Capital Thinking Update - October 3, 2011

    View Authors 3 October 2011

    General Legislative

    On Monday, October 3, the House will meet at 2:00 p.m. for legislative business to consider the following bills on suspension of the rules: H.R. 686, the “Utah National Guard Readiness Act;” H.R. 765, the “Ski Area Recreational Opportunity Enhancement Act of 2011;” H.R. 489, a bill to clarify the jurisdiction of the Secretary of the Interior with respect to the C.C. Cragin Dam and Reservoir; H.R. 473, the “Help to Access Land for the Education of (HALE) Scouts Act;” H.R. 470, the “Hoover Power Allocation Act of 2011;” H.R. 670, a bill to convey certain submerged lands to the Commonwealth of the Northern Mariana Islands; and S.Con.Res. 29, a concurrent resolution authorizing the use of the U.S. Capitol rotunda for a Congressional Gold Medal ceremony honoring Neil A. Armstrong, Edwin E. ‘Buzz’ Aldrin, Jr., Michael Collins and John Herschel Glenn, Jr. The Senate convenes at 2:00 p.m. for a period of morning business. Thereafter, the Senate will resume consideration of the motion to proceed to S. 1619, the “Currency Exchange Rate Oversight Reform Act.”


    Budget, Appropriations

    LEGISLATIVE ACTIVITY

    • FY2012 Continuing Resolutions:
      • First attempt by the House fails. On September 21, the House failed to pass its proposed FY2012 Continuing Resolution (CR), which would have funded the federal government from October 1 through November 18, 2011, using the $1.043 trillion discretionary spending cap enacted in the Budget Control Act of 2011 (BCA) (the $1.043 trillion cap results in a 1.409 percent overall reduction from the current FY2011 discretionary spending level). The bill included $3.65 billion in disaster funding, including $1 billion for FY2011. It also included an offset for the additional FY2011 disaster aid through the rescission of $1.5 billion from the Department of Energy’s (DOE) Advanced Technology Vehicle Manufacturing Program. The CR was defeated in a 195 – 230 vote in which 6 Democrats voted in favor of the measure and 48 conservative Republicans voted against it. In general, Democrats were opposed to a disaster funding offset and what they felt was an inadequate amount of disaster relief. Republicans who voted against the bill wanted additional spending cuts.
      • Revised stopgap succeeds in the House. On September 23, following the failure of its first attempt, the House passed, 219-203, a revised short-term spending bill (HR 2608) that would fund the government through November 18, at an annualized rate of $1.043 trillion. The bill was largely unchanged from the previous CR, except that it added an additional offset for disaster relief funding that would raise approximately $100 million by rescinding money for the loan program at the DOE that supported the defunct solar panel maker Solyndra, bringing the total amount rescinded from the DOE to $1.6 billion.
      • Senate rejects House-passed CR. Following the House’s passage of a CR on September 23, the Senate voted to table the spending bill, in a vote Majority Leader Harry Reid (D-NV) set up to show his party’s forbiddance to allow the measure to move forward. The contention between the two parties remained the offset of disaster relief funding. As noted above, the House-passed CR included an offset for the additional $1 billion in emergency disaster relief funding for FY2011. Democrats continued to oppose offsetting disaster aid, particularly in a year when a record number of states have had to declare disasters from flooding and tornado damage.
      • Senate passes stopgap funding legislation. On September 26, the Senate passed (79-12) a stopgap funding bill (HR 2608) to keep the government running through November 18. The measure did not include the $1 billion in disaster funding for FY2011 or offsets, but did leave the remaining $2.65 billion for FY2012 (to become available on October 1). By removing this disaster aid, the Senate averted a standoff with the House over rescinding the $1.6 billion from the DOE. Although the $1 billion in FY2011 money was removed, $2.65 billion remains for FY2012 and will become available beginning on October 1. The breakthrough came after Federal Emergency Management Agency officials said its Disaster Relief Fund had enough money to move into the new fiscal year. Moments later, the Senate passed by voice vote a “clean,” short-term continuing appropriations bill (HR 2017) to fund the government through October 4, allowing the House time to consider the longer-term spending measure.
      • House moves quickly to pass Senate’s “clean” CR through October 4. The House cleared the Senate-passed “clean” stopgap spending bill on September 29 in a pro forma session, which will keep the government operating into October, giving the chamber time to vote this week on a longer-term measure to keep the government running through mid-November. The short-term CR will finance the government through October 4 at the $1.043 trillion level agreed to in the debt limit law (PL 112-25) enacted in August.
      • House expected to consider longer-term Senate-passed CR. Early this week, the House is expected to take up the Senate-passed bill (HR 2608) that would keep the government running through November 18. The House Rules Committee will meet Monday to pave the way for floor consideration of the bill. The full House is expected to take up the measure on Tuesday.
    • Other Senate Appropriations Activity. Other recent appropriations action included Senate Appropriations Committee approval of the Labor-HHS-Education, Transportation-Housing and State-Foreign Operations bills on September 21. This leaves the Interior-Environment bill as the only measure not reported out of the full committee in the Senate. Again, with an omnibus appropriations measure the anticipated final scenario for FY2012, it is unlikely any of these bills will be brought to the Senate floor as stand-alone measures, but rather, they will be used for positioning in the omnibus negotiations.
    • Other House Appropriations Activity. On September 29, House appropriators released a draft FY2012 Labor-HHS-Education (LHHS) Appropriations bill, despite never marking up the measure. Releasing the text, however, offers a chance for House Republicans to set markers for the coming spending debate during conference negotiations with Senate Democrats for work on an omnibus bill. The draft measure provides $153.4 billion in FY2012 discretionary spending for the three departments and related agencies, which represents approximately $4 billion less than the current FY2011 level and the amount provided for in the Senate version. However, it is about $14 billion more than the cap originally set by the House-passed FY 2012 budget resolution for the LHHS bill.


