May Washington D.C. Preview

May 6, 2019

QUICK FIX

— Disaster aid on the way? Congressional leaders aim to finally pass a bill this month to deliver more than $17 billion in disaster aid to communities that have spent months waiting for help in recovering from hurricanes, wildfires, tornadoes and flooding. Senate spending leaders are hashing out the details of updated text that includes more assistance to Puerto Rico. But it's still unclear if that plan will earn backing from other congressional leaders and President Donald Trump after months of feuding over aid to the U.S. territory.

 

— China talks endgame: China's lead trade negotiator, Vice Premier Liu He, will be in Washington for a new round of talks May 8 that could mark the decisive session in efforts to resolve trade tensions between the world's two largest economies. The latest talks follow a negotiating round that began April 30 in Beijing, where the two sides moved closer to a deal. Trump over the weekend revived a threat to increase tariffs in an effort to speed up the process.

 

— It's always Mueller time: House Judiciary Democrats are eyeing May 15 for a hearing with special counsel Robert Mueller — a step Republicans say is unnecessary. Partisan tensions have only intensified after the revelation that Mueller challenged Attorney General William Barr's handling of his report into Russian interference in the 2016 campaign and allegations that Trump obstructed justice. Judiciary Chairman Jerry Nadler (D-N.Y.) has also subpoenaed the Justice Department to obtain an unredacted copy of Mueller's report and underlying evidence and is threatening to hold Barr in contempt of Congress if he doesn't turn over the documents, a fight that could end up in court.

 

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

HEALTH CARE

'Medicare for All' rollout: House Democrats are trying to turn the potentially divisive "Medicare for All" proposal into a high-profile show of solidarity, making a forceful case for universal health care and casting Republicans as the main obstacle to improving the nation's medical system.

 

A House Rules Committee hearing last week marked the first such examination of single-payer health care in a decade and skirted the Democrats' deep divisions over how far left to veer in pursuit of guaranteed health coverage.

 

Instead, the Democrats are closing ranks to amplify the party's broader ambitions on a critical political issue ahead of the 2020 elections — and blunt GOP attacks over Medicare for All's cost and government expansion.

 

But the show of unity could be short-lived. National Nurses United — which is closely allied with the Congressional Progressive Caucus — is now urging House Speaker Nancy Pelosi to bring Medicare for All legislation to the House floor for a vote.

 

That rallying cry threatens to intensify in the coming weeks. The Congressional Budget Office published an analysis of the single-payer concept, and House Budget Chairman John Yarmuth (D-Ky.) told POLITICO his panel will hold its own hearing on Medicare expansion proposals in late May.

 

House Ways and Means Chairman Richard Neal (D-Mass.) also promised Progressive Caucus co-chair Pramila Jayapal (D-Wash.) an eventual hearing on Medicare for All — marking a major win for progressives who appear increasingly willing to flex their muscle in pursuit of liberal priorities.

 

And on the campaign trail, Medicare for All is taking on a heightened profile as competition within Democrat's crowded presidential field heats up. — Adam Cancryn and Alice Miranda Ollstein

EMPLOYMENT & IMMIGRATION

'Remain in Mexico' appeal: A federal appeals court could decide this month whether the Trump administration can proceed with its "remain in Mexico" policy. The initiative, launched in January, forces certain non-Mexican asylum seekers to stay in Mexico until the resolution of their U.S. court cases.

 

The regulatory pipeline: The Trump administration has several high-profile immigration regulations in the works including the "public charge" rule, which could block legal immigrants from obtaining green cards if they've received government assistance or are deemed likely to do so in the future. There's also a regulation that aims to allow the government to detain children beyond a current 20-day limit dictated by the 1996 Flores settlement agreement. Both issues received large numbers of public comments, which require a review and response by the government.

 

Lingering at OMB: Several closely watched regulations under review by the White House budget office could advance in the coming month, including a proposed rule to roll back work authorization for spouses of H-1B visa holders. Another final rule would raise investment thresholds in the EB-5 immigrant investor visa program, which allows foreigners to apply for a green card if they invest $1 million in a U.S. commercial project that will create or preserve at least 10 jobs. There's also an interim final rule that would allow the broad implementation of a biometric entry-exit system. — Ted Hesson

TRANSPORTATION

Infrastructure month: A meeting between congressional Democrats and the president at the end of April sparked optimism that an agreement would be reached on a $2 billion infrastructure bill that would fund roads, broadband and more. But they didn't address where that money would come from. Another meeting to resolve that question will be held later this month.

