The Judiciary Committee will mark-up legislation to prioritize the fight against human trafficking, along with the nomination of Stephen Boyd to be Assistant Attorney General. For hearings, the Appropriations Committee's Subcommittee on Commerce, Justice, Science, and Related Agencies will hold a hearing to look at the FY 18 budget estimates for NASA, while the Legislative Branch Subcommittee will review the budget for the Senate Sergeant at Arms and the Capitol Police Department. The Banking, Housing, and Urban Affairs Committee will hold a hearing to examine principles of housing finance reform.

On Friday, the only committee activity in the Senate will be in the Armed Services Committee as they conclude their third day of three days of closed mark-up sessions on the National Defense Authorization Act for fiscal year 2018. There are no hearings scheduled to occur in the House.

Miscellaneous

House Democrats Blast WH Policy on Congressional Responses - On Tuesday, House Democratic Leader Nancy Pelosi (D-CA) sent a letter to the White House Counsel and the U.S. Attorney General urging that a White House policy of ignoring oversight requests from all but a select few Members of Congress be scrapped. Leader Pelosi was joined on her letter by other House Democratic Leaders as well as the Ranking Members of each standing committee. According to the letter, the Justice Department issued a determination last month that the various Executive Branch departments and agencies only have to adhere to requests for information from Committee Chairs, while similar requests from those in high-level committee positions in the minority party or "rank-and-file" members from either party did not need to be accommodated. "A formal policy of ignoring requests by the Minority and any Member of Congress who isn't a Chairman is without precedent or rational justification" Leader Pelosi wrote, adding that "this policy represents an unprecedented assault on the basic constitutional design of our republic." A request was made "to immediately withdraw this blanket ban on oversight requests."

Massachusetts Delegation Introduce Congressional Resolutions Honoring "Big Papi" - In recognition of the Boston Red Sox retiring former slugger David Ortiz's iconic number 34 on Friday, the House and Senate delegations from Massachusetts introduced companion resolutions praising the Fenway hero and thanking him for bringing three World Series titles back to New England and for his many contributions on and off the field. Though led by the Bay State delegation, the resolutions were also co-sponsored by Senators and House Members from across the region.




Budget/Appropriations

CBO Issues Document Explaining "Governmental Activity" for Budgetary Purposes - On Tuesday, the Congressional Budget Office (CBO) released a document to try and put into laymen's terms what qualifies as a "governmental activity" as it determines budgetary impact. The CBO summarized this as "when the Congress considers legislation that would authorize a nonfederal entity to carry out certain duties, CBO must decide whether to treat the associated cash flows as federal transactions when estimating the bill's budgetary effects."

House Budget Committee Issues Debt One-Pager - On Wednesday, the House Budget Committee majority staff put forth a one-page document warning of a "growing probability of a sovereign debt crisis" for the nation, which the staff blames in part on "ever-expanding government and uncontrolled spending." The document summarizes data gathered from the CBO that barring any change in current law, the debt held by the public will rise from today's 77 percent of GDP, to "113 percent of GDP in the next 20 years" and that in the next 30 years, "debt is projected to reach 150 percent of GDP." The staff contends that higher debt comes from "spending growth well above historic levels of revenues" and that according to CBO projections, spending "will persistently outpace revenue growth." The staff noted that mandatory spending and interest on the debt "will continue to dominate the budget" however within 12 years, "these categories of spending are expected to consume all Federal revenue." This will require all government activities to be financed via borrowed money. The solution, according to the staff, is "for Congress to pass a budget resolution that reaches balance and outlines a long-term, fiscally sustainable path."



Energy & Environment

Svinicki Set for Floor Vote - The Senate is expected later today to confirm Kristine Svinicki to serve as a Commissioner on the Nuclear Regulatory Commission (NRC). Her current term of office ends on Friday.

House Subcommittee Approves Five Energy Bills - On Wednesday, the Energy and Commerce Committee's Subcommittee on Energy approved five measures designed to "modernize the nation's energy infrastructure and promote energy security." Three of the five passed by voice vote: the Hydropower Policy Modernization Act of 2017, which designates the Federal Energy Regulatory Commission (FERC) as "the lead agency for licensing hydropower projects;" the Enhancing State Energy Security Planning and Emergency Preparedness Act, which would help states preserve and protect the nation's energy infrastructure "against physical and cybersecurity threats;" and H.R. 2786, which facilitates "small conduit hydropower facilities" to be added to the nation's infrastructure as "an emerging new source of renewable energy." Two other bills passed on near party-line votes, and included the Promoting Cross-Border Energy Infrastructure Act (H.R. 2883), which is designed to "permit the construction of cross-border pipelines and electric transmission facilities;" and the Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (H.R. 2910) which would help streamline the effort to site interstate natural gas pipelines. The two bills passed by votes of 18 to 12 and 17 to 14 respectively. The bills now go to the full committee for further consideration.

