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NJ Daily / OUTLOOK

Health, Defense Encroach As Sotomayor Takes Center Stage

July 13, 2009

Congress faces a packed schedule this week, as members of each chamber continue to search for ways to pay for healthcare reform, the Senate debates funding authorization for the Pentagon and considerable attention will be cast toward Capitol Hill as Supreme Court nominee Judge Sonia Sotomayor begins her confirmation hearings.

The Senate today begins consideration of the FY10 defense authorization bill, a $679.8 billion measure that prescribes funding levels for the military and sets Pentagon policy.

Senate Armed Services Chairman Carl Levin has said he hopes to vote on the measure by the end of the week, although he acknowledged on Thursday that debate could spill into next week.

 

Among the issues expected to dominate floor consideration is the committee's decision to authorize $1.75 billion for seven F-22 Raptor fighter jets for the Air Force that the Pentagon does not want.

The Obama administration has threatened to veto the measure if it includes any funding for F-22s. Defense Secretary Gates insists the 187 F-22s now in the Air Force fleet or in production are adequate to combat current and future threats.

Levin and Armed Services ranking member John McCain both oppose the add-on -- which passed the committee on a 13-11 vote -- and plan to fight it on the floor.

But the Lockheed Martin fighter, which has work spread across 44 states, has significant support on Capitol Hill.

Indeed, 44 senators sent President Obama a letter just days before his inauguration in January imploring him to continue production of the F-22. They argued that the program, which employs 25,000 workers at 1,000 suppliers in 44 states, provides $12 billion in economic activity annually in the United States.

"I think probably the most credible person in America on national security issues is Secretary Gates," McCain, a longtime foe of pork-barrel spending, said during a brief interview last week. "If he can't succeed, then it's quite a commentary."

McCain has said he will try on the floor to overturn the bill's authorization of $438.9 million for a second engine program for the Joint Strike Fighter. But, unlike the F-22, Levin said he supports funding the alternate engine despite the administration's assertions it is unnecessary.

The White House has raised the possibility it would veto the authorization bill if it continues the second engine program, arguing that it is too costly and would delay fielding of the aircraft to the Air Force, Navy and Marine Corps.

Former President George W. Bush made similar arguments in repeated attempts to terminate development of an alternate engine, only to be rebuffed by Congress.

Despite some differences with the administration, Levin says the bill endorses roughly 90 percent of the Pentagon's FY10 budget request and last week downplayed any threats to veto the bill over the F-35 alternate engine or the F-22.

"I would not predict a veto," Levin said.

Meanwhile, the House might release its healthcare overhaul bill this week following a delay of its release Friday after the Blue Dog Coalition went public with their dissatisfaction. Committee markups expected to begin today have been pushed back as well.

Rep. Mike Ross, D-Ark., chairman of the Blue Dog Health Care Task Force, characterized a two-hour Friday meeting with the three House chairmen negotiating the healthcare overhaul - Ways and Means Chairman Charles Rangel, Energy and Commerce Chairman Henry Waxman and Education and Labor Chairman George Miller -- and Majority Leader Hoyer as a preliminary discussion on the dozen or more provisions Blue Dogs want addressed.

He said he expects another meeting early this week and more over the next week or two to delve deeper into the Blue Dogs' concerns. Ross singled out the coalition's desire to achieve more Medicare cost containments, avoid basing the public option on Medicare payment rates and provide small businesses with relief from an employer mandate.

House Democratic Caucus Chairman John Larson of Connecticut said he was not troubled by the delay. "It's normal and completely understandable under these circumstances," Larson said Friday.

House Ways and Means Democrats announced Friday they plan to get most of the revenue they need from a surtax starting at 1 percent for married couples, beginning with those who have $350,000 adjusted gross income. The surtax percentage would gradually increase so it hits those with adjusted gross incomes of more than $500,000 and then more than $1 million with the highest tax. That would raise about $540 billion.

The Senate Finance Committee is searching for ways to pay for the measure and will continue meeting this week to offset their $1 trillion overhaul bill. The committee, which is the last hope in either chamber for a bipartisan bill, is forced to fill a $320 billion funding gap after Senate Democratic leaders protested taxing employer-based health benefits to help pay for the measure.

