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

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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