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NJ Daily

OUTLOOK

Supplemental, Energy, Taxes, Medicare Shape Floor Debates For A Busy Week

House Democratic leaders are looking to take up the war supplemental appropriations package this week and are exploring whether to include an extension of unemployment insurance benefits.

Adding impetus to the decision, Democratic aides said, was a Labor Department report issued late last week that said the unemployment rate grew to 5.5 percent in May, a 0.5 percent rise from the April rate.

 

Several lawmakers have since voiced their support for keeping the provision in the package, including House Ways and Means Chairman Charles Rangel and Sen. Olympia Snowe, R-Maine, who is a member of the Senate Finance Committee.

House Democratic leaders initially sought to scale back the domestic spending portion of the package approved by the Senate last month, including the unemployment provision, in an effort to win Republican support and avert a White House veto.

President Bush has said that he would veto the Senate supplemental, in part, because of the measure's domestic spending, such as $10.4 billion for Gulf Coast states affected by 2005's Hurricane Katrina.

 

In a letter to Bush sent Friday, Rangel -- as well as Reps. Sander Levin, D-Mich., and Jim McDermott, D-Wash., senior members of the Ways and Means Committee -- said that the latest unemployment rate warrants the extension.

"We believe it would be both economically unwise and morally wrong to deny extended unemployment benefits to workers who have lost their jobs through no fault of their own," the letter said. "These unemployed workers and their families are suffering in an economy that both limits their employment prospects and drives up their cost of living."

The supplemental package the House could consider is expected to include an increase in veterans' education benefits, which is estimated to cost $51 billion over 10 years.

House Democratic leaders are considering whether to offset the cost of the veterans' provision. The Blue Dog Coalition has pressured House Democratic leaders to offset the cost of the proposal.

 

Last month, the Blue Dogs held up House action on the package until after House Democratic leaders agreed to offset the cost of increased veterans' education funding by imposing a 0.5 percent tax on individuals making more than $500,000 and couples $1 million in gross income.

But the offset was scrapped by the Senate, which approved an amended package last month, and Senate Majority Leader Reid has told House leaders that the offset would not get through the Senate.

On Tuesday, senators will vote whether to limit debate on proceeding to a Democratic package of energy initiatives. The action follows last week's failed cloture motion on a climate change bill that bogged down over a host of issues, including energy prices and unrelated judicial nominations.

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The energy package includes items the White House has threatened to veto, including repealing $17 billion in tax incentives for oil and gas companies; instituting a windfall-profits tax on the top five major integrated oil and gas companies, and making gasoline price-gouging a federal crime.

It also includes veto-bait language supported by Senate Judiciary Democratic and Republican leaders that would allow the United States to sue OPEC for manipulating crude oil supply and prices.

Another provision aims to clamp down on oil futures market speculation by preventing traders of U.S. crude oil from routing transactions through offshore markets.

It would require the Commodity Futures Trading Commission to increase the margin requirement for all oil futures trades, contracts or transactions.

Senate Democratic leaders have already pulled out and separately moved one initial piece of that energy package: a plan to suspend the filling of the Strategic Petroleum Reserve for the rest of the year that garnered widespread support in Congress and led to President Bush agreeing to suspend the reserve's deposits.

Democratic leaders had moved that separately to increase its chances, calling into question whether Democrats believe that the rest of the plan has a viable shot of becoming law as well.

If the cloture motion on moving to the energy package fails, Reid says he might try to then limit debate on going to a $55.5 billion tax extenders bill the House approved in May.

Movement on the tax extender legislation is not assured either, thanks to the thus-far stalwart opposition of Senate Republicans to offsetting the cost of extending existing tax cuts.

With some modifications, the managers' amendment by Senate Finance Chairman Max Baucus is expected to preserve the core of the House-passed bill, including around $18 billion in renewable energy incentives and a host of other expiring provisions for businesses, individuals and families. It might include a one-year fix for the alternative minimum tax.

Although some business groups such as the U.S. Chamber of Commerce are cool to the measure because of its offsetting revenue-raisers, many others are expected to move into full-tilt lobbying mode once the details are released.

Provisions such as the research and development credit and active financing exemption allowing multinationals to defer taxes on income earned overseas are considered so important that most business groups are willing to overlook the offsets.

Those include immediate taxation of offshore income earned by wealthy fund managers as well as delaying a new tax break for multinationals -- which has been delayed for five years -- by another 10 years.

The White House has threatened to veto the House-passed bill. But business and other interests lobbying on the bill, including environmental groups and advocates for the poor, are going to try and peel off a handful of Senate Republicans who are up for re-election to try to overcome a filibuster.

