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NJ Daily / OUTLOOK

Senate Waits For CBO As House Set To Begin Floor Debate

November 2, 2009

House Democratic leaders have an ambitious agenda this week as they work to resolve some of the most difficult disagreements surrounding their health reform overhaul. They will have to address abortion and immigration before they release a manager's amendment in time to vote on the package before Veterans Day on Nov. 11, if they hope to marshal the 218 votes they need.

Anti-abortion Democrats want to strengthen language prohibiting federal funding for abortions. A compromise drafted by Rep. Lois Capps, D-Calif., requires companies to separate federal and private money if they offer abortion coverage and mandates that at least one plan in the health insurance exchange covers abortion and one does not.

The amendment doesn't go far enough for anti-abortion members, led by Rep. Bart Stupak, D-Mich. Stupak says he has 40 members willing to vote to block the health bill unless leaders allow a vote that would add the Hyde Amendment to the health bill.

 

Stupak had been negotiating with House Energy and Commerce Chairman Henry Waxman, but the two have been unable to bridge their differences. House leaders are focusing on anti-abortion members who would like to vote to pass health reform. Negotiators are hoping to strengthen the accounting rules and clarify conscience clauses prohibiting discrimination against health plans or providers who refuse to provide abortion services -- changes they hope will move enough members out of Stupak's camp.

Meanwhile, Rep. Chris Van Hollen, D-Md., the assistant to the speaker, is spearheading negotiations to address concerns about immigration. The Senate's version of the overhaul prohibits undocumented immigrants from using the exchange to buy health insurance -- even if they pay with their own money. Some members of the House want to add a similar provision to the legislation, a proposal that has drawn fire from some leaders and the Congressional Hispanic Caucus.

Meanwhile, the Senate is waiting for CBO to release it from the healthcare holding pattern it has been in since Senate Majority Leader Reid sent his overhaul proposals to scorekeepers early last week.

Reid will not share the proposals -- outside of a rough outline of the public option he sent CBO that allows states to opt out -- for fear of an unfavorable score being made public. Reid sent different scenarios on several hot-button issues to CBO and will cobble a final bill together from the provisions with the best outcomes that can bring the total price tag in at less than $900 billion -- and be paid for over 10 years without adding to the deficit.

Moderate senators have been working on alternatives to Reid's public option, hoping to move it even further from the left than the leader's original marker. Liberals would like a stronger public option than one states can opt out of, but they largely deemed Reid's proposal an acceptable compromise.

Moderates last week talked about any public option proposal including some kind of trigger based on private insurers' ability to first provide affordable coverage as well as giving states the flexibility to form solutions.

The addition of a trigger could gain the support of Sen. Olympia Snowe, R-Maine, for the bill. Snowe, Democrats' best hope of adding a GOP vote, has long pushed for a trigger and has said she will not support a public option without one.

CBO's analysis will help Reid decide how to make insurance affordable in the overhaul and whether the bill will include an employer mandate, a tax on high-cost insurance plans or a long-term insurance program for the disabled -- a longtime priority for the late Sen. Edward Kennedy, D-Mass.

Led by Sen. Ron Wyden, D-Ore., 10 Democratic senators wrote Reid Friday asking him to open healthcare exchanges beyond those who do not have employer-sponsored health insurance. The exchanges are meant to be a one-stop shop where consumers can compare and purchase insurance plans.

"We are concerned that under current proposals, too many Americans will not be able to purchase insurance in the exchanges," they wrote. "To function properly, these markets will need to be robust enough to reform insurance industry behavior to hold down costs and improve quality."

The senators who signed on to the letter are a mix of liberals and moderates. They said they understand the need for collectively bargained health plans to maintain participants and would be willing to accept keeping employees whose plans are collectively bargained out of the exchanges.

Wyden has pushed for expanding the exchanges' reach for some time to no avail.

Also, the House and Senate are set to clear two signature pieces of tax legislation, an extension and expansion of a tax credit for homebuyers and net operating loss relief for struggling companies.

Reid and Finance Chairman Max Baucus hatched a plan to attach the measures to an extension of unemployment insurance benefits, which carries great political weight. A cloture vote on their substitute amendment is set for this afternoon, and the necessary 60 votes are expected, setting up final passage shortly after. The Obama administration has signed off on the plan, and House Democrats are expected to send it to the president's desk before the end of the week.

