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OUTLOOK

Housing, Energy To Top Week's Agendas

Congress could complete its work on a housing-recovery package as early as this week as lawmakers look to make minor changes to the legislation so they can ship it quickly to the White House before the August recess.

The Senate passed its version of housing legislation on Friday, 63-5, to revamp the oversight of government-sponsored enterprises Fannie Mae, Freddie Mac and the Federal Home Loan Bank System; overhaul the Federal Housing Administration's mortgage insurance program, and allow the FHA to guarantee up to $300 billion in new loans for at-risk subprime borrowers. It would siphon some of Fannie's and Freddie's new business to create an affordable housing trust fund.

 

The Senate bill will likely change some as it is considered again in the House, which has passed its version. There is broad agreement on the most important sections. Lawmakers are expected to wrap up their work quickly, especially as Fannie and Freddie shares plunged last week over concerns they lack sufficient capital and the government might have to bail them out.

"[The House] will send it back soon hopefully then we can send it back to the president some time next week," Senate Banking Chairman Christopher Dodd said Friday.

The measure is made up of different amendments that required three separate Senate cloture votes, taking weeks to obtain final passage because of opposition from a few Republicans.

 

House lawmakers are expected to tweak the bill, though they would have to get the support of the Senate on the changes to clear the bill soon.

Dodd has lobbied for the House to accept the Senate bill without any changes, but that is not expected to occur because the Senate bill would provide $3.9 billion in Community Development Block Grants for communities to buy and fix foreclosed properties -- funding that is not offset. The Blue Dog Coalition insists the funding be paid for or be dropped.

Also, the Senate bill would require rules for the new GSE regulator to be completed within six months upon enactment. House Financial Services Chairman Barney Frank has argued the time frame should be longer to ensure that the rules are crafted properly and are not rushed.

Critics note the language would also give unprecedented powers to the interim regulator; the Democratic Senate is not likely to confirm any full-time regulator appointed by the Bush administration near the end of its term.

 

Frank also wants to change a Senate provision he contends would limit Fannie's and Freddie's ability to hold jumbo mortgages. The Senate bill would grant authority for the new regulator to restrict the two's portfolios, specifically determining whether they are able to deliver liquidity "through securitization."

Critics argue that language could allow the regulator to require them to securitize loans for more than $417,000 but not hold them in their portfolios.

The Senate bill also contains a $14.5 billion package of tax incentives, but approximately $2.4 billion is not offset.

To comply with pay/go budget rules, the business community expects House Ways and Means Chairman Charles Rangel to include a one-year delay of worldwide interest expensing rules for multinational companies. That provision was included in an earlier House version but faces opposition from Senate Republicans. Rangel has not spoken about his next move. After Senate passage Friday, House Speaker Pelosi signaled she wanted to wrap up the legislation soon: "I am confident that Chairman Frank and Chairman Rangel will arrive at a bipartisan, bicameral compromise with our Senate colleagues soon because we share the common goal of protecting homeownership and home values, and restoring stability to the housing market."

Meanwhile, House and Senate Democratic leaders appear likely to move multiple energy bills this week targeting existing federal oil and gas production leases as well as excessive oil futures speculation.

Senate Democrats, meanwhile, are poised to move a speculation bill this week.

There have been several market speculation bills offered, including two on Friday, the day after Majority Leader Reid and other leaders sat down with market speculation experts.

There is a growing sense in both parties that market speculation has contributed to the spike in oil and gas prices. Democrats are looking to allow the Commodity Futures Trading Commission, instead of market exchanges themselves, to set speculation limits.

Senate Republican leaders are pushing a bill that, among other things, would allow for drilling of oil and natural gas 50 miles off the coastline of states that agree to do so and lift a ban on Western oil shale production.

House Democratic leaders are planning to move a speculation bill likely next week. This week they are moving a package intended to counter GOP demands for new oil and gas drilling by focusing on areas already open for production.

The package resuscitates a "use-it-or-lose-it" proposal that failed to clear the suspension calendar before the Independence Day recess.

The new proposal adds language to expedite production in about 23 million acres of the National Petroleum Reserve in Alaska by requiring the BLM to offer production leases annually. Democrats say they are now doing it about every two years. BLM counters that land-use planning and inadequate funding can lengthen the time in between lease sales.