EPA Marks One-Year Anniversary of TSCA Reform Act - On Thursday, Environmental Protection Agency (EPA) Administrator Scott Pruitt announced that EPA had met its first-year statutory responsibilities under the Frank R. Lautenberg Chemical Safety for the 21st Century Act. The Lautenberg Act, adopted last June, amended and updated the four decades-old Toxic Substances Control Act (TSCA) which regulates "chemical substances and mixtures in commerce." In the first year since passage, the EPA finalized three rules: one that established a "process and criteria for identifying high priority chemicals for risk evaluation;" another that established a "process for evaluating high priority chemicals to determine whether or not they present an unreasonable risk to health or the environment;" and a third that requires industry to report "chemicals manufactured or processed in the U.S. over the past 10 years" to ensure they are part of the active TSCA Inventory and thus allow EPA to better prioritize for risk evaluation. Also in the first year, the EPA "released scope documents for the initial ten chemicals for risk evaluation under the amended law," and developed the means for non-EPA parties "interested in submitting draft risk evaluations to the EPA for consideration."

Bicameral Letter Urges Interior Department to Protect ANWR - On Wednesday, Senator Ed Markey (D-MA) and a handful of House and Senate colleagues sent a letter to Interior Secretary Ryan Zinke asking that the Department maintain "important protections from oil and gas drilling in the Coastal Plain of the Arctic National Wildlife Refuge and the National Petroleum Reserve-Alaska." The lawmakers indicated that both areas are "environmentally and culturally important and worthy of safeguarding for future generations."

NOAA Shows First Day of Summer Map - On Wednesday, the National Oceanic and Atmospheric Administration (NOAA) unveiled an interactive map of the United States showing hundreds of locations across the country and what the historical record high was on the first day of summer, along with the record cold for that day. Of particular interest is that the coldest first day of summer on the eastern side of the Mississippi River was atop New Hampshire's Mt. Washington.

For more information on the Council's work on energy & environment issues, please contact David O'Donnell.



Financial Services/Fiscal Policy

Senate Banking Committee Holds Hearing with Regulators on Economic Growth - At the third in a series of hearings laying the groundwork for financial regulatory reform legislation, the Senate Banking Committee heard from a series of federal regulators on Thursday regarding their recommendations for economic growth. In his opening remarks, Chairman Mike Crapo (R-ID) specifically pointed to several key areas where he hopes to find bipartisan solutions, including "tailoring regulation based on the complexity of banking organizations; changing the $50 billion threshold for SIFIs; exempting more banks from stress testing; simplifying the Volcker Rule; and simplifying small bank capital rules." Of note, Federal Reserve Governor Jerome Powell said that the Fed would be open to looking at many of those issues, and specifically highlighting that the agency believes "small banking organizations could be exempted from the Volcker rule," and that the Fed would support increases in both the $10 billion stress test threshold and the $50 billion threshold for enhanced prudential supervision. Keith Noreika, Acting Comptroller of the Currency, also expressed his support for reviewing the Volcker Rule and the $50 billion threshold. Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg said that both his agency and the Federal Reserve are exploring ways to "improve" the living will submission process.

House Panel Finishes Work on Flood Insurance Bills - The House Financial Services Committee completed its multi-week markup on flood insurance related legislation on Wednesday, when it approved five additional bills, three of which passed unanimously. Among the bills headed to the House floor include the Flood Insurance Market Parity and Modernization Act (H.R. 1422), which clarifies that flood insurance policies written by private carriers satisfy the mandatory purchase requirement, and the Taxpayer Exposure Mitigation Act (H.R. 2246), which eliminate the National Flood Insurance Program's (NFIP) mandatory purchase requirement for commercial properties.

Fed Says Big Banks Passed Stress Tests - The Federal Reserve announced on Thursday that all 34 bank holding companies (BHCs) that were subject to supervisory stress tests have passed the initial results for a third straight year. The agency reported that since 2009, the banks have added more than $750 billion in common equity capital. Federal Reserve Governor Jerome Powell said the successful results indicate that, "even during a severe recession, our large banks would remain well capitalized." This was the seventh round of stress tests led by the Federal Reserve since 2009 and the fifth round required under the Dodd-Frank Act. The Federal Reserve will release the results of the Comprehensive Capital Analysis and Review (CCAR) on Wednesday.

