Weekly Update


MONDAY, APRIL 28, 2008
SECOND ECONOMIC STIMULUS SKEPTICISM Congressional leaders are still mulling what to include in a second economic stimulus package and what items should get bundled with the war supplemental measure. The President and some Republicans are doubtful that a second package is truly necessary and want to wait and see if the tax rebate checks (which will begin being distributed in May) will be sufficient for the prescribed economic purpose. FARM BILL ALMOST COMPLETE The House and Senate negotiators have agreed in principal and should be signing off a new farm bill today (HR 2419). Lead negotiators came to the agreements on the bill that will cost over $570 billion over the next 10 years. After months of negotiations and two separate one week extensions, there seems to finally be bipartisan consensus. SENATORS WANT MINING OVERHAUL A group of ten Senators, mostly from eastern states, wrote a letter to the leaders of the Senate Energy and Natural Resources Committee. The Senators wanted to weigh in on the mining reform bill that will take shape in that Committee. Specifically, the Senators insist upon collecting royalties on hard rock mining production based on the gross income or net smelter return, and repealing the percentage depletion allowance for mining on public lands. Progress on the Senate’s version of the mining bill has been slow. The ten Senators are: Feingold (WI), Sununu (NH, Cantwell (WA), Gregg (NH), Reed (RI), Whitehouse (RI), Menendez (NJ), Snowe (ME), Cardin (MD) and Sanders (VT). SENATE TRYING TO MOVE MEDICAID REGULATIONS Last week, the House overwhelmingly (349-62) passed HR 5613 to block 7 separate Medicaid Regulations from the Bush administration. That bill is being fast-tracked through the Senate and could be heard on the floor as early as this week. With a White House threat of a veto, the bill should meet some serious resistance by Republican Senators. In Fiscal Year 2008 the Federal Government paid approximately $208 billion of Medicaid which is about 57 percent of all Medicaid spending. ENSIGN AMENDMENT FACING ITS CHALLENGES The outlook for the package of renewable energy tax credits remains hazy. The tax credits have passed the Senate as part of a housing bill, but it is not known yet when the House will take up the housing bill or if they will include the tax credits in a second stimulus package. Complicating the picture further, the House and Senate will have to find offsets for the $6.6 billion worth of credits that they both can live with. Moving the renewable energy tax credits remains on the “to do” list of Congressional leaders, but the leaders must find the right vehicle, potential offsets, and window of opportunity to move forward. SOUTH KOREA FREE TRADE AGREEMENT FACING BIPARTISAN CRITICISM After a strict party line disagreement on the Columbian Free Trade Agreement the past few weeks in Congress, we are seeing new challenges the Bush Administration will face with the South Korean Free Trade Agreement. Both parties are skeptical that the deal was poorly negotiated and should be restructured. South Korea was the 7th largest market for U.S. exports last year, but the U.S. had a $12.8 billion trade deficit with South Korea in 2007primarily due to the imbalance of auto-trade. The skeptics in both Congress and private industries feel this trade agreement will worsen that deficit. CLIMATE CHANGE BILL IN THE WORKS Senators Lieberman and Warner have been meeting with their colleagues to start paving the way for the upcoming debate on their climate change bill. The Lieberman-Warner measure is expected on the Senate floor in early June. No word yet on how many days of debate the measure will get. The pair has been listening to feedback, including feedback from several states about the preemption issue, and are trying to smooth-out as many concerns as they can. As such, Senator Lieberman is already drafting a manager’s amendment that would make slight adjustments to the underlying measure. The manager’s amendment is expected to be released in several weeks. Meanwhile, Senator Voinovich is preparing his own climate change measure that could be offered as an alternative to the Lieberman-Warner bill. He is getting input from the White House and others as he puts the final touches on his proposal. Senator Voinovich’s approach is reported to lean heavy on tax incentives for clean energy technologies and would use a cap-and-trade program only as a fallback if the first approach does not hit the desired reduction targets. But progress for a House climate change bill seems to be at a standstill. For climate change legislation to progress in the House, it must first get past the Energy and Commerce Committee. Subcommittee Chairman Boucher has been moving more slowly and methodically in his approach, and believes that a House climate change bill will not succeed if it is not a truly bipartisan measure; so far, Committee Ranking Member Barton has not expressed willingness to negotiate or help move a climate change bill.	