The additional $21 billion in tax cuts, split nearly evenly between the homebuyer credit and lengthened NOL carryback language, is backed by an array of industries but is perhaps of most benefit to the real estate sector. Influential yet struggling retail, manufacturing and newspaper companies weighed in with lawmakers, arguing the recovery could stall if the provisions are not enacted.

The provisions are projected to add $43.3 billion to the deficit in FY10, mostly due to the NOL carryback measure. But over a decade, the provisions are estimated to cost much less as the government recoups tax revenues from companies that will no longer carry losses forward to offset future taxes.

The movement on consequential tax legislation clears two items off of tax writers' to-do list, but there are dozens of expiring provisions left in limbo probably until December. Most of the measures, including the estate tax, expire on Dec. 31.

Another unemployment insurance extension will likely be needed, and Congress will have to tackle the Dec. 31 expiration of a 65 percent COBRA health insurance subsidy for laid-off workers. President Obama also wants to provide 57 million retirees and government beneficiaries with a $250 check, at a $13 billion cost. None of those provisions factor in additional steps lawmakers may decide on to help jolt the economy, such as transportation funding and tax credits for hiring.

One way to fund at least an $8.5 billion sliver of what lawmakers are contemplating is through a crackdown on the use of offshore bank accounts to escape U.S. taxes.

Baucus and House Ways and Means Chairman Charles Rangel have introduced legislation to, among other things, slap a 30 percent tax on foreign financial institutions for failure to disclose account information and impose penalties for failing to report offshore accounts larger than $50,000.

A Ways and Means subcommittee is holding a hearing on the bill and general offshore tax compliance issues on Thursday. "With billions of dollars in revenue being lost each year, strengthening our tax compliance efforts is essential," said Ways and Means Select Revenue Measures Subcommittee Chairman Richard Neal, D-Mass., a co-sponsor of the bill. "It is my hope that this hearing marks the beginning of a vigorous campaign by Congress and the Obama administration to end the practice of offshore tax avoidance by U.S. citizens."

The intense focus on health care will take a breather Tuesday morning, when German Chancellor Angela Merkel is expected to address a joint meeting of Congress at 10:30 a.m.

Merkel's address will be the first time in 52 years a German government leader has addressed Congress.

The visit will be just days ahead of the 20th anniversary of the fall of the Berlin Wall, and Merkel is expected to give her views on how the United States and Germany can work together to confront international security threats, on climate change measures and to resolve the global financial crisis.

* The Senate meets today at 2 p.m. for morning business and at 4 p.m. will resume consideration of the unemployment insurance benefits extension.

* The House meets today at 12:30 p.m. for morning hour and 2 p.m. for legislative business.

APPROPRIATIONS

The Senate this week will try to finish the $64.9 billion, FY10 Commerce-Justice-Science Appropriations bill, and possibly take up the $133.9 billion Military Construction-VA spending measure.

Senate Appropriations Chairman Daniel Inouye, who highlighted the Senate's plans Thursday during debate on the final version of the $32.2 billion Interior bill, said he would like to finish the remaining bills individually and urged Senate Republicans to cooperate.

"Without cooperation, we will no doubt be forced to return to an omnibus-type of approach which limits all members' right to debate and amend the measures that the committee has recommended," Inouye said.

The Senate has finished seven of the 12 annual spending bills, while the House has cleared all 12 bills. To date, Congress has sent Obama five of the 12 annual spending bills, including the Interior measure, which included a continuing resolution that funds the federal government at FY09 levels through Dec. 18.

Inouye's comments came roughly two weeks after Senate Democratic leaders failed to get the 60 votes needed to cut off debate on the C-J-S bill.

Since then consideration of the measure has been put off, while the Senate considers other business. Reid has said he intends to hold another cloture vote on the bill, which is likely to come this week, according to Inouye.

If Senate Democrats win the cloture vote, an amendment by Sens. David Vitter, R-La., and Robert Bennett, R-Utah, to require the 2010 census to ask about citizenship would be deemed not germane. The amendment is opposed by several civil rights groups and the Congressional Hispanic Caucus, Congressional Black Caucus, and Congressional Asian Pacific American Caucus.