Baucus could significantly sweeten the deal by adding the AMT patch, without offsets. That would make it much tougher for Republicans to oppose, but that could risk a months-long standoff over the extenders with Blue Dogs who are demanding offsets. The House is already slated to take up a fully-offset AMT patch this summer.

Meanwhile, the Senate is expected to consider legislation this week meant to prevent a Medicare physician payment cut that will carry additional changes for the federal health care program as well. The $20 billion bill by Baucus will increase physician payments 1.1 percent in 2009, link adoption of electronic prescribing to Medicare reimbursement and ease access for low-income beneficiaries for prescription drug assistance.

The bill must be signed by the president before July 1 to stop the scheduled 10.6 percent payment cut. Even if Baucus can attract enough Republicans to cut off debate and pass the bill, his version is likely to run into a presidential veto because the chairman has said the cost of the measure will be offset by cuts in additional payments to private insurers who offer Medicare Advantage plans.

The administration opposes cuts to Medicare Advantage. Senate Finance ranking member Charles Grassley said he will propose a competing Medicare bill that would pass muster with the White House.

The Senate meets today at 3:15 p.m. to resume consideration of the motion to proceed to energy legislation.

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. The House meets at 9 a.m. for morning hour and 10 a.m. for legislative business on Tuesday and at 10 a.m. for legislative business Wednesday and Thursday. There are no votes expected Friday.

APPROPRIATIONS

With the FY09 budget resolution passed by both chambers last week, the House Appropriations subcommittees will begin marking up their respective funding bills.

On Wednesday, the House Homeland Security Appropriations Subcommittee and the Interior-Environment Subcommittee will mark up their bills.

The budget resolution caps discretionary spending at $1.013 trillion -- $21 billion more than what President Bush requested.

Differences between Bush and Democratic leaders over spending has led many lawmakers to believe that few, if any, appropriations bill will be enacted this year.

The Military Construction-VA Appropriations Subcommittee and the Commerce-Justice-Science Appropriations Subcommittee are on tap to mark up their respective bills Thursday.

FINANCE

(These two events replace an outdated list that mistakenly appeared in the print edition of Monday's CongressDailyAM.)

The Senate Banking Committee will hold a Tuesday hearing examining the securities underwriting at investment banks.

The panel's interest comes after the recent Federal Reserve action to provide Wall Street investment houses lines of liquidity if they are in trouble because of the potential risk that their failure could seriously disrupt the nation's economy.

The Fed earlier this year provided a $30 billion line of credit to help JPMorgan Chase buy Bear Stearns. The Fed does not regulate nonbank financial institutions, such as investment banks, and their deposits are not insured by the federal government.

The House Financial Services Capital Markets Subcommittee will hold a hearing Tuesday on legislation to create an Office of Insurance Information with the Treasury Department.

Capital Markets Subcommittee Chairman Paul Kanjorksi, D-Pa., contends his bill would provide lawmakers and the White House advice and expertise on national and international insurance issues.

Some critics fear that it could open the door to an eventual federal regulator for the industry, which is currently overseen at the state level.

GOVERNMENT OPS

Robert Flores, head of the Justice Department's Office of Juvenile Justice and Delinquency Prevention, is scheduled to be on the hot seat Tuesday at a House Oversight and Government Reform Committee hearing on his office's grant decisions in FY07.

With added discretion due to an earmark moratorium last year, OJJDP appeared to ignore its rankings to give grants to less-qualified applicants, several of which advanced causes, such as abstinence promotion, favored by Flores.

Flores' grant decisions have drawn scrutiny from inside Justice and from Sen. Claire McCaskill, D-Mo.

The committee has scheduled a hearing Wednesday on the Census Department's plans for the 2010 survey. The hearing is part of stepped-up oversight of the bureau since it announced it would scrap plans to use handheld computers for follow-up on the 2010 count, a decision that will cost the government billions.

Since the decision, the agency official who had primary responsibly the 2010 Census has stepped down and the bureau has begun renegotiating its contract with the maker of the handheld devices, Harris Corp. Committee Democrats criticized Harris' cost-plus type contract at a prior hearing.

The committee is set Wednesday July 9 to hold its second hearing on trailers with elevated levels of formaldehyde that FEMA used to house Hurricane Katrina victims. Heads of companies that made many of the trailers have been asked to testify.

HEALTH

House Ways and Means Health Subcommittee Chairman Fortney (Pete) Stark, D-Calif., plans a hearing Tuesday on disparities in health care for women, and racial and ethnic minorities. The panel will examine disparities in access to health insurance and differences in treatment for those who are covered.

Also Tuesday, the Senate Finance Committee will hold the third in a series of hearings on healthcare reform. Witnesses will include a medical professor from Wake Forest University, the CEO of the health insurer Aetna and the president of an Ohio-based faucet business.

