The House will convene on Tuesday, May 10, taking up the following measures: H.R. 1229, the Putting the Gulf of Mexico Back to Work Act and H.R. 1016, the Assessing Progress in Haiti Act. The Senate will convene at 2:00 PM on Monday, May 9 for morning business.
- Senate Vote on House and Administration FY2012 Budget Proposals. Several factors, including the death of Osama bin Laden, delayed this week’s tentative Senate vote on the House-passed FY2012 Budget Resolution. Senate Majority Leader Harry Reid (D-NV) intends to bring up the measure next week, although he would like the Senate to finish its consideration of the small business bill (S. 493) and hold a vote on repealing oil and gas subsidies first. The Senate vote on the House FY2012 Budget Resolution and presumed offset vote on the President’s FY2012 Budget Proposal are primarily political maneuvers to reflect inadequate support for either to pass in the Senate.
- Markup of Senate FY2012 Budget Proposal. Senate Budget Committee Chairman Kent Conrad (D-ND) announced a markup of an FY2012 Budget Resolution in his committee, possibly as early as next week. His plan proposes to reduce the deficit by $4 trillion over 10 years and includes tax reform measures aimed to produce $1 trillion in new revenues. The measure identifies savings from Medicare, though it does not propose a complete transformation of the program as does the House-passed measure. The proposal does not address any changes to Social Security.
- ESEA Reauthorization. On May 4, the U.S. Chamber of Commerce weighed in on legislation to reauthorize No Child Left Behind (NCLB), supporting the retention of key aspects of the current law’s accountability system. Former Secretary of Education and NCLB architect, Margaret Spellings, is now President of the Chamber’s Forum for Policy Innovation.
- For-profit Colleges. In a May 2, op-ed for Roll Call, Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-IA) warned future college students about enrolling in for-profit colleges and renewed his commitment to “reform federal oversight of for-profit higher education” through legislation. The piece criticized Corinthian Colleges, Inc. for its recent 12 percent tuition increase, high withdrawal rates and investment in its default management program.
- Teacher Appreciation Week. On May 2, Education Secretary Arne Duncan published an open letter to America’s teachers in honor of Teacher Appreciation Week, praising the profession and asking for teacher input to help transform teaching and shape public education going forward. The next day, President Obama honored the 2011 National and State Teachers of the Year at the White House.
- Higher Education Rulemaking. The Department of Education announced it will begin conducting roundtable discussions and public hearings concerning its policies on teacher preparation and college completion, including First in the World, a competitive grant program proposed in President Obama’s FY2012 Budget. Roundtable discussions are open to the public, but require registration to participate, and begin May 12, in Nashville, TN.
- For-profit Colleges. According to a May 2 Securities and Exchange Commission filing, the Justice Department will join a whistle-blower lawsuit against Education Management Corporation – a large for-profit college company – charging the company defrauded the government by illegally paying recruiters based on student enrollment. It marks the first time federal prosecutors joined a case alleging illegal practices devised to increase federal student aid revenue. Several states also are expected to join the lawsuit alleging violations of their state False Claims Acts.
- Clean Energy Bank. The Senate Energy and Natural Resources Committee intends to report legislation establishing a Clean Energy Deployment Administration prior to the Memorial Day recess, although an offset to pay for the approximately $10 billion bank to incentivize green technologies development and deployment has yet to be identified.
- Oil Production. After passing the Restarting American Offshore Leasing Now Act (H.R. 1230) on May 5, the House next week is expected to approve the Putting the Gulf Back to Work Act (H.R. 1229) and the Reversing President Obama’s Offshore Moratorium Act (H.R. 1231). Efforts by House Democrats to force a vote on a bill that would repeal the section 199 manufacturing tax deduction for the largest integrated oil companies failed on a procedural vote; another effort aimed at eliminating this and other tax breaks is expected next week. House Natural Resources Committee Chairman Doc Hastings (R-WA) also intends to consider legislation in coming weeks to adjust the method by which Outer Continental Shelf oil revenues are shared with oil-producing states, including for states such as Virginia that are interested in offshore production.
- Congressional Hearings. The Senate Energy and Natural Resources Committee will receive testimony on May 10 on new developments in upstream oil and gas technologies and on May 12 regarding pending carbon capture and sequestration legislation. Its Subcommittee on National Parks will also receive testimony on nearly two dozen pending bills. On May 11, the House Committee on Natural Resources will hold a full committee oversight hearing titled, "American Energy Initiative: Identifying Roadblocks to Wind and Solar Energy on Public Lands and Waters."