Ryan Offers Vision for Tax Reform Legislation - In what his office called his "first major speech on tax reform," House Speaker Paul Ryan (R-WI) reiterated many of the elements others in Congress and the Trump Administration have previously laid out for a tax code overhaul, including reducing the tax code from seven brackets down to three; preserving critical dedications including mortgage, charitable giving, and retirement savings; moving to a territorial tax system; and lowering the corporate tax rate. Speaking at the National Association of Manufacturers' (NAM) 2017 Manufacturing Summit, Ryan added to the chorus on those calling for tax reform to be permanent, saying that businesses require certainty to "hire more workers, invest in their businesses, and plan for the future." Ryan also said that Washington is "going to get this done in 2017," despite the dwindling legislative calendar.

Committee Hearings Planned This Week - The financial services and banking related committees will hold the following hearings this week in Washington, D.C.:

Tuesday

  • 10:00 a.m. - House Financial Services Capital Markets, Securities, and Investment Subcommittee, "U.S. Equity Market Structure Part I: A Review of the Evolution of Today's Equity Market Structure and How We Got Here" 

Wednesday

  • 10:00 a.m. - House Financial Services Monetary Policy and Trade Subcommittee, "The Federal Reserve's Impact on Main Street, Retirees, and Savings"
  • 2:00 p.m. - House Financial Services Financial Institutions and Consumer Credit Subcommittee, "Examining the BSA/AML Regulatory Compliance Regime"

Thursday

  • 10:00 a.m. - Senate Banking Committee, "Principles of Housing Finance Reform"

 

For more information on the Council's work on financial services issues, please contact Chris Averill


Healthcare

Senate GOP Releases Draft Healthcare Legislation - On Thursday, Senate Majority Leader Mitch McConnell (R-KY) and Republican leadership unveiled their long-awaited draft healthcare reform legislation. Among key provisions, the measure would adjust health insurance tax credits for income and geography beginning in 2020. The credits would be available for people with income of up to 350 percent of the federal poverty level, versus 400 percent under current law. While the House bill requires individuals to maintain insurance coverage or face a higher premium, the Senate proposal does not include language requiring continuous coverage. A phase-out of higher payments for Obamacare's Medicaid expansion would begin in 2021 and be completed by 2024.  With a slim majority, Republicans can only afford to lose two votes from the caucus, as Democrats are widely expected to unanimously oppose the measure. A group of conservative Republican Senators - Ted Cruz (R-TX), Ron Johnson (R-WI), Mike Lee (R-UT), and Rand Paul (R-KY) - released a joint statement shortly after the text was released expressing their inability to vote for the bill in its current form as it "does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their healthcare costs." But the group did say they "are open to negotiation and obtaining more information before it is brought to the floor."  On Friday, Senator Dean Heller (R-NV), who faces a difficult re-election bid next year, said that he too could not support the bill in its current form, saying he wants to "protect Medicaid expansion states." It remains to be seen whether McConnell will be able to cobble together enough votes from the conservative wing, or by appeasing more moderate members such as Heller, Senator Susan Collins (R-ME), or Senator Lisa Murkowski (R-AK). Meanwhile, President Donald J. Trump tweeted his support of the Senate's effort, and U.S. Department of Health and Human Services (HHS) Secretary Tom Price issued his own press statement supporting the legislation. A vote is expected on the measure by the full Senate this week. A detailed section-by-section summary of the discussion draft may be viewed here.

Blunt Objects to NIH Cuts - Senator Roy Blunt (R-MO), Chairman of the Senate Labor-HHS-Education Appropriations Subcommittee, said Thursday that he was opposed to the cuts contained in President Donald J. Trump's budget for the National Institutes of Health (NIH). Blunt remarked at a hearing on the proposal that "the budget, of course, proposes cuts that I think you can rest assured the committee will find unacceptable," adding that "no one should have to defend" such deep cuts. The president's budget would slash $7.4 billion from NIH funding, or roughly a quarter of its current funding level. Blunt said that such a decrease in funding could result in a loss of roughly 90,000 jobs nationwide and a $15.3 billion loss in economic activity.

