The May edition of the CEO Report, the high-level outlook on the policy issues driving the month ...

The May edition of the CEO Report, the high-level outlook on the policy issues driving the month ... and beyond.

TRADE

Tough talks all around: May could see turning points for a few of President Donald Trump's biggest trade priorities.

First on the list is the U.S.-China relationship, which saw the beginning of ahigh-level dialogue to avert a potential trade war. The U.S. is still preparing tariffs and investment restrictions as punishment for China's technology transfer policies. On May 11, written comments are due to the U.S. Trade Representative's office arguing for exclusions of products from a list of $50 billion-worth of targeted imports. A public hearing will be held on May 15. The comment period on those tariffs will close on May 22, although it's unclear when the administration will impose duties.

Latest NAFTA push: Talks heat up again May 7 when U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo meet again in Washington. Lighthizer said he is aiming to conclude an agreement within two weeks to meet congressional deadlines for passage of a deal this year.

Tariff deadline redux: Trump's steel and aluminum tariffs will be back in the headlines towards month's end when a 30-day extension applied to the European Union, Canada and Mexico expires on June 1. Most notable will be the fate of the European Union, which has opposed being subject to either tariffs or quotas while other countries have accepted arrangements that would restrict their exports to the U.S. Permanent exemptions for Canada and Mexico will likely be connected to an outcome on NAFTA. - Adam Behsudi

FINANCIAL SERVICES

Rolling back the rules: The House this month is planning to pass a landmark bank deregulation bill and send it to Trump for his signature. The legislation (S. 2155), which the Senate passed in March, would scale back key rules from the 2010 Dodd-Frank law to the benefit of the nation's lenders. House Financial Services Chairman Jeb Hensarling (R-Texas) initially wanted to amend and expand the measure, but Senate Democrats, who were key to its success, warned that they would kill the legislation if it came back to them for a vote. It looks like the Democrats are going to win this one. Now, we'll see how the legislative victory plays out in an election year.

Easing a rule, opening the floodgates?: The House this week is expected to pass resolution (S.J. Res. 57 ) to block a 2013 Consumer Financial Protection Bureau measure intended to combat discrimination in auto lending. The legislation, passed by the Senate last month, would then head to Trump for his signature. It will be the first time Congress has successfully used the Congressional Review Act to block a years-old agency action outside the narrow window provided by the 1996 law.

Cracking down on China (more): Trade disputes aren't the only issue roiling U.S.-China relations. The House and Senate are planning to move ahead with bills (S. 2098, H.R. 4311) that would overhaul the way American companies do business with the Asian giant. The legislation targets the Committee on Foreign Investment in the United States, a Treasury-led, interagency panel that reviews foreign takeovers of U.S. companies for national security risks. The revamp has attracted opposition from the business community, which fears that it will be too restrictive, and Republicans are debating how to narrow down a set of initial proposals in response to the pushback.

Volcker rule revamp: Comptroller of the Currency Joseph Otting said financial regulators are aiming for mid-May to release a proposed rule simplifying the Volcker rule, which bans banks from making risky, short-term speculative trades. Otting has also expressed hope that he will be able to request input this month on enforcement of the Community Reinvestment Act, which requires banks to lend to poorer communities. Both of those timelines could slip, particularly because FDIC chairwoman nominee Jelena McWilliams still has not yet been confirmed to her post.

Cleaning up money laundering: Bank regulatory agencies are meeting with the Treasury Department's Financial Crimes Enforcement Network early this month to present recommendations for giving banks more flexibility in enforcing the Bank Secrecy Act.

