This week, the Senate will take up one of the most significant overhauls of the financial industry since the Dodd-Frank Act was signed into law in 2010.
The bipartisan bill would raise the asset threshold for banks to be considered so-called “too big to fail” financial institutions from $50 billion to $250 billion. The legislation has divided Democrats, pitting moderate and red-state Democrats supportive of the bill against progressives, like former Rep. Barney Frank, who favor raising the threshold to between $100 billion and $125 billion.
Former Federal Reserve Chairman Paul Volcker also opposes an increase to $250 billion, writing in a letter to Ohio Democratic Sen. Sherrod Brown that such a change “would go too far.” “It would have the effect of substantially reducing the regulation of 25 of the 38 largest banks to which these standards now apply, notably including the operating subsidiaries of several large foreign banks,” he wrote.
But its path through the Republican-led Senate seems clear, with a dozen Democratic senators signed on as cosponsors to the bill, including the five who have the toughest races this election cycle—Heidi Heitkamp of North Dakota, Joe Manchin of West Virginia, Joe Donnelly of Indiana, Jon Tester of Montana, and Claire McCaskill of Missouri.
“For years, I’ve been working with my Republican colleagues on a plan to reduce red tape and give community banks and credit unions the freedom to focus on their customers, especially in rural areas where their services are needed the most,” said Heitkamp in a statement last year.
The Senate bill has been met with a cool reception among House Republicans, in part because it makes few changes to the Consumer Financial Protection Bureau. House Republicans passed a bill last year that would cripple that agency and goes much farther than the Senate bill in scaling back Dodd-Frank. That legislation, for instance, would repeal the Volcker Rule that prevents government-insured banks from making risky investments. It remains to be seen how the two chambers can reconcile their bills.
Meanwhile, the House will vote this week on a measure to force the CFPB and other financial agencies to review their regulatory requirements more frequently. It will also vote on two measures targeting the Environmental Protection Agency, seeking to ease emissions limits on hazardous air pollutants from electric- power plants and brick and clay manufacturers. Finally, the House will take up a bipartisan Federal Communications Commission reauthorization.
Here’s what else is on tap this week:
DEFENSE AND FOREIGN POLICY
The Senate Intelligence Committee will hold a hearing Wednesday on reforming the security-clearance process. As the backlog of federal employees, applicants, and contractors waiting for background checks to be completed has risen to more than 700,000, Mark Warner, the panel’s vice chairman, recently told National Journal that the issue would be “one of my top priorities this year.” The hearing also comes as more than 30 of President Trump’s aides with interim clearances, including Jared Kushner, lost their privilege to view highly classified information.
The committee will also meet for two closed briefings this week.
Meanwhile, Director of National Intelligence Dan Coats and Defense Intelligence Agency director Robert Ashley are set to testify before the Senate Armed Services Committee on Tuesday for a hearing on worldwide threats. And on Thursday, Curtis Scaparrotti, commander of the United States European Command, is slated to testify before the panel on the defense authorization request for fiscal 2019 and the Future Years Defense Program.
The House Armed Services Committee will gather for hearings on national security challenges and U.S. military activities in Africa on Tuesday and on military-service-acquisition reform on Wednesday.
The Senate Foreign Relations Committee will consider the nomination of Joseph Macmanus to be ambassador to Colombia on Wednesday.
ENERGY AND ENVIRONMENT
A House Energy and Commerce panel will hold a hearing Wednesday on the future of U.S. transportation fuels—a particularly timely event in light of last week’s series of White House meetings on the biofuel-blending mandate. Rep. John Shimkus, the chairman of the subcommittee that will be hosting the hearing, tried to bring lawmakers and stakeholders together to devise legislation last year to reform the mandate, but those efforts petered out with no real progress.
Trump has called for another meeting on the mandate, which requires the blending of 15 billion gallons of ethanol into gasoline annually, next week, according to Bloomberg. United Steelworkers members will head to Capitol Hill on Tuesday and Wednesday to pressure lawmakers to make changes to the mandate.
Some merchant refiners, which employ members of the union, complain that the cost of compliance threatens profits and employment.
Meanwhile, Lisa Murkowski, the top Republican on the Senate energy committee, will convene a hearing to move the ball forward on Trump’s pick to head the Interior Department’s geological research arm: James Reilly. A retired astronaut, who previously led oil-and-gas research in the private sector, Reilly advises the U.S. and allies on space exploration, according to the White House.
Trump took more than a year to choose a nominee to lead the U.S. Geological Survey, the agency that Reilly would head up if confirmed. That agency provides research on fossil fuel and mineral development, a favorite policy for the Trump administration. In a December executive order, Trump called on U.S. agencies to build plans to develop more of those rare minerals in order to reduce dependence on imports. The House Natural Resources Committee will mark up legislation Wednesday to speed up permitting approvals for mines that contain the minerals.
Murkowski has longed complained about the White House’s pace in processing nominees for the Interior Department. Reilly will still have to get approval from the committee and the full Senate before taking over the post.
The Senate Health, Education, Labor and Pensions Committee will keep up the focus on the opioid crisis with a hearing Thursday to examine what changes in laws and regulations would be helpful to states to combat the problem. Witnesses will include a bipartisan group of governors.
Last week, the federal government ramped up its fight against the opioid epidemic. Senate lawmakers introduced legislation that would authorize $1 billion to go to prevention, enforcement, treatment, and recovery programs, including imposing a three-day limit on initial opioid prescriptions. The House Energy and Commerce Committee health subcommittee, meanwhile, reviewed a slew of bills to address the crisis. And the Justice Department announced a task force that will focus on opioid manufacturers and distributors that have contributed to the epidemic.