The committee is attempting to find more savings in Medicare and Medicaid and have about a dozen potential revenue raisers to choose from to make up the difference.

Both chambers are eyeing a surtax on wealthier households -- a revenue raiser that rankles Republicans and conservative Democrats.

Senate Finance Democrats are looking at a straight-up 5 percent millionaires' surtax, estimated to raise $350 billion. To fill in the remaining holes, senators are looking at a variety of options, including applying the 1.45 percent Medicare payroll tax paid by workers to investment income above a certain limit, raising $100 billion. That option is also controversial because it would hit households earning less than $250,000, which Obama pledged to avoid during the presidential campaign.

Other ideas include capping the value of itemized deductions at 35 percent and limiting tax-free health benefits to $25,000 in annual coverage, each raising $90 billion. Obama proposed a more expansive version of the itemized deduction cap, which was immediately panned as detrimental to the downtrodden housing market and charitable giving.

Perhaps the greatest determinant of the Senate's schedule this week gets under way this morning: the Senate Judiciary Committee's confirmation hearing of Sotomayor.

With senators likely to occupy the morning with opening statements before Sotomayor offers her opening statement in the afternoon, the key days of testimony will be Tuesday and Wednesday, when Sotomayor will take multiple rounds of questions from senators. Her testimony might spill into Thursday, after which witnesses will testify, potentially consuming Thursday and Friday.

New York Democratic Reps. Jose Serrano and Nydia Velazquez will highlight Sotomayor's personal story and her chance to be the court's first Hispanic.

Former FBI Director Louis Freeh, former New York County District Attorney Robert Morgenthau and National Fraternal Order of Police President Chuck Canterbury will highlight Sotomayor's work as a prosecutor.

Republicans will call Frank Ricci, the firefighter from New Haven, Conn., who won a discrimination case when the Supreme Court overturned a ruling by a panel of judges that included Sotomayor, to bolster their contention that she has let her personal views affect her decisions. Former National Rifle Association head Sandy Froman will likely take shots at Sotomayor's rulings on the Second Amendment.

Republican members have said they will question Sotomayor about her past position on the board of a group providing legal advocacy for people of Puerto Rican descent that often sued cities over employment issues.

But it remains unclear if Republicans will unveil any unannounced lines of questioning or oppose Sotomayor strongly enough to risk political fallout. Democrats, including Senate Majority Whip Durbin, have said blanket opposition to Sotomayor could alienate Hispanic voters.

National Republican Senatorial Committee Chairman John Cornyn of Texas and Senate Minority Whip Kyl might offer barometers of the GOP's disposition. Both sit on the committee and represent states with large Hispanic populations. And as members of leadership, both, and Cornyn in particular, must weigh the political needs of Senate Republicans.

• The Senate meets today at 11 a.m. to consider the defense authorization bill.

• The House meets today at 12:30 p.m. for morning hour.

APPROPRIATIONS

The breakneck pace on appropriations bills continues in the House this week as Democratic leaders intend to bring to the floor the $33.3 billion FY10 Energy and Water appropriations bill and the $24.1 billion FY10 Financial Services spending measure.

Also, the House Appropriations Committee Friday morning will mark up the $160.7 billion Labor-HHS spending bill.

The House Transportation Appropriations Subcommittee will mark up its bill today and the Defense Appropriations Subcommittee will clear its bill Thursday in a closed meeting.

Action on these spending bills comes as House Democratic and Republican leaders continue to try to come to an agreement on how many GOP amendments can be offered to the appropriations bills.

In their weekly colloquy on the floor Friday, House Minority Whip Cantor proposed to Hoyer that Republicans be allowed to offer 20 amendments with 10 minutes for debate on each.

"That is a fair and good-faith proposition," Cantor said.

Hoyer said he would consider the offer and noted it was similar to the one he suggested three-and-a-half months ago that Republicans declined.

House Democratic leaders intend to get all of the 12 annual spending bills through the House by the end of the month and have limited the number of amendments that can be offered to help ensure the deadline is met.

"We are on a good schedule now," Hoyer said. "We have passed seven of the 12 bills from the House. We have five more left to go. My expectation is that we will complete those."

