June Washington D.C. Preview
— Another trade war: President Donald Trump's use of tariffs as a foreign policy tool will be tested this month after he threatened to impose 5 percent tariffs on Mexico beginning June 10 unless that country does more to stop illegal border crossings into the United States. Mexican leaders and a U.S. delegation led by Secretary of State Mike Pompeo are holding a summit Wednesday. If border issues remain unresolved, Trump has threatened to increase the duty rate each month until it reaches 25 percent on Oct. 1.
— On a second front: The Trump administration is expected to announce sweeping restrictionson asylum that would effectively block Central American migrants from entering the U.S. A draft DHS proposal would prohibit migrants from seeking asylum if they have traveled through a country other than their own before arriving on U.S. soil. In addition, the White House is working on a legislative fix that would be less vulnerable to a court challenge. Language similar to the DHS draft proposal is expected to be included in Trump's new immigration bill that would boost security at the southern border and seeks to admit more high-skilled, well-educated immigrants.
— Disaster deal is almost done: The House this week is expected to pass a $19.1 billion disaster relief package after Republicans thwarted three attempts to fast-track the bill during the Memorial Day recess. Conservatives — upset that the legislation doesn't offset spending or fulfill Trump's request for emergency border aid — have demanded a roll call vote. The Senate passed the bill, H.R. 2157, on May 23 after a last-minute scramble to strip out border aid, which proved an insurmountable sticking point for lawmakers.
BUDGET & APPROPRIATIONS
Moving down the to-do list: With disaster aid almost a done deal, Senate Appropriations Chairman Richard Shelby (R-Ala.) may now turn to fiscal 2020 funding bills. The Senate spending leader recently said he would like to see a higher number for defense. He also expressed interest in once again combining that measure in a minibus with the Labor, HHS and Education title, pairing the two most contentious and expensive spending bills.
Meanwhile, House appropriators are chugging along with an aggressive markup schedule. Eight out of 12 spending bills are ready for floor votes, and the House is on track to pass the whole dozen by month's end. — Caitlin Emma
On the Hill: Among the host of appropriations measures the House is likely to move this month are the Energy and Water title and Interior and EPA title. Also queued up are several other bills containing provisions that would block the U.S. from withdrawing from the Paris climate accordand the Trump administration's effort to weaken fuel economy standards. Plus, both chambers are moving along with the National Defense Authorization Act. The Senate's version — which cleared committee in late May — contains a proposed three-year phaseout of the military's use of PFAS chemicals in firefighting foam, and there's expected to be another push to add additional PFAS language as the measure hits the floor. Both the Senate Environment and Public Works Committee and House Energy and Commerce are continuing efforts to craft PFAS bills of their own.
Car wars: The Trump EPA is expected to issue emission standards this month for vehicles for model years 2021-2025 — a move that will officially kick off the legal battle with California and several other states that oppose the rollback from the stricter levels set by the Obama administration. EPA and the Transportation Department have proposed freezing fuel economy standards, though the administration may end up offering up some incremental increases — but nothing like the 5 percent annual improvement the previous administration sought.
Along with that, EPA is expected to revoke California's power to set its own emissions regulations, a move that would certainly head to the courts. This has automakers nervous that they could soon be facing two different auto markets in the U.S. — one that adheres to the Obama targets and one that is closer to the looser Trump levels. — Anthony Adragna
Opioids on trial: A case in Oklahoma is providing an unprecedented examination of how the country spiraled into a devastating opioid epidemic — and could indicate to what degree drugmakers accused of fueling the crisis will be held responsible in hundreds of other lawsuits pending across the country.
Most of the litigation against opioid makers and distributors — involving states, cities, counties and tribes — is wrapped up in a single massive lawsuit overseen by a federal judge in Ohio. But the Oklahoma lawsuit against a single manufacturer of prescription painkillers is the first to reach trial and could establish a precedent for damages paid to communities ravaged by opioids. A big judgment against pharmaceutical company Johnson & Johnson could push other defendants to settle rather than take their chances at trial.