House Subcommittee Looks at Safety Net Health Programs - The House Energy & Commerce Subcommittee on Health held a hearing Friday entitled, "Examining the Extension of Safety Net Health Programs," which specifically focused on Federally Qualified Health Centers (FQHCs) and the State Children's Health Insurance Program (SCHIP). These two programs have traditionally enjoyed strong bipartisan support in Congress and have been recognized for their ability to help low-income adults and children achieve better health outcomes. The hearing had originally been scheduled for Wednesday, June 14th.

House Republican Healthcare Leaders Seek Action from CMS on Unimplemented Recommendations - Three key House Republicans on Friday sent a letter to Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma expressing concern over a "backlog of unimplemented recommendations" from the Department of Health and Human Services' (HHS) Office of Inspector General (OIG) over a span of several decades. The recommendations, which the members say are low-cost and not contested by CMS, deal with Medicare Parts A and B, Medicare Part D, and Medicaid. The letter was sent by House Energy and Commerce Committee Chairman Greg Walden (R-OR), Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA), and Health Subcommittee Chairman Michael C. Burgess, M.D. (R-TX). The group said they expect CMS to be able to complete the 12 highlighted recommendations within the next year.

For more information on the Council's work on healthcare issues, please contact David O'Donnell.



Higher Education

ED Announces Year-Round Pell Grants - On Monday, June 19, the U.S. Department of Education (ED) announced that year-round Pell Grants would be made available to students beginning on July 1, 2017.  The policy change will provide thousands of students to financial resources that will allow them to complete their coursework on their own schedules.  In making the announcement, Secretary of Education Betsy DeVos said, "This decision is about empowering students and giving them the flexibility and support needed to achieve their goals."  The change will allow eligible students to receive up to 150 percent of the students' Federal Pell Grant Scheduled Award beginning with the 2017-2018 award year.  Restoration of year-round Pell Grants has had pi-partisan support and was included in the budget deal passed by Congress last month. 

House Passes Perkins Career and Technical Education Bill -
On Thursday, June 22, the House passed the Strengthening Career and Technical Education for the 21st Century Act (H.R. 2353), reauthorizing the Carl D. Perkins Career and Technical Education Act, by a voice vote.  This is the first major overhaul of the program, which provides federal support to state and local career and technical education (CTE) programs, since 2006.  The bipartisan legislation, introduced by Rep. Glenn Thompson (R-PA) and Raja Krishnamoorthi (D-IL), improves upon the Perkins program by allowing states more flexibility to respond to evolving education and economic needs, and also focuses on ensuring that education prepares historically disadvantaged or vulnerable students for high-skill, high-wage careers.  The bill also aims to better align training with in-demand jobs, and increases the focus on employability skills and work-based learning.  Many education leaders and advocates were alarmed when, in his FY 2018 budget proposal, President Donald Trump propsed cutting the Perkins program by $166 million.  House Education & Workforce Committee Chairwoman Virginia Foxx praised the bill, saying that it "puts America on the right path to closing the skills gap and sets our workers up for a future of success."  Read more in Rep. Thompson's press release.

DeVos Names New COO of Federal Student Aid - On Tuesday, June 20, U.S. Secretary of Education Betsy DeVos announced her intent to appoint Dr. A. Wayne Johnson as Chief Operating of Federal Student Aid (FSA), describing him as "the right person to modernize FSA for the 21st Century."  Dr. Johnson has 30 years of experience in the financial services industry and holds a Ph.D. in higher education leadership.  A Georgia native, he is the Founder, Chairman and former CEO of First Performance Corporation, a global payment card technology platform company.  FSA currently serves 42 million student loan borrowing clients and administers more than $1.4 trillion in current outstanding Federal Student Loan balances.  Senator Lamar Alexander (R-TN), Chairman of the Senate HELP Committee, praised the pick, saying "I look forward to working with Dr. Johnson to ensure that the office is putting the best interests of students and taxpayers first and operating efficiently to carry out critical tasks."  The previous COO fo FSA, James Runcie, resigned abruptly in May, and stated in emails leaked to the media that he disagreed with the direction of the department under Secretary DeVos.  Read more in Inside Higher Ed

Department of Education Released Regulatory Reform Progress Report - On Thursday, June 22, the U.S. Department of Education released its first Regulatory Reform Task Force Progress Report.  All federal agencies, including the Department of Education, were required to establish Regulatory Reform Task Forces pursuant to an executive order signed by President Trump in February 2017, which aims to alleviate unnecessary regulatory burdens.  While the task force is still in the preliminary stage of its work, the 66-page document describes the next steps in the process, and cites the administration's previously- announced plan to pause two "burdensome" regulatory proposals: the borrower-defense and gainful-employment rules. In the report, the task force said the looming rule-making process for these two rules will be "arduous" and require significant resources and oversight from the department. In a written statement, Secretary DeVos said that the task force members "have been tasked with providing recommendations on which regulations to repeal, modify or keep in an effort to ensure those that remain adequately protect students while giving states, institutions, teachers, parents and students the flexibility needed to improve student achievement."  Read more in Inside Higher Ed.