- BOEM Regulatory Compliance. The Bureau of Ocean Energy Management (Bureau) will issue guiding principles for submitting applications for permits to drill in coming weeks, to both improve operator applicant submissions and help expedite the processing of APDs. Bureau Director Michael Bromwich has also reiterated his belief that the Bureau has broad authority to expand regulatory oversight to offshore contractors – without the need for new regulations or rulemakings – in the case of egregious violations. Senator Vitter (R-LA) has sent Bromwich a letter asking for him to provide documents with respect to his view that the Bureau has this authority, including any legal memoranda prepared by his staff that would support this expanded scope of jurisdiction beyond just operators.
- Wind and Solar on Federal Lands. As noted above, on May 11, the House Committee on Natural Resources will hold a full committee oversight hearing titled, "American Energy Initiative: Identifying Roadblocks to Wind and Solar Energy on Public Lands and Waters." The hearing intends to examine the policies and actions, such as permitting delays that may be blocking or delaying the development of renewable energy sources on federal lands and waters.
- Mercury Pollution from Power Plants. EPA will hold three public hearings in May on the proposed mercury and air toxics standards. The new power plant mercury and air toxics standards would require many power plants to install widely available, proven pollution control technologies to cut harmful emissions of mercury, arsenic, chromium, nickel and acid gases, in effort to prevent 17,000 premature deaths and 11,000 heart attacks a year. The hearings will take place on May 24 in Chicago, IL and Philadelphia, PA and on May 26 in Atlanta, GA.
- Alaskan North Slope Oil Spill. EPA has announced that BP Exploration Alaska, Inc. will pay $25 million in civil penalties and implement a system-wide pipeline integrity management program for spilling more than 5,000 barrels of crude oil from the company’s pipelines on the North Slope of Alaska. The penalty is the largest per-barrel penalty to date for an oil spill. The settlement requires BP Alaska to develop a system-wide program to manage pipeline integrity for the company’s 1,600 miles of pipeline on the North Slope based on Pipeline and Hazardous Materials Safety Administration’s integrity management program. The program will address corrosion and other threats to these oil pipelines and require regular inspections and adherence to a risk-based assessment system. The program will cost an estimated $60 million over three years. Of the $25 million penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act. The remainder, $4.95 million, will be paid to the U.S. Treasury. The funds paid to the Oil Spill Liability Trust Fund will be used to finance federal response activities and provide compensation for damages sustained from future discharges or threatened discharges of oil into water or adjoining shorelines.
- Asthma. Asthma affects nearly 25 million people in the U.S. On June 9 and 10, the EPA will host the National Asthma Forum in Washington, D.C. Health care providers, health departments, community asthma coalitions, researchers, policy makers and others will gather to discuss the most effective community based strategies for improving asthma outcomes, building successful and sustainable asthma care programs and extending the reach and impact of high quality asthma care to everyone in need. Registration for the forum is currently open.
- Senate Banking Committee to Review FCIC Report. On May 10, the Senate Banking Committee will hold a hearing titled, “Reviewing the Financial Crisis Inquiry Commission's Final Report.” Phil Angelides, Chairman of the Financial Crisis Inquiry Commission, will testify before the Committee.
- House Financial Services Subcommittee to Discuss Federal Reserve Transparency. On May 11, the House Financial Services Domestic Monetary Policy and Technology Subcommittee (Ron Paul (R-TX), Chairman) will hold a hearing on the Federal Reserve’s compliance with the Dodd-Frank Act and the Freedom of Information Act.
- House Financial Services Subcommittee to Consider SEC Whistleblower Provisions. On May 11, the House Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee (Scott Garrett (R-NJ), Chairman) will hold a hearing on the Securities and Exchange Commission (SEC) whistleblower provisions of the Dodd-Frank Act.
- Senate Banking Committee to Discuss Dodd-Frank Implementation. On May 12, the Senate Banking Committee will hold a hearing titled, “Oversight of Dodd-Frank Implementation: Monitoring Systemic Risk and Promoting Financial Stability.” The witnesses will include Neal Wolin, Deputy Secretary of the Treasury; Ben Bernanke, Chairman of the Federal Reserve Board of Governors; Sheila Bair, Chairman of the Federal Deposit Insurance Corporation (FDIC); Mary Schapiro, Chairman of the SEC; Gary Gensler, Chairman of the Commodity Futures Trading Commission (CFTC); and John Walsh, Acting Comptroller of the Currency, Office of the Comptroller of the Currency.
