Senate Looks To Slug It Out As House Eyes Exit Strategy

July 26, 2010

CongressDaily

Dan Friedman and Amy Harder, with Billy House, Humberto Sanchez, Megan Scully, Bill Swindell, Chris Strohm, David Hatch, Andy Leonatti and George E. Condon Jr. contributing

Win, lose or draw, Senate Democrats will slug through votes on key pieces of their agenda ahead of the August recess, even if it takes dropping the meat of their top legislative priority.

Senate Majority Leader Reid last week announced he will not push a broad energy and climate bill before the August recess due to lack of GOP support, a move that likely ended chances of action this year.

Instead, Reid hopes to bring a modest package to the floor this week. "We know where we are. We know that we don't have the votes," Reid said Thursday of a comprehensive bill. "This is a step forward."

Republicans, meanwhile, are introducing substitute legislation that includes several proposals addressing the Gulf of Mexico oil spill.

The Democrats' legislation is pared from the climate and energy proposal Sens. John Kerry, D-Mass., and Joe Lieberman, D-Conn., have been working on for months. The package is expected to include legislation approved by the Energy and Natural Resources Committee that reforms drilling regulations in the Outer Continental Shelf and a bill sponsored by Sen. Robert Menendez, D-N.J., that removes the liability cap for oil companies in the wake of an oil spill.

Other energy provisions that will be part of the proposal include Home Star, dubbed "cash for caulkers," that gives rebates to homeowners who retrofit their homes to make them more energy efficient, and a bill that incentivizes the use of natural gas as fuel. A cap-and-trade system targeting the utility sector and a renewable electricity standard were among the biggest casualties in Reid's announcement last week.

Energy and Natural Resources ranking member Lisa Murkowski and Minority Leader McConnell are pushing forward with an oil spill substitute bill. The Republicans' package will also include the bill passed out of Murkowski's committee, which was co-sponsored by Murkowski and Energy and Natural Resources Chairman Jeff Bingaman, but with slight variations.

On top of that, it will include several Republican-sponsored measures, including a lifting of the drilling moratorium in the Gulf of Mexico; allowing coastal states to share in revenues generated from offshore drilling and establishing a congressionally mandated oil spill commission. On the oil liability issue, Murkowski introduced a bill several weeks ago that would give the president discretion to set the liability cap depending on a specific scenario. This will also likely be part of the bill.

Given the tight schedule and how much importance Reid has placed on oil spill legislation passing before Congress heads to recess, it is unlikely he will allow senators to offer amendments, Senate aides and energy experts say. A spokeswoman for Reid declined to say definitively what the senator plans to do, and instead noted that the leader will work with Republicans to determine the amendment process.

If Reid does offer amendments, senators from both parties will likely offer proposals they wanted in the package outlined late last week. Democrats and environmental groups are urging Reid to include a renewable electricity standard in the bill, which was a core part of the energy legislation passed out of the energy committee last year.

Republicans will have numerous amendments ready, should Reid allow them. Amendments likely to come up include measures to stop the administration from pulling the plug on the proposed nuclear waste repository site at Yucca Mountain in Nevada, opening up oil drilling in the Arctic National Wildlife Refuge and a proposal by Sen. John (Jay) Rockefeller, D-W.Va., that would delay for two years EPA regulation of carbon emissions.

Action on what Kerry said is "admittedly a narrow, limited" energy bill, would follow what both parties expect to be a failed cloture vote Tuesday on a motion to proceed to a campaign spending bill, the DISCLOSE Act.

The measure responds to a Supreme Court ruling throwing out campaign spending strictures for corporations and unions. The bill would require those organizations to detail political spending and fundraising.

Democrats have no GOP support for the bill. They may also lose votes in their own caucus.

A GOP leadership aide said the vote is "clearly a checked-box exercise." Democratic staffers said it should turn up the heat on Republicans such as Arizona Sen. John McCain and Sen. Susan Collins of Maine, who voted for the McCain-Feingold campaign finance bill the Supreme Court has repeatedly weakened.

Reid surprised even some of his aides by filing cloture on the measure late Thursday night.

The vote reflects an effort by the majority leader to force votes that draw out differences with Republicans. It comes as part of a burst of legislative activity in the Senate in which energized Democrats seemed to surprise Republicans and some observers with their unity and combativeness.

Senate Republicans thought they would defeat an amendment that added a $30 billion Treasury lending fund to a small business jobs bill on Thursday. GOP aides predicted Democrats would defect because of the GOP's attempt to compare it to the Troubled Asset Relief Program, going so far as to call it "Baby TARP."