For more information on the Council's work on higher education issues, please contact Taylor Pichette.




Technology

Patent Reform Bill Introduced in Senate - On Wednesday, Senator Chris Coons (D-DE) introduced the STRONGER Patents Act of 2017 along with cosponsors Senators Tom Cotton (R-AR), Dick Durbin (D- IL), and Mazie Hirono (D-HI). The bill would limit repetitive and harassing challenges against patent owners in the U.S. Patent and Trademark Office's (USPTO) patent challenge review process, known as inter partes review (IPR). The constitutionality of the IPR process is currently being scrutinized by the Supreme Court in the case of Oil States Energy Services LLC v. Greene’s Energy Group, LLC. The STRONGER Patents Act would also restore incentives for challengers and patent holders to reach agreements before going to court and ensure the USPTO has full access to the fees the office collects. The bill has already received praise from the Innovation Alliance, the American Conservative Union, Conservatives for Property Rights, and the Medical Device Manufacturers Association. The bill is similar to the STRONG Patents Act that Senator Coons introduced last session, but did not leave committee. However, Senator Coons expressed confidence that the bill would receive more co-sponsors from both parties and stated he is hopeful that the Trump administration would, "align with a stronger patent view than maybe was the case in the previous administration." In other USPTO news this week, the Supreme Court handed down a decision in the case of Matal v. Tam, which challenged the USPTO's decision to refuse trademarks that USPTO officials deems offensive. The Supreme Court ruled 8-0 in favor of Simon Tam and found that it is unconstitutional for the USPTO to refuse to register a trademark for being offensive on racial, religious, or similar grounds. Read more in The Hill and The Washington Post.

White House Hosts Tech Week - This week, the White House hosted "Tech Week," an initiative by the Trump administration to bolster relations with the technology industry through a series of events hosted by the White House's Office of American Innovation and Office of Science and Technology Policy. These meetings come after months of frustration with the Trump administration from technology companies, many of which have spoken out against President Trump's immigration orders and decision to withdraw from the Paris Climate Accord. On Monday, the Office of American Innovation hosted the first meeting of the American Technology Council, a group of technology industry leaders and administration officials who aim to modernize the government's IT infrastructure. The group, which includes the CEOs of Apple, Amazon, Microsoft, IBM, and Intel, discussed ways to improve service for citizens while strengthening protections against cyberattacks. The group reportedly also raised the topics of high-skill immigration reform and emerging technologies with President Trump. On Thursday, the Office of Science and Technology Policy shifted focus for 'Tech Week' with an event titled, "American Leadership in Emerging Technology." Administration officials divided attendees, including technology company leaders, venture capital firm representatives, and administration officials, into three working groups to discuss areas of focus for the administration. The groups discussed drones, 5G wireless broadband and the Internet of Things (IoT), and financing emerging technology. Trump administration officials stated that the event focused on, "ways in which we can expand geographic diversity and tech investment" outside of major technology hubs. The session on 5G wireless broadband and IoT was notably hosted by Federal Communications Commission (FCC) Chairman Ajit Pai with executives from AT&T, Sprint, Verizon, and T-Mobile in attendance. Read more in The New York Times and The Hill.

FCC Acts on Enforcement Chief and Proposal to Access Blocked Caller ID - On Wednesday, Federal Communication Commission (FCC) Chairman Ajit Pai announced he is appointing Rosemary Harold to be the chief of the FCC's enforcement bureau. Harold previously worked as an attorney at the FCC before becoming a partner at the law firm Wilkinson Barker Knauer LLP. On Tuesday, Chairman Pai also announced he will send Congress his plans for an "Office of Economics and Data," which he initially unveiled in early April. Chairman Pai said that the plan for office structure and authority is currently under development, but he hopes to have the Commission approve the creation of the new office in the fall. In other FCC news this week, the Commission voted to advance a proposal that would allow law enforcement agencies to access blocked caller ID information in cases of threatening calls. The proposal would extend a temporary exemption the FCC granted to law enforcement in March following a stream of anonymous threats against Jewish community centers across the U.S. Read more in The Hill and Broadcasting & Cable.

