November Washington D.C. Policy Agenda

November 5, 2018

BIG PICTURE: The lame-duck Congress returns to D.C. next week for a session packed with pressing priorities - chiefly, keeping the government open. Their focus will be driven, in part, by Tuesday's midterm elections , which will determine who controls each chamber after the end of the year. The Trump administration, meanwhile, moves forward with regulatory changes in education, finance, immigration, energy and more:

- Avoiding a partial shutdown. Even though they've slated a full year of funding for the military and many non-defense programs, legislators still need to approve fiscal 2019 levels for seven departments and a slew of major agencies by Dec. 7. So November will be a month of legislative troubleshooting, complicated by sour attitudes of lawmakers in whichever party fails to win the House majority.

- More troops to the border: The sudden deployment of 5,200 active-duty troops to the U.S.-Mexico border last week is only the beginning. "We'll do up anywhere between 10,000 and 15,000 military personnel, on top of Border Patrol, ICE and everybody else at the border," President Donald Trump said a few days later, vowing that the thousands of Central American migrants fleeing to the U.S. to apply for legal asylum wouldn't enter.

- Title IX changes:The Trump administration this month is expected to drop its long-awaited proposed rewrite of rules for schools handling allegations of sexual harassment and assault. Expect the proposal to make a slew of controversial changes, including allowing students to cross-examine their accusers, giving them access to a wide range of information dug up by campus investigators and narrowly defining sexual harassment.

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

 

BUDGET & APPROPRIATIONS

Wall brawl: Leaders will need to find a way to mollify Trump in his demand for increased border wall funding in order to move forward with the Homeland Security spending bill, H.R. 6776 ,S. 3109 (115). And they must prep two spending measures they also neglected to pass on the floor before the fiscal year began on Oct. 1 - the bill that funds the State Department, plus the legislation that funds the departments of Commerce and Justice and federal science programs.

Still unfinished - but further along than the other stragglers - is the four-bill package caught up in conference negotiations that began over the summer. Spending leaders will look to resolve policy disputes this month over that bundle, which funds the departments of Agriculture, Interior, Transportation and Housing and Urban Development, as well as agencies like the IRS and the EPA.

A long-term fix: The special budget reform panel created this year is expected to mark up a proposal to switch to every-other-year budgeting, an effort to break the cycle of dysfunction that led to two shutdowns this year. Under that plan, Congress would adopt a budget on a biennial basis but would still be required to pass spending bills every year. - Jennifer Scholtes

 

AGRICULTURE

Farm bill down to the wire: House and Senate farm bill negotiators have to hash out a compromise deal between their versions of the bill before the end of the year, when funding for most agriculture programs runs out. The top four leaders of the House and Senate Agriculture Committees remain far apart on several issues, including which types of conservation programs to continue and whether to expand work requirements for food stamp recipients. Senate Ag Chairman Pat Roberts (R-Kan.) set a goal of finalizing a conference report after members return the week of Nov. 12.

If Congress can't produce a compromise bill, lawmakers may decide to pass an extension of current law. The fight would then pivot to which programs will be included in the extension, prompting groups to scramble to keep their initiatives funded.

Protecting produce: The FDA will hold a series of public meetings to debate its draft guidelines outlining how farmers can protect their fruits and vegetables from contamination. The daylong sessions start late this month and continue into December. They will be held in Portland, Ore.; Anaheim, Calif.; Albany, N.Y.; and Atlanta. - Liz Crampton

 

TRADE

Awaiting signatures: Leaders of the three North American countries are expected to sign the new U.S.-Mexico-Canada Agreement, the replacement for NAFTA, at the end of the month. The pact will still require congressional approval before it can go into effect, and that vote won't take place until next year.

