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Congressional Update - Fall Preview

September 2011

We foresee an extremely busy work period as Congress nears the end of its August recess. On Wednesday, President Barack Obama announced that he had asked congressional leaders to convene a joint session next Wednesday night so that he can deliver a major economic policy speech. Citing procedural obstacles, Speaker Boehner asked the President to delay his speech by one day. After some resistance, the President accepted the Speaker's request and will speak before Congress on Thursday evening. In the speech, the President will implore Congress to consider a series of proposals intended to reinvigorate the economy. As we look ahead to this speech and the reconvening of Congress after Labor Day, here is an outline of some of the pressing issues we believe Congress will address this Fall.

FUNDING THE GOVERNMENT

Overlooked by many during the debate over raising the debt ceiling is the upcoming deadline to fund Fiscal Year 2012 (FY 2012), which begins on October 1. In April, Congress passed a continuing resolution (CR) to fund government operations for the remainder of FY 2011. At the time of passage, a shut down of the government seemed like a very real possibility and a CR was not reached until $38 billion in cuts in discretionary spending was found.

When Congress returns in September, we expect a similar, though not quite as contentious, debate over funding for FY 2012. The Debt Reduction package agreed to earlier this month put into place a more generous spending amount than had earlier been agreed to by the House. Republican leaders may have their work cut out for them in order to convince some of the more ardent budget hawks in the House to allow for that additional funding to be used.

There are twelve (12) separate appropriations bills and it is unlikely that all will be signed into law before the October 1 deadline, necessitating some sort of CR that most likely will allow the government to continue operating at FY 2011 levels. To date, the House has passed six of 12 funding bills, while the Senate has only completed one (the Military Construction bill). It is still to be determined whether the disparities in spending priorities between the House and Senate will lead the Congress into another 11th hour battle requiring a short term CR that includes spending cuts similar to the process used for this year’s budget.

SUPER COMMITTEE’S NEXT STEPS

Created when Congress extended the debt ceiling, the Joint Select Committee on Deficit Reduction -- commonly referred to as the “Super Committee” -- is comprised of 12 Members of Congress.

The Super Committee’s mandate is to produce legislation by November 23 that the Congressional Budget Office (CBO) scores as reducing the deficit by $1.5 trillion. According to the Committee’s directive, the deficit reduction target can be attained through any combination of reductions in discretionary, mandatory and entitlement spending or through changes to the tax code.

Earlier this week, the Committee Chairs, Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX), announced the hiring of Mark Prater as the panel’s staff director. Prater is a widely respected veteran aide on Capitol Hill, who currently works as the deputy staff director and chief tax counsel for Senate Finance Committee Republicans. As the Committee begins its work, below are dates it must adhere to from the legislation:

  • September 16: The Super Committee must hold (or have held) its first meeting.
  • Mid-September: In order to withhold a $500 billion increase in the debt ceiling, Congress would need to pass a resolution of disapproval. Even if such a resolution were to pass both the House and the Senate, it would be vetoed by the President and would require a two-thirds vote of both the House and Senate to override his veto, a very unlikely scenario.
  • October 1 through December 31: During this period, both the House and the Senate must vote on (but not necessarily adopt) a resolution that would send to the States a Balanced Budget Amendment to the Constitution. Adoption, which requires a two-thirds vote in each legislative body, is considered unlikely.
  • October 14: The Super Committee must “consider” any recommendations from House and Senate committees with respect to changes in law necessary for debt reduction. It is important to note that while the Committee must consider these suggestions, it is not required to include them in any final proposal.
  • November 23: By this date, the Super Committee is required to vote on a report that contains recommendations scored by CBO as reducing the debt over the next 10 years. It will take a simple majority vote of the Members of the Committee to advance legislation to the House and Senate.
  • December 23: By this date the House and Senate must have voted on the Super Committee’s proposed legislation without amendment.
  • Should the above deadlines not be met, any legislation the committee produces will lose the privileges of expedited consideration, and a similar sequestration mechanism will be triggered should the committee not produce at least $1.2 trillion savings. Such automatic spending cuts would go into effect in early 2013.

CYBER SECURITY

Throughout the course of this year, cyber security policy has been a prominent issue in Congress. In both chambers, committees of jurisdiction have held hearings and considered legislation aimed at modernizing the nation’s protection capabilities against a cyber attack. When Congress returns after Labor Day, we fully expect cyber security to remain a central issue. Therefore, in the coming weeks, the Public Policy and Government Relations group at EAPD will be publishing a comprehensive analysis of the proposals pending before Congress. In the meantime, below is a brief summary of the current status of cyber security reform on Capitol Hill.