White House and Congress Discuss Rural Broadband - On Wednesday, President Trump announced that his administration will include broadband internet in his infrastructure plan. A Trump official said that the administration knows, "we'll have to invest monetarily in this effort, but we are still hoping we can leverage other dollars, other investment, and also make sure we're making investments that are going to be good for the long-term." President Trump made this announcement in Cedar Rapids, Iowa, as part of the White House's Tech Week. Rural broadband was also on the agenda for Congress with three separate hearings. On Tuesday, the Senate Commerce Committee's Communications Subcommittee discussed the Federal Communications Commission's (FCC) Universal Service Fund (USF) and rural broadband investment. On Thursday, subcommittee Chair Senator Roger Wicker (R-MI) and Ranking Member Senator Brian Schatz (D-HI) reintroduced the Reaching Underserved Rural Areas to Lead (RURAL) on Telehealth Act, which Senator Wicker signaled during the committee hearing. The RURAL on Telehealth Act would qualify non-rural hospitals serving rural areas for USF funds. On Wednesday, the House Telecommunications subcommittee held a hearing to review the mapping of broadband coverage. Subcommittee Chair Representative Marsha Blackburn (R-TN) stated in her opening remarks, "accurately defining broadband and ensuring access to accurate mapping data is imperative so that hard-working taxpayer money targets areas most in need of broadband service." On Thursday, the House Small Business subcommittee also held a hearing on expanding rural broadband access. Read more in Multichannel News and Morning Consult.


For more information on the Council's work on technology issues, please contact Emily Heisig or Taylor Pichette.



Trade

USTR's Lighthizer Outlines Trade Agenda for Senate and House Committees - On Wednesday, U.S. Trade Representative Robert Lighthizer appeared before the Senate Finance Committee to give an overview of the President's trade agenda, and repeated his testimony a day later before the House Ways and Means Committee. During his Finance Committee appearance, Ambassador Lighthizer devoted a good portion of his time discussing the Administration's re-boot of the North America Free Trade Agreement (NAFTA). Ambassador Lighthizer indicated that the 90-day congressional consultation window on NAFTA negotiations runs through mid-August, and that public hearings will take place during this week. During Ambassador Lighthizer's appearance before the Ways and Means Committee, the Committee's ranking member, Richard Neal (D-MA) mentioned to him that he had told then-President Obama that it would likely have been easier to start Transatlantic Trade and Investment Partnership (TTIP) negotiations before the Trans Pacific Partnership (TPP) talks, but was curious if Ambassador Lighthizer had reached out to his European counterparts. The Ambassador said that he realizes the importance of our relationships, and that he has talked with his EU counterpart, however a variety of recent elections in Europe and upcoming German elections in the fall have slowed things a little. Mr. Neal also discussed a report that Ford Motor Company would be building small cars in China instead of Mexico and then importing them to the U.S. and asked the Ambassador if this policy was in step with the Administration's goals of keeping businesses here. Mr. Lighthizer agreed that it was "troubling" and that he "wanted to look and see what the incentives are" for Ford to move. He added that if Ford's decision to move was based "not on economic decisions" then the Administration should take action. Representative John Larson (D-CT) took the opportunity to pose six questions to the Ambassador with a request that he respond in writing: on NAFTA, how can the U.S. see greater access to Canadian & Mexican procurement markets given our "Buy America" provisions in trade; what intellectual property protections in NAFTA; enforcement of environment and labor protections in our future free trade agreements; addressing the need for currency rules and protections in future trade agreements; strong and enforceable disciplines in NAFTA and other trade agreements; and a commitment that the U.S. is not backing out of the U.S.-Korea free trade agreement. On this final item, Mr. Lighthizer said that the Administration is looking at all of our trade agreements and that while discussions are ongoing, there are no plans to drop out of the Korea-U.S. agreement at this point. However, Ambassador Lighthizer emphasized to Mr. Larson and to others that the Administration would not stand for nations having trade barriers while they are running trade surpluses with the United States, stating that such nations "had better get rid of the barriers and let us sell there, because we're not going to tolerate it anymore."