Before the signing this month, officials may work out side agreements in which the U.S. will remove tariffs on imports of steel and aluminum from Mexico and Canada. In exchange, those two countries may agree to cap the amount of the two metals that each exports to the United States. Mexico has threatened not to sign the new trade agreement if those tariffs remain in place, and Canada has also held firm on the need to remove them. However, officials from both Canada and Mexico say very little negotiating has actually happened since the spring. - Megan Cassella and Alexander Panetta

Month of meetings: Trump will have a chance at the end of the month to sit down with Chinese President Xi Jinping on the sidelines of the G-20 Leaders' Summit in Buenos Aires. The meeting represents the most likely opportunity for the two sides to agree to halt the escalation of tariffs. The Trump administration's 10 percent tariffs on $200 billion in Chinese goods are set to increase to 25 percent on Jan. 1 if a compromise is not reached, and Trump has also threatened additional penalties on all remaining imports from China.

Vice President Mike Pence will make a swing through Asia in the middle of the month to attend a pair of summits in Trump's place. He will start with the Association of Southeast Asian Nations Leaders' Summit in Singapore before moving on to the Asia-Pacific Economic Cooperation Leaders' Summit in Papua New Guinea. - Cassella

 

TAX

Extenders on deck: Tax legislation looks possible this month, with so-called extenders taking center stage. Some three dozen of the "temporary" tax benefits - with recipients ranging from renewable energy companies to short-haul railroads - will expire at the end of the year unless they're renewed.

Some lawmakers are expected to push for fixes to errors accidentally inserted in the new tax law, H.R. 1 (115). There could be bipartisan support for fixing the so-called retail glitch that's requiring restaurants and retail stores to write off internal improvements over several decades, rather than immediately as lawmakers intended.

Retirement legislation that includes some tax-advantaged savings provisions is also possible. There are several ideas floating around. The House passed legislation, H.R. 6757, in September that includes universal savings accounts, which basically offer tax advantages similar to a 401(k) or IRA without the limits and penalties for early withdrawals. In the Senate, there's bipartisan legislation, S. 2526 , that, among other things, would allow small businesses to team up and offer savings plans to their workers.

Tax law regs, cont'd: Outside of Congress, rulemaking for the new tax law is unfolding. Limits on business interest deductibility are under regulatory review by the White House Office of Management and Budget, and they're expected to get approved later this month. Next up: rules on foreign tax credits are expected to soon get OMB review. - Aaron Lorenzo

 

Canada

Taxing for advantage: In an attempt to remain competitive with the United States following Republicans' tax cut law, the Canadian government will announce details of its response as part of a fiscal update Nov. 21. Canada is signaling that it will opt for targeted measures, like capital-cost deductability, rather than broad-based corporate cuts to regain the corporate tax advantage it held for years. With the countries' corporate rates now similar, the Canadian government sees its competitive advantage in lower health costs for companies and higher workforce education rates. But Finance Minister Bill Morneau has said that he sees U.S. tax write-offs for capital investment as a challenge to investment in his country. - Alexander Panetta 

 

TRANSPORTATION

Rules of the road: Self-driving car legislation is the one major pending piece of business for transportation lawmakers this year. The House quickly passed its version of legislation, HR 3388, setting out federal self-driving car rules, but the Senate has moved at a relatively glacial pace on its own bill (S. 1885 (115) ), hung up over disagreements about liability and safety concerns. Most watching the legislation feel that November will be a make-or-break month for the Senate to act in time to work out a final version before the end of the year. - Kathryn A. Wolfe 

 

FINANCIAL SERVICES

Changing of the guard: Republicans will soon pick committee leaders for the next Congress, and among the most intriguing questions is who will succeed retiring House Financial Services Chairman Jeb Hensarling as the panel's top GOP member. Those in the running include Reps. Patrick McHenry (R-N.C.) and Blaine Luetkemeyer (R-Mo.). The election, of course, will decide whether Republicans will be assigning chairmanships or ranking members. If control of the House flips, Democrat Maxine Waters of California has a lock on the committee gavel.

Derivatives rule: On Nov. 19, the comment period ends for a proposed SEC rule that would set capital requirements for brokers selling derivatives, the products that helped fuel the financial crisis. The SEC's Democratic commissioners say the rule, which has languished at the agency for years, could lead to greater risks in the financial system.

