IT’S FINALLY AUGUST – FOR REAL
They are gone. Despite hopes for a legislative accomplishment during the extra week the Senate
was calendared to be in session, Senate leaders threw in the towel on August 5 and headed out of
town to join their House counterparts who left for the summer the last week of July. Between
September 8, when Members return, and the end of the fiscal year on September 30, Congress is
in session for only 12 days. A number of the year’s biggest issues remain unresolved, and some
of them will require congressional action during those 12 days.
Iran
First up will be one of the most high-profile issues of the Obama Presidency. Both chambers
will consider a resolution of disapproval on the President’s Iran nuclear agreement. In the
House, opponents of the President’s Iran nuclear agreement should have a comfortable majority.
In the Senate, the vote is likely to be closer. Key Democrat Charles Schumer (D-NY) announced
that he would support the resolution of disapproval as well as vote to override the promised
Presidential veto. The President was already planning to spend the recess pushing hard for the
Iran agreement, but the influence Senator Schumer’s decision could have on undecided
Democrats poses an additional challenge for the President and his team. At this point, it appears
unlikely that either the House or the Senate would be able to muster the two-thirds vote
necessary to override a veto, but both sides will be lobbying Members intensely between now
and the final votes on the matter.
Funding the Federal Government
During July, progress on appropriations bills for fiscal year 2016 ground to a halt in both the
House and Senate. With both Republicans and Democrats acknowledging that the ordinary
process cannot be revived before the end of September, the most likely outcome will be a
continuing resolution (CR). The controversy surrounding the Planned Parenthood videos is
leading some to call for defunding the organization as part of the CR, with some defunding
proponents even willing to risk a government shutdown. However, when asked on August 6 if
the controversy would make it difficult for Congress to ensure federal government funding after
September 30, Senate Majority Leader Mitch McConnell (R-KY) told reporters, “We’re not
doing government shutdowns.”
Democrats are seeking a “budget summit” that would bring Congress and the Administration
together to rework the spending limits and sequestration requirements that resulted from the
Bipartisan Budget Act of 2013 (Ryan/Murray). Majority Leader McConnell had said earlier in
the week that “at some point we’ll negotiate the way forward.” This broader negotiation on
spending priorities is unlikely to eliminate the need for at least a short-term CR in September,
but supporters of a new approach on spending hope the process can get started as soon as
possible.
Papal Visit
As soon as the Iran debate is over, Congress and the President will welcome Pope Francis to
Washington. The Pope arrives on Tuesday, September 22, the start of Yom Kippur. The
following day he will meet privately with the President at the White House, meet with U.S.
Catholic bishops at St. Matthew’s Cathedral, and say Mass before a large crowd outdoors at
Catholic University in northeast Washington. Thursday morning the Pope goes to the Capitol to
address a joint session of Congress. Speculation is already building over what topics the Pope
will discuss in his historic address, as well as whether congressional battles over government
funding, Iran, or Planned Parenthood will influence his remarks.
Highway Trust Fund
Congress failed again in July to agree on a long-term funding solution for the federal Highway
Trust Fund (HTF), opting instead for another short-term extension that will run out on October
29. The Senate Republican leadership continues to argue for an extension that would keep the
program going until after the 2016 elections. (The Senate did pass a six-year reauthorization on
July 30 with strong bipartisan support, but the House had already left for the August recess.)
Identifying acceptable ways to pay for the additional money the HTF needs continues to be the
sticking point. Unless there is a breakthrough, Congress may find itself facing short-term
highway funding votes every two or three months between now and the end of 2016.
Optimistic predictions from House Ways and Means Committee Chairman Paul Ryan (R-WI)
about chances for progress on international tax reform fuel speculation that a bargain could be
reached by the end of the year as part of the HTF. One component of such a bargain could be a
“low one-time toll charge” on capital of U.S. corporations now effectively stranded overseas by
our high corporate tax rate. Chairman Ryan has suggested that revenue from this toll charge
could be dedicated to highway spending. Senate Finance Committee Chairman Orrin Hatch (RUT) is decidedly less optimistic about getting even a subset of tax reform completed before the
end of 2015.
Congressional leadership has been unwilling to deal directly with the future of the Export-Import
Bank, which has led the Bank’s supporters to look for legislation that could be amended to
include an extension of the institution’s charter. Senate supporters succeeded in attaching an
amendment to the HTF, but the bill was never taken up in the House. Expect supporters to keep
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looking for opportunities to add the Export-Import Bank to other must-pass legislation
throughout the rest of the year.