Congressional Trade Leaders Urge President to Discuss Trade Barriers With India's PM - On Friday, Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) were joined by House Ways and Means Committee Chairman Kevin Brady (R-TX) and Ranking Member Richard Neal (D-MA) in sending a letter to President Trump to urge that he "advocate for market-based reforms and eliminate trade and investment barriers" in discussions with Prime Minister Modi of India. The Prime Minister will visit the President this week. In their letter, the four top Congressional trade leaders provided a host of their concerns "including inadequate intellectual property rights protection, forced localization, non-science based agricultural barriers, and high tariffs for American exports in the Indian market." They added that Indian businesses "continue to benefit from open U.S. markets," however India has not eliminated nor adequately addressed a number of trade and investment barriers even as India has "imposed several new significant barriers that have harmed U.S. producers" in a variety of economic sectors.

White House Formally Submits Ex-Im Bank Nominees - On Monday, the White House formally submitted the nominations of former Representative Scott Garrett (R-NJ) to be the President of the Export Import Bank and former Representative Spencer Bachus (R-AL) to serve as a board member. If confirmed, Mr. Garrett would take the place of Fred Hochberg, who resigned his position as Ex-Im Bank President back in January. Currently, the Ex Im Bank is operating without a quorum, and the confirmation of the two nominees would allow the Bank to commit to transactions greater than $10 million. Still, some supporters of the Ex-Im Bank are not convinced the two nominees share their enthusiasm for the mission of the Ex-Im Bank. Indeed, House Democratic Whip Steny Hoyer (D-MD) said in a statement urging opposition to Mr. Garrett's nomination that "for President Trump to nominate to lead the Bank and serve on its board one of its most vocal opponents runs counter to the clear interests of American businesses and workers and his own promise to support and create American jobs."

May Import and Export Price Indexes Rise - On June 15th, the Bureau of Labor Statistics (BLS) issued data showing that for the month of May, U.S. import prices dropped by 0.3 percent, which was down from April's 0.2 percent increase in import prices.  For the month, import prices from Japan were unchanged after a 0.1 percent drop in April and a 0.2 percent rise in March.  May's import price indexes from Canada were down 0.6 percent for the month. Import price indexes were up 0.2 percent from Mexico and "last recorded a monthly decline when the index fell 1.2 percent in January." For China, the import index was unchanged after it fell 0.1 percent in April and 0.2 percent in March. Further, import prices from China are down 1.1 percent over the one-year period ending in May. Prices for U.S. exports dropped 0.7 percent in May, which was "the first monthly drop since August 2016 when the index declined 0.8 percent." In addition, the May 2016 to May 2017 export price index rose 1.4 percent.


For more information on the Council's Trade Working Group, please contact Peter Phipps or Taylor Pichette.



Transportation

House Transportation Committee Chairman Introduces FAA Reform Bill - On Thursday, House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) introduced legislation to reauthorize and reform the Federal Aviation Administration (FAA).  Chairman Shuster was joined by Aviation Subcommittee Chairman Frank LoBiondo (R-NJ) and Aviation Subcommittee Vice Chair Paul Mitchell (R-MI), as well as Representatives Sam Graves (R-MO), Colleen Hanabusa (D-HI), and Kyrsten Sinema (D-AZ) as original co-sponsors of the bill, the 21st Century Aviation Innovation, Reform, and Reauthorization (AIRR) Act, or H.R. 2997.  As introduced, H.R. 2997 reauthorizes the programs and policies of the FAA for six years and, as the sponsors indicate, will "reduce red tape in the FAA's certification process for aircraft and aviation products, improve the safety of air travel, improve the flying experience for consumers, foster innovation in unmanned aircraft systems (UAS), fund the Nation's airport infrastructure, and separate our antiquated air traffic control (ATC) service from the federal government and help finally modernize the system."

One of the major components of the bill would move the ATC system from FAA control toward non-governmental management.  Under a new non-profit corporation, the ATC system would function "as a business with a CEO that is answerable to a Board of Directors nominated by a diverse cross-section of the aviation system's stakeholders and users."  All current air traffic controllers would transition to the new system over a three-year period, and since the new entity would "receive no federal funding or financial backing of the government," it would be able to impose fees.  Overall aviation safety would remain the primary function of the FAA and the agency would serve as the new ATC entity's regulator.

The bill includes a prohibition on involuntarily "bumping" passengers once they have boarded an airplane; a prohibition on cell phone use for in-flight calls; implementation of "best practices" to enhance the flying experience for passengers with disabilities; and fare transparency regarding "government-imposed taxes and fees." The bill also includes "robust funding" for the Airport Improvement Program (AIP) to ensure that airports have funds "for planning and development purposes" and continues to provide funds to address airport noise.  Regarding uses for Passenger Facility Charges (PFC), the bill allows "airports to more effectively finance projects that improve airport infrastructure." The bill will be marked up tomorrow.