New account, who dis?: Beginning May 11, banks will have to comply with a significant new Treasury Department rule requiring them to verify the identities of owners of new accounts. The rule is intended to crack down on customers using front companies to mask criminal activity. - Mark McQuillan

BUDGET & APPROPRIATIONS

Avoiding an omnibus (but probably not): Appropriations leaders in both chambers are plowing into the fiscal year 2019 spending season extolling a return to "regular order" - passing spending bills individually in an attempt to avoid a dreaded catch-all funding bill this fall, which Trump has threatened to veto. In a break from past years, several bills will see floor time in both the House and Senate. But given the already-truncated calendar, it'd be almost impossible for all 12 spending bills to land on the president's desk by Sept. 30. Maybe a few individual spending bills will be signed into law, but Congress will almost certainly still be headed into a continuing resolution come Sept. 30.

The game plan: Both chambers plan to tackle the easiest bills first: Military Construction-VA, as well as Legislative Branch and Energy-Water. Subcommittees in the House have already finished up the first two bills, with the third slated for a markup today. The Senate hasn't announced its schedule yet, but the Appropriations chairman has said he's shooting for floor votes by July.

Clawbacks scaled back: The White House is set to a deliver a package of proposed rescissions to Congress May 7. The much-hyped package is expected to be roughly $11 billion, significantly less than initially expected. Aides have said the Trump administration is planning to only target unused spending from past years, and won't try to roll back funding from this year's $1.3 trillion omnibus (H.R. 1625 ). Either way, the spending cuts could be a hard sell in the Senate.

The rescissions proposal could still hit federal agencies, even if it never gets a vote. Under law, funding that the president proposes to cancel can be frozen for 45 days. - Sarah Ferris

DEFENSE

Debate all day (and all of the night): The House Armed Services Committee begins consideration of its version of the annual National Defense Authorization Act with a markup on May 9. The panel's six subcommittees approved their portions of the bill (H.R. 5515) in April.

The daylong session is likely to feature contentious debates on a slew of military and political issues, including the Trump administration's proposal for new low-yield nuclear weapons, a ban on transgender troops in the military and funding for a wall on the U.S.-Mexico border. The full bill will also highlight the tradeoffs lawmakers made to boost Navy shipbuilding and other big-ticket programs and still maintain the $716 billion Pentagon spending topline set by a recent two-year budget deal.

In the Senate, the Armed Services Committee plans to move its version of the massive bill during the week of May 21, with the debate behind closed doors.

Spending bills start moving: In April, the Military Construction and Veterans Affairs Subcommittee approved its spending bill for the VA and military infrastructure programs, which is typically among the least controversial funding measures. A full Pentagon spending bill is likely to move in June, according to Defense Appropriations Subcommittee Chairwoman Kay Granger (R-Texas).

In the Senate, the Defense Appropriations panel is still waiting to hear from Defense Secretary Jim Mattis on the Pentagon's budget proposal. - Connor O'Brien

DATAPOINT

Survey finds 4M more uninsured: An annual survey by the Commonwealth Fund finds the uninsurance rate grew in 2018, with about 4 million fewer Americans covered by health insurance. The uninsured rate increased most among Republicans and those living in the South. - Tucker Doherty

Check out the DataPoint graphic here. Want to add DataPoint to your Pro account? Learn more.

TECHNOLOGY

Long reach of EU's data rules: The end of the month brings a big deadline for companies that harvest consumer data: The General Data Protection Regulation goes into full effect in Europe on May 25. The sweeping package of consumer privacy regulations, approved in April 2016, imposes new rules about how companies collect, process and store the data of EU citizens. Among the new rules, companies must disclose when they collect data and get express user consent to do so, rather than stuffing data-gathering permissions into lengthy terms of service agreements. They must also disclose what data they hold and allow people to transport it to another website or delete it altogether.

The rules apply to companies operating in the EU, regardless of their location or industry - putting a broad swath of executives on the hook. The costs of failing to comply are steep. Companies that violate the rules may be forced to pay up to €20 million or 4 percent of their global revenue, whichever is higher. Already, companies like Facebook and Google have announced they will extend some version of GDPR-required practices to customers worldwide, though they will be tailored to different countries.