The Oklahoma trial, which is being streamed online, is expected to last for much of the summer. — Paul Demko
HEA watch: All eyes are on Senate HELP Chairman Lamar Alexander (R-Tenn.), and Sen. Patty Murray (D-Wash.), the committee's ranking Democrat, for signs of progress on a bipartisan deal to update the Higher Education Act — the sweeping law that governs the nation's student financial aid programs. The two have been working behind closed doors for months to come up with the legislation's first update since 2008.
Education Department funding: House leaders have said they plan to consider the spending bill that funds the Education Department by the end of June. Last month, House appropriators approved a roughly $200 billion fiscal 2020 spending draft for the departments of Health and Human Services, Labor and Education. It included a roughly $76 billion budget for the Education Department, and largely rejected the Trump administration's proposed cuts. — Kimberly Hefling
Question mark on T-Mobile-Sprint: The FCC is poised to give the giant T-Mobile-Sprint mergera green light, but the Justice Department is another story. DOJ antitrust chief Makan Delrahim hasn't shown his hand on the $26 billion deal, possibly suggesting that he's seeking new concessions from the two wireless companies. Whether those additional asks will be acceptable to T-Mobile and Sprint — which have been seeking regulatory approval for more than a year — is unclear. FCC Chairman Ajit Pai said he's satisfied with T-Mobile's commitments to rural broadband and 5G, and his two fellow FCC Republicans are on board, giving Pai the majority that his agency needs to approve. — Eric Engleman
Whose best interest?: On June 5, the SEC will vote to adopt landmark rules designed to eliminate conflicts of interest by financial advisers and require them to put their customers' interests ahead of compensation considerations. The vote on the so-called best interest rule — expected to draw condemnation from Democrats in Congress — is a victory for insurance companies and brokerages. They sought the regulation as an alternative to the stricter "fiduciary rule" finalized by the Obama administration and later tossed out by the courts.
Rethinking monetary policy: Academics, community groups and other labor market experts will convene in Chicago on Tuesday and Wednesday for a "Fed Listens" conference to review how the central bank conducts monetary policy. Among other things, the Fed will consider whether there's a better way to keep its 2 percent inflation target credible following years of muted inflation.
They've got a plan: Treasury will release a highly anticipated plan to overhaul the housing finance system as early as this month. Trump in March directed the Treasury to come up with a proposal to end government control of Fannie Mae and Freddie Mac, the companies behind about half of the nation's mortgages. Treasury seized the companies in 2008 to stave off catastrophic losses during the housing crisis, and the way they will operate in the future has been a subject of debate ever since. Federal Housing Finance Agency Director Mark Calabria , who oversees Fannie and Freddie, says he expects to engage with Treasury on the mechanics of releasing the companies once the report is unveiled.
Debt collection: The House Financial Services Committee will hold a hearing on debt collection practices June 25, with a likely focus on a controversial rule proposed last month by the Consumer Financial Protection Bureau that laid out what debt collectors are permitted to do when pursuing overdue bills. While the bureau's proposal specifies that collectors can make no more than seven telephone calls a week over a particular debt, it would allow them to send an unlimited number of emails and text messages. Consumer advocates say it doesn't go far enough to protect debtors from harassment, and the congressional panel, led by Chairwoman Maxine Waters (D-Calif.) is likely to have its own criticisms. — Mark McQuillan
Legislative limbo: Two big pieces of bipartisan legislation got caught in political crossfire in the Senate last month. Here's what awaits lawmakers when they return from their recess:
— Retirement security: A bipartisan bill passed by the House, H.R. 1994, which includes several tax provisions, seemed greased for passage in the Senate until Sen. Ted Cruz (R-Texas) stepped in and brought it to a halt. Cruz is upset that House Democrats stripped a provision from the bill that would have allowed families to tap 529 savings accounts to pay for homeschooling costs. And Senate aides recently told POLITICO's Morning Tax that Cruz isn't the only senator with a hold on the legislation. The bill had seemed like a political no-brainer, since it also includes a fix for the tax increases on survivor benefits that have hit some families of military personnel who died in the line of duty.