But after Senate Small Business Chairwoman Mary Landrieu spent, by her calculation, 12 hours on the floor, standing much of the time as she rebutted criticisms of the measure, Democrats, with two GOP votes, unanimously backed the amendment.

The fund was originally included in the bill but was removed to be voted on as a separate amendment after Republican support for the bill in its original form evaporated. Landrieu was able to win the votes of Sens. George LeMieux, R-Fla., and George Voinovich, R-Ohio, to put the fund back in.

Small Business ranking member Olympia Snowe voted against the fund, saying it was too reminiscent of TARP.

Though on a relatively obscure measure, the vote involved a significant amount of money, and was hailed Friday by President Obama.

Democrats hope before the recess to pass the underlying small-business bill, which includes $12 billion in related tax breaks. Reid will probably need to cut a deal with Republicans to allow votes on a few amendments. The GOP has threatened to withhold all support for the bill unless some votes are allowed. Lemieux, who advocated for the $30 billion lending fund, said he would not be the sole Republican to give Democrats cloture on the overall bill.

Passing the bill would allow Democrats to cite passage in July of three bills related to the economy. Congress previously passed a sweeping financial regulatory reform bill and an extension of federal unemployment benefits through Nov. 30. In each case, Democrats note, all but a few Republicans were opposed.

Senate Democrats also expect next week to confirm Solicitor General Elena Kagan to the Supreme Court. And they hope before Sunday to find time to pass an FAA reauthorization bill or temporarily extend authorization.

The packed schedule means the majority will be hard-pressed to pass both an energy bill and small-business bill before the break. By forcing a vote on the DISCLOSE Act, Reid delayed action on small business.

If Republicans do not yield back time, consideration of the bill would continue into next week, and Republicans are unlikely to cooperate without a deal on amendments.

"If Reid doesn't allow people's amendments, I guarantee there is not going to be a lot of excitement about helping him expedite votes on a bill we think is flawed," a Republican leadership aide said.

The aide said Reid will face a choice around Wednesday on whether to advance the small-business or the energy bill.

"Something's got to give," he said. "Either small business gets punted or energy gets punted."

Meanwhile, the ethics problems of Rep. Charles Rangel, D-N.Y., will be the main attraction in the House this week, unplanned but guaranteed to steal the spotlight even as members scramble to wrap up legislative work while on the way out for an extended summer recess.

Already, Majority Leader Hoyer has warned that the chamber could be in session through Saturday to finish up.

"I would put members on notice that there will be certain matters that we must complete and that we will complete and, as a result, members ought to make sure that they have flexibility for next Saturday," Hoyer said.

Regardless of such legislative demands, the marquee event of this busy week will be the Thursday hearing of a House Ethics Committee panel to formally read specifics of the charges that Rangel violated congressional ethics rules.

The New York Democrat and former Ways and Means Committee chairman says he's not looking forward to the showdown, but he said he's ready to defend himself and his re-election prospects in a trial that is likely to begin in September.

The circus atmosphere certain to surround that event is likely to overshadow efforts by House Democratic leaders to focus public interest on their jobs agenda, including the late-blooming "Make It in America" agenda announced last week.

And there will be other business, Hoyer said in a floor colloquy Thursday with House Minority Whip Cantor. He said he expects the members will vote on the first of the FY11 appropriations bills -- the Transportation-HUD and Military Construction-VA bills -- as well as an amended war supplemental from the Senate. (For more on this, see Appropriations topic below.)

"There are obviously other possibilities of bills coming from the Senate, and we will consider those as time permits," said Hoyer, including the small-business jobs bill.

And still other bills will be "under discussion" for possible action, said Hoyer, including oil spill response legislation; FAA reauthorization; a 9/11 compensation bill, and an Education and Labor bill relating to safety requirements in mining.

Hoyer admitted that uncertainty in the House continues on the war supplemental.

Hoyer said he remained unsure of what exactly the Senate will be passing, or "what's going to be in it." But he reiterated, "It is my intention to ensure that the money for the troops is, in fact, passed before we leave here."

• The Senate meets at 3 p.m. today to resume consideration of the motion to proceed to the DISCLOSE bill.

• 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 p.m.

APPROPRIATIONS

House Democratic leaders are working out how to handle the $59 billion war supplemental the Senate sent the chamber late Thursday night.