The deadline comes as U.S. lawmakers contemplate their own digital privacy regulations. The European rules may set a precedent for what companies are willing to tolerate. - Steven Overly

EMPLOYMENT & IMMIGRATION

DACA's days in court: The fate of roughly 700,000 "DREAMers" brought to the United States as children will play out in several closely watched court battles this month. The Trump administration will try to persuade the liberal 9th Circuit Court of Appeals to allow it to proceed with a planned termination of the Deferred Action for Childhood Arrivals program, which offers deportation relief to DREAMers and allows them to work legally. The appeals court will hear oral arguments over five related California cases on May 15 in Pasadena.

Texas and six other states jumped into the DACA fight with a lawsuit that contends the program doesn't pass constitutional muster. The states want to shut down DACA renewals, or perhaps kill the program altogether. Brownsville-based U.S. District Court Judge Andrew Hanen - who put the brakes on a broader 2014 deportation relief program during the Obama administration - will hear the case. The plaintiffs are betting he'll view the DACA program in the same light.

Migrant caravan crosses the border: The dramatic journey of a migrant caravan from Central America will soon move to its next stage: the asylum process. Roughly 90 migrants had sought asylum in the United States by May 3, with dozens more waiting across the border in Tijuana, according to news reports. The asylum cases will likely proceed behind closed doors. Federal asylum officers will screen the migrants and decide if their cases should head to immigration court, where legal machinations can take years. - Ted Hesson

AGRICULTURE

Farm bill action heats up: Farmers and ranchers are hoping Congress can give them some certainty by completing the farm bill, especially as trade tensions bring unpredictability to agricultural markets. Reauthorized every five years, the sweeping legislation covers a broad range of programs including food stamps, rural development and crop insurance subsidies.

The House could take up its version of the bill ( H.R. 2) as soon as this month, although it's unclear whether the bill has enough GOP support to pass.

Democrats are staunchly opposed to the plan, which would impose stricter work requirements on about 5 million to 7 million Supplemental Nutrition Assistance Program recipients while pouring billions into training and education programs.

Many powerful conservative groups have also lined up against the bill, arguing it gives farmers too much taxpayer-funded support while not going far enough on work requirements for SNAP. The Senate Agriculture Committee is working on its own bill that leaders promise will be a bipartisan effort. The timing for introducing the Senate version of the legislation remains unclear.

How many calories in that pizza?: Restaurants, grocery stores and movie theater chains will be required to post calorie counts on their menus as of May 7. The long-delayed FDA rule, which stems from a provision in the Affordable Care Act, is taking effect despite some lingering industry opposition, particularly from pizza chains. The fact that the agency is sticking with the rule despite the Trump administration's deregulatory push is another indication that the FDA is defying partisanship, surprising public health advocates and frustrating some food industry leaders who thought they'd get a break.

The restaurant industry and consumer groups support uniform national labeling to inform consumers and avoid a patchwork of inconsistent state and local laws. Pizza chains and retailers, including grocers and convenience stores, continue to press for legislation in Congress that would relax the rule and give the companies a break on liability. - Helena Bottemiller Evich

ENERGY

EPA's Pruitt problem: The spotlight remains on EPA Administrator Scott Pruitt, who faces a slate of investigations and inquiries into his management, ethics and lavish spending at the helm of his agency - and during his time as Oklahoma attorney general. Pruitt appeared before two House panels in April and blamed his aides for installing a $43,000 privacy booth in his office, approving more than $100,000 in first-class flights and providing big raises for close aides. His appearance may have given him some breathing room with GOP lawmakers, but he's likely to have to return for a grilling by senators this month.

Of course, the deciding factor in whether he remains is Trump, who's been mum on Pruitt since the hearings. But that hasn't stopped the steady, almost daily, drip of news about the administrator. New documents have highlighted ties to multiple lobbyists who helped Pruitt set up several international trips. All the while, the House Oversight Committee is getting deeper into its probeof Pruitt's activities - meeting with at least one of the employees who haveexited the department in recent days. - Kelsey Tamborrino

Muddy waters for landmark law: Pruitt has promised to unveil his rule this month to vastly retract the number of streams and wetlands protected under the federal Clean Water Act. The scope of the 1972 law, which assesses fines for oil spilled into waterways and requires permits for developers filling in streams and wetlands, has been in question for more than a decade thanks to a pair of muddled Supreme Court decisions. The new rule, based on the late Supreme Court Justice Antonin Scalia's opinion in a 2006 case, is expected to leave it up to states to regulate wetlands that aren't connected to the larger river network and streams that flow only seasonally or after storms - waterways that make up the vast majority of the arid West.