— IRS overhaul: Also hanging fire is a bipartisan bill, H.R. 1957, that would overhaul some IRS operations. The problem there is a provision that would codify the agency's Free File program, which offers no-cost filing assistance to lower-income taxpayers. The legislation passed the House by voice vote, but then ProPublica published a series of articles alleging Intuit, H&R Block and other tax prep companies involved in the program were trying to minimize its use. That stirred up liberals who have long criticized Free File, saying the IRS should set up an independent free assistance program.
Tell it to the judge: The next stop for Democrats' effort to obtain Trump's tax returns is almost certainly federal court, after the administration last month refused a subpoena to surrender them. How exactly a decision to sue the administration would unfold is up to House Speaker Nancy Pelosi , our Brian Faler recently reported. She could have the chamber vote to authorize House General Counsel Douglas Letter to file the suit. A quicker option would be to have a House leadership panel, the Bipartisan Legal Advisory Group, green-light it, though whether that's allowed under House rules is open to question. House Ways and Means Chairman Richard Neal(D-Mass.) has been demanding six years' worth of Trump's personal tax records, along with those of several of his businesses, since early April. — Toby Eckert
Next steps on new NAFTA: Trump and administration officials said they want to get the new North American trade pact passed in Congress by August. They stepped up the pressure last week by sending lawmakers what's called a draft Statement of Administrative Action — a step necessary at least 30 days before it can submit the legislation to implement the deal.
Both Canada and Mexico have taken first steps to ratify the deal, called the U.S.-Mexico-Canada Agreement. But Pelosi has indicated that she wants to see how Mexico implements the policy before USMCA gets a vote in Congress. The administration has just 28 legislative days to work out a deal with Democrats if it wants the agreement considered by both chambers this summer. And while Mexico's president last week said the country would continue to push for ratification despite Trump's latest tariff threat, congressional Democrats and some Republicansworry that the dispute could sink USMCA.
More tariff hearings: Starting June 17, the Office of the U.S. Trade Representative will hold hearings on Trump's plan to impose a 25 percent tariff on virtually all the remaining Chinese goods that the U.S. imports. (Exceptions have been carved out for pharmaceuticals and certain crucial minerals.) The hearings could take up to two weeks, according to industry officials.
Watching G-20 news: Trump and leaders from around the world will gather in Japan on June 28-29 for a meeting of leaders from the Group of 20 nations. Trump could meet with Chinese President Xi Jinping on the sidelines of the summit after talks on ending trade tensions fell apart in May. However, China has ramped up its criticism of the U.S. since then, and no meetings between U.S. and Chinese officials are scheduled. — Sabrina Rodriguez
Parliament's last push: The fate of two major bills could play out in coming weeks as the Canadian Parliament prepares to break for election season. The House of Commons is scheduled to adjourn within the next three weeks and remain dormant through the Oct. 21 federal election. It is not expected to return for a regular session until 2020.
— The USMCA bill: Prime Minister Justin Trudeau last week introduced bill C-100, to implement the U.S.-Mexico-Canada Agreement, making Canada the first of the NAFTA countries to take that step. Trudeau's strategy for advancing the bill will likely depend on how the Trump administration handles House Democrats' demands for changes to the NAFTA replacement. The Trudeau government is wary of completing its end of the ratification process without assurance that the U.S. Congress will pass a similar bill. Further delay in Washington might force the Canadian government to put off ratification until 2020. Canadian lawmakers could still be recalled for an emergency session to vote on the bill in July or August.
— Revamping environmental reviews: The other major bill in the mix is C-69, legislation that would overhaul the permitting and regulatory process for Canadian energy infrastructure projects. The legislation, which would set out a process for creating a new regulatory agency to study the environmental, health and economic impacts of certain projects, has come under fire from the oil industry and its allies in federal and provincial government, who argue it is too restrictive. The Canadian Senate's energy committee has approved more than 200 amendments to the bill, though it could be amended further before the chamber takes a vote to move it back to the House of Commons for final sign-off. — Alex Panetta and Lauren Gardner
EMPLOYMENT & IMMIGRATION
UAW takes another swing: Workers at the Volkswagen plant in Chattanooga, Tenn., will vote in mid-June on whether to join the United Automobile Workers union. The vote will be the third at the plant in five years and follows an intense procedural battle at the National Labor Relations Board. — Ian Kullgren
Senators to grill Shanahan: The Senate Armed Services Committee is heading toward a high-stakes confirmation hearing later this month for Pat Shanahan to be the permanent Defense secretary. Since taking over as acting secretary from Jim Mattis, who resigned, on Jan. 1, Shanahan has won over influential allies, including Senate Armed Services Chairman Jim Inhofe(R-Okla.), a positive sign that Shanahan will be confirmed.
