September CEO Report

BIG PICTURE: This is the last real month for action on Capitol Hill before the midterms, and Republicans will try to score points on trade deals and government funding, while getting Supreme Court nominee Brett Kavanaughconfirmed:

- Government shutdown? If President Donald Trump follows through on histhreats to shut down the government over money for the border wall, federal funding would lapse for a third time this year. Republicans are aiming to advance a smaller bundles of bills, rather than rolling them into the kind of catchall omnibus they're accustomed to clearing. Republicans would like to pass the bills and go home, but Trump's threats could give Congress headaches just as the GOP is hoping to go home to campaign.

- NAFTA. Talks will continue Wednesday after the Trump administration notified Congress of its intent to sign a new deal in the next 90 days with Mexico and possibly Canada. The administration will have to provide the text of any new NAFTA agreement by the end of September to be on course for departing Mexican President Enrique Peña Nieto to sign the deal before his last full day in office on Nov. 30.

- Interest rate friction: The Federal Reserve is expected to hike interest rates again this month, in what would be the first increase since Trump publicly criticized the central bank for raising rates. If the Fed sticks to its plans, it could trigger an angry tweet from the president, shoving the bank further into the political spotlight it hates. Chairman Jerome Powell will also face questions from the press after the second day of meetings on Sept. 26.

Here's a deeper dive on the September policy agenda:


Tech in the hot seat: Twitter CEO Jack Dorsey and Facebook Chief Operating Officer Sheryl Sandberg will testify before the Senate Intelligence Committee on Sept. 5 to discuss foreign influence campaigns on social media.

The executives are likely to face a range of other questions, including onRepublican complaints that Twitter, Facebook and Google "censor" conservative content, an allegation the firms deny. Google's participation in the hearing is still TBD. The search giant wanted to send a senior vice president, but the Intelligence panel is holding out for a higher-level executive, publicly inviting Larry Page, CEO of Google parent company Alphabet.

Dorsey flies solo: Later that afternoon, Dorsey will go before the House Energy and Commerce Committee to discuss Twitter's content practices. The company has been squeezed between conservatives who accuse it of "shadow banning," or reducing the visibility of their accounts, and liberals who say it's not doing enough to purge peddlers of conspiracy theories like Alex Jones of the far-right website InfoWars. Dorsey has been on a media tour trying to explain the company's process but it hasn't tamped down criticism from Republicans, including the president, who accuse Twitter of suppressing their views. - Steven Overly


Election security efforts heat up: The Secure Elections Act, which seeks to compel states to use voting equipment that can be audited with paper backups, may be up for a vote this month despite reservations from the Trump administration and some prominent Republicans. The bipartisan bill, S 2593,hit a snag after a Rules Committee markup was canceled late last month. It was unclear if the White House scuttled the markup. A Trump spokeswoman said the administration had concerns the bill may be unnecessary given Homeland Security's mandate to help states secure elections. But Sen. James Lankford(R-Okla.), one of the bill's chief sponsors, remains optimistic he'll eventually win enough support for passage.

More corporate oversight: The White House is considering three actions that could give Washington significantly more control over the types of products that telecom companies buy - and who they buy from. Because of growing concerns about the risk Chinese tech products may pose in the U.S. supply chain - mainly because foreign software and hardware could provide a digital backdoor for espionage or malicious activity - the Trump administration plans to issue two executive orders and a presidential memorandum that together will give agencies more power to regulate telecom's technology purchases, sources told POLITICO. - Mike Farrell


Ratcheting up on China: A public comment period on Trump's proposal to slap either a 10 percent or 25 percent duty on an additional $200 billion worth of Chinese goods ends Sept. 6. After that, the president can make good on his threat to impose the tariffs, although his administration has previously taken a few extra weeks before imposing duties. For its part, China has threatened tostrike back on an additional $60 billion worth of U.S. goods.

Around the world: Lighthizer is expected to meet with European Union Trade Commissioner Cecilia Malmström in September for more talks on the scope of future trade negotiations. Lighthizer or one of his deputies also are expected at a group of 20 trade ministers meeting in Buenos Aires Sept. 14-15.

