October Washington DC Preview


— Still appropriations season: Lawmakers will spend October trying to strike the compromises necessary to close the book on appropriations for fiscal 2020. Federal departments and agencies are running on a stopgap that keeps spending levels static until Nov. 21, while Congress hasn't finished a single one of the 12 annual spending bills. A showdown on border wall funding could derail negotiations between the House and Senate, although Senate Appropriations Chairman Richard Shelby (R-Ala.) said last month that he thinks spending measures like Energy-Water, Transportation-HUD and Agriculture-FDA could gain enough bipartisan backing to pass on the Senate floor.

— Tariffs and more tariffs: Chinese Vice Premier Liu He returns to Washington Oct. 10-11 to try to strike a deal to end the trade war — as tariffs on $250 billion worth of Chinese goods are set to increase from 25 percent to 30 percent on Oct. 15. Separately, President Donald Trump will slap punitive tariffs on about $7.5 billion in European goods. Unless a deal is reached, planes will be hit with a 10 percent tariff and various European goods — such as sweaters, wine and cheese — will be slapped with a 25 percent duty.

— Election Day: Canada's two leading parties — Liberals and Conservatives — are in a dead heat to win the most seats in Parliament, polls show, with just two weeks to go before the Oct. 21 vote. The leaders of five major parties will participate in English- and French-language debates this week. There's enough time remaining for surprise political scandals to sway public opinion, even though the recent revelations of Prime Minister Justin Trudeau appearing in blackface and brownface haven't affected the polls much. If no party wins an outright majority, the formation of a minority coalition government could take a few weeks.


Congress comes together over cannabis: All eyes will turn to the Senate after the House passed landmark legislation last month, with overwhelming bipartisan support, that would allow banks to do business with cannabis companies without fear of federal punishment. Senate Banking Chairman Mike Crapo (R-Idaho) has emerged as an increasingly vocal advocate for addressing the banking issue. Last month, he told POLITICO that he planned to mark up a bill and expressed optimism that the Senate will move something.

Rep. Ed Perlmutter (D-Colo.), the chief sponsor of the SAFE Banking Act in the House, added a couple of amendments prior to the floor vote that were explicitly aimed at building Republican support and boosting the chances of passage in the GOP-controlled Senate. Perhaps most notably, language explicitly stating that banks can do business with hemp companies was added in part as a hook for Senate Majority Leader Mitch McConnell. The Kentucky Republican emerged as an ardent champion of hemp since it was legalized in the 2018 farm bill, regularly touting it as a boon for his home state's struggling farmers. — Paul Demko


Trading notes in Congress: Officials from the USTR's office and Hill staff members have been using a two-week congressional recess to resolve House Democrats' problems with the new USMCA Agreement. House Speaker Nancy Pelosi continues to emphasize that Democrats are on a "continued path to yes," despite the impeachment inquiry.

Finally time for Brexit?: U.K. Prime Minister Boris Johnson continues to push for an Oct. 31 Brexit deadline even if there's no deal to extricate the United Kingdom from the European Union. However, the British parliament approved a law to require the government to request an extension if no agreement is reached by Oct. 19. Johnson has indicated he may seek to circumvent that law, but many political analysts expect an extension until January 2020 will come into force. — Sabrina Rodriguez


LGBTQ discrimination: The Supreme Court will hear arguments Oct. 8 in three cases that address whether the 1964 Civil Rights Act's Title VII, which bans employment-related sex discrimination, also prohibits discrimination based on sexual orientation or gender identity. Two of the cases, Bostock v. Clayton Cty., Ga and Altitude Express, Inc. v. Zarda, will be argued together and involve, respectively, a child welfare services coordinator and a skydiving instructor who say they were fired because they are gay.

The other case, R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC, concerns a transgender funeral home employee named Aimee Stephens who in 2014 was fired from her job for dressing and presenting as a woman. The justices will consider whether transgender people are covered under Title VII's sex-based discrimination protections, or whether they must rely on existing law that bars "sex stereotyping."

The Equal Employment Opportunity Commission, which filed the lawsuit on behalf of Stephens during the Obama administration, and the Trump administration have been at odds over the issue. The EEOC says transgender people are protected under Title VII, but DOJ, which is representing the EEOC before the Supreme Court, says they are not protected under the law. — Rebecca Rainey

Public charge final rule: The Trump administration's "public charge" final rule will go into effect Oct. 15. Under the measure, immigrants could be denied green cards if they've used certain public benefits or are deemed likely to do so in the future. The targeted benefits are food stamps, welfare, Medicaid and housing assistance. Medical organizations and advocates for the poor argue the regulation will force immigrant families to choose between vital health services and a future chance to obtain a green card. — Ted Hesson


Another strike: Chicago teachers — who make up the nation's third-largest school district — said they plan to walk out if a contract settlement isn't reached by Oct. 17. Their strike would follow a wave of successful walkouts by teachers in Denver, Los Angeles and West Virginia earlier this year.

Affirmative action case not over: Although a federal judge upheld Harvard's use of race in admissions, Students For Fair Admissions and longtime anti-affirmative action activist Edward Blum, who led the suit, confirmed to POLITICO that his group will formally appeal the ruling soon. The decision was the first in a case widely believed to become the Supreme Court's next opening to ban affirmative action.