Tax Extenders
As it did in the last Congress, the House Ways and Means Committee approved bills that would
make certain temporary tax provisions permanent, including, among others, the research and
development tax credit and the deduction for state and local sales taxes. The Senate Finance
Committee approved a $96.9 billion package that extends all the expiring tax provisions through
the end of 2016. (The Joint Committee on Taxation’s dynamic score lowered that cost to $86.6
billion, even though there is no expectation that the final extender package will include any
offsets.) No further action is expected before late in the year, and the most likely outcome is that
something close to the Senate Finance Committee package will be enacted.
Debt Limit
On July 29, Treasury Secretary Jack Lew notified Congress that the Treasury would continue to
employ extraordinary measures through the end of October to prevent a breach of the current
$18.113 trillion federal debt limit. The Secretary’s letter also observed that such measures would
“likely . . . last for at least a brief additional period of time,” which suggests Congress will not
confront the debt limit before sometime in November. There are no indications yet from the
Republican leaders in Congress what kinds of concessions they might seek in return, although
the Administration remains opposed to any bargaining over the debt limit. The last time
Congress addressed the debt limit in February 2014, it opted to suspend the limit for 13 months –
effectively taking the issue off the table for the duration of the 2014 midterm election campaign.
Energy and the Environment
The Obama Administration released the final Clean Power Plan rule on August 3. The rule calls
for a 32 percent reduction in carbon emissions from the 2005 level by 2030 but gives states
discretion to develop and implement their own measures to achieve state-based goals. Although
congressional Republicans plan to advance legislation to delay or sidetrack the rule (e.g.,
Congressional Review Act resolution of disapproval and legislation allowing states to opt out of
the rule), the real challenge will be in the courts with critics arguing that the Obama
Administration has far exceeded its authority under the Clean Air Act.
The other hot energy topic in September will be oil exports. It is expected that the House will
vote this fall to end the 40-year ban on the export of domestic crude oil. The legislation has
gained considerable momentum, with the support of more than a dozen Democrats and several
studies finding that repealing the ban will reduce domestic gasoline prices. In addition, the Iran
deal creates new pressure for Congress to act. Supporters of lifting the export ban have pointed
out the inconsistency of allowing Iran to export oil into the global market while maintaining
restrictions on U.S. oil companies. Legislation to lift the oil export ban is also moving in the
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Senate. In July, the Senate Energy and Natural Resources Committee approved legislation to lift
the ban, and the Senate Committee on Banking (the committee of jurisdiction) will likely take up
similar legislation in the coming months.
NDAA
Congress has passed the National Defense Authorization Act (NDAA) for over 50 consecutive
years, including last year when it was passed in December. This year’s reauthorization is stalled,
however. Although listed as an item that “could be” considered by Congress for the last work
period, it was punted until after Labor Day. To quote a favorite movie, The Princess Bride, the
conference report appears to be “mostly dead.” But 50 years of precedent is noteworthy, and the
hope is Congress will find a way to get it over the finish line.
Cybersecurity
Last month, we reported that, even though Senate Majority Leader Mitch McConnell wanted the
Senate to debate and pass the Cybersecurity Information Sharing Act (CISA) in July, a cluttered
legislative agenda would force him to try again in September. While that was the outcome, his
efforts to bring the measure to the floor with just days to go before the August recess resulted in
an agreement on a limited number of amendments (10 Republican and 11 Democrat
amendments). While the Senate now has a roadmap to complete CISA and move to conference
with the House, there is no clear date in September when this legislative journey will
begin. With the Iran nuclear agreement and budget uncertainties expected to dominate the
Senate’s attention in September, CISA may have to wait until October.
Patents
Earlier in the summer, there was hope that the House would vote on legislation to curb so-called
“patent trolling,” the act of filing frivolous patent-infringement lawsuits against inventors and
businesses with the goal of collecting sizeable cash settlements. This hope proved to last no
longer than a summer fling as powerful interest groups, most prominently the pharmaceutical
industry, emerged in July to delay a vote on the House floor and possibly derail patent reform
altogether this Congress.
Like their counterparts in the House, the Senate Judiciary Committee voted out a patent troll bill
earlier this year. But Judiciary Committee Senators also pledged to continue improving the bill
before it went to the full Senate for a vote. Given the many fault lines of the legislation and the
late emergence of the pharmaceutical industry’s strong opposition, it remains unclear at this
point how Members can craft and advance legislation that gains the support of a majority of
stakeholders and, ultimately, of Congress.
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