PSW Weekly Round-Up - 9/9

Legislative / Policy Update

Senate Floor. The Senate this week will vote on the Ebola Eradication Act and will continue to consider nominations, focusing on appointments to various federal agencies.

House Floor. The House is expected to pass three energy bills that are unlikely to be considered by the Senate. The measures would block oil and gas drilling in the Arctic National Wildlife Refuge, off the Atlantic and Pacific coasts, and in the Eastern Gulf of Mexico. Last floor votes for the week are expected no later than 3 p.m. on Thursday, allowing House Republicans to journey to Baltimore to begin their three-day annual retreat, which was originally scheduled for the Greenbrier resort in late January but was postponed because of the government shutdown. President Trump is scheduled to address the group on Thursday.

FY 2020 Appropriations. Now that Congress and the President have agreed on a budget deal raising the spending caps for fiscal years 2020 and 2021, the Senate Appropriations Committee is getting to work on this year’s appropriations bills. On Tuesday, Sept. 10, subcommittees will mark up the Defense spending measure and the Labor-HHS-Education bill. On Thursday, Sept. 12, the full committee will mark up those two bills as well as the Energy and Water appropriations and the State-Foreign Operations bill. No subcommittee markups are scheduled for the latter two bills, but subcommittee members are reportedly signing off on the bills behind the scenes.

Also on Thursday, the full committee will vote on what are known as the 302(b) allocations, which are the spending targets used by each of the 12 subcommittees in crafting their individual bills. If you’re planning to follow the committee action on Thursday, note that the markup webcast will be audio only. This will be true for the next two Thursdays as well when the full committee marks up two more minibuses that package four bills each. Senate Appropriations Chair Richard Shelby (R-Ala.) would like the full Senate to pass the first minibus this month, but Majority Leader Mitch McConnell has given no indication as to when the full Senate will take up the spending bills.

Meanwhile on the House side, Appropriations Chair Nita Lowey (D-N.Y.) has not said how or when her committee will adjust the spending levels in the bills that were crafted before the new budget caps were enacted. The committee approved all 12 bills and the House passed 10 of the 12 using spending levels that were $5 billion less than the new FY 2020 budget cap for defense and $15 billion more than allowed for non-defense under the budget agreement.

With only 13 legislative days between now and the beginning of the new fiscal year on Oct. 1, there is not enough time to pass the FY 2020 appropriations bills so Congress will need to pass a continuing resolution to keep the government open. The House plans to vote the week of Sept. 16 on a CR that is expected to last until late November or early December.

Drug Pricing. In the coming weeks, House Speaker Nancy Pelosi plans to unveil a proposal that would direct the federal government to negotiate prices for drugs that account for an outsized portion of Medicare and Medicaid spending. In addition to Medicare and Medicaid, the negotiated prices would apply to private insurance plans.

The legislation has been toughened from an earlier draft after pushback from progressives in the Democratic caucus. The earlier version would have allowed the government to negotiate the price of 25 drugs, but that was increased to at least 250 in a more recent draft. The change, however, was not enough for some progressives, who want the government to negotiate lower prices for almost all drugs. Pelosi is walking a fine line with her caucus as more moderate Democrats are concerned that the proposal could move too far to the left.

Plans are for the bill, which is expected to be designated as H.R. 3 to underscore its importance, to be marked up by both the Energy and Commerce Committee and the Ways and Means Committee. Pelosi’s top health aide, Wendell Primus, has been holding talks with the Trump Administration, but it’s unclear what the President’s position will be on the House approach to lowering drug prices.

Defense Spending. During the recess, staff of the House and Senate Armed Services Committees worked to resolve differences between the two chambers’ versions of the National Defense Authorization Act (NDAA). The hope is to draft a conference committee report by Sept. 19 and finalize signatures of the conferees by Sept. 23, allowing for floor votes and final passage before Sept. 30.

One of the biggest hurdles to reaching an agreement will be what to do about President Trump’s shifting of $3.6 billion in military construction funds to help pay for a border wall. The House version of the NDAA has language barring such funding transfers in the future and does not include language to replenish the funds for the 127 projects that are losing money. In contrast, the Senate version replaces the funds and does not include any language restricting funding transfers. The President’s reprogramming affects roughly $1.8 billion in funds for projects in the U.S. and its territories, with the remainder coming from projects in other countries.