Higher ed battle: Sen. Lamar Alexander (R-Tenn.) proposed a piecemeal update to the Higher Education Act, which drew criticism from civil rights groups, labor unions and consumer advocates, but won praise from the White House and groups representing for-profit colleges. Critics of that approach want a more comprehensive overhaul. House Democrats are expected to bring forward their own higher ed reauthorization proposal this fall.

Title IX rules could drop: We're still keeping an eye out for the Trump administration's new formal regulations on how schools will handle allegations of sexual harassment and assault. The new regulations — expected this fall — scrap Obama-era guidance and replacing them with rules that critics say are too lenient on schools. — Bianca Quilantan


Tweet storm warning: The Fed's rate-setting committee will meet at the end of the month against the backdrop of a U.S. manufacturing sector that is dangerously close to recession, a result of trade tensions and slowing global growth. Financial markets are expecting the Fed to cut its main borrowing rate, but central bank officials have given few clues as to their plans. No matter what they do, Trump is likely to be dissatisfied, since he has been haranguing the Fed for months via Twitter to more aggressively slash rates.

Regional bank relief: On the regulatory front, the Fed will finalize a major overhaul of the rulebook for large U.S. regional banks, in line with a landmark bank-deregulation law enacted last year, as well as one for foreign banks that would keep their requirements roughly on par with their domestic counterparts.

Corporate shell game: The House this month is expected to pass legislation that would require companies to disclose their owners, a major step forward in the push to unmask anonymous shell companies used to hide criminal activity. The bill by Rep. Carolyn Maloney (D-N.Y.) would mandate that corporations share so-called beneficial ownership information with the Treasury Department. The legislation, which has bipartisan support, is expected to be paired with a broader revamp of anti-money laundering rules. The Senate Banking Committee is also considering shell company and anti-money laundering bills.

Consumer report: CFPB Director Kathy Kraninger will appear before the Senate Banking Committee on Oct. 17 to deliver the agency's semi-annual report to Congress. Democrats will grill her on the bureau's enforcement activity — which consumer groups say has plunged during the Trump administration — and the lower levels of restitution included in recent settlements. — Mark McQuillan


Hemp rules: The Agriculture Department is expected to introduce this month its long-awaited rules for industrial hemp production, which have Bernie pending regulatory review by the White House budget office. Growers and processors have been stuck in limbo since Congress legalized the plant in the 2018 farm bill.

Harvest headaches and trade aid: Farmers are harvesting crops under the shadow of Trump's trade war for the second year in a row. To blunt the financial damage, USDA will continue sending out checks to producers under the second round of its trade relief program. More than 418,000 farmers have applied for aid, and the department has doled out $5.43 billion for 2019 production so far. They are authorized to pay out up to $14.5 billion for this year. — Ryan McCrimmon


Waiting for movement: The tax agenda for October depends on whether lawmakers can get off the dime on several issues. Advocates for so-called green energy tax credits are working to get the House Ways and Means Committee to consider a package of bills, with legislation to expand an existing tax credit for electric car buyers possibly the centerpiece.

Also jockeying for attention are supporters of eliminating or scaling back the $10,000 federal deduction limit on state and local taxes. Rep. Bill Pascrell (D-N.J.), a senior Ways and Means member, has said Democrats hope that legislation will be ready by the middle of the month — though such a measure is likely to die in the Republican-controlled Senate.

Talks will continue on a potential year-end tax package that could renew the roughly three dozen expired temporary tax breaks called extenders. Proposed changes to Social Security, including the possibility of higher payroll taxes, also would could get more consideration. — Aaron Lorenzo


Defense policy delays: Any hope for a quick finish to annual defense policy legislation has been cast aside as leaders of the House and Senate Armed Services committees continue their negotiations on the fiscal 2020 National Defense Authorization Act well into October — and perhaps beyond.

The Democratic House and Republican Senate have no shortage of thorny issues to reconcile as they attempt to hammer out a compromise. At the top of the list: Democratic-backed provisions to limit the president's war powers on Iran and Republican provisions to replenish $3.6 billion in military construction projects drained for the border wall with Mexico.

Defense appropriations for the new fiscal year that began last week are still tied up as well.

New Pentagon picks get to work: The Senate has nearly finished confirming a new round of nominees to long-vacant top Pentagon posts. Army Gen. Mark Milley is the new chairman of the Joint Chiefs of Staff. Air Force Gen. John Hyten is the new vice chairman. And Ryan McCarthy, who had been acting Army secretary, is now permanent.

The Senate is set to consider the president's nominee for Air Force secretary, Barbara Barrett, when it returns next week from a long recess. A former business executive and trained astronaut, Barrett is likely to be confirmed but faces opposition from Sen. Richard Blumenthal (D-Conn.), who wants her to ban the service from spending money at Trump-branded properties after reports that air crews stayed at the Trump Turnberry golf resort in Scotland. — Connor O'Brien


Happy Cybersecurity Awareness Month: Business leaders this month can expect to hear a lot more about ensuring that their systems and networks are adequately protected against digital assaults. Transparency about cybersecurity risk varies widely across sectors, according to a report from Moody's Investors Service, and that lack of insight into their cyber strategies could soon "erode investor confidence and affect credit quality." Regulators are paying closer attention to how prepared companies are to defend against attempted hacks, Moody's says, with the SEC suggesting that companies deal with cyber risk in the same way they address economic and business risks and that they disclose when breaches occur.