But Republicans have said the rush to finish the work on this deadline has resulted in a break with tradition; typically the majority party has not limited amendments to appropriations bills.

"The precedence of the House is open rules" for appropriations bills, Cantor said. "So far this year ... there have been six bills that have been deliberated, discussed and debated under a restricted rule and we are seemingly on track for 12."

Cantor criticized Appropriations Chairman David Obey, saying he believes he has taken a hard line on the amendment issue.

"I for the life of me don't understand how an individual, much less the chairman of the Appropriations Committee, is content to spend the taxpayer dollars without allowing there to be a full and open debate," Cantor said.

Hoyer said that Obey and other Democratic leaders are committed to meeting the schedule and want precautionary time agreements to ensure Republicans don't tie up the appropriations process by filing large numbers of amendments.

Hoyer said that at last week's full committee markup of the Energy and Water and Financial Services bills several amendments were offered "most of which were not germane to the bills." The markup wrapped up past midnight.

ENVIRONMENT

While Senate Environment and Public Works Chairwoman Barbara Boxer has delayed a planned vote this summer in her panel on climate change until the fall, she will press ahead with three scheduled hearings this week on the subject.

On Tuesday afternoon, the panel will look at the role the transportation sector would play, with testimony from Transportation Secretary LaHood and EPA's air quality chief Regina McCarthy, who was just confirmed by the Senate June 2.

Earlier Tuesday, the panel holds a hearing on what economic benefits for the agriculture and forestry industries could arise in a cap-and-trade program. Bill Hohenstein, director of the global climate change program at USDA, is the government witness.

A third hearing Thursday looks at how U.S. businesses can stay globally competitive in a greener economy.

The hearings touch on key unresolved issues regarding agriculture and trade that will be pivotal for Senate Democratic leaders to gain 60 votes for a cap-and-trade and energy strategy.

Boxer initially planned to introduce and mark up a cap-and-trade bill before the August break but now plans to do so in September to build support. Majority Leader Reid is planning to bring a climate and energy plan to the full Senate in October.

Obama wants Congress to send him a strategy before the United States enters United Nations climate change talks in Denmark in December. But that is contingent on successful negotiations with scores of undecided Democrats and perhaps a handful or so of Republicans.

FINANCE

Congress this week will continue its work on revamping the nation's financial regulatory system with a series of hearings examining a range of issues that are likely to be included in a final bill.

The Senate Banking Committee will hold a Tuesday hearing on the administration's proposed Consumer Financial Protection Agency, which would oversee regulation of customer banking, mortgage and credit insurance products.

House Financial Services Chairman Barney Frank has sponsored his version of legislation that hews closely to the White House outline. His committee will hear from community and consumer advocates on the proposal on Thursday while his panel's Domestic Monetary Policy Subcommittee will hold a Wednesday hearing on the Federal Reserve's role in safeguarding consumer protection. The Obama plan and Frank bill would strip that role from the central bank, which opposes the diminution in its powers.

The Senate Banking Securities Subcommittee will hold a Wednesday hearing on greater regulation of hedge funds and other private investment pools. The administration has proposed that hedge funds, private equity groups and other such pools be required to register with the SEC. Some legislators would like to place even greater disclosure requirements upon such pools.

On Wednesday, the Financial Services Committee will hear from banking representatives on the administration's overhaul plan. The Financial Services Capital Markets Subcommittee will hold a Tuesday hearing on the state of the SEC as SEC Chairwoman Mary Schapiro has attempted to clean house at the agency, which critics said was demoralized in the Bush administration by insufficient funds and a lack of aggressive enforcement.

On Friday, the Obama administration proposed new legislation to beef up the SEC's consumer protection enforcement, such as requiring a fiduciary duty for any broker, dealer, or investment adviser who gives investment advice about securities.

Such standards had been applied unevenly in the past. The administration also called on the SEC to have the authority to limit or restrict mandatory, predispute arbitration clauses in broker-dealer, municipal securities dealer, and investment advisory agreements. The legislation is likely to be included in the overhaul package.

And the Financial Services Oversight and Investigations Subcommittee will hold a hearing today on legislation that would prohibit lawmakers and their staff from trading in stocks, bonds or commodities based on information they have gleaned from their job duties.