Fed policymakers meet: Federal Reserve policymakers will meet right after the elections. While they aren't expected to raise interest rates, investors will watch for signals on how many rate hikes are likely to come next year. That discussion will happen against the backdrop of Trump's drumbeat of attacks on the Fed, a wildly fluctuating stock market, and trade battles with China and other economies. - Mark McQuillan

 

ENERGY

Staying alive: There's bipartisan interest on Capitol Hill in reviving a popular conservation program that saw its authorization lapse Sept. 30, but still much uncertainty about how to do it. Committees in the House and Senate have both advanced bills permanently authorizing the Land and Water Conservation Fund, which uses revenue from offshore oil and gas drilling to protect and preserve national parks, forests and recreation areas. But two crucial lawmakers - House Natural Resources Chairman Rob Bishop (R-Utah) and Senate Energy Chairwoman Lisa Murkowski (R-Alaska) - oppose removing the program from the annual appropriations cycle, a provision sought by some supporters. Lawmakers are looking to cut a deal and pass it in the lame-duck session. - Anthony Adragna

Electric slide: Neil Chatterjee is back in the driver's seat at FERC after Kevin McIntyre relinquished the chairmanship in October so that he could focus on recovering from a recent health setback. McIntyre said he'd "commit myself fully" to a commissioner role.

When the Senate returns later this month, lawmakers will take up the FERC nomination of Bernard McNamee, the Energy Department's policy office chief, on Nov. 15. Even if he skates through the energy committee, it's unclear when he might get confirmed by the Senate. For those keeping track, the chairman's gavel has so far changed hands four times during the Trump administration, and McNamee is likely to field questions about whether he's next in line. - Darius Dixon

 

DEFENSE

Military buildup on hold: The president's edict for federal agencies to slash spending could deal a setback to the military buildup defense hawks have long pursued. In response to Trump's call for 5 percent cuts to rein in the skyrocketing budget deficit, Deputy Defense Secretary Patrick Shanahan says the Pentagon is preparing two budgets for 2020 fiscal year: a $733 billion national defense proposal, as originally planned, and a $700 billion plan, sought by Trump, that would trim 4.5 percent from the original proposal. Cuts, Shanahan says, would likely force the Pentagon to slow some major programs, noting modernization of weapons platforms is "the biggest knob we have to turn." - Connor O'Brien 

 

DATAPOINT

Lobbying frenzy for discount drugs: Lobbying for a $19 billion drug discount program more than doubled in the past year and a half, pitting industry, K Street and hospitals against one another. The program requires drug companies to offer steep discounts to clinics and providers that serve a disproportionate share of low-income and uninsured patients. Recent growth in spending and participants led to greater scrutiny from Republicans - and the lobbying boom.

 

 

HEALTH CARE

Obamacare's new challenges: The health care law's insurance marketplaces opened for signups last week at a crossroads. The markets are more stable than they've ever been, with rate increases moderating and more insurers selling coverage. But the law's advocates have plenty of reason for concern. This is the first enrollment season without the individual mandate requiring people to be insured, which was repealed by the GOP Congress. The Trump administration has expanded the availability of cheaper, less-comprehensive health plans, including those that don't cover pre-existing conditions. A pending lawsuit partially supported by the Trump administration could wipe out the entire law.

This all adds up to another enrollment season filled with uncertainty for a law seemingly always on the edge of peril. - Jason Millman

 

TECHNOLOGY

Midterms start the shot clock: The elections will send big technology companies scrambling to prepare their policy shops and lobbying efforts for a Congress that, come 2019, could look a lot different - or not. A blue wave, red wave or something in between that results in a divided Congress will all hold different significance and pain points for tech.

Republicans are already looking ahead to 2020, and victory in the midterms would embolden them to ramp up attacks on Silicon Valley for what they claim is anti-conservative bias embedded in tech platforms. Tech companies, which have been caught flat-footed by the allegations, may have to deploy more resources to counter them, both in the immediate term and looking ahead to what's sure to be a bruising next few years. Democratic victory, meanwhile, would drive a focus on issues including diversity in tech and foreign election meddling via social media.