Last week Sen. Mary Landrieu, D-La., wrote Vitter outlining problems with the proposal.

"Your amendment, as currently drafted, would only do harm to our country by delaying the census at [a] cost of approximately $1 billion to our already beleaguered taxpayers and to our state by stalling important projects, including law enforcement grants and $500,000 for the New Orleans Crime Coalition, to name just a few," Landrieu wrote.

DEFENSE

House and Senate negotiators will continue to work behind closed doors this week to resolve differences in the two chambers' versions of the FY10 Defense Appropriations bill, but the schedule for sending the $636 billion spending measure to the floor remains uncertain.

At issue is whether to use the must-pass Defense spending measure as a vehicle for other legislation, including a bill to increase the national debt limit.

So far, discussions have been limited mostly to negotiations among staffers, who have resolved most of the differences in the bills. House Defense Appropriations Subcommittee Chairman John Murtha, D-Pa., and Inouye, who also chairs the Senate Defense Appropriations Subcommittee, have not met to discuss the bill.

The military's immediate bills are largely covered by the continuing resolution, but the Defense Department relies on the annual appropriations bill to pay for raises for military personnel and award contracts for new programs.

Pentagon spokesman Geoff Morrell said last week that the longer the Pentagon operates under a CR, "the more likely we are to face negative consequences." But the Defense Department, he added, is "not really at a point where it has been a problem to date."

ENVIRONMENT

Senate Environment and Public Works Chairwoman Barbara Boxer has planned to start a markup Tuesday on climate legislation but Republicans have vowed not to show up.

All seven panel Republicans have agreed to boycott the markup on cap-and-trade legislation from Boxer and Foreign Relations Chairman John Kerry and will hold their own meeting on the subject instead. Given the five-seat edge Democrats have on Boxer's panel, Republicans would not be able to defeat the bill if it came up for a final vote. Their only leverage is to prevent a quorum.

Republicans want more information, including a full cost analysis from EPA and input from CBO. They say they also want more time to look at the bill themselves.

Boxer has defended the process, stating she exceeded committee rules requiring a chairman's mark to be unveiled at least three days before a markup by releasing a revised version of the bill on Oct. 23. She also has cited three hearings last week on that bill and previous hearings by the panel on the subject.

Republicans counter that Democrats three times delayed a markup on the Republican "Clear Skies" bill before the measure was defeated on a 9-9 vote in March 2005 because they also wanted more analysis.

EPA Administrator Jackson acknowledged to the panel at a hearing last week that the agency did not run a full suite of economic models on the Kerry-Boxer bill and instead concluded that it was similar enough to a House-passed bill to determine that its costs would also average about $100 per household annually.

Boxer is only one of five committee heads with jurisdiction on a cap-and-trade bill to signal plans to hold a markup this year. The Senate Energy and Natural Resources Committee has already passed an energy bill Reid has said he would combine with a cap-and-trade plan.

FINANCE

The House will look to consider legislation by Rep. Carolyn Maloney, D-N.Y., which would move up implementation of the Credit Card Accountability, Responsibility and Disclosure Act from Feb. 22 to Dec. 1. The law, enacted in May, placed restrictions on issuers such as a ban on raising rates on existing balances retroactively, a 45-day notice of any rate increase, and prevention of billing on balances for days not included in the last billing cycle as a result of a grace period.

The 45-day notice requirement has taken effect, but other provisions do not kick in until next year. But sponsors contend they were moved to act because issuers have been closing inactive accounts, cutting credit limits and raising interest rates in advance of the rules taking effect.

Meanwhile, the House Financial Services Committee enters its fourth week of marking up a series of bills to revamp the nation's financial regulatory system by taking up the most politically contentious of the bunch: a measure to allow the federal government to take over firms deemed too big to fail.

The measure, backed by the administration, would give resolution authority to the federal government so it can take over top-tier financial firms, unwind their assets and get them back into the private market -- similar to the process the FDIC uses for failed banks.

The administration and congressional Democrats want to prevent a case similar to American International Group, in which the federal government took over the firm and extended a $180 billion-plus line of credit to prevent its failure from triggering a market collapse.

The cost of resolving a failing firm would be first paid from its assets, before shareholder and creditor claims. Any subsequent shortfall would be paid by fees assessed on large financial firms with assets of $10 billion or more, which could be paid out when such dues would not be a financial burden upon a company.