Lighthizer and Japanese Economic Revitalization Minister Toshimitsu Motegi are expected to hold more talks before a meeting between Trump and Japanese Prime Minister Shinzo Abe on the sidelines of the United Nations General Assembly meeting in New York.

Auto inquiry: Commerce Secretary Wilbur Ross could deliver a much-anticipated report on whether auto imports pose a threat to national securityin September, although the formal deadline for concluding the investigation is still months away. Senate Finance Chairman Orrin Hatch is also considering legislation aimed at reining in Trump's ability to impose tariffs on national security grounds under Section 232 of the 1962 Trade Expansion Act. - Doug Palmer


Musical chairmanships: Congressional retirements could help determine who leads congressional committees next year. The Senate Finance Committee will change leadership when Hatch (R-Utah) retires. In line behind him isChuck Grassley (R-Iowa), who is expected to leave his Judiciary chairmanship to take over at Finance if Republicans retain Senate control.

If Grassley forgoes the Finance gavel, it would go next to Mike Crapo (R-Idaho), who currently serves as Banking chairman. In that case, Pat Toomey(R-Pa.) would take over Banking, where Toomey's opposition to the Export-Import Bank could spell trouble for that agency. - Cristina Rivero

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Senate to wrap major opioid package: The Senate is expected to approvesweeping legislation to fight the opioid crisis in the coming days, giving vulnerable lawmakers up for reelection a powerful talking point heading into the midterms. However, it could still be months before the Senate and House reconcile their opioid legislation and approve a final package.

The slow pace has frustrated health care advocates, who say an even more robust response is needed to address a drug abuse crisis that kills more than 100 Americans each day. The Senate bill would expand access to treatment and prevention, encourage drugmakers to develop alternative pain treatments and crack down on shipments of synthetic opioids and illicit drugs. - Jason Millman


Volker 2.0: Banks and consumer groups will weigh in on proposed changes to the so-called Volcker rule, which prevents lenders from making trades to profit off short-term price changes in the markets. The banks are worried that the revisions to the rule - one of the most controversial post-crisis regulations - will capture a greater number of trades than are already covered. Consumer groups are concerned that Volcker 2.0 could heighten financial risk. The comment period ends Sept. 17.

Fannie-Freddie future: Retiring House Financial Services Chairman Jeb Hensarling will lay down a marker on what his successors should do with Fannie Mae and Freddie Mac on what will be the 10th anniversary of the government's takeover of the mortgage giants. Housing finance reform is the biggest piece of unfinished business from the financial crisis. The Texas Republican is planning to hold hearings and release legislation.

Bitcoin exchange: The Securities and Exchange Commission is expected to make its next decision on whether to allow a Bitcoin-based exchange-traded fund. The cryptocurrency's track record has not been great. Last month, the SEC rejected applications for nine ETFs, and before that, it turned down one proposed by the Winklevoss twins, of Facebook fame. Still, hope that the SEC will approve a fund this year appears to be driving investor interest in Bitcoin.

Whistleblower rule: The deadline for the public to comment on an SEC proposal to change the rules for paying whistleblowers ends on Sept. 18. In June, the commission voted 3-2 for the proposal, which would give the agency the discretion to reduce awards to tipsters in cases involving penalties of $100 million or more. - Mark McQuillan


Trump's refugee cap: The president will decide by the end of the month how many refugees to admit in fiscal year 2019. The president set the cap at 45,000 this year - the lowest ceiling since the program began in 1980. Resettlement groups fear the number could fall even further this time around. A Republican close to the White House and a former White House official told POLITICO in early August that the cap could drop to as low as 15,000. Refugee backers also worry the Trump administration could cut funding to several resettlement groups, a threat laid out in a March notice.

Public charge delayed: The Trump administration's timeline to publish the so-called "public charge" proposed rule has stretched at least into September - and it's not clear when it will land. The regulation will outline the criteria by which an immigrant would be considered a taxpayer burden and therefore denied a green card or admission. Initially slated for a July release, the proposal remains under review at the White House budget office. According to leaked drafts, the receipt of virtually any public benefit would count as a negative on a green card application.