Whoever wins, data privacy looks to remain a live issue on Capitol Hill throughout the lame-duck period - Sen. Ron Wyden (D-Ore.) just last week debuted draft legislation that would give the FTC new powers to police privacy practices and jail executives who mislead the agency - teeing up a lively debate for 2019. Both parties have said they want to pass comprehensive privacy legislation, and lawmakers will spend November jockeying for committee gavels.

Tech companies will want to move quickly to try and shape the debate, with a particular focus on incoming leadership at each chamber's intelligence, commerce and judiciary panels. - Kyle Daly

 

CYBERSECURITY

Beijing roars back: Chinese hackers are back in a big way, and the Trump administration is ramping up efforts to curtail digital attacks on businesses. Hackers tied to the Chinese government are among of the most aggressive - and successful - perpetrators of cyberattacks to steal U.S. business secrets. That activity appeared to decline in 2015 after Washington and Beijing signed a deal in which both nations agreed not to carry out digital attacks against the other for economic gain, but is ticking up again.

Late last month, the Trump administration announced charges against Chinese intelligence officers for a scheme to steal plans for an airline engine. Additionally, the Justice Department launched a "China Initiative" to develop approaches to prevent trade secret theft through cyber means or more traditional espionage activities. - Mike Ferrell

 

EDUCATION

School safety report: The DeVos-led school safety commission is expected to produce its recommendations by the end of the year. The panel spent much of the summer hearing from experts about hardening schools, mental health services for students, and better coordinating between school and law enforcement officials - all of which could wind up in the report. Gun-related recommendations, such as age limits on the purchase of firearms, are unlikely. - Benjamin Wermund 

 

EMPLOYMENT & IMMIGRATION

Family detention: The comment period for a proposed rule that seeks to allow the Trump administration to detain families together through the course of immigration proceedings will close on Nov. 6. The regulation would codify parts of the 1997 Flores Settlement Agreement, which outlines standards for the detention and care of migrant children in federal custody. The proposed rule seeks to terminate the agreement and related litigation - but first DHS will need to review and consider more than 30,000 comments.

Visa changes: A host of visa changes is set to move forward in November:

- EB-5 investment: The Trump administration plans to issue a final rule this month that will raise the investment threshold for the EB-5 investor visa program, according to the administration's fall regulatory agenda. The program allows foreigners who invest $1 million in a U.S. commercial project that will create or preserve at least 10 jobs to apply for a green card, or $500,000 if the investment is to be made in a high-unemployment or rural area. The proposed rule, which advanced in the final days of the Obama administration, suggested the investment thresholds would be raised to $1.8 million and $1.35 million.

- H-1B: U.S. Citizenship and Immigration Services plans to issue a proposed rule that would change the registration process for employers that seek skilled foreign workers through the H-1B visa program, according the regulatory agenda. The proposal would increase the percentage of visa holders with a U.S. master's degree, a DHS official told POLITICO in October.

- H1-B part 2: USCIS also could publish a notice of proposed rulemaking that will roll back work authorization for spouses of H-1B visa holders. A 2015 regulation granted H1-B spouses the ability to apply for work permits, but the Trump administration intends to rescind it in an effort to protect U.S. workers. The administration's fall regulatory agenda said the notice would land in November, but a related court filing suggested early 2019 would be more likely. - Ted Hesson

 

EHEALTH

Rule of three: Three rules key to promoting data sharing could come in November and must come by January. The first, from the Centers for Medicare and Medicaid, may require health plans to allow patients to see claims data and could make data sharing a requirement for participation in Medicare.

A second rule, from HHS's Office of the National Coordinator for Health IT, will define legally acceptable ways that health systems can restrict the free flow of health information; it's expected to clarify how quickly health systems will need to adopt new standards that make it easier for app makers and health systems to extract information from electronic health records.

ONC also has been working on a final Trusted Exchange Framework and Common Agreement, which provides general principles for health information exchange to encourage more information sharing. - Arthur Allen

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