THE WEEK AHEAD: This week, the House will take up legislation to ban discrimination based on genetic information (HR 493), a measure to enhance regulatory standards concerning industrial dusts that can cause explosions (HR 5522), and a bill to provide a short-term extension of the Higher Education Act. Meanwhile, the Senate will begin its week with a cloture vote on a bill to reauthorize the FAA (HR 2881). If cloture is established, the Senate will then spend the remainder of the week debating the measure. KEY HEARINGS AND MARKUPS BANKING: The Senate Banking, Housing and Urban Affairs Committee will hold a hearing on financial literacy for homebuyers: Thursday, May 1 at 2:00 p.m., 538 Dirksen Building. EDUCATION: The House Education and Labor Committee will mark up the 21st Century High-Performing Public School Facilities Act (H.R. 3021): Wednesday, April 30 at 10:0 a.m., 2175 Rayburn Building. The Select Revenue Measures Subcommittee of the House Mays and Means Committee will hold a hearing on tax incentives for postsecondary education: Thursday, May 1 at 10:00 a.m., 1100 Longworth Building. ENERGY & NATURAL RESOURCES: The Senate Environment and Public Works Committee will hold an oversight hearing on EPA toxic chemical policies: Tuesday, April 29 at 10:00 a.m., 406 Dirksen Building. The Senate Appropriations Subcommittee on Energy and Water Development will hold hearings on FY 2009 appropriations for programs under its jurisdiction: Wednesday, April 30 at 9:30 a.m., 138 Dirksen Building. The Water Resources and Environment Subcommittee of the House Transportation and Infrastructure Committee will hold a hearing on proposals for reauthorizing water resource development programs: Wednesday, April 30 at 2:00 p.m., 2167 Rayburn Building. FINANCIAL SERVICES: The Senate Appropriations Subcommittee on Financial Services will hold hearings on FY 2009 appropriations for programs under its jurisdiction: Wednesday, April 30 at 3:00 p.m., 192 Dirksen Building. HOMELAND SECURITY: The Oversight of Government Management, the Federal Workforce and the District of Columbia Subcommittee of the Senate Homeland Security and Governmental Affairs Committee will hold a hearing titled, “The Impact of Implementation: A Review of the REAL ID Act and the Western Hemisphere Travel Initiative.”: Tuesday, April 29 at 9:30 a.m., 342 Dirksen Building. NOTE: David Quam, Director of Federal Relations, will testify on behalf of NGA. TRANSPORTATION & INFRASTRUCTURE: The Economic Development, Public Buildings and Emergency Management Subcommittee of the House Transportation and Infrastructure Committee will hold a hearing titled, “Saving Lives and Money through the Pre-Disaster Mitigation Program”: Wednesday, April 30 at 9:00 a.m., 2253 Longworth Building. The Water Resources and Environment Subcommittee of the House Transportation and Infrastructure Committee will hold a hearing on proposals for reauthorizing water resource development programs: Wednesday, April 30 at 2:00 p.m., 2167 Rayburn Building. 09' BUDGET NEGOTIATIONS CONTINUE As part of the on-going budget negotiations, Senate Budget Committee Chairman Kent Conrad and House Budget Committee Chairman John Spratt met with members of the Democratic “Blue Dog” coalition. The parties are trying to resolve the sticking points that remain over AMT tax relief and the use of reconciliation procedures. While no final agreement was reached at the meeting this week, the two budget chairmen have pledged to assemble a list of options on how Congress could provide AMT relief that is fully paid for with offsets – the chief demand of the Blue Dogs. WAR SUPPLEMENTAL MAY OFFER DOMESTIC SPENDING Work on the war supplemental appropriations bill continues this week as Congress tries to complete the measure and have it to the President by Memorial Day. At this point it looks unlikely that the supplemental will contain a second economic stimulus package. But, the war bill is likely to contain other domestic, non-defense spending items. Congressional leaders are sorting through these add-on items which could include funding for wildfires, secure rural schools, weatherization, food stamps and unemployment insurance. The underlying war measure would provide $108 billion for FY 08 and possibly another $70 billion to “bridge” the funding needs for FY 09 for operations in Iraq and Afghanistan. Non-defense, domestic spending could add another $20 billion to the total. Because Members of Congress also want to have votes on troop withdrawal language, torture policy, and on the domestic spending add-ons, these votes could take the form of amendments or be packaged into a second bill separate from the war funding. Again, Congressional leaders are working to find the best strategy and combination that allows them to make their points but doesn’t result in a veto which would require them to start all over.
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