The Senate agreed to move it without the roughly $23 billion in domestic funding inserted by the House earlier this month. That vote followed a failure to invoke cloture, 46-51, on the House version, in an expected result.

The House, which is set to recess from Friday until Sept. 13, can either vote on the Senate version or attempt to alter the bill.

Hoyer said Friday that he expects Congress to send the supplemental to the president before the recess. He did not say whether the House would accept the Senate bill or whether it would seek to change it.

"I am not going to speak to exactly how we will take it up, I can just assure you that the funding for the troops will be passed before Friday," Hoyer said.

If Democrats try to pass the Senate bill as is, it is unclear if they would try to pass the measure under suspension of the rules, which requires a two-thirds vote. This scenario would rely on Republicans to vote for the package, many of whom have said they would back the Senate version. But it is not certain that the threshold could be reached without the help of some Democrats opposed to the war.

If the Democrats choose to put the Senate supplemental on the floor for a simple majority vote they would likely need help from some anti-war Democrats to pass the rule needed to bring the measure to the floor.

In May, the Senate sent the House the same $59 billion package. But House Democrats, led by Appropriations Chairman David Obey, sought to provide additional aid to states. Obey crafted the $23 billion provision that included $10 billion for school districts, and House Democrats subsequently passed the $81 billion package just before leaving for the Independence Day recess.

With the midterm elections getting closer and more Democrats growing skittish over voting for legislation that would add to the deficit, Obey was forced to offset the $23 billion provision.

But the White House took issue with one of the pay-fors, the $800 million rescission to education programs. Obey had argued that the cut would not affect education programs flush from stimulus and other funding. However, the White House ultimately issued a veto threat on the House measure.

The House version was doomed by 13 Democratic Senators who sided with Obama and also said they would oppose the proposed education rescission.

The Senate package includes $33.5 billion for the Pentagon for the wars in Afghanistan and Iraq, and $6.2 billion for State Department programs and foreign aid, including $1.32 billion for State operations in Afghanistan, Pakistan, Iraq and aid for Haiti. The package also includes $13.4 billion in mandatory spending for the Veterans Affairs Department to help Vietnam veterans exposed to Agent Orange, and $5.1 billion for the Federal Emergency Management Agency's disaster relief fund.

The House will also consider the FY11 Transportation-HUD and Military Construction-VA appropriations bills, the first two of the 12 annual spending measures to come to the House floor.

The Transportation-HUD bill includes $67.4 billion in discretionary spending, which is $500 million below the previous year.

The Military Construction-VA bill includes $77.3 billion in discretionary funding, which is a slight decrease from the $78 billion Congress provided in FY10. The bill, which passed the full committee with bipartisan support, also includes $50.6 billion in FY12 advance appropriations.

The House Rules Committee is scheduled to meet Tuesday to consider the rule for the Military Construction-VA bill.

Asked during the weekly leaders' colloquy, Hoyer said he had to talk to Obey before he could say if the bills would come up under open rules.

This is a touchy subject for House Republicans who contend that their minority rights were compromised in the FY10 appropriations process when Democratic leaders limited the number of amendments that could have been offered on appropriations bills by establishing a deadline for filing the amendments, known as a preprinting requirement.

Democrats claimed at the time that the action was taken to meet their goal of getting all 12 annual spending bills through the House before the beginning of the August recess.

Republicans argued that, prior to FY10, the majority had typically allowed unlimited amendments on appropriations bills and that limiting the number set a bad precedent by hurting the minority's abilities to represent their constituents.

In retaliation for the move, Republicans, amid the commotion that ensued, forced a series of 53 roll-call votes in June 2009 on the $64.4 billion FY10 Commerce-Justice-Science Appropriations bill.

DEFENSE

The House Defense Appropriations Subcommittee will meet Tuesday to mark up the FY11 Defense appropriations bill, which will total $7 billion less than the Pentagon's $530.9 billion request for its accounts that fall under the panel's purview.

With a tight budget allocation, Subcommittee Chairman Norm Dicks, D-Wash., is not expected to add funding to keep alive a second engine program for the F-35 Joint Strike Fighter or to buy more Boeing Co.-built C-17 cargo planes.

If Dicks proceeds as expected and rejects funding for those two high-profile programs, he would avert veto threats from the White House, which considers any spending to keep those two efforts alive as wasteful.

General Electric Co. and Rolls Royce Group build the alternative engine for the stealthy fighter. The Pentagon has argued that the Pratt & Whitney primary engine is sufficient for the fighter program.