Still, the former Boeing executive will have to answer questions on a raft of issues that have become flashpoints between the military and Congress, including efforts to shield the USS John McCain from view during Trump's visit to Japan over the long Memorial Day weekend, the Defense Department's revised transgender troop policy, diverting military funds to the U.S.-Mexico border and the administration's ratcheting up of the U.S. military posture in the Middle East aimed at deterring Iran. — Connor O'Brien
USDA policies in House hot seat: Some of the Trump administration's most controversial food and agriculture proposals will be scrutinized during House hearings this month. The House Agriculture Committee will hold a subcommittee meeting on Agriculture Secretary Sonny Perdue's plan to relocate two research agencies outside of Washington, which USDA economists fear is a way to suppress research findings that don't align with White House priorities.
And the House Education and Labor Committee will host Brandon Lipps, head of the Food and Nutrition Service, for a subcommittee hearing this week on USDA's proposal to restrict states from waiving work requirements for certain food stamp recipients, as well as the department's rollbackof school nutrition standards.
Overgrown deadlines: Corn and soybean growers in the Midwest are way behind on spring planting due to wet weather across the region. Many farmers this month will decide whether to take a "prevented planting" insurance payment from USDA or to plant late and risk lower yields come harvest time. The choice is complicated by the administration's new $16 billion trade relief program for producers affected by retaliatory tariffs, though officials have tried to shape the plan to minimize its influence over planting decisions.
Agriculture-FDA appropriations: The House Appropriations Committee is set to mark up its Agriculture-FDA measure on Tuesday, and the Senate could introduce its own bill in coming weeks. — Ryan McCrimmon
Next round in Huawei fight: The president's executive order last month set the stage for a broad U.S. ban on Chinese-made telecom equipment. The same day Trump signed the order, the Commerce Department put Chinese telecom giant Huawei on its "entity list," essentially barring U.S. companies from doing business with it.
Some industry groups are wary about how the directive will affect business — and a global supply chain heavily reliant on Chinese components. Smaller telecom companies are worried about the cost of switching out Huawei gear for more expensive products, which could cost hundreds of millions of dollars.
Washington appears to be taking these concerns seriously. "We will look broadly at where there could be elements of risk, but I'm hoping we'll be able to narrow," Robert Kolasky, head of the Department of Homeland Security's National Risk Management Center, told POLITICO. "I don't think our risk assessment is going to be so broad that it stifles the ability to do things." — Michael B. Farrell
Data sharing is caring: HHS officials are awaiting final public comments this month on a set of rules that will determine how much data-sharing will be required of health IT vendors, doctors and medical groups.
The Office of the National Coordinator for Health Information Technology set a June 3 deadline for comments on its proposed rule under the 21st Century Cures Act defining what kinds of data-sharing restrictions will not be defined as illegal information blocking. The Centers for Medicare and Medicaid Services has the same deadline for comment on its interoperability rule, which will make it harder to avoid sharing patient information in the appropriate settings.
On June 17, meanwhile, comments are due on the final proposed draft of the national coordinator's trusted exchange framework, which establishes guidelines for network-to-network exchange of health information nationally. — Arthur Allen
Infrastructure implosion: After a blowup at the White House, hopes that Trump and Democrats could work together on a $2 trillion infrastructure package appear dashed . Trump so far has stuck to his rhetoric about not working on an infrastructure bill as long as Democrats are investigating him, and there's no sign that the probes are going away. The rest of the year will likely be consumed by appropriations and a continuing focus on problems with Boeing's 737 MAX, which remains grounded. — Kathryn A. Wolfe