House Democrats are looking to reinsert a ban on the exportation of oil produced in Alaska, as well as press President Bush to complete construction of two pipelines transporting oil from the petroleum reserve in Alaska and natural gas from the state to the rest of the country.

The natural gas pipeline is embroiled in a standoff in Alaska and the state Legislature is trying to determine who should build it.

The House this week will take up a bill by Transportation and Infrastructure Chairman James Oberstar that authorizes $1 billion for bridge repairs, reconstruction or replacement.

It also requires the Transportation Department to develop a way to prioritize bridge repairs, rehabilitation and replacement based on their safety risk and require states to invest in bridge upgrades.

The National Academy of Sciences also would be required to independently review how to assign how priorities are designated based on risk to make sure decisions are based on need.

The bill is the Minnesota Democrat's response to the Aug. 1 collapse of the I-35W bridge in Minneapolis.

Initially, he considered a $5 billion program financed by a temporary 5 cent per gallon increase in the gasoline tax. But opposition led Oberstar to introduce a scaled-back bill in October to authorize $2 billion from the Treasury in FY08 and FY09. But since FY08 is nearly over, Oberstar's bill now would just authorize $1 billion for next year.

Transportation and Infrastructure Republicans have cited concern that the bill allows only limited flexibility for states to manage highway programs. Transportation and Infrastructure ranking member John Mica has not taken a position on Oberstar's bill, his spokesman said Friday.

* The Senate meets at 2 p.m. for morning business and then considers global HIV-AIDS legislation. No votes will be taken.

* The House meets today at 12:30 p.m. for morning hour and 2 p.m. to consider suspension bills. Votes will be postponed until 6:30 p.m.

APPROPRIATIONS

After a flurry of activity, including clearing three spending bills for floor action last week, the Senate Appropriations Committee has not scheduled any markups for this week.

A hearing that will be convened by Labor-HHS Appropriations Subcommittee Chairman Tom Harkin, D-Iowa, Wednesday morning is the only event on the panel's schedule.

The pause in the committee's legislating comes after Senate Majority Leader Reid said last week he expected Congress to perhaps finish work on two of the 12 annual spending bills -- the Defense appropriations bill and the Military Construction appropriations bill -- before passing a continuing resolution ahead of the November election that funds the government until a new president takes office.

House Democratic leaders have indicated they hope to wrap up the year by Sept. 26, putting to rest speculation that Congress would return after the election for a lame-duck session to address unfinished spending bills and other issues.

Democratic leaders' appetite to finish work on all the appropriations bills was quelled, in part, by a pre-emptive threat issued by Bush this year that he would veto any appropriations bill that exceeds recommendations in his FY09 budget proposal.

Despite signals from House and Senate leaders that the appropriations process will likely not be completed this year, Senate Appropriations Chairman Robert Byrd last week called on Senate leaders to schedule floor time for debate and votes for the 12 spending bills.

"Unfortunately, President Bush's veto threats have discouraged some from wanting to get important funding legislation on the Senate floor," Byrd said. "We are a separate branch and we hold the power over the purse. This senator will continue to urge that we complete our work."

Byrd urged the Senate to fulfill its legislative duty at a full committee markup Thursday before the panel approved the Transportation-HUD, Energy and Water, and Financial Services appropriations bills. The full committee has approved six of the 12 appropriations bills, including the Commerce-Justice-Science, Homeland Security and Labor-HHS measures passed last month.

Also at the markup, Byrd reiterated his intention to finish work on all the appropriations bills by the end of the month and scheduled for July 24 full committee markups of the Interior, Defense, and Legislative Branch appropriations bills.

He said he intends to mark up a second supplemental emergency spending bill July 22. The supplemental is expected to draw a lot of interest from lawmakers to address their spending priorities as prospects for completion of the annual appropriations bills dim.

DEFENSE

The House Defense Appropriations Subcommittee Wednesday will mark up the FY09 Defense appropriations bill.

Appropriators hope to send the spending measure to the full committee for approval the following week, raising the possibility the bill might be considered on the floor before the August recess.

Senate appropriators are not expected to mark up their version of the Defense spending bill until the following week.