The subcommittee is stacked with alternate engine supporters, who could offer an amendment to add funding for the engine. The FY11 defense authorization bill includes $485 million for the effort, with congressional supporters arguing that a competition against the F-35's primary engine would drive down costs on the $100 billion alternate engine program and provide a back-up for the multiservice fighter.

"I suspect there will be a discussion on that issue," Defense Appropriations Subcommittee ranking member C.W. (Bill) Young, R-Fla., said last week.

Meanwhile, Dicks' decision not to include funding for more C-17s would run counter to the chairman's reputation as one of Boeing's biggest supporters on Capitol Hill.

The aerospace giant, which builds commercial aircraft at a plant just outside Dicks' district, has lobbied to include five C-17s in FY11 to supplement international orders and keep the production lines running at optimum speed, several defense sources recently told CongressDaily. The C-17s are not built at the Everett, Wash., plant, but the program employs 30,000 people in 43 states.

Defense Secretary Gates wants to end the C-17 program with the 223 planes now on order. And he has said repeatedly that he would recommend the president veto any legislation that keeps the procurement program alive.

A spokesman for Dicks last week would not comment on the details of the chairman's mark, saying it would not be final until Tuesday.

Also Tuesday, the Senate Armed Services Committee will hold a confirmation hearing for Marine Corps Gen. James Mattis to be the next commander of U.S. Central Command.

Mattis, who now leads U.S. Joint Forces Command and had planned to retire soon, would take over from Army Gen. David Petraeus. On July 4, Petraeus was sworn in as the commander of U.S. and allied forces in Afghanistan, following the resignation of Army Gen. Stanley McChrystal.

The CENTCOM commander is charged with overseeing the wars in Iraq and Afghanistan and U.S. military operations in the Horn of Africa. Mattis, an expert in counterinsurgency warfare, has commanded forces in both Iraq and Afghanistan.

FINANCE

The House Financial Services Committee will mark up legislation Tuesday to establish a licensing and regulation system for Internet gambling, reversing a 2006 law that banned the multibillion-dollar industry.

Financial Services Chairman Barney Frank said he would likely tweak his bill to mollify concerns of Indian tribes, which argue the bill could restrict them from accepting bets outside of their jurisdiction, and that it should not place them at a disadvantage over revenue-sharing compacts they have with states.

Frank's bill would allow states and tribes to opt out of the system, and would continue a ban on sports gambling over the Web. A companion bill by Rep. Jim McDermott, D-Wash., would place taxes on such a system, estimated to bring in as much as $42 billion over a 10-year period, though many analysts think that would be lower.

Rep. John Campbell, R-Calif., has said he would likely offer an amendment that would place a ceiling over how much a gambler could lose on an hourly and daily basis to limit abuse. Other possible amendments could divert revenue for compulsive gambler programs and limit transactions to debit accounts, rather than credit cards.

The panel also will mark up legislation that would help preserve the 1.7 million subsidized rental units located in private apartment complexes, many of which are aging, and another measure that would establish statutory framework for the covered-bonds market, which are bank-issued debt backed by a pool of loans. Such bonds are more commonly used in Europe to help fund the housing market.

The panel on Thursday will hold a hearing on proposals to expand liquidity in the commercial real estate market.

The Capital Markets Subcommittee will hold a Thursday hearing examining private mortgage insurance as part of its examination of the housing finance system, which lawmakers will attempt to overhaul next year. Subcommittee Chairman Paul Kanjorski, D-Pa., has noted private mortgage insurance companies have provided safeguards against foreclosures for lenders, but faced questions over whether it is sufficiently regulated given the big losses it suffered during the housing downturn.

HEALTH

This morning, the Chamber of Commerce and the National Federation of Independent Business team up to roll out a Web site aimed at collecting small-business perspectives on the healthcare overhaul law's impact.

"There's a huge amount of propaganda everywhere, with people saying 'the bill is bad' or 'the bill is good,'" said James Gelfand, health policy director at the Chamber. "We wanted to take the microphone and give it to small businesses, and hear from the real people affected by the law."

To introduce the site, the Chamber and NFIB will host Sen. Mike Johanns, R-Neb., who earlier this month introduced legislation to repeal the overhaul law's mandate that requires employers to provide health insurance for their employees or face a penalty and legislation to roll back a tax reporting provision in the law that requires businesses to file 1099 tax forms if they purchase over $600 in goods from another business.