- House Financial Services Committee Addresses Legislative Proposals. On May 12, the House Financial Services Committee will markup legislative proposals: (i) to extend the deadline for implementation of the Dodd-Frank Act’s provisions regarding derivatives (H.R. 1573, which was approved by the House Agriculture Committee on May 4); (ii) to reauthorize the National Flood Insurance Program (H.R. 1309); and (iii) to replace the Consumer Financial Protection Bureau’s independent director position with a five-member commission.
- SEC Staff to Hold Roundtable on Money Market Funds and Systemic Risk. The SEC will host a roundtable discussion on May 10, on money market funds and systemic risk. The roundtable will include participants from the Financial Stability Oversight Council (FSOC) and allow stakeholders in money market funds to exchange views on the potential effectiveness of certain options in mitigating systemic risks associated with money market funds. These will include options raised in the President’s Working Group report on possible money market fund reforms that was issued in October 2010.
- FDIC to Discuss Retail Forex Transactions. On May 10, the FDIC will hold an open meeting to consider the publication of a proposed rulemaking related to the regulation of FDIC-supervised entities engaged in retail forex transactions.
FINANCIAL SERVICES NEWS
- White House Reportedly Preparing FDIC Chairmanship Nomination. Several media reports have indicated that Martin J. Gruenberg, the current Vice Chairman of the FDIC Board of Directors and previous Acting Chairman, will be nominated by the White House to succeed Sheila Bair as FDIC Chairman when Ms. Bair’s term ends in June 2011. Mr. Gruenberg is also the Chairman of the Executive Council and President of the International Association of Deposit Insurers. Previously, Mr. Gruenberg served as Senior Counsel to Senator Paul S. Sarbanes (D-MD) on the staff of the Senate Banking Committee.
- Ways and Means Hearing. The House Committee on Ways and Means has scheduled a hearing for May 12 on reforming Medicare physician payments. The hearing will focus on innovative delivery and physician payment system reform efforts.
- Regulations. The Center for Medicare and Medicaid Services (CMS) released the final rule for the Medicare Hospital Inpatient Value-Based Purchasing Program. The VBP program allows for value-based incentive payments to be made in a fiscal year to hospitals that meet performance standards and will apply to payments for discharges occurring on or after October 1, 2012. CMS also published the final rule for the Medicare Inpatient Psychiatric Facilities Prospective Payment System for discharges occurring during the rate year beginning July 1, 2011.
CMS published a proposed rule regarding Methods for Assuring Access to Covered Medicaid Services, to create a standardized, transparent process for States to follow as part of their broader efforts to “assure that payments are consistent with efficiency, economy and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area” as required by the Social Security Act. Comments will be accepted until July 5.
OTHER HEALTH NEWS
- Health Care Reform Lawsuits. The Court of Appeals for the 4th Circuit is set to hear oral arguments in the health reform challenge brought by the Commonwealth of Virginia and Liberty University in Lynchburg, VA. The court has announced that they will post audio recordings of the proceedings on the Internet.
- Health Care Reform Challenge. The State of Florida continues to take the lead in challenging the individual mandate included in the Affordable Care Act (ACA). The State House voted to include an initiative on the 2012 ballot to allow voters to reject the health reform law, adding language to the State constitution that says no law can "compel, directly or indirectly, any person or employer to purchase, obtain, or otherwise provide for health care coverage."
- Pre-Existing Conditions Insurance Plan. Enrollment in the Pre-Existing Conditions Insurance Plan (PCIP) has hit 18,000 individuals and growing. The program was created by the ACA as a temporary insurance program for people who have been denied coverage due to pre-existing conditions. The program will phase out in 2014 with the entry of new insurance coverage options through the Sate-based health insurance exchanges. The Administration is touting this as a success, while enrollment numbers are well below previous expectations estimating around 250,000 individuals would enroll.
International, Defense, Homeland Security
- Trade Developments. U.S. Trade Representative (USTR) Ron Kirk’s submission Wednesday of letters to Congress on Colombia’s progress on its labor action plan and to Senate Finance Committee Chairman Max Baucus (D-MT) promising further consultations on the Korea beef protocol has shifted calculations on trade policy once again. Following Wednesday’s developments, reauthorizing the lapsed Trade Adjustment Assistance (TAA) program now stands as arguably the most important, and potentially the most vexing, remaining issue under discussion, as the Administration and Congress attempt to finalize a “grand bargain” on trade before the August recess.