Meanwhile, the House Oversight and Government Reform Committee continues its investigation of Bank of America's acquisition of Merrill Lynch, with former Treasury Secretary Henry Paulson appearing before the panel Thursday.

In a June 25 appearance before the committee, Federal Reserve Chairman Bernanke testified that he did not threaten Bank of America CEO Ken Lewis or the bank's board members if they attempted to cancel the merger last year.

But lawmakers remain skeptical of the Fed's role in the deal, and some are raising questions about the Fed's power and transparency even as the Obama administration has proposed giving the regulatory agency more authority to monitor systemic risk in the nation's financial institutions.

On Friday, House Financial Services Capital Markets Subcommittee ranking member Scott Garrett, R-N.J., was joined by 13 Republicans and three Democrats on the Financial Services Committee in urging the White House to slow its push to overhaul the financial regulatory system until after the Fed's role in the merger has been fully investigated by Congress.

There is "a considerable amount of other testimony and evidence that calls into question [Bernanke's] claims," the lawmakers wrote. "No additional powers should be contemplated for the Federal Reserve ... until this issue is thoroughly investigated and the Federal Reserve is cleared of any wrongdoing."

The House Oversight and Government Reform Committee expects to call on former SEC Chairman Christopher Cox and other federal regulators to testify before the conclusion of the investigation, a spokesman said, but dates for future hearings have not yet been set.

GOVERNMENT OPERATIONS

The new Senate Homeland Security and Governmental Affairs Contracting Oversight Subcommittee chaired by Sen. Claire McCaskill, D-Mo., Thursday will examine contracts awarded to companies held by Alaskan natives. Alaska Native Corporations are eligible for no-bid contracts usually steered toward small businesses, but they are exempt from rules capping the value of the deals.

Committee investigators released preliminary data last month on 20 ANCs, showing that only one in five contract dollars awarded to the companies between 2000 and 2008 was actually performed within Alaska's borders, and about 40 percent of the money during that time period flowed to companies located outside the state. Witnesses include procurement officials from the Small Business Administration and the Defense Department, as well as the executive director of the Native American Contractors Association.

Meanwhile, the Senate is expected to vote today on whether to confirm Robert Groves to be director of the Census Bureau.

Reid filed cloture on the nomination Thursday evening. Sens. David Vitter, R-La., and Richard Shelby, R-Ala., had placed holds on the nomination, citing concerns about Groves' past support for the use of statistical sampling to account for hard-to-reach populations, as well as the Census Bureau's tapping of the Association of Community Organizations for Reform Now as one of thousands of partner groups to promote participation in the decennial count.

HEALTH

The Senate Health, Education, Labor and Pensions Committee will begin a fourth week of marking up the panel's version of a healthcare overhaul.

The panel is in the midst of marking up the most contentious portions of the bill, including a public plan option and a proposed pay-or-play employer mandate.

Sen. Christopher Dodd, D-Conn., wields the gavel while HELP Chairman Edward Kennedy battles cancer, hoped to wrap up the hearings already, but hundreds of Republican amendments are pending.

Sotomayor's confirmation hearings might hold up the proceedings. Sen. Tom Coburn, R-Okla., also serves on the Judiciary Committee and will likely be absent from many of the HELP hearings. HELP Sens. Sheldon Whitehouse, D-R.I., and Orrin Hatch, R-Utah, also have seats on Judiciary. The panel could also run into trouble if the Finance Committee begins marking up its version of the overhaul, as several senators serve on both panels.

HOMELAND SECURITY

The Senate Homeland Security and Governmental Affairs Committee Wednesday will tackle the thorny issue of setting national standards for driver's licenses.

The committee will hold a hearing on legislation that would repeal the Real ID law, which was enacted in 2005 but has been enmeshed in controversy and rejected by several state legislatures.

The new legislation, called the PASS ID act, would require states to issue secure drivers' licenses to their residents, but removes some of the main obstacles to the Real ID law.

The hearing will feature testimony from Homeland Security Secretary Napolitano and David Quam, director of federal relations for the National Governors Association -- both of whom support the PASS ID act.

Unlike the 2005 law, PASS ID would not require states to establish a central information technology hub to verify that their residents do not have licenses from another state. PASS ID also would not require states to verify the authenticity of identification documents, such as birth records.