 

The infrastructure agreement pretty quickly was consumed by sniping from both sides. Senate Minority Leader Chuck Schumer insisted he wouldn't support a gas tax increase unless the 2017 GOP tax overhaul, H.R. 1 (115), was reopened to help pay for it, and Republicans, including House Minority Leader Kevin McCarthy, said they would do no such thing. Still, it's not insignificant progress for an issue on which both sides say they want to notch a win. — Kathryn A. Wolfe

TRADE

Window closing on new NAFTA: The next few weeks also could determine whether Trump will bow to pressure to reopen the U.S.-Mexico-Canada Agreement to address concerns Democrats have about the deal's labor, environmental and enforcement provisions. Republicans are pressing Trump to lift tariffs on steel and aluminum imports from Canada and Mexico to clear the way for approval of the USMCA deal, but Trump has not provided any indication he is prepared to take that step.

 

Against that backdrop, Vice President Mike Pence is expected to continue a busy travel agenda to stir up grassroots support for the new North American trade deal. The former Indiana governor could visit "dozens" of congressional districts before the effort is over, a White House aide said.

 

Automakers on alert: Trump faces a May 18 deadline to decide whether to impose tariffs on imports of autos and auto parts. The basis for that decision is a Commerce Department investigation of whether those goods threaten U.S. national security. Commerce Secretary Wilbur Ross delivered the report to the White House on Feb. 17, but it has not been made public. White House officials say the law under which the investigation was conducted — Section 232 of the Trade Expansion Act of 1962 — gives them flexibility to extend the deadline.

 

Trump, travel and trade: The president heads to Japan at the end of the month to meet the country's new emperor and further talks with Prime Minister Shinzo Abe about a potential U.S.-Japan trade deal.

 

U.S. Trade Representative Robert Lighthizer could travel to Chile on May 17-18 for the annual Asia-Pacific Economic Cooperation trade ministers meeting. One potential hot topic is the potential for the WTO's dispute settlement system to collapse by the end of the year unless the U.S. stops blocking new Appellate Body judges. — Doug Palmer

BUDGET & APPROPRIATIONS

Markup season in full swing: House spending leaders are zipping through fiscal 2020 funding bills with the goal of passing all 12 by the end of June. Three bills — including one that would increase budgets at the departments of Labor, Health and Human Services and Education — have already moved out of their House Appropriations subcommittees. A subcommittee markup for the Pentagon's spending bill has been slated for May 15. And House appropriators have set out the full roster of funding levels ahead of a markup this week.

 

But the Senate is doing its own thing, advancing a budget resolution earlier this year with no guarantee of a floor vote. There are no markups or spending bills in sight — but Appropriations Chairman Richard Shelby (R-Ala.) told POLITICO he isn't worried. Instead, Senate spending leaders are eyeing a budget caps deal that would stave off $126 billion in spending cuts next fiscal year.

 

Meanwhile, Trump has shown no interest in a deal that would hike spending levels. But austerity aside, the president last week asked for $4.5 billion to handle what it calls a "humanitarian crisis" at the U.S.-Mexico border. Democrats aren't outright rejecting the request, conscious of the federal government's need to handle an influx of immigrant children and families, but they're opposed to the administration's immigration policies. — Caitlin Emma

TECHNOLOGY

T-Mobile-Sprint regulatory crunch: It's been more than a year since T-Mobile and Sprint announced their plans to merge, and federal regulators may be nearing a decision on whether to let that happen. The Wall Street Journal last month reported that Justice Department staffers warned the companies they were unlikely to recommend approving the $26 billion deal as currently structured.

 

Since then, Sprint and T-Mobile executives, who disputed the report's accuracy, have met with DOJ officials for further talks. DOJ antitrust chief Makan Delrahim — who has the final say on whether DOJ moves to block the deal — told CNBC late last month that he's still undecided on the merger as his agency awaits more data from the companies on the benefits they claim will result from combining. Over the course of the merger review process, they've repeatedly submitted additional information on that front to both the DOJ and FCC, which also must approve the deal before it can be consummated. For their part, T-Mobile and Sprint pushed back their own deadline for closing the deal to July 29, according to a recent SEC filing. — Kyle Daly

ENERGY

Ethanol growth: EPA is likely to issue a final rule that would allow the sale of 15 percent ethanol blends during the summer months, a move the corn industry and biofuels producers hope will boost demand for so-called E15 fuel. That fuel had been prohibited from being sold between June 1 and Sept. 15 for decades because of concerns about its contribution to air pollution. But a sustained push by farm state lawmakers including Sen. Chuck Grassley (R-Iowa) ultimately prevailed, and the EPA in March issued its proposal to allow the sales, with the aim of finalizing it before the summer driving season kicks off.