Essentially two overarching TAA-related issues remain on the table. The less complicated one is the substantive question of which elements would be part of a renewed TAA program. Although most Congressional Republicans and Democrats at both ends of Pennsylvania Avenue are currently far apart on what the content of a reauthorized TAA ideally would look like, with most Republicans viewing the program as a “necessary evil” at best, pro-TAA House Ways and Means Committee Chairman Dave Camp (R-MI) and others already have planted the seeds for a policy compromise. If the Republican Congressional Leadership believes it needs to support a modest TAA renewal as part of overall discussions on trade policy, striking a deal with the Democrats on the specific contents of the program would not be overly difficult.
The second, more complicated issue is the procedural question of exactly how and when the TAA debate will fit into the rest of the Congressional trade agenda. Leverage over that agenda continues to shift. On the one hand, the U.S. business community’s public support for TAA boosts the Democrats’ case. However, ironically because the Administration’s progress with Colombia and Panama has enabled those FTAs to join the Korea agreement as “ready to go,” on balance the advantage lies with the Republicans. Therefore, the Democrats will have to decide what else they will be willing to sacrifice in order to garner a timely vote on a robust TAA package, but it is becoming increasingly difficult for anyone to delay votes on the FTAs as part of that effort.
- U.S.-Pakistan Relations after bin Laden. The future of U.S.-Pakistan relations hangs in the balance in the aftermath of the Pakistani military and intelligence service’s inability, or alleged unwillingness in some quarters, to identify and work to apprehend Osama bin Laden in Abbottabad. So far, tenuous support remains in Congress for continuing U.S. foreign assistance to Pakistan. Speaker of the House John Boehner (R-OH), Senate Foreign Relations Committee Chairman John Kerry (D-MA), Senate Select Intelligence Committee Chairwoman Dianne Feinstein (D-CA) and others have echoed the Obama Administration’s general approach that they would prefer to maintain cooperative military and development relations with Pakistan for the foreseeable future. On the other hand, Senate Armed Services Committee Chairman Carl Levin (D-MI) spoke for many on Capitol Hill when he noted that Pakistan “has a lot of explaining to do.” The recent warning by General Ashfaq Kayani, Pakistan’s Chief Army Officer, against future similar U.S. military operations in Pakistan only heightens Congressional skepticism.
- Public Employee Pension Transparency Bill Would Prevent State and Local Governments From Issuing Tax Exempt Bonds. Representative Devin Nunes (R-CA) introduced the Public Employee Pension Transparency Act (H.R. 567), which would require sponsors of pension plans for State and local government employees to file an annual report with the Treasury Department, setting forth a schedule of the funding status of the plan, a statement of the plan's investment returns and a statement of the amount of outstanding pension obligation bonds, along with other requirements. As a penalty for failure to comply with the reporting requirements, a State or local government would lose its tax exemption for interest on State and local bonds, Build America Bonds and for issuers and holders of qualified tax credit bonds. The bill was discussed at a House Ways and Means Oversight Subcommittee hearing this past week.
- IRS Continues to Seek FATCA Comments. The IRS continues to solicit comments on implementation of the Foreign Account Tax Compliance Act provisions (FATCA). This week, a Treasury official commented that the IRS is seeking comments regarding trusts, insurance contracts, family attribution rules and rules related to deemed compliance. Once these areas are considered, the official said, regulations may be proposed and draft foreign financial institution agreements may be released. A recent IRS notice set forth a test for private banks to identify accounts that have indicia of U.S. ownership or in instances where a bank manager has actual knowledge that the account is owned by a U.S. person. The IRS has also issued guidance regarding deemed-compliant banks. However, Treasury officials have said these are simply preliminary guidance, and Treasury would like to issue comprehensive proposed regulations, which will take time to draft.
OTHER TAX NEWS
- Proposal to Change Passthrough Taxation. This week, Senate Finance Chair Max Baucus (D-MT) said that lawmakers may need to consider treating some passthrough entities (such as partnerships and Subchapter S corporations) as taxable corporations. There are rumors that Treasury may propose treating passthrough entities with $50 million or more in revenues as corporations. Baucus' statement added fuel to speculation that such a proposal may be on the horizon. The change in passthrough taxation was suggested as part of the ongoing debate regarding tax reform and deficit reduction.
