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Legislative / Policy Update

Senate Floor. The Senate convened at 10 a.m. today. Senate Minority Leader Chuck Schumer (D-N.Y.) plans to use a provision in a 2017 sanctions law to force the Senate to vote on a measure that would block the Administration’s plan to lift sanctions on three Russian companies. Majority Leader Mitch McConnell (R-Ky.) wants to move forward on S. 1, which would impose new sanctions on the Syrian government and enhance security cooperation with Israel and Jordan. Senate Democrats, however, object to taking up the bill until the Senate passes legislation to reopen the government.

House Floor. The House convened at noon today and will vote on a continuing resolution that would reopen the government through Feb. 1. The measure will be considered under suspension of the rules, meaning that approval by two-thirds of voting members is necessary for passage. On Thursday, the House plans to vote on a CR that provides funding through Feb. 28. That measure will require only a majority vote for approval. Also this week, the House will vote on a $12 billion disaster aid package that would provide assistance to communities affected by wildfires, hurricanes, and other natural disasters.

Both the House and Senate are scheduled to be in recess next week, but House Majority Leader Steny Hoyer (D-Md.) said today that “if the government is not open, we will not have a recess.” Monday is Martin Luther King, Jr. Day, a federal holiday, but the House will be in session Tuesday through Friday of next week if the government has not re-opened. The Senate is expected to follow suit.

Government Shutdown. As the partial government shutdown continues, President Trump on Monday said he has the “absolute legal right” to declare a national emergency to build a border wall, but “I’m not looking to do that.” A new report by the Congressional Research Service examines the question, “Can the Department of Defense Build the Border Wall?” The report notes that “because the NEA [National Emergencies Act] and related military construction authorities do not appear to have been employed to construct barriers along the U.S. border, the invocation of such authorities for that purpose would raise a variety of novel legal issues….”

Trade Policy Update. The U.S.-Mexico-Canada Agreement (USMCA) was signed on Nov. 30 in Buenos Aires. That started a clock under the Trade Promotion Authority (TPA) statute, with two deadlines ahead: (1) By Jan. 29, the Administration must provide Congress with a list of required changes to U.S. law, and (2) the International Trade Commission must complete its report on the agreement no later than March 15. However, with the ITC closed because of the government shutdown, its report could be delayed.

Beyond those two milestones, it is up the Administration how quickly to move things forward by submitting the final text and a draft Statement of Administrative Action (SAA) to Congress. USTR may consider taking that step within the next 2-3 weeks. That seems ambitious, particularly with House and Senate Democrats still asking tough questions about the enforceability of the labor and environmental provisions.

Thirty days after the final text and draft SAA are submitted (around March 1 if the timeline above were followed), the Administration can formally transmit the USMCA implementing bill to Congress. Congress then has a maximum of 90 legislative days to act. Speaker Pelosi could stop the TPA clock through a House Rules change (as she did with the Colombia FTA in 2007) and it is therefore in the Administration’s interest to ensure that an understanding with Democrats is in hand before proceeding. For his part, President Trump appears willing to apply pressure to House leadership by invoking a six-month notification of withdrawal from the current NAFTA.

Meanwhile, the Section 232 tariffs on Canadian and Mexican steel and aluminum (and corresponding countermeasures by those two countries) have not been resolved. The U.S. has proposed replacing the tariffs with quotas, but so far both Mexico and Canada have rejected such proposals. It is nevertheless assumed that quotas are the most likely outcome, as long as they are adequately generous and structured in a way that grants some flexibility to Mexico and Canada in complying. It is hard to imagine Congress agreeing to take up and approve the USMCA with 232 tariffs and countermeasures still in place, providing a clear incentive for the Administration to resolve this issue in the coming months before sending the USMCA implementing bill to Capitol Hill.

Politics / Process

Committee Assignments. House Democrats are expected to announce the remainder of their committee assignments this week, while House Republicans are expected to release all of their assignments today or tomorrow. Last night, Democrats added one more member, Rep. Jimmy Gomez (Calif.), to the Ways and Means Committee, having previously announced 10 new members. Gomez will join Rep. Linda Sanchez of California as the second Hispanic Democrat on the powerful committee. The late Democratic addition allows Republicans to increase their numbers on Ways and Means to 17, making room for three new members – Reps. Drew Ferguson (Ga.), Jodey Arrington (Tex.), and Ron Estes (Kan.).

DATES TO NOTE:

  • Jan. 29 – State of the Union.
  • Jan. 30-31 – Chinese Vice Premier Liu He is in Washington for trade talks with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Details have not been announced and timing could change.
  • Jan. 30 – Feb. 1 – House Republicans’ retreat at the Greenbrier Resort in White Sulphur Springs, W.Va.
  • Feb. 7 – The President’s former attorney, Michael Cohen, will testify before the House Oversight and Reform Committee.
  • Feb. 13-15 – House Democrats’ retreat. Location TBA.

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