Quicker visa denials: U.S. Citizenship and Immigration Services visa officers will be able to more swiftly deny visa applications under a new memo that goes into effect Sept. 11. The memo will allow visa adjudicators to reject petitions without first issuing a request for additional evidence or a "notice of intent to deny," which offers an explanation of a denial and a chance to respond.

Chief executives from 60 prominent U.S. companies - including Apple, Mastercard and Coca Cola - ripped the new guidance and similar moves in anAugust letter to DHS Secretary Kirstjen Nielsen, arguing Trump administration changes already have resulted in "arbitrary and inconsistent adjudications" of visa renewals. - Ted Hesson


Enter Chairman Inhofe: Following the death of Senate Armed Services Chairman John McCain, Sen. Jim Inhofe is in line to lead the influential panel. While the Oklahoma Republican largely shares McCain's hawkish views, he's politically more conservative and more closely aligned with Trump.

Inhofe and McCain differed on numerous issues, including Inhofe's claims that climate change is a hoax and his opposition to closing excess military bases.

In the months Inhofe has held the gavel in McCain's place, he also eschewed McCain's smash-mouth style of oversight and displayed a clear deference for Pentagon witnesses and nominees. And he has distanced himself from McCain's criticism of the heavy volume of Defense Department appointees drawn from defense contractors. - Connor O'Brien


Farm bill crunch time: Sept. 5 is a big day in farm country, with the 56 members of the bicameral farm bill conference committee holding their first public meeting. Senate Agriculture Chairman Pat Roberts (R-Kan.) intends to present a conference report at the gathering, though ranking member Debbie Stabenow (D-Mich.) has cautioned that more time may be needed.

The committee has until Sept. 30 to produce a compromise bill and pass it through both chambers to avoid having to extend current law. An extension would likely mean negotiations would be pushed past the midterm elections. That's a risky proposition for Republicans as they try to maintain control of Congress, but no farm-state Democrat wants to field campaign trail questions about a missed deadline, either.

SNAP is the challenge: The major gulf between the House and Senate versions - H.R. 2 and S. 3042 - is the Supplemental Nutrition Assistance Program, formerly known as food stamps. The House bill, which wasuniversally opposed by Democrats, would impose stricter work requirements on millions of able-bodied adult recipients and pour billions of dollars into mandatory state-run SNAP education and work-training programs. The Senate bill, passed on a bipartisan vote , avoided House Republicans' SNAP proposals and would leave the program, which accounts for more than three-quarters of the farm bill's price tag, largely unchanged.

Trade aid application time: Starting Sept. 4, farmers who have lost money due to the retaliatory tariffs from trading partners like China, Mexico and the European Union can apply for the first batch of $4.7 billion in direct paymentsthat USDA plans to disburse. Most of those funds - some $3.6 billion - will flow to soybean growers. Some commodity groups questioned the way the program was structured. USDA said payments will be based on actual production, so row crop farmers will have to wait until their harvest wraps up to apply. - Catherine Boudreau


Feeling GILTI? The Treasury Department and IRS are expected to roll out another key regulation soon for the Tax Cuts and Jobs Act addressing the law's Global Intangible Low-Taxed Income, or GILTI, provision. Treasury sent the proposed rules to OMB for review in late August, the final step before they're released. GILTI is akin to a minimum tax on companies' foreign profits. Though it's aimed at things like earnings from patents and royalties, some experts say it could reach much further than that, so corporate America isanxious to see some specifics.

Tax Reform 2.0: A new tax cut package is expected to hit the House floor this month. It's mostly aimed at making permanent the tax breaks for individuals that are now set to expire as part of the TCJA. But the plan also includes provisions meant to encourage more savings, an expansion of "529" education savings accounts and writeoffs for start-up companies. It's mostly a political exercise ahead of the November elections, though, since it's not likely to get through the Senate.