Senate Transportation Committee Introduces FAA Reauthorization Bill - Also on Thursday, the Senate Commerce, Science, and Transportation Committee's Chairman John Thune (R-SD) introduced the Senate's version of FAA reauthorization and reform legislation.  Chairman Thune was joined by the Ranking Member of the full Committee, Senator Bill Nelson (D-FL), as well as Senators Roy Blunt (R-MO) and Maria Cantwell (D-WA), the Chairman and the Ranking Member of the Aviation Operations, Safety, and Security Subcommittee, respectively, as original co-sponsors of the Federal Aviation Administration (FAA) Reauthorization Act of 2017 (S. 1405).

As introduced in the Senate, S. 1405 will reauthorize the programs and policies of the FAA through fiscal year 2021, and as the bill's chief sponsor stated, will focus on "enhancing safety, improving air travel for the traveling public, and [implement] reforms to help bring the future of aviation closer to reality." Chairman Thune said the bill would help "address eroding rural access to our air transportation system and delays created by congestion around our most populated corridors." On ATC reform, the bill is different from the House version whereby S. 1405 moves forward on recommendations made by "independent government watchdogs" to ensure a smooth transition to the satellite-based NextGen ATC system.  Further, the bill requires that the FAA provide an assessment of how each NextGen program is contributing to the air traffic control system and its current implementation status.

In addition, the bill continues and reauthorizes the Essential Air Service (EAS) program, which would help ensure commercial flight service continues to many parts of rural America.  It also contains a variety of drone management and safety measures that will, among other things, help mitigate runway incursions and flight-path interference.  Further, it increases AIP funding by $400 million for an annual level of $3.75 billion to help address airport infrastructure needs, and the bill streamlines the PFC application process. Finally, the bill includes consumer protections, particularly a ban on "bumping" passengers involuntarily once they have been seated on an airplane, and the bill removes the cap on compensation that airlines can provide to "bumped" passengers.  The bill also includes provisions to help passengers with disabilities, ensure seating fees are disclosed and explained, and "creates a standard method for airlines to disclose their ancillary fees" such as baggage fees. The bill will be marked-up later this week.

Senate Committee Hears from TSA Nominee - On Wednesday, the Senate Commerce, Science, and Transportation Committee held a hearing where Senators received testimony from David Pekoske, the President's choice to head-up the Transportation Security Administration (TSA). The qualifications of Mr. Pekoske, a former Vice Commandant of the U.S. Coast Guard, to lead TSA generally were not questioned, however Senators did raise particular areas of concern. Some urged that the nominee "push back" against proposed funding cuts to TSA while others asked him to focus on workforce issues. Though TSA is often equated with aviation safety, Senator Cory Booker (D-NJ) expressed his concern about rail safety in the New York-New Jersey area, and in citing the bombing earlier in the week in Brussels, urged Admiral Pekoske to focus attention on rail transportation. Admiral Pekoske stated that he "will place a lot of emphasis, if confirmed, on looking at the threat for rail" adding that he would coordinate with rail operators and local law enforcement officials on intelligence gathering to understand what they know in order to better understand risks. A mark-up on the nomination is set to occur on Thursday.

House Panel Discusses Intercity Rail Service - On Thursday, the House Transportation and Infrastructure Committee's Subcommittee on Railroads, Pipelines, and Hazardous Materials held a hearing to review how best to accentuate the use of intercity passenger rail service in the United States, with a particular focus on challenges and opportunities that rail transportation faces now and in the future. In questions to the panel of rail experts, Representative Elizabeth Esty (D-CT) discussed the proposed high-speed rail upgrade to the Northeast Corridor (NEC Future) and asked about any potential switch in the preferred route from a coastal setting to a more inland route. The Federal Railroad Administration (FRA) indicated that they are in the process of considering all comments received from Connecticut residents and others and would be wrapping-up their Record of Decision on the project and have a response "soon." She also asked about the opportunity to utilize public private partnerships (P3s) on the NEC Future project, and the FRA representative indicated that they are inclined to welcome all funding sources, including from the private sector, to help the project to fruition. The Subcommittee's ranking member, Representative Mike Capuano (D-MA), noted that passenger rail is an "absolute necessity" for a successful economy, adding further that the Gateway Project and high-speed rail generally are "critical" for the nation. Mr. Capuano also spoke out against the President's budget regarding cuts to rail funding and had the majority of the witnesses agree with him about the impact the cuts would have.

For more information on the Council's work on transportation issues, please contact Peter Phipps.