- Meetings on Deficit Reduction. On May 5, Vice President Biden met with Republican and Democratic lawmakers to discuss deficit reduction, which would include tax reform. House Ways and Means Chair Dave Camp (R-MI) reported, in connection with these discussions, that he is open to discussing reforming the tax code by lowering tax rates and reducing tax expenditures, as suggested by the National Commission on Fiscal Responsibility and Reform. The Commission recommended setting individual income tax rates at 8 percent, 14 percent and 23 percent and reducing the corporate tax rate to 25 percent. Camp also pointed to the repeated extension of temporary tax provisions (tax extenders) and the uncertainty these extensions create for taxpayers, as a reason to address tax reform. He said he supports deficit reduction through spending cuts rather than raising revenue - a contrast with Secretary Timothy Geithner, who said that the Administration believes deficit reduction requires both spending cuts and revenue raisers. The group of bipartisan lawmakers will meet with Biden again on May 10.
- Spectrum. Senate Commerce Committee Chairman Jay Rockefeller (D-WV) and Ranking Member Kay Bailey Hutchinson (R-TX) are working on bipartisan spectrum legislation that they hope to have ready for mark up this month. The compromise legislation would combine Chairman Rockefeller’s bill, the Public Safety Spectrum and Wireless Innovation Act (S.28), with Ranking Member Hutchinson’s draft Wireless Innovation and Spectrum Enhancement (WISE) Act, allocate the 700 MHz D-block to public safety and grant the Federal Communications Commission (FCC) authority to conduct incentive auctions. A key issue of discussion continues to be how to fund the nationwide public safety network, including whether to provide funding for maintenance and operation of the network. While Chairman Rockefeller’s bill would authorize $11 billion from incentive auctions of broadcast spectrum to construct and maintain a public safety broadband network, Hutchison’s language would provide a combination of grants and zero-interest loans to construct the network, including $4 billion in grants for rural and high-cost areas. In the aftermath of the death of Osama bin Laden, Chairman Rockefeller said that “the events of the last week have put the losses suffered 10 years ago by fire fighters, police and other first responders back on the front page,” including the “overwhelming challenges” of an “overloaded, incompatible and inadequate communications system.” The Public Safety Alliance issued a news release urging passage of the D-block legislation.
Debate on the subject of incentive auctions also continued this week, with an aide to Senator Olympia Snowe (R-ME) noting that the FCC is focused too much on incentive auctions rather than taking a comprehensive approach to spectrum management. Broadcasters said at a recent event sponsored by the Brookings Institution that television stations are worried about the impact repacking would have if they don’t decide to relinquish spectrum. They also believe a spectrum inventory should be conducted prior to any auction. CTIA, the wireless trade association, indicated it was willing to discuss the issue of repacking with broadcasters. CTIA submitted a paper to the FCC this week in which engineer Peter Rysavy concluded, “The wireless industry is making extremely efficient use of spectrum,” making the demand for more spectrum necessary. Meanwhile, the House Energy and Commerce Subcommittee on Communications and Technology is planning to hold a hearing on the D-block spectrum issue in mid-May. No final date has been set.
- Cybersecurity. The House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade held a hearing on “The Threat of Data Theft to American Consumers,” which examined risks related to data breaches, ongoing investigations and industry data security practices, among other issues. Chair Mary Bono Mack (R-CA) indicated she was not pleased that Sony and Epsilon declined to testify following the companies’ recent data breaches. Bono Mack said she plans to introduce legislation soon that would safeguard consumer information, provide a national standard for data security and ensure that consumers are promptly notified of a breach. Meanwhile, House Energy and Commerce Committee Ranking Member Henry Waxman (D-CA) urged the Subcommittee to pass bipartisan data security legislation similar to the measure the full committee passed during the last Congress. In response to a question from Subcommittee Ranking Member G.K. Butterfield (D-NC), David Vladeck, the Federal Trade Commission’s (FTC) Director of Consumer Protection, said that last year’s bipartisan bill, H.R. 2221, was a good framework because it would set data security standards, require customer notification of a security breach and impose civil penalties. To improve that legislation, however, Vladeck called on the Subcommittee to include language noting that a breach relating to geo-location data also should trigger disclosure to consumers. Responding to a question from Bono-Mack about how quickly companies should notify customers of a security breach, Vladeck said as soon as possible, but two things delay notification: the need to determine what, and to what extent, data has been made accessible; and the need to repair the security breach. Representative Cliff Stearns (R-FL), former Chairman of the Subcommittee, spoke about his data breach legislation from the 109th Congress and the need for Congress to provide reasonable security measures for consumers. Representative Marsha Blackburn (R-TN) said that companies must do more to protect their online presence, and industry should move forward with best practices. In response to a question from Representative John Dingell (D-MI), Vladeck said that should the FTC be granted rulemaking authority, the agency would need to conduct rulemaking pursuant to the Administrative Procedures Act.