 

The upcoming rule will also limit trading in the credits that refiners must buy to show compliance with the Renewable Fuel Standard, a move that's designed to curb speculation and reduce the costs for fuel processors. That's been a major priority of refiners, particularly owners of smaller plants who say the cost of the RFS was killing their business. EPA had responded to those concerns by issuing dozens of waivers allowing refiners to avoid complying — and drawing sharp criticism from ethanol makers and their political backers that it undermined Congress' intent in implementing the renewable fuel policy. EPA is considering issuing only partial waivers to refiners, but that's not likely to silence the corn and biofuels industry. — Matt Daily

FINANCIAL SERVICES

Trump's regulators: The country's top banking regulators will go before the new Congress for the first time as a group to testify on their efforts to ease financial rules, an area Trump boasts is one of his biggest accomplishments for the economy. Newly empowered House Democrats have different ideas about that, as do Sen. Elizabeth Warren (D-Mass.) and other Democrats on the Senate Banking Committee. Randal Quarles, the Federal Reserve's vice chairman for supervision, Comptroller of the Currency Joseph Otting, FDIC Chairman Jelena McWilliams and National Credit Union Administration Chairman Rodney Hood will appear before Senate Banking on May 15. The House Financial Services Committee, led by Rep. Maxine Waters (D-Calif.), will hold its own hearing the following day.

 

Going public on privacy: May 7 marks the first public hearing in Senate Banking Chairman Mike Crapo's push to revisit data privacy safeguards, an issue that's looming larger than ever following massive breaches at companies like Facebook, Equifax and Uber. The Idaho Republican says data privacy is one of his highest priorities this year and that it could lead to new legislation — one of the few major issues that can get bipartisan support.

 

Taking up CFTC fight: The Senate is expected to confirm Heath Tarbert to be the new chairman of the Commodity Futures Trading Commission, the country's derivatives regulator. Tarbert, currently the assistant secretary for international markets at the Treasury Department, will step right into a contentious fight with the European Union, which is considering regulations that could give the EU some authority over U.S. clearinghouses. The outgoing CFTC chairman, Christopher Giancarlo, earlier this month issued a blistering warning against the EU over such encroachment, and Tarbert is expected to take an equally hard line.

 

Debt collectors: The Consumer Financial Protection Bureau will release a rule regulating debt collectors this month that agency critics fear will make life easier for an industry that is already the subject of tens of thousands of consumer complaints. CFPB Director Kathy Kraninger said in April that the rule would update the implementation of the 1977 Fair Debt Collection Practices Act to reflect new technologies and include "clear, bright-line limits on the number of calls [consumers] may receive from debt collectors." In practice, that means collectors may have more leeway to send text messages and emails to consumers they're targeting, among other things.

 

New Congress, same gridlock: Congress this month will once again punt on a long-term fix for the National Flood Insurance Program, which protects millions of Americans from financial risk but has been operating without a long-term reauthorization since September 2017. The program is set to expire at the end of the month, and it's likely lawmakers will pass another temporary extension, possibly through Sept. 30. — Mark McQuillan

TAX

Deadline day: The Trump administration is expected to reject a request by Ways and Means Chairman Neal to turn over Trump's tax returns. Both sides will be marshaling their legal arguments for a likely court showdown, which will focus on the extent of Neal's authority to demand the returns under a law that allows the chairs of Congress's tax committees to examine anyone's confidential tax information.

 

Retirement boost: The House could vote this month on retirement savings legislation, H.R. 1994, that has broad backing from the financial services, insurance and investment sectors. The bill would, among other things, create a new tax credit for small businesses that automatically enroll employees in 401(k) retirement plans.

 

Helping 'Gold Star' families: House lawmakers are hoping for quick action on bipartisan legislation to reverse a tax increase that has hit some survivors of military personnel killed in action. As an unintended consequence of the 2017 tax overhaul, survivor benefits allocated to children of the service members are now being taxed at the same rate as a trust or estate — which can be far higher than the tax rate that applied before the overhaul. Neal told reporters he supports the bill, whose original 16 cosponsors include six Democrats and three Republicans from his panel. But he declined to give a timeline for advancing it.

 

Free File squabble: Lawmakers are bogged down on legislation, H.R. 1957, to overhaul some IRS functions, including taxpayer services and property seizures, that had appeared to be on a bipartisan glide path to passage. The House passed the bill in April, but Senate Finance Committee Democrats are now unsure about a provision that would codify an IRS agreement with private-sector companies to offer their tax filing software for free to low-income taxpayers, called Free File.