The new rule comes even as industry groups, states and environmentalists are still fighting it out in court over the Obama administration's 2015 rule on the same topic, which critics, including the president, have blasted as federal overreach. - Annie Snider

HEALTH CARE

Presidential prescription for Rx prices: Trump is set to give his first major speech on drug prices as early as this week, an event expected to coincide with new regulatory actions but unlikely to bring big legislative changes. Trump is said to view the rollout as a major step toward fulfilling one of his most high-profile campaign promises. The president has pledged multiple times to crack down on the pharmaceutical industry but has yet to take any major action.

Administration officials hope that laying out specific plans for lowering the cost of drugs will persuade health companies to voluntarily make changes that would benefit customers. HHS Secretary Alex Azar has said the drug pricing plan will go "much further" than the president's February budget request, which among other things advocated for Medicare and Medicaid demonstrations to test new ways of paying for drugs on a smaller scale, like allowing some states to try negotiating drug costs in Medicaid.

Officials say a framework Azar has developed would dismantle provisions that have shielded parts of the drug industry from more vigorous competition, including changes to the Medicare Part D system, also called the prescription drug benefit. FDA Commissioner Scott Gottlieb has separately suggestedremoving a legal safe harbor that prevents drug manufacturer rebates to big insurers from being considered a kickback, saying the move "could help restore some semblance of reality to the relationship between list and negotiated prices and thereby boost affordability and competition." And the FDA could go after brand-name drug companies that use loopholes to block competition from generic drug makers after their patents or periods of marketing exclusivity expire.

Such talk is starting to rattle industry watchers, who until now weren't expecting big surprises from the administration. - Adriel Bettelheim

TAX

Senate's turn on IRS overhaul: The Senate Finance Committee may havesomething to say this month about a series of House-passed bills to reshape parts of the IRS, including the agency's customer service operations.

The legislative package passed the House the same week as Tax Day, which was notable this year because of a breakdown in IRS information technology systems that kept the agency from receiving tax returns and payments for most of the day. Supporters of the bills, which include provisions meant to improve IT services and cybersecurity, pointed to the Tax Day troubles at the IRS as reason to keep up momentum for the legislation. Members of the Ways and Means Committee have also asked the IRS for more information on the breakdown.

The taxman cometh: Speaking of the IRS, Senate Finance members are moving closer to formal consideration of Trump's nominee to head the agency, tax lawyer Chuck Rettig. The White House submitted his nomination paperwork last month and he began personally meeting members of the panel in April, both of which are steps ahead of a nomination hearing, though that has yet to be scheduled.

Show us the money: First-quarter corporate financial reports will continue to trickle in this month, providing plenty of fodder to Republicans and Democrats in Congress, along with interest groups, that continue to spar over what they perceive as positives and negatives of the Tax Cuts and Jobs Act, a battle certain to continue through November's midterm elections. Opponents of thenew tax law are pointing to a surge in stock buybacks like the one Apple announced May 2 as evidence that it's helping corporations and investors more than average Americans. Proponents cite bonuses, pay hikes and business expansions to argue the opposite. In the background of the politics, businesses are continuing to await guidance from the Treasury Department and IRS on provisions that warrant more clarity, a regulatory process that remains in early stages. - Aaron Lorenzo

CYBERSECURITY

First signs of election hacking?: Last week brought the first publicly revealed election-related cyberattack of the 2018 campaign season. The Knox County Election Commission in Tennessee said hackers afflicted its computer systems with a denial-of-service attack, which led to a delay in disclosing results of the May 1 primary for local races. Local station WBIR reported that the attackers remained unknown, "but there was evidence Tuesday night that the IP addresses of the computers were coming from both inside and outside the United States."