House Energy and Commerce Oversight and Investigations Subcommittee Chairman Bart Stupak, D-Mich., will haul FDA's food safety czar before his panel Thursday to talk about when FDA will be able to fully implement the food protection plan the agency initiated in November.

The plan is meant to heighten FDA's efforts against contaminated food, particularly from foreign countries. Food safety czar David Acheson talked about releasing a progress report on the plan in April, but the agency has not issued the update. An FDA spokeswoman said the report would be out soon.

HOMELAND SECURITY

The annual appropriations process for the Homeland Security Department will kick into high gear this week as the House Homeland Security Appropriations Subcommittee meets Wednesday to mark up the department's FY09 spending bill.

The Bush administration is requesting about $50 billion for the department, about $38 billion for discretionary spending. The budget request would boost funding for border security but slash money for politically popular grant programs.

The Democratic-led subcommittee is likely to increase funding for the grant programs.

The department is seeking about $2.2 billion -- about $1.5 billion less than Congress allocated for FY08 -- for grant programs that help state and local governments, law enforcement agencies, ports, firefighters and emergency responders.

Notably, the department is only seeking $200 million for state homeland security grants and $210 million for port security grants, two programs that lawmakers boosted funding for in FY08.

On another front, the department is seeking about $294 million for a massive cybersecurity program to protect computer networks across the federal government from attacks and intrusions.

Meanwhile, the House Homeland Security Committee plans three hearings this week on department programs and operations.

On Thursday, the department will hear from Homeland Security Secretary Chertoff during a hearing to review border security matters. The hearing will review the department's visa waiver program, which allows visitors from certain countries to come to the United States for a limited time without visas.

Also on Thursday, the Homeland Security Management Subcommittee plans a hearing to examine how prepared the department is to manage a catastrophe.

On Wednesday, the Homeland Security Intelligence Subcommittee plans a hearing on a bill aimed at preventing unwarranted classification of information pertaining to defense, terrorism and weapons of mass destruction.

The bill was introduced Thursday by Intelligence Subcommittee Chairwoman Jane Harman, D-Calif., and is co-sponsored by ranking member Dave Reichert, R-Wash.

IMMIGRATION

Homeland Security Secretary Chertoff and Commerce Secretary Gutierrez today will discuss the state of immigration in the United States and administration efforts on immigration reform at a news conference at the Customs and Border Protection office.

Since talks broke down last year in Congress over a comprehensive immigration package, there has been little legislative action on the issue, save a few hearings in the House, and few observers expect much to happen on the topic during the waning days of the 110th Congress.

JUDICIARY

Senate Judiciary ranking member Arlen Specter will speak to members of the American Civil Liberties Union today about legislation he and Judiciary Chairman Patrick Leahy have championed to protect reporters from being forced to reveal confidential sources in federal court.

Their panel approved the bill in October but it has yet to reach the floor for a vote.

The House last year passed similar legislation by a veto-proof majority, but opposition from the Justice Department and White House might have kept the bill from the Senate floor so far.

Specter will discuss a bill that would protect U.S. journalists from libel suits brought in foreign courts that do not have the same protections for free speech that are found in the Constitution.

Fans and foes of legislation that would eliminate a longstanding exemption granted to AM and FM radio stations allowing them to broadcast music without paying certain royalties will appear before the House Judiciary Courts, the Internet and Intellectual Property Subcommittee on Wednesday. The panel's chairman, Rep. Howard Berman, D-Calif., introduced the bill in December.

A resolution opposing the measure has attracted more than 200 supporters. Nancy Sinatra, singer and daughter of Frank Sinatra, will testify on behalf of the recording industry-backed musicFIRST coalition. The National Association of Broadcasters, which has called the bill a tax on local radio, will provide a witness.

Meanwhile, FCC Commissioners Jonathan Adelstein and Deborah Tate and Sen. Mark Pryor, D-Ark., will join scholars and executives from Comcast, Verizon, and Walt Disney Co. at a Tuesday conference on children's online safety and literacy sponsored by the National Cable and Telecommunications Association and Cable in the Classroom. Speakers will discuss the role of parents, schools and the Internet industry to protect kids who surf the Web.

POLITICS

Maine, South Carolina, North Dakota and Virginia hold congressional primaries Tuesday, but few seats are in play this week.

In Maine, where the general election race for the Senate is well under way, Republican Sen. Susan Collins has no primary opponents, and Democratic Rep. Tom Allen has just one, educator Tom Ledue. There is a six-way Democratic primary to succeed Allen in the 1st District, but party leaders expect former state Senate Majority Leader Chellie Pingree -- also a former national president of Common Cause -- to win the nomination.

In Virginia, former Gov. Jim Gilmore has effectively secured the GOP nomination in the Senate race, and is headed for a November showdown with another former governor, Democrat Mark Warner.