 

Following news reports that Intuit and H&R Block have made it hard for taxpayers to use the program, some Democrats would like to scuttle the provision. But Grassley, the Senate Finance chairman, has indicated he's not interested in reopening the legislation, which he introduced in the Senate with the panel's ranking member, Ron Wyden (D-Ore.). — Aaron Lorenzo

DEFENSE

DefAuth on deck: The House and Senate Armed Services Committees are nearing consideration of their versions of the fiscal 2020 National Defense Authorization Act. The competing must-pass bills will reveal fault lines between House Democrats and Senate Republicans on key national security issues, including defense spending levels, nuclear weapons and the president's Space Force proposal.

 

The Senate committee aims to consider its defense bill in late May, before Memorial Day. And the House panel is set to hold subcommittee markups on June 4 and 5, with the full committee considering the bill at a daylong markup June 12.

 

Spending action, too: The House Defense Appropriations Subcommittee is slated to consider its fiscal 2020 defense spending bill on May 15. The Senate Appropriations Committee has yet to schedule a markup for its version of the bill. — Connor O'Brien

CYBERSECURITY

'Critical functions': The Department of Homeland Security designated a list of 55 critical functions that are so important to the nation that a cyberattack on these areas of industry, government and daily life would "have a debilitating effect on security, national economic security, national public health or safety." The department divided the list into four categories: "connect," which includes things like providing internet services; "distribute," such as transporting cargo; "manage," such as conducting elections; and "supply," such as producing chemicals. The ultimate goal is to more effectively target the department's cybersecurity work and to more closely scrutinize critical functions across all industries.

 

Industry groups have praised the approach. The U.S. Chamber of Commerce called it a "key pillar" of the Trump administration's cyber strategy. Phil Reitinger, a former top DHS official who now leads the Global Cyber Alliance, said it will sweep in important players that might not normally get attention — particularly small and medium-sized businesses. — Tim Starks

AGRICULTURE

Moving day nears: The Agriculture Department is expected to name a final location for two research-focused agencies that USDA plans to move outside of the Washington, D.C., area. Secretary Sonny Perdue's plan to reshape USDA's research wing — first announced last year and described as a cost-saving measure — attracted interest from more than 130 locations hoping to house the Economic Research Service and National Institute of Food and Agriculture. Perdue released a shortlist of three finalist sites and two alternatives on May 3.

 

Opponents of the move, including several current and former agency staffers, have warned that relocation could push out experienced researchers and hamper the agencies' ability to coordinate with other USDA offices.

 

Separately, ERS employees on May 9 will vote on whether to unionize, an effort that is union organizers say is widely expected to pass. NIFA is also in the process of setting up a bargaining unit and will likely hold its own vote before the end of May.

 

Deadline for tomato talks: A new deal governing tomato trade between the U.S. and Mexico could be announced in the first half of May, if talks are successful. The Commerce Department has said it would withdraw from an existing tomato trade pact on May 7 and restart an anti-dumping investigation.

 

Florida tomato growers support Commerce's pending withdrawal. The anti-dumping probe dates back to the 1990s, but was never finished because the U.S. and Mexico struck a series of so-called suspension agreements. Florida producers are unhappy with the latest, six-year-old deal and Mexican growers have made an offer in the negotiations. They predict tomato prices in the U.S. could rise sharply if a new deal is not reached.

 

Dietary supplement oversight: The agency will hold a public meeting May 16 to gather input on its "responsible innovation" strategy to overhaul its regulatory framework for dietary supplements like vitamins, minerals and herbs. In a February announcement, the agency said it would be the most significant modernization of its oversight of dietary supplements in 25 years. — Catherine Boudreau

EDUCATION

HEA watch: Sen. Lamar Alexander (R-Tenn.), the Senate HELP chairman, wants his committee to markup a bill reauthorizing the Higher Education Act this month. We haven't seen a bill yet, but Alexander and Patty Murray (D-Wash.), the top Democrat on the committee, have been working on it all year. It's the latest attempt to pass what would be the first reauthorization of the federal higher education law in more than a decade.

 

School spending: The House committee overseeing education funding plans is expected to mark up the fiscal 2020 spending bill May 8. Watch for possible efforts by Democrats to use the bill to bar guns from schools. — Benjamin Wermund

CANADA

Let's maybe make a deal: Canada could decide this month whether it will ratify the new North American trade agreement this year. The House of Commons adjourns in June for the federal election, and it isn't expected to be in session much after that before 2020. That means a USMCA bill would probably have to be introduced this month to get through Parliament. The prospects look bleak. Canada is reluctant to ratify while American steel and aluminum tariffs are still on, and it is also wary of moving before the U.S. Congress — where the deal's prospects remain uncertain. — Alexander Panetta

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