States are bracing for the possibility of more hacks, and officials are starting to consider how to spend the $380 million in election security grant money they will receive from the fiscal 2018 spending package Congress recently approved. Digital security experts have warned that the grants will only cover a slim portion of the costs needed to better secure election systems nationwide.

Capitol Hill doesn't appear poised to take additional action. Momentum for more election security legislation slowed in recent weeks after lawmakers briefly showed some bipartisan signs of life for the Secure Elections Act (S. 2261), a bill to that would codify the election security grant program and streamline the exchange of cyber threat intelligence between Washington and the states. It's now unclear when, or if, that proposal will move.

Cybersecurity executive order: May 11 will mark the one-year anniversary of Trump's cybersecurity executive order, which launched a sweeping review of the federal government's digital vulnerabilities. Cyber watchers are curious what the administration will do once all the reports are complete. And former White House officials have warned that cyber staff churn will inevitably slow down the administration's work John Bolton's arrival in April as Trump's new national security adviser prompted the departure of both Rob Joyce , Trump's top cyber adviser, and Tom Bossert, Trump's homeland security adviser who led the administration's response to high-profile cyber assaults like the WannaCry ransomware attack.

Botnet threat: One upcoming report of interest to businesses will detail the threat from botnets - armies of remotely hijacked computers that malicious hackers use to debilitate targets with floods of traffic. The White House has hinted that the review will likely promote voluntary cooperation from the private sector on disrupting botnets. - Cory Bennett

TRANSPORTATION

FAA bill finally takes wing: The House has passed its FAA reauthorization bill, after a Sisyphean journey ended with its sponsor, House Transportation Chairman Bill Shuster (R-Pa.), finally dropping the piece that had held it up for years: a proposal to spin off air traffic control into a nonprofit entity. Once that was dropped, the bill ( H.R. 4) passed swiftly. Lawmakers in both chambers have said they want to see a bill enacted before Congress breaks for the August recess. But that's a steep - some would say impossible - goal.

Up next, the Senate will need to take up its version of the bill (S. 1405 ) on the floor before the two competing versions can be reconciled. Senate passage will depend largely on securing floor time. The longer that takes, the more bills will crop up to jostle for attention in the race to August. - Kathryn Wolfe

EDUCATION

A Decision for DeVos in Tennessee: Education Secretary Betsy DeVos will weigh a wonky but important issue in the coming weeks on testing in Tennessee and the Every Student Succeeds Act, the federal education law that replaced No Child Left Behind in 2015. The law requires states to draft plans to hold schools accountable for student learning and progress, among other things.

Tennessee state lawmakers recently voted to hold students, teachers and public schools harmless when it comes to this year's statewide standardized tests, following major glitches with the exams. That means teachers, students and schools won't be penalized for poor performance on the tests. The move will likely require permission from DeVos, since the state pledged to consider 2018 testing data in holding schools accountable for student outcomes.

DeVos approved the plan drafted by Tennessee under the Every Student Succeeds Act in August. Whether she approves the state's request for a pass on this year's test scores will be closely watched by some education policy experts who support strong, test-based accountability, even when there are problems like technical glitches.

"Sadly, the victims of this escape from accountability are Tennessee's schoolchildren and in particular, low-income students and students of color who are most in need of the support and funding that should be directed to schools where students are falling the furthest behind," said Charles Barone, national policy director for Democrats for Education Reform.

Featured Posts
Recent Posts
Archive
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
How can we help?
0

KeyAg Distributors, 4525E, 3425N, Murtaugh, ID 83344          800-388-3659

Disclaimer/Privacy Policy  © 2016-2020 Pacer Technology

  • Facebook Clean
  • LinkedIn Clean
  • Twitter Social Icon
  • Instagram Social Icon