Meanwhile, the House Armed Services Strategic Forces Subcommittee will hold a hearing Thursday on the military's modernization of its nuclear weapons complex. Witnesses include Thomas D'Agostino, administrator of the National Nuclear Security Administration, and Michael Anastasio, director of the Los Alamos National Laboratory in New Mexico.

ENVIRONMENT

A bill on the House floor this week from Rep. Barney Frank, D-Mass., that would include the Taunton River in Massachusetts under the National Park Service's Wild & Scenic River system has followed a convoluted timeline of events both sides are using to either claim or refute that Frank's bill is intended to kill a proposed liquefied natural gas plant in his district.

Critics say the bill -- which the Rules Committee takes up today -- is intended to kill a LNG plant along the lower urban section of the river in Frank's district. Frank says otherwise. The timeline is as follows:

The late Rep. Joe Moakley, D-Mass., introduced a bill in 1999 to study whether the upper part of the river should be designated under the program. That bill passed in 2000. The Interior Department by early 2002 recommended that the lower part of the river also be studied for possible designation.

Frank says that at that point he wanted to ensure that all affected communities were fine with that idea before agreeing to that.

Later in April 2002 he sent a letter with Rep. James McGovern, D-Mass., to then-House Transportation and Infrastructure Water Resources and Environment Subcommittee Chairman John Duncan, R-Tenn., asking for a project to dredge down to 40 feet in the lower part of the river to be included in a water infrastructure projects bill being considered that year so that an initial authorization to do so in 1968 would not expire.

Frank argues he did not ask for the dredging to be done but only to ensure that its authorization not expire in case it ever needed to be done.

He later in 2007 amended his request so that the dredging would not occur in parts covered by the Wild & Scenic River program.

Critics say, though, that the letter to Duncan shows that Frank was open then to a type of dredging that would have violated the program, especially since it would be done to accommodate increased marine traffic due to a still uncompleted building of a bridge in the area.

Weaver's Cove Energy first proposed the LNG plant also in the spring of 2002. Frank then in the fall of that year proposed that the Interior Department study whether the lower half of the river should be included in the Wild & Scenic River program. He later introduced a bill in the 109th Congress authorizing such designation.

The Weaver's Cove project has been turned down twice by the Coast Guard and once by the Commerce Department over navigational safety and environmental concerns and the company is appealing those decisions.

Frank supports an alternative LNG plant located off the coast of Gloucester in the district of Rep. John Tierney, D-Mass., but not another alternative offshore site that would pump to a land-based site in Frank's district.

Regardless of who is to be believed, the bill has -- to the ire of Democrats -- been lumped by Republicans into the larger charged debate over gas prices as they continue to hammer Democrats for not supporting their plans to expand domestic oil and gas production.

FINANCE

The House Financial Services Committee will mark up legislation Tuesday to treat ratings for municipal bonds the same way as those offered by corporations.

Lawmakers have complained credit-rating agencies have engaged in a dual ratings system in which municipal bonds often receive lower ratings than corporate bonds with the same or higher risk of default.

GOVERNMENT OPS

House Democratic chairmen are pushing ahead with plans to hold top current and former Bush administration officials in contempt of Congress, despite Republican charges that those tactics amount to publicity ploys.

Oversight and Government Reform Chairman Henry Waxman has threatened to hold a vote Wednesday on a resolution citing Attorney General Mukasey for contempt if he continues to refuse to comply with a committee subpoena for a FBI report on its interview of Vice President Cheney.

FBI agents interviewed Cheney during former Special Counsel Patrick Fitzgerald's investigation into the disclosure of the covert status of former CIA operative Valerie Plame.

Judiciary Commercial and Administrative Law Subcommittee Chairwoman Linda Sanchez, D-Calif., said last week that Judiciary Chairman John Conyers will likely hold a committee vote "in the next couple of weeks" on contempt charges against former White House Deputy Chief of Staff Karl Rove, who refused to comply with a committee subpoena requiring he appear at a hearing last week to discuss his role in alleged politicization of the Justice Department.

Efforts by House Democrats to hold administration officials in contempt are hamstrung by the refusal of the U.S. attorney for the District of Columbia to prosecute the cases.