The two House races worth watching are in the 10th District, where Democrats are targeting GOP Rep. Frank Wolf, and in the 11th District, where GOP Rep. Tom Davis is retiring.

Judy Feder, a dean at Georgetown University who lost to Wolf in the 2006 election, is running against nonprofit executive Mike Turner for the Democratic nomination.

Accountant Keith Fimian is the lone Republican running for Davis' seat, but four candidates are seeking the Democratic nomination, with former Rep. Leslie Byrne and Fairfax County Executive Gerry Connolly the two frontrunners for the nomination.

Sen. Lindsey Graham, R-S.C., is expected to win his primary race against Republican National Committeeman Buddy Witherspoon. The challenger has focused much of his campaign on Graham's support for immigration reform.

There are no primary races for North Dakota's only House seat; Democratic Rep. Earl Pomeroy will face Republican Duane Sand in November.

The filing period for congressional candidates closes Tuesday in Kansas and Friday in New Hampshire.

In Kansas, former Rep. Jim Ryun and state Treasurer Lynn Jenkins have filed to run for the Republican nomination for the seat held by freshman Democratic Rep. Nancy Boyda, who knocked off Ryun in 2006.

In New Hampshire, former Rep. Jeb Bradley is one of three Republicans who have signed up as potential challengers of Democratic Rep. Carol Shea-Porter.

So far, Sens. Pat Roberts, R-Kan., and John Sununu, R-N.H., have not attracted primary opponents.

TECHNOLOGY

The Senate Commerce Committee Wednesday will examine the problem of secretly installed computer spyware and discuss the FTC's efforts to fight high-tech hackers who profit from the practice.

Sen. Mark Pryor, D-Ark., who introduced an anti-spyware bill in June 2007, will chair the hearing. Senators also plan to discuss the commission's legal proceedings against computer hijackers, a committee aide said.

TELECOM

With the Feb. 17 switchover to digital television signals coming into focus, the House Energy and Commerce Telecommunications and the Internet Subcommittee holds the latest in a series of oversight hearings Tuesday.

Witnesses will include FCC Chairman Kevin Martin and Mark Goldstein of GAO.

The FCC holds its monthly public meeting Thursday featuring a hearing on the fees that wireless carriers charge customers for early termination of contracts.

The issue has generated considerable traction on Capitol Hill and is the focus of class-action lawsuits against cellular providers.

National Cable and Telecommunications Association President Kyle McSlarrow today will address the National Press Club with a speech about policy matters affecting his industry. Across town at the Ritz-Carlton, Google Chairman and CEO Eric Schmidt speaks before the Economic Club of Washington at the same time.

TRADE

The Senate Finance Committee will hold a hearing Thursday on trade preference programs, many of which expire at the end of this year.

Congress passed a two-year extension of the Caribbean Basin Initiative, which provides duty-free access for goods from 19 countries, as well as an expanded program for Haitian apparel, as part of the farm bill.

Others seeking duty relief include the Andean countries and the roughly 140 nations that benefit from the Generalized Systems of Preferences program. Those programs expire Dec. 31, and each carries unique controversies.

The Andean program, which Congress just extended in February, is tied up in the debate over the Colombia Free Trade Agreement.

Colombia benefits from duty-free access but wants to lock in those preferences permanently under the free trade pact, and the White House has made the trade deal among its top legislative priorities.

The looming expiration of the Andean preferences program gives Republicans some leverage, as they try to pressure House Democrats for perhaps a post-election vote on the Colombia deal.

On the GSP, some senior lawmakers like Senate Finance ranking member Charles Grassley, want to force some changes so that more developed countries like Brazil and India are weaned from the program.

Grassley and others argue those countries' hardball tactics in world trade talks also provide an impetus for relaxing or stripping their U.S. trade preferences. But most observers think that in such a political year, it will largely be legislation to extend the existing program.

Another must-do on the trade agenda is reauthorization of Trade Adjustment Assistance, which is a pre-requisite for any movement on the Colombia pact.

Grassley and Senate Finance Chairman Max Baucus will continue talks with the administration on that front this week.

Meanwhile, Baucus and Sen. Olympia Snowe, R-Maine, will be on hand to announce a new coalition in support of a revamped and modernized TAA on Wednesday. The Trade and American Competitiveness Coalition will be spearheaded by the National Foreign Trade Council and other business groups.

WHITE HOUSE President Bush this week will be traveling in Europe, making stops in Germany, Italy, France, the United Kingdom and Vatican City. Bush might be making his final trip to Europe as president. He will also attend the U.S.-European Union summit in Slovenia.

This article appears in the June 14, 2008 edition of NJ Daily.

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