September Washington DC Preview
— Shutdown scramble: When Congress returns from summer break Sept. 9, lawmakers will have just 13 working days to pass a dozen spending bills that provide updated funding levels and prevent another government shutdown at month's end. Sound unrealistic? House and Senate leaders acknowledge the heavy lift and impossible deadline, especially with major partisan pitfalls like funding for the president's border wall hanging over negotiations. To buy more time, House leaders are preparing lawmakers for a stopgap fix that would extend current funding levels until late November or early December, keeping the government open.
— Betting on the Fed: The Federal Reserve will make its decision on interest rates on Sept. 18, and markets are heavily counting on another cut on the heels of July's rate reduction — the first in more than a decade. The Fed has cited the negative effects of President Donald Trump's trade wars on business investment and manufacturing, along with slowing global growth, as the main focus of its deliberations. Trump has pressed the Fed to aggressively slash rates, and no matter what the central bank does this month, it's unlikely to satisfy him.
— Defense bill endgame: Leaders of the House and Senate Armed Services committees will launch their negotiations on a final version of the National Defense Authorization Act (H.R. 2500, S. 1790 ) when they return from the long summer recess. Republicans and Democrats in both chambers want to pass the bill before the Oct. 1 start of the new 2020 fiscal year. A two-year budget deal that boosts defense spending will help smooth the way, but lawmakers still will have to bridge several major policy differences. For instance, House Democrats are pushing to limit the president's authority to go to war with Iran, block military support in Yemen's civil war and overturn the Pentagon's more restrictive transgender troop policy — provisions most Republicans oppose.
Uncertain detente: Talks between China and the U.S. on an agreement to end the bilateral trade war are expected in September, but no date has been announced and expectations for a deal have faded in recent months. A 15 percent tariff on about $110 billion of Chinese imports took effect Sept. 1, with duties planned on more goods at the end of the year. Trump's current 25 percent duty on about $250 billion worth of Chinese goods is expected to rise to 30 percent on Oct. 1.
Trade at the U.N.: Trump and Japanese Prime Minister Shinzo Abe could shake hands on a final agreement covering autos, agriculture and digital trade when they meet on the sidelines of the U.N. General Assembly meeting later this month.
One unknown is whether Chinese President Xi Jinping will attend the U.N. gathering since he will be busy with preparations for the 70th anniversary of the People's Republic of China on Oct. 1. However, the U.N. hopes Xi and several other world leaders will attend a climate change summit on Sept. 23. The White House has not said whether Trump will take part in that meeting.
Fate of North American pact: The USMCA agreement will be back in the spotlight after Congress returns. Trump's chances of winning approval of the USMCA before the end of the year could hinge on closed-door talks House Democrats and USTR Robert Lighthizer held in August over several contentious issues. — Doug Palmer
The PFAS problem: House and Senate negotiators are pushing to hash out a final deal on a major package dealing with toxic chemicals in communities' drinking water and food supplies in time to move it as part of the annual defense bill in September. Both chambers passed provisions relating to the ubiquitous chemicals, called PFAS, as part of their defense bills earlier this summer. The biggest legislative sticking point is whether to list some or all PFAS as hazardous for the purposes of Superfund cleanups — a move that would help prod the military and other responsible parties to clean up contaminated sites, but that many fear could also create massive new liabilities for not just chemicals manufacturers, but also farmers who spread contaminated sludge on their fields, water utilities that supplied the sludge, and fire departments that used foam containing the compounds.
A House Oversight and Reform Committee subpanel has called major manufacturers of the chemicals to testify on Sept. 10 about how long they knew about the health dangers. — Annie Snider and Anthony Adragna
Trump tax returns: Lawsuits over both Trump's state and federal tax returns are winding their way through federal courts. Oral arguments are scheduled for Sept. 18 for the lawsuit that Trump filed to block a New York state law that would allow House Ways and Means Chairman Richard Neal (D-Mass.) access to the president's state returns. Neal has so far shown little interest in taking New York up on that offer. The D.C.-based federal judge in that case has said he will consider whether to move the case to the Southern District of New York. Neal recently told the court in the case dealing with Trump's federal returns that a whistleblower bolstered House Democrats' argument that the returns are needed to boost oversight of the IRS's required audits of presidents. The cases are proceeding as Deutsche Bank has all but admitted that it has some of Trump's returns.
Unfinished business: A group of temporary tax provisions known as extenders has been expired for well over a year and a half now, with still more set to lapse at the end of this year unless Congress acts. Still, it remains to be seen if an extenders package could get attached to a broader budget or spending agreement. The Senate also has yet to dispatch with House-passed retirement security legislation that would also roll back a tax increase from Republicans' tax tax overhaul on the benefits given to survivors of soldiers who died in the line of duty. — Bernie Becker
EMPLOYMENT & IMMIGRATION
Court watch: One major legal battle to watch in September is over the "public charge" final rule, which will allow federal immigration authorities to deny green cards to immigrants who receive certain public benefits or are deemed likely to do so in the future. At least five lawsuits have been filed since the rule was issued in mid-August.
The Trump administration also will attempt to enforce a new detention regulation that aims to allow children to be detained with their parents beyond a current 20-day limit. The final rule institutes federal guidelines for the detention of families, but it will need the approval of Los Angeles-based U.S. District Judge Dolly Gee before it can go into effect. Gee rejected a July 2018 request to alter the settlement agreement that set the 20-day limit.