In the House, Speaker John Boehner (R-OH). has chosen to defer legislation until after a 12-member GOP panel he appointed to review the Obama Administration’s cyber security proposal makes its formal recommendations in October. In the Senate, after much wrangling back and forth, Senate Minority Leader Mitch McConnell (R-KY) announced on July 28 that he will work with Senate Majority Leader Reid on comprehensive legislation they hope to have ready by the end of the year. As the House awaits the report by the cyber security taskforce and the Senate develops its own bill, committees of jurisdiction in both chambers will continue to hold hearings on this pressing issue. In fact, the Senate Judiciary Committee has already announced it will hold a hearing on September 7 to consider the nation’s cyber security policy and emerging threats.

PATENT REFORM

In early August, Senate Majority Leader Harry Reid (D-NV) announced that the Senate will consider the House's version of a bipartisan patent reform bill immediately upon its return after Labor Day. According to Leader Reid, the bill will be the first to move after the recess as part of a package of legislation designed to boost job creation. As we discussed in an earlier report, the bill would switch the U.S. to a first-to-file patent system in line with most other industrial nations. While the bill has drawn opposition, particularly from small businesses, it has wide-ranging support from industry, both parties, the U.S. Chamber of Commerce and the White House and is expected to pass in the Senate and be signed by the President this fall.

FEDERAL AVIATION ADMINISTRATION REAUTHORIZATION

The ability for the Federal Aviation Administration (FAA) to continue to collect ticket taxes and fund airport maintenance projects briefly expired earlier this summer in a dispute between House Transportation and Infrastructure Committee Chairman John Mica (R-FL) and the Senate, including Senator John Rockefeller (D-WV). While a short term extension through September 16 was finally passed by the Senate, this issue will need to be faced quickly once Congress returns.

TRANSPORTATION FUNDING

With Congress having been consumed by the debt ceiling debate, the House and Senate began the August recess without having taken any steps towards reauthorizing transportation funding. Federal transportation funding expires on September 30, so action in both chambers in early September is quite likely. Earlier this month, Senator Barbara Boxer (D-CA), Chair of the Environment and Public Works Committee, held a meeting to outline a bipartisan plan for Senate action originally proposed in mid-July by Boxer and Ranking Member James Inhofe (R-OK). As early as September 8, the Committee plans to mark-up a clean, four-month extension of transportation funding, while also marking up a second bill that would extend funding for two years at a cost of $109 billion.

This plan is at odds with the strategy put forward in the House, where Chairman Mica has been steadfast in pushing his own bill which would provide funding for six years at a cost of $230 billion. Mica’s bill would reduce transportation spending by about one-third from existing levels. Given the disparity between the proposals, it is almost certain that another short-term extension will be necessary as the House and Senate work to move their respective bills through committee and to the floor.

The Obama Administration has said passage of a highway bill would be a priority when Congress returns from August recess, while an earlier effort to create a National Infrastructure Bank has lost momentum under concerns that implementation of such a program would take years and therefore do little to aid the struggling economy. Should Congress be unable to extend funding by September 30, the current law authorizing highway and transit spending will expire and with it the gasoline tax that generates about $34 billion a year for infrastructure projects.

THE ELEMENTARY AND SECONDARY EDUCATION ACT (ESEA)

ESEA has been up for reauthorization since 2007 when No Child Left Behind (NCLB), President Bush’s major education initiative first expired. Ten years into NCLB, advocates on both sides of the aisle are pushing for reform. It was thought that reauthorization would happen in 2011, particularly after Senator Tom Harkin (D-IA), Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, announced plans at the beginning of the year to hold a mark-up before the Spring recess. Four months later, a mark-up has not been scheduled. A major impetus for reform was the NCLB-mandated standard that by 2014, all public school students should be scoring at least a “proficient” level in math and reading or risk having federal funding rescinded (a target many school districts across the country have said is unreachable). Responding to these concerns on August 8, Secretary of Education Arne Duncan announced that the Obama Administration will move forward with a plan to offer states waivers from this 2014 requirement.

While a relief to school administrators, this announcement seemingly has removed some of the momentum for passing legislation this year, though the bipartisan agreement necessary to get the bill through the House and Senate was far from certain even before the Administration’s decision. Chairman Harkin has described negotiations with his Senate HELP counterpart Senator Michael Enzi (R-WY) as “going well,” but added that they remain far apart on key issues like accountability, teachers, and comparability.

In the House, a pathway to bipartisan compromise seems even less likely. Education and Workforce Chairman John Kline (R-MN) introduced his bill, the “State and Local Funding Flexibility Act,” which would grant school districts the flexibility to redirect federal funding for education, including funds specifically earmarked for low-income and disadvantaged students, toward programs they deem most likely to improve student achievement. The proposal was strongly rebuked by the Ranking Member on the Committee, George Miller (D-CA), who voiced concern about what this flexibility would mean for poor and minority public school students.

NEXT STEPS

As Congress returns to session and these issues continue to unfold, we will continue to monitor news from Capitol Hill and provide additional updates as new developments occur.

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