House lawmakers Thursday will take on a different public health issue. The House Energy and Commerce Committee oversight and investigations subcommittee will examine the country’s preparedness for and response efforts to seasonal influenza. The current flu season has been the worst the country has seen in nearly a decade.
The date is set for the big tax-extenders hearing: March 14.
Interests ranging from the renewable-energy sector to realtors will be gearing up this week to defend their prized, but chronically temporary, tax breaks before the upcoming hearing.
The Ways and Means Committee’s subcommittee on tax policy hasn’t released a list of witnesses yet, but there will likely be no shortage of industry representatives looking to make their case to lawmakers.
It’s all part of a plan by House tax writers to clear out the extenders following last year’s tax-code overhaul. Some extenders were made redundant by provisions in the overhaul, but several industries are still backing theirs, saying they’re necessary to stay competitive.
Elsewhere, lawmakers continue to work on a federal funding bill, due March 23. Members in both chambers are talking up the idea of a broad omnibus spending package, perhaps the last major piece of legislation this year. If Congress can’t put together an omnibus, they would need to pass another continuing resolution. Either way, that means there will a host of interests looking to attach their provisions to the funding bill.
In the tax world, that means fixes to last year’s code overhaul. There are a few candidates that could ride on a March funding bill, including a fix to the “grain glitch,” in which agricultural cooperatives could potentially reduce their taxable income to zero.
Senate Finance Committee member John Thune has said the panel was “very close” to finishing language. “It’s just really now getting sign-off from stakeholders,” Thune told reporters last Thursday. “We’ve circulated draft language and gotten feedback, and I think we probably got it in about a good a place that we can get it.”
Thune didn’t say, however, whether it would show up in an end-of-month funding bill.
The House plans to vote Tuesday on a landmark piece of bipartisan telecommunication legislation that could bring big changes to the FCC and federal spectrum policy. RAY BAUM’s Act was announced Friday in a bicameral agreement between Sens. John Thune and Bill Nelson, the head and ranking members of the Senate Commerce Committee, and Reps. Greg Walden and Frank Pallone, the head and ranking members of the House Energy and Commerce Committee.
The legislation will provide the FCC with its first congressional reauthorization in 28 years, with the goal to improve efficiency and transparency at the nation’s premier telecommunications regulator. The bill also includes provisions from the Senate’s MOBILE NOW Act, which is designed to reduce regulations hampering the deployment of wireless 5G networks and to help identify government-held spectrums that can be sold off to the private sector.
The federal government’s use of spectrums will also be in the spotlight during a House Energy and Commerce oversight hearing set for Tuesday. The Subcommittee on Communications and Technology will hear from David Redl, the head of the National Telecommunications and Information Administration, which oversees the nation’s spectrum policy.
A bill authorizing cyberincident-response teams at the Homeland Security Department is set to be marked up Wednesday at a meeting of the House Homeland Security Committee. The bill was introduced by Rep. Michael McCaul, the committee’s chairman. The committee will hold a joint subcommittee hearing later on Wednesday to examine the findings of a Government Accountability Office inquiry into DHS’s implementation of its cyber workforce authorities, as well as the agency’s efforts to strengthen that workforce.
The ongoing Russian cyberattacks—particularly those targeting the network infrastructure that underpins the upcoming midterm elections—are likely to feature prominently in Tuesday’s Senate Armed Services Committee hearing on worldwide threats. In addition to Russia, the intelligence officials could also touch on ongoing cybercampaigns being conducted by North Korea and Iran.
The House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection will meet Wednesday to review the impact of emerging technologies on retail operations and logistics.
The House Science Subcommittee on Energy will discuss advances in fusion technology with some of the nation’s top researchers on Tuesday. On Wednesday, the House Science Subcommittee on Space will receive testimony from acting NASA director Robert Lightfoot Jr. on the space agency’s budget for fiscal 2019.
President Trump’s schedule this week combines diplomacy and politics. He meets with two foreign prime ministers—Israel’s Benjamin Netanyahu on Monday and Sweden’s Stefan Lofven on Tuesday. Netanyahu comes to Washington amid a personal corruption scandal. Lofven is expected to talk to Trump about North Korea since Sweden has longstanding diplomatic relations with Pyongyang and represents U.S. interests there. On Wednesday, the president will deliver remarks at the Latino Coalition Legislative Summit, followed by a Cabinet meeting Thursday. Trump then travels to Moon Township, Pennsylvania for a Saturday campaign rally.
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"As Trump signed a joint statement with Kim Jong Un that offered few details on how the North Korean leader would make good on his vow to denuclearize, Republicans on Capitol Hill said Tuesday that they want and expect the White House to submit any final agreement for their approval." Senate Majority Leader Mitch McConnell called for any agreement to be in the form of a treaty.
President Trump announced that the United States will suspend "war games" with South Korea, which are "inappropriate" given his meeting with North Korean leader Kim-Jong Un. "We will be stopping the war games which will save us a tremendous amount of money," said Trump, "unless and until we see the future negotiation is not going along like it should." The military exercises "carried out each year by the US and South Korean militaries have been consistently cited by Pyongyang as a US rehearsal for war, and a reason it needs to build a nuclear arsenal."
President Trump "heaped praise on North Korean leader Kim Jong Un on Tuesday, calling him 'a very worthy, very smart negotiator' and vowing to meet with him 'many times.' Speaking to reporters in Singapore after his landmark summit with Kim, Trump said that he found the North Korean premier to be a 'very talented man' who 'loves his country very much.'"