Another legal challenge to watch will be over Trump's ban on asylum seekers who pass through a third country en route to the U.S. The American Civil Liberties Union has asked San Francisco-based U.S. District Judge Jon Tigar to restore a nationwide injunction blocking the policy based on new evidence in the case, and he will hold a hearing on the motion Sept. 5.
Regional immigration deals: The Trump administration has brokered immigration deals with Mexico and Guatemala, but both agreements will be subject to further review this month.
After Trump threatened to slap tariffs on Mexican goods coming into the U.S., Mexico agreed in June to deploy 6,000 troops to intercept migrants traveling north. At the same time, the U.S. expanded the implementation of its "remain in Mexico" program, which forces non-Mexican asylum seekers to wait in Mexico pending the outcome of their court cases. The parties agreed to evaluate the success of the counter-migration measures after 90 days — a deadline that arrives Sept. 5. The number of migrants arrested at the U.S.-Mexico border has fallen in recent months and officials have attributed the drop to the June agreement.
The Trump administration also announced a deal with Guatemala in late July that would allow the U.S. to send non-Guatemalan migrants to that country if they passed through it during their journey. Acting Homeland Security Secretary Kevin McAleenan has said the agreement must clear several procedural hurdles before taking effect.
There could be an agreement on the horizon with Panama, too. The Washington Post reported Aug. 21 that the Trump administration was trying to broker a deal that would require that country to accept "extra-continental" asylum seekers from Asia, African and other countries. — Ted Hesson
Housing finance overhaul: Treasury will release a highly anticipated plan to overhaul the housing finance system this month. Trump in March directed Treasury to come up with a plan to end a decade of government control of Fannie Mae and Freddie Mac , the companies behind about half of the nation's mortgages. Mark Calabria, the federal regulator who oversees Fannie and Freddie, said he expects to engage with Treasury on the way the companies will operate in the future once the report is unveiled.
Rewriting the rulebook: On the regulatory front, the Fed is poised to complete a major overhaul of the rulebook for large U.S. regional lenders, in line with last year's bank deregulation law, as well as one for foreign banks that would keep their requirements roughly on par with their domestic counterparts.
House hearings: The House Financial Services Committee will hold a slew of hearings this month, delving into student loan servicers on Sept. 10, oversight of the SEC on Sept. 24 and legislation on debt-collection practices on Sept. 26. Chairwoman Maxine Waters (D-Calif.) has also pledged to step up oversight of Facebook's plans to develop a new cryptocurrency, Libra, after meeting in August with Swiss authorities. Meanwhile, the Senate Banking Committee has scheduled a hearing for Sept. 3 on human trafficking and the financial system.
Key confirmations coming: The Senate will vote when it returns to confirm Thomas Feddo to a new Treasury Department post responsible for policing foreign investment and to extend the tenure of Fed Gov. Michelle Bowman. — Mark McQuillan
AI in the USA: The Center for Data Innovation analyzed and compared how the United States, the European Union and China are becoming the main competitors of global leadership in artificial intelligence technology. Although the EU leads in the number of AI research talent, the U.S. has the most AI start-ups and research and development companies, according to a new report by the nonprofit, non-partisan think tank. — Cristina Rivero
Eye on tech: Lawmakers are poised to continue scrutinizing the tech industry when they return to Washington next week. Silicon Valley is drawing fire from the left and right alike over a raft of issues including user privacy, online hate speech, election meddling and claims of anti-conservative bias. Capitol Hill's highest-profile venue for airing grievances this month may be an antitrust oversight hearing the Senate Judiciary Committee set for Sept. 17. Slated to testify are Justice Department antitrust chief Makan Delrahim and FTC Chairman Joe Simons, who are both heading up competition probes into tech giants. They will field questions from some of the same Senate Judiciary members who have convened their own task force dedicated to investigating concerns raised by the industry.
That Senate probe is met by a similar effort in the House, where Energy and Commerce antitrust subcommittee chair David Cicilline (D-R.I.) is heading up an investigation into tech competition. Separately this month, the House Homeland Security Committee will depose 8chan owner Jim Watkins behind closed doors . Racist and violent content have flourished on his site, which in recent months has hosted multiple screeds believed to be authored by mass shooters. The committee has said it plans to consider legislation to address how social media companies — including not just fringe sites like 8chan but also giants like Facebook and Twitter — handle terrorism-linked content. — Kyle Daly
Congress eyes higher education bills: Bipartisan negotiations in the Senate over a sweeping revamp of federal higher education policy stalled over the summer. But as Congress returns from its August recess, all eyes will be on Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to see if they agree to take up narrower higher education bills rather than a comprehensive rewrite of the law.
House Democrats, meanwhile, are expected this fall to unveil their proposal to reauthorize the Higher Education Act. House Education Chairman Bobby Scott (D-Ill.) has said he's not interested in striking a "narrow compromise" with Republicans and instead wants a sweeping overhaul of federal policy.
DeVos deregulatory push continues: At the Education Department, regulation-writers are up against a Nov. 1 deadline to publish a slew of higher education rules so that they can take effect next summer (rather than after the 2020 presidential election). The Trump administration kicked things off with its overhaul of regulations governing student loan forgiveness for defrauded borrowers and mandatory arbitration agreements used by colleges, which were announced Friday. Education Secretary Betsy DeVos is also looking to finalize in the coming months proposals that would ease federal requirements on college accreditors, expand protections for religious schools, and boost federal aid to competency-based education programs. — Michael Stratford
Regulators grapple with vaping: At least 193 potential cases of lung disease in teenagers and young adults are forcing federal agencies to grapple with a vast, nearly unregulated market of nicotine- and marijuana-based vaping products.