Both of those requirements were criticized for being too burdensome and costly to states.

Critics contend that PASS ID will water down security standards and ultimately undermine recommendations for secure licenses made by the 9/11 Commission.

On Tuesday, the conservative Heritage Foundation plans a forum with critics of the PASS ID act, including Janice Kephart, who served as counsel to the 9/11 Commission.

INTELLIGENCE

The House could take up a bill this week authorizing programs and spending for the nation's intelligence community.

Controversy erupted last week over the FY10 intelligence authorization bill after the White House threatened to veto it over a provision that would allow all members of the congressional Intelligence committees to be briefed on covert CIA activities.

The White House said the provision would "run afoul" of tradition under which briefings could be limited to only top congressional leaders.

Mindful of the veto threat, House Intelligence Chairman Silvestre Reyes said he plans to work with the Obama administration to find "a middle ground" on procedures for congressional briefings.

But debate on the bill will likely be overshadowed by allegations Democrats made last week that the CIA has misled Congress during briefings. Reyes said the CIA lied to Congress on at least one occasion.

Key Republicans dispute the allegations, saying they are being made to provide political cover for House Speaker Pelosi, who said earlier this year that the CIA had misled Congress. They are demanding that Pelosi provide evidence to back up her claim.

House Oversight and Government Reform ranking member Darrell Issa has also asked the FBI to investigate the charges. Republicans are also angry that they were prevented by the Democratic-led House Rules Committee from offering several amendments to the bill.

JUDICIARY

Commerce Secretary Locke and intellectual property rights leaders will release a report today detailing the impact of copyright on the U.S. economy. The analysis covers four years through 2007 and was prepared by Economists Inc. for the International Intellectual Property Alliance, which represents U.S. music, movie, software and video game industries.

Locke will be joined by Business Software Alliance President Robert Holleyman, Motion Picture Association of America Chairman Dan Glickman, Recording Industry Association of America Chairman Mitch Bainwol and others.

The report's author, Stephen Siwek, wrote a 2007 paper for IIPA that estimated the core U.S. copyright industries accounted for an estimated 6.5 percent of the nation's gross domestic product in 2005, up slightly from the prior year.

POLITICS

Voters in California's 32nd District will finally get the chance Tuesday to fill the seat vacated in February by the appointment of Labor Secretary Solis.

State Board of Equalization Member Judy Chu, the Democratic nominee, is expected to cruise to victory over Monterey Park GOP City Council Member Betty Chu and Libertarian nominee Christopher Agrella.

Judy Chu emerged from a bruising open primary in May, defeating Democratic state Sen. Gil Cedillo. She has the backing of major labor unions such as the Service Employees International Union and the American Federation of State, County and Municipal Employees.

Chu was also endorsed by the state Democratic Party before the primary and Los Angeles Mayor Antonio Villaraigosa. She raked in more than $1 million during the campaign.

TELECOMMUNICATIONS

The highlight of the week occurs Wednesday when the two remaining FCC nominees -- South Carolina regulator Mignon Clyburn and former Commerce official Meredith Baker -- testify before the Senate Commerce Committee.

The Democrat and Republican, respectively, would round out the five-member agency, which now has three regulators, including its new chairman, Julius Genachowski. Broadband policy continues to dominate as the main topic of communications-related conferences around town.

Today the Technology Policy Institute hosts a discussion on the subject featuring representatives of Comcast, Public Knowledge and Verizon. The Phoenix Center follows Wednesday with a session featuring a keynote by FCC Commissioner Robert McDowell. On Friday, the Media Access Project, a public-interest law firm, weighs in with a forum featuring remarks by Thomas Kalil, associate director for policy in the White House Office of Science and Technology.

WHITE HOUSE

Obama, back from his weeklong overseas trip, will hit the road again this week.

He will spend today at the White House before he travels Tuesday to Warren, Mich., for a speech, and to St. Louis to throw out the first pitch at Major League Baseball's annual All-Star game. Wednesday he is back at the White House.

Thursday, he will campaign in New Jersey for Democratic Gov. Jon Corzine and then go to New York City to address the NAACP. On Friday, he will have meetings at the White House.

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