USMCA. Proponents of the U.S.-Mexico-Canada Agreement remain hopeful that legislation can be passed by the end of the year. Before the recess, House Democratic working groups provided U.S. Trade Representative Robert Lighthizer with their proposals for changes in four major areas – labor, environment, enforcement, and pharmaceuticals – and they are now awaiting formal counterproposals from USTR.

Committee Action of Note:

September 10

• House Judiciary Committee markup of three gun control bills.
• Senate Appropriations Subcommittee on Defense markup of the FY 2020 Defense Appropriations Act.
• Senate Appropriations Subcommittee on Labor-HHS-Education markup of the FY 2020 Labor-HHS-Education and Related Agencies Appropriations Act.
• Senate Banking Committee hearing on housing reform with Treasury Secretary Mnuchin, HUD Secretary Carson, and Mark Calabria, director of the Federal Housing Finance Agency.

September 11

• Senate Commerce, Science, and Transportation Committee hearing on TSA Oversight with Patricia Cogswell, Acting Deputy Administrator, Transportation Security Administration.
• House Transportation and Infrastructure Committee hearing on pricing and technology strategies to address congestion and financing of U.S. roads.
• House Financial Services Subcommittee on National Security, International Development, and Monetary Policy hearing on the macroeconomic effects of climate change.

September 12

• Senate Appropriations Committee hearing to consider the 302(b) subcommittee allocations and markup of four bills -- Defense, Energy & Water, State-Foreign Operations, and Labor-HHS-Education.
• Senate Banking, Housing and Urban Affairs Committee hearing on developments in global insurance regulatory and supervisory forums.
• Senate Armed Services Committee hearing on the nominations of Ryan D. McCarthy to be Secretary of the Army and Barbara M. Barrett to be Secretary of the Air Force.
• House Judiciary Antitrust Subcommittee hearing on the effect of data and privacy on competition in the digital market place.
• House Judiciary Committee markup to formalize procedures into an impeachment investigation, and vote to establish basic parameters of forthcoming hearings including who can question witnesses, what the president’s rights are, and what parts of the investigation can be made public.

Political Update

Democratic Primary. On Thursday, 10 Democratic candidates will take the stage in Houston for the third Democratic debate of the 2020 cycle. Former Vice President Joe Biden., Sen. Cory Booker (N.J.), Mayor Pete Buttigieg, former HUD secretary Julián Castro, Sen. Kamala Harris (Calif.), Sen. Amy Klobuchar (Minn.), former Rep. Beto O’Rourke (Tex.), Sen. Bernie Sanders (Vt.), Sen. Elizabeth Warren (Mass.), and tech entrepreneur Andrew Yang all made the cut for the debate. Tom Steyer just missed the cut but has officially qualified for the fourth debate in October, meaning there will be two nights of debates per DNC rules.

Trump Campaign. The President and his allies traveled the country in August to promote his 2020 re-election campaign, and Trump will be on the road again this week as he holds rallies in North Carolina (Sept. 9) and New Mexico (Sept. 16). The President has averaged a 43.3% approval/53.7% disapproval rating since August 1. Over the weekend, former South Carolina governor and congressman Mark Sanford joined the most crowded primary against a sitting president in modern history, but his chances to unseat the President may be made even harder as South Carolina, Arizona, Nevada, and Kansas all announced they are planning to cancel their Republican primaries and caucuses next year in an attempt to clear the field for Trump.

Retirements. Currently, five Senators (4 Republicans and 1 Democrat) and 20 House members (16 Republicans and 4 Democrats) have announced they are not running for re-election in 2020. This includes Rep. Sean Duffy (R-Wisc.), who will step down on Sept. 23. He will be replaced in a special election on a date to be set by the governor. The Senate total includes Sen. Johnny Isakson (R-Ga.), who is retiring at the end of this year because of health concerns. The Republican governor will name a replacement until a special election is held in 2020 to fill the remaining two years of Isakson’s term. Also, a special election is being held Tuesday, Sept. 10, to fill the seat of Rep. Walter Jones (R-N.C.), who passed away in February.

North Carolina Special Election. Still another special election Tuesday in North Carolina will close out the final congressional race of 2018. Last year's race in the 9^th District was marred by election fraud by the Republican candidate’s campaign, leading to tomorrow’s special election between Democrat Dan McCready and Trump-backed Republican Dan Bishop. The Trump team will be in Fayetteville today to campaign for Bishop to protect a seat firmly held by Republicans since 1960.