HEALTH

Congress is waiting to hear from the president this week on whether leaders need to schedule veto override votes on Medicare legislation.

Congress last week sent the president a bill that averts a 10.6 percent Medicare physician payment cut, shortly after House Speaker Pelosi and Senate Majority Leader Reid held a brief enrollment ceremony.

The Centers for Medicare and Medicaid Services is in a holding pattern for at least a few more days, said spokesman Peter Ashkenaz, having committed to delaying processing claims and buying Congress more time to work out legislation since the cut went into effect July 1.

The House passed the bill overwhelmingly on June 24. Republicans have criticized a major offset that cuts extra government payments for private insurers that offer Medicare Advantage plans.

But House Republicans agreed with their leaders at the last minute to pass the bill 355-59. Senate Democrats hoped to ride on the coattails of that vote and abandoned a compromise they were near completing with Republicans.

They failed the first time around, falling one vote short on June 24. But they were able to pull off a 69-30 vote Wednesday to limit debate on the bill, which passed by voice vote. The president has steadfastly threatened to veto the bill over the Medicare Advantage cuts.

The Senate Finance Committee and the House Ways and Means Health Subcommittee continue their series of separate hearings on healthcare reform.

On Tuesday, the Health Subcommittee will examine different state approaches to universal health coverage.

On Thursday, the Finance Committee will hear from CBO Director Peter Orszag and others on innovations that can improve quality of care. The hearing will focus on comparative effectiveness research and health information technology, a committee spokeswoman said.

HOMELAND SECURITY

A series of hearings are planned this week to examine homeland security issues ranging from securing the nation's borders to what the Bush administration is doing to comply with requirements of a massive bill implementing recommendations of the 9/11 Commission.

The House Homeland Security Committee will summon Homeland Security Secretary Chertoff to testify Thursday on what his department is doing to align border security programs, personnel and resources.

Several of the panel's subcommittees plan hearings this week to assess what kind of progress the Homeland Security Department has made on meeting mandates of the so-called 9/11 Act nearly one year after it was signed into law.

The Transportation Subcommittee has called a hearing Tuesday to examine the department's efforts to screen passenger aircraft cargo. Under the law, the department must ensure that all cargo is screened by 2010.

The Border Subcommittee plans a hearing Wednesday to examine how the department is using flexibilities granted to it for the visa waiver program, under which citizens from certain countries can travel to the United States without a visa.

But the department must also implement a system that uses biometrics, such as fingerprints, to verify when foreigners leave the United States by next June, or else the visa waiver program cannot be expanded further.

And the Emerging Threats Subcommittee also plans a hearing Wednesday to examine how the department is complying with bio-surveillance requirements of the law.

The Emergency Communications Subcommittee has also called a hearing for Tuesday to examine national emergency communications capabilities.

Across Capitol Hill, the Senate Homeland Security and Governmental Affairs Committee will hold a hearing Tuesday to consider the nomination of Gus Coldebella to be the department's general counsel. He has been serving in an acting capacity.

HOUSE LEADERSHIP

House Majority Leader Hoyer is addressing the American Council for Capital Formation Thursday morning at the Phoenix Park Hotel.

Minority Leader Boehner will speak to the leadership PAC of Sen. John Thune, R-S.D., Tuesday afternoon before attending fundraisers for Reps. Ginny Brown-Waite, R-Fla., and Sam Johnson, R-Texas. Boehner is also planning to attend a fundraiser Thursday for Rep. Dennis Rehberg, R-Mont.

Boehner leaves town Friday to visit the National Renewable Energy Laboratory in Denver and Alaska's Arctic National Wildlife Refuge with a group of GOP lawmakers.

Minority Whip Blunt is giving a speech on trade this afternoon at the Council on Foreign Relations in New York.

INTELLIGENCE

The House this week is expected to vote on a major bill authorizing programs and spending for the nation's intelligence community that includes restrictions on the CIA's ability to use contractors to interrogate terrorism suspects.

House Intelligence Chairman Silvestre Reyes said the bill authorizes the largest funding increase for the intelligence budget in history.