The fee would apply to all systemically important firms, including top banks and possibly insurance carriers, hedge funds and private equity firms.

In addition, the bill would create an eight-member council to monitor systemic risk throughout the financial system, including identifying companies whose operations could pose a risk threat to the market if they were to collapse. They would be under tougher capital, leverage and liquidity requirements. The council would be headed by Treasury and contain nonvoting representatives from state insurance and banking offices.

Rep. Ron Paul, R-Texas, could offer his legislation to require the GAO to audit the Federal Reserve; the measure has more than 300 co-sponsors. Rep. Brad Sherman, D-Calif., will attempt to place limits on the resolution authority language, arguing that without any cap, the bill would operate like "TARP on steroids."

"There are quite of number of Democrats who are concerned about the points I am raising. On the other hand, all the Democrats like what's going on with the administration and leadership," Sherman said.

The panel also is expected to wrap work on two other bills: one that would beef up protections for securities investors and one to create a Federal Insurance Office within the Treasury Department.

HOMELAND SECURITY

The House is expected to take up legislation to extend and expand the Homeland Security Department's ability to regulate security at U.S. facilities that store or use dangerous chemicals.

Republicans are likely to seek floor time to offer amendments to remove or dilute a handful of provisions, such as one to give the department the authority to require chemical facilities to use safer technologies and processes.

Republicans also object to a provision that would allow citizens to sue DHS over security violations and another that would allow states to adopt stricter security standards than put forth in federal regulations.

On Wednesday, Senate Homeland Security and Governmental Affairs Chairman Joseph Lieberman and ranking member Susan Collins will try to finish marking up legislation to overhaul security standards for U.S. labs that work with the world's deadliest pathogens.

The panel postponed marking up the bill last week, which would implement recommendations of a congressionally chartered commission that found an attack using a weapon of mass destruction is likely by 2013, and that it will most likely involve a biological weapon.

Action on the bill hit a roadblock mainly because Sen. Carl Levin, D-Mich., wanted the panel to seek input from federal agencies. Lieberman pledged to seek feedback from John Brennan, Obama's homeland security adviser.

POLITICS

Today is the filing deadline for candidates running in Illinois federal and state races in 2010.

Voters will head to the polls Tuesday in California and New York for the special elections to replace former Rep. Ellen Tauscher, D-Calif., who left her seat to become undersecretary of State for arms control and international security and former Rep. John McHugh, who vacated his to become Army secretary.

California Lt. Gov. John Garamendi, a Democrat, is favored to win Tauscher's seat in his race against attorney David Harmer, a Republican, and three third-party candidates.

In New York, voters will choose between Democrat Bill Owens, an attorney, Conservative Party candidate Doug Hoffman, an accountant, and Republican Dede Scozzafava, a state Assemblywoman.

Tuesday is also Election Day in New Jersey and Virginia, where governorships are at stake.

TELECOMMUNICATIONS

The FCC this week will embark on yet another controversial initiative: laying the groundwork for its 2010 review of its media ownership rules, a process required once every four years by the Telecommunications Act of 1996.

The agency holds three public workshops today through Wednesday that will feature the views of academics, broadcasters, public-interest advocates and regulators. The economic challenges faced by newspapers have mostly quieted demands by lawmakers in both parties for the FCC to roll back changes it made during the Bush administration making it easier for newspapers and broadcast outlets to consolidate in the nation's top 20 major markets.

WHITE HOUSE

Obama will start his week today with a meeting of his Economic Recovery Advisory Board.

On Tuesday, he will meet with Merkel in the morning and then with the leader of 300 million Orthodox Christians, Ecumenical Patriarch Bartholomew. He will then participate in the U.S.-European Union Summit with the prime minister of Sweden, Fredrik Reinfeldt, European Commission President Jose Manuel Barroso and the European Commission High Representative Javier Solana.

On Wednesday morning, he will accept credentials from foreign ambassadors before leaving for Madison, Wis., where he will talk about education.

On Thursday, the president will host a Tribal Nations Conference at the Interior Department, with representatives of the 564 federally recognized tribes. In the afternoon, he will meet with President Ian Khama of Botswana.

On Friday, he will attend meetings at the White House.

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