Former CBO Director Douglas Holtz-Eakin, now the president of the American Action Forum, is also expected to speak.

Gelfand made clear that the focus of the event is to hear how small business owners or representatives feel about the new law. At a time when Congress and the administration are focused on creating jobs, Gelfand said small businesses are where we need to look for answers.

"These are the people who create real jobs, not government jobs," said Gelfand.

Later in the week, Congress will revisit electronic health records "meaningful use" regulations released by HHS this month, as the House Energy and Commerce Health Subcommittee follows the Ways and Means Committee's lead to investigate the implementation of the stimulus bill's health information technology program.

Democrats and Republicans alike questioned HHS officials last week on whether the regulations were stringent enough to ensure providers who get federal funds actually use the technology. Members also grilled the agency on restrictions of funds to individual hospitals multicampus systems.

Meanwhile, the administration continues pushing the electronic health record stimulus funds to stakeholders next week as the FDA and FCC hold a joint meeting to discuss investment and innovation in health technology and the impact of the new regulations. Rural lawmakers last week expressed concern that broadband infrastructure in less populous areas could not support the necessary technology.

Finally, with one week left before the House's recess, all eyes are on the Senate to pass an extension of increased Medicaid funds to help balance state budgets. Hopes are not high that the legislation will be passed before the House leaves, but with the 45th anniversary of the Medicare and Medicaid programs coming up Friday, expect greater lobbying pressure on lawmakers.

HOMELAND SECURITY

House lawmakers plan a hearing Tuesday on how best to create a nationwide, wireless broadband network for public safety organizations, as legislative and lobbying activity increases around the issue.

The Homeland Security Emergency Communications Subcommittee will hear from FCC and Homeland Security Department officials, as well as first responders, on the government's plan to auction key spectrum to commercial wireless providers. Public safety organizations want to use the D-block spectrum to create a national interoperable communications network.

Some first responder groups support the auction, while others oppose it, fearing that commercial providers will not help meet the needs of public safety organizations. Homeland Security ranking member Peter King and Emerging Threats Subcommittee Chairwoman Yvette Clarke, D-N.Y., have introduced legislation that would set aside the D-block for first responders, essentially preventing the FCC from doing an auction.

Lieberman and McCain introduced companion legislation last week, and Rockefeller announced last week he plans to introduce similar legislation.

TELECOMMUNICATIONS

With lawmakers increasingly turning their attention to strengthening online privacy, FCC Chairman Julius Genachowski will weigh in on the topic Tuesday during a hearing before the Senate Commerce Committee. Appearing alongside Genachowski will be Jon Leibowitz, chairman of the Federal Trade Commission.

Rep. Bobby Rush, D-Ill., chairman of the Energy and Commerce Commerce, Trade and Consumer Protection Subcommittee, introduced privacy legislation last Monday, while Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., has floated a draft measure.

But Sen. Byron Dorgan, D-N.D., a senior member of the Senate Commerce Committee, recently told CongressDaily that crafting related legislation has proven difficult in the upper chamber, and with limited time left on the congressional calendar, he doesn't expect Senate action this year.

Genachowski also is scheduled to appear today at a convention and political conference sponsored by the Communications Workers of America, one of several organizations opposed to the proposed merger of Comcast and NBC Universal. Comcast Executive VP David Cohen is scheduled to brief reporters Wednesday about the latest developments with the transaction.

TRADE

The House will vote this week on a handful of trade and manufacturing bills as part of House Democrats' "Make It in America" agenda.

The bills include one creating an export assistance fund for clean-energy manufacturing, a bill requiring the president to formulate a long-term national manufacturing strategy and a bill creating a commission to eliminate the trade deficit by the end of the decade.

At a briefing unveiling the agenda, Democrats said the House could also consider extending the advanced fuel technology tax credit, which Ways and Means Chairman Sander Levin was planning on including in a green-energy tax bill.

WHITE HOUSE

Autos, education and travel in two states are on the president's agenda for the week. Today and Tuesday have been left pretty open to give the president the flexibility to deal with Congress. But on Wednesday he travels to Edison, N.J., to talk about the economy. He then goes to across the Hudson River to New York for a Democratic fundraiser.

On Thursday, he will deliver what the White House is calling a major education speech at the National Urban League's Convention in Washington.

On Friday, he takes to the road again to offer a defense of the $85 billion federal bailout of the auto industry. He will tour two auto plants -- one GM and one Chrysler -- in the Detroit area.

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