The intelligence community has not had an authorization bill enacted into law for three years. Bush vetoed the FY08 intelligence authorization bill mainly because it included a provision that would have required all U.S. intelligence agencies to abide by the Army Field Manual when conducting interrogations.

Some Democrats tried to include the provision again in the FY09 intelligence authorization bill but their effort was thwarted, mainly because Reyes did not support it.

The authorization bill does include, however, a provision that prohibits the CIA from spending money on contractors to conduct interrogations.

The provision by Rep. Jan Schakowsky, D-Ill., includes an exception under which the CIA director may request a waiver from the director of national intelligence to use contractors.

A waiver can be sought if no federal employee is capable or available to carry out an interrogation, or if "such interrogation is in the national interest of the United States and requires the use of a contractor," according to the language.

Notably, the bill also requires the U.S. intelligence community to produce a comprehensive assessment on Syria's efforts to develop weapons of mass destruction.

The bill also authorizes most of the administration's funding request for the National Cybersecurity Initiative. The initiative is a classified program to counter cyber-threats.

TAXES

Lawmakers and lobbyists are anticipating Reid might make another run at bringing up a roughly $120 billion bill that would shield 21 million more taxpayers from the alternative minimum tax, extend various renewable energy and other tax breaks affecting businesses and individuals.

Reid and Senate Finance Chairman Max Baucus have twice failed to achieve 60 votes to proceed to the House-passed tax "extender" bill, which would be the vehicle for changes the Senate wants to make, such as adding the $62 billion AMT "patch" without offsets.

However, Democrats cajoled two more Republicans into changing their votes last time, and -- buoyed by last week's overwhelming Medicare vote -- might be counting on the pressure getting to enough additional GOP senators to finally put the bill over the top. Last week, GOP leaders were adamant that the Democrats would be foolish to try again, however, arguing that the bill's revenue offsets for extending tax provisions that have been enshrined in the tax code for years should be dropped.

Republican senators also object to some provisions in the bill on policy grounds, such as a $1.5 billion tax break benefiting trial lawyers and a proposal to restructure tax credits to help build a rail line in New York City, although the latter was contained in Bush's budget proposal.

The White House has threatened to veto the House-passed tax bill because of its offsets, which include tightening tax rules for investment services managers' offshore deferred compensation plans and delaying a tax break for multinational corporations taking effect next year.

The business community has mostly given the green light to the offsets, however, if it means extending their favored initiatives such as the research and development credit and active-financing exemption for banks' and manufacturers' overseas business activities. Some Republicans argue that agreeing to offsets now would set a dangerous precedent, however, with expiration of Bush's 2001 and 2003 tax cuts looming in 2010.

TECHNOLOGY

Competition and consumer privacy implications of the burgeoning Internet advertising industry will be the focus of two hearings Tuesday -- one by the Senate Judiciary Antitrust Subcommittee and another by the House Judiciary Antitrust Task Force.

The Senate Commerce Committee examined the issue last week, hearing officials from the FTC, Google, Microsoft and other companies.

The hearing comes in the wake of a recently announced advertising partnership between rivals Google and Yahoo.

Some lawmakers have expressed concerns that the pairing would affect the collection, storage and use of data relating to an individual's online activity.

Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., has pledged to keep a close eye on the Google-Yahoo agreement.

Yahoo CEO Jerry Yang and other executives from Yahoo and Google have been meeting with members and staffers in an attempt to calm fears and answer questions.

Meanwhile, the House Energy and Commerce Telecommunications and the Internet Subcommittee on Thursday will examine what high-speed Internet providers know about their subscribers' Web use at a hearing on an online content analysis technique known as "deep-packet inspection."

A spokeswoman for Telecommunications and the Internet Subcommittee Chairman Edward Markey, D-Mass., said NebuAd CEO Robert Dykes and others will testify. Dykes, whose high-tech firm's relationship with Charter Communications was shelved recently, appeared before the Senate Commerce Committee last week to defend his business model.

Under the proposed arrangement, which Charter said it would delay after concerns were raised by lawmakers and privacy watchdogs, NebuAd would have copied and analyzed Charter customers' Web surfing habits.

Critics such as the Center for Democracy and Technology suggested the deal might run afoul of federal and state wiretap laws.

This article appears in the July 19, 2008 edition of NJ Daily.

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