- AT&T/T-Mobile Merger. As we noted last week, AT&T has filed its application with the Department of Justice for review of the T-Mobile merger and filed its FCC application on April 21, 2011. In its Public Interest Statement to the FCC, AT&T stated that the proposed merger will not only avoid harm to consumers, but will result in significant benefits, including greater efficiencies in the use of existing spectrum. AT&T focused on broadband deployment and stated that resulting spectrum efficiencies would pave the way for 4G LTE deployment to more than 97 percent of Americans. AT&T emphasized that while competition in the wireless industry is on the rise, T-Mobile’s position as an independent competitor is tenuous. The company has lost market share for the past two years and lacks clear means to acquire much-needed spectrum, the Statement noted. Some public interest groups, however, argue that the benefits described by AT&T can be achieved in the absence of a merger and that an AT&T/T-Mobile combination would negatively impact consumers. Sprint also has been vocal in its opposition to the merger. The FCC announced its pleading cycle for comments: Petitions to Deny are due May 31, 2011; Oppositions are due June 10, 2011 and Replies are due June 20, 2011.
- Hearings. The following hearings have been scheduled:
- May 10, 2011: Senate Judiciary Privacy, Technology and the Law Subcommittee hearing titled, “Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones and Your Privacy.”
- May 11, 2011: Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing titled, "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?"
- May 12, 2011: Senate Commerce, Science and Transportation Committee hearing titled, “Economic Ramifications of Cyber Threats and Vulnerabilities to the Private Sector.”
- May 13, 2011: House Energy and Commerce Communications and Technology Subcommittee hearing titled, “FCC Process Reform.” This hearing was originally scheduled for May 3, 2011.
- May 26, 2011, TBD – House Judiciary Committee Review of the Proposed AT&T/T-Mobile Merger.
May 12 FCC Open Meeting. The FCC’s next open meeting on May 12 will address the following items:
- A Notice of Proposed Rulemaking to extend the outage reporting requirements for interconnected VoIP and broadband service providers to promote the resiliency of America’s 9-1-1 system and the country’s critical communications infrastructure;
- As part of the Commission's regulatory reform efforts, a Notice of Proposed Rulemaking to remove outdated regulations governing the exchange of telephone traffic between U.S. and foreign carriers that are no longer necessary to protect consumers and competition, while strengthening protections against anticompetitive practices by foreign carriers and;
- As part of the Commission's Data Innovation Initiative, a First Report and Order and Further Notice of Proposed Rulemaking to eliminate unnecessary reporting requirements regarding international telephone service, while streamlining and modernizing.
- Transportation Reauthorization. The House and Senate authorizing committees continue working on SAFETEA-LU reauthorization legislation. The House is working towards a potential release timeline around the Memorial Day recess, and the Senate Environment and Public Works Committee is likely to follow. The key news this week was the circulation of a complete draft of the Obama Administration’s reauthorization proposal in legislative form. A partial draft was circulated last week as reported in our previous Capital Thinking report. The Administration’s draft text made national news in calling for the study of a Vehicle Miles Travelled (VMT) tax, which has long been viewed as a successor to the gasoline tax as cars become more fuel efficient and the current financing mechanism becomes more and more unsustainable. However, in light of the widespread voter frustration and concern over high gas prices, the Administration (which has from the outset shunned talk of a VMT) distanced itself sharply from the draft proposal to tax drivers for every mile they drive, calling it an early, unofficial draft and stating that it did not reflect the input or the views of senior Administration officials. However, the level of detail in the draft, including authorized funding levels that match the President’s FY2012 Budget Proposal, suggest the bill is relatively developed and has been through some OMB review. While there may be some question as to provenance of its contents, there is no doubt that the release of this proposal is indicative of the continued forward movement on the SAFETEA-LU reauthorization effort.