    Education

    LEGISLATIVE ACTIVITY

    • ESEA Reauthorization. On September 29, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Tom Harkin (D-IA) announced plans to introduce a bill overhauling the outdated No Child Left Behind (NCLB) law. The committee will meet October 18 at 2:30 p.m. to mark up the bill, which has not yet been finalized but is expected to include: new standards for college and career readiness; a revised accountability system based on student growth; teacher evaluations based, in part, on student achievement; and additional flexibility for states and local school districts to use federal funding where it is most needed. According to Chairman Harkin, the “legislation … reflects two years of bipartisan hearings, discussions, and negotiations and almost a decade of learning from teachers and parents about the strengths and weaknesses of the No Child Left Behind Act.” He commended Ranking Member Michael Enzi (R-WY) for his continued partnership in this effort.
    • FY 2012 Appropriations. On September 29, House Appropriators released a draft FY2012 Labor-HHS-Education (LHHS) Appropriations bill, despite never having marked up the bill. Releasing the text, however, offers a chance for House Republicans to set markers for the coming spending debate during conference negotiations with Senate Democrats for work on an omnibus bill. The draft measure provides $69 billion for the Department of Education, which is $2.4 billion below FY2011 levels and $11.5 billion below the President’s Budget Request. The bill maintains the maximum Pell Grant award of $5,550, but makes other changes in response to the Pell shortfall, including decreasing lifetime eligibility from 9 years to 6 years, rolling back recent changes to the qualification formula, eliminating eligibility for students who attend school less than half-time, eliminating eligibility for students without a high school diploma or GED and limiting funding to the neediest students. The draft measure also eliminates more than 30 education-related programs which the Committee found “duplicative, inefficient, or unauthorized.” Finally, the bill also includes language blocking the implementation of recently published Department of Education rules related to “gainful employment.”

    REGULATORY ACTIVITY

    • Back to School. President Obama delivered his third annual “Back-to-School” speech on September 28 at Benjamin Banneker High School in Washington, D.C. Throughout the week, he and a number of Administration officials made media and other public appearances, as part of NBC News’ Education Nation summit. As such, education was the focus of the President’s weekly address on September 24, during which he touched on the education aspects of his recent jobs proposal, Race to the Top, reforming NCLB and ESEA flexibility for states.
    • ESEA Flexibility. In a speech on September 23, President Obama announced plans to waive many requirements set forth in the decade-old NCLB law and impose the policy prescriptions his Administration previously advanced to Congress. The President said, “Our kids only get one shot at a decent education. They cannot afford to wait. So, since Congress has been unable to act, I will.” The President also noted his commitment to giving states more flexibility to meet high standards and allowing states, schools and teachers to come up with innovative ways to compete. Specifically, his ESEA flexibility plan focuses on supporting state and local reform efforts in three critical areas:
      • Transitioning to college- and career-ready standards and assessments
      • Developing systems of differentiated recognition, accountability and support
      • Evaluating teacher and principal effectiveness and supporting improvement

        House Education and the Workforce Committee Chairman John Kline (R-MN) criticized the Administration’s waiver plans because they will bypass Congressional efforts and lead to greater confusion among states and schools. While Senator Harkin admitted the waiver plan was the “best temporary solution available,” he also called it “a patchwork approach rather than a national solution.”
    • Teacher Preparation. On September 30, Education Secretary Arne Duncan provided a keynote speech at an event hosted by the independent think tank Education Sector, in which he unveiled the Administration’s proposal to reform and improve teacher preparation programs. Secretary Duncan specifically urged Congress to support teacher training programs by funding the Hawkins Centers for Excellence and authorizing the Presidential Teaching Fellows program.
    • Gainful Employment. In a notice of proposed rulemaking on September 27, the Education Department announced it would ease the approval process for new vocational programs, requiring fewer new programs than are currently required to obtain approval from the Education Department before operating. Colleges creating new programs would need only to obtain the Department’s approval if the programs were “substantially similar to” ones that fail the debt-to-income or loan-repayment tests of the regulation. The 45-day comment period for the proposed rule ends November 14, 2011.


    Energy

    LEGISLATIVE ACTIVITY

    • Congressional Hearings. On Tuesday, the Senate Energy and Natural Resources Committee will receive testimony on the Secretary of Energy Advisory Board’s Shale Gas Production 90-day interim report; the 180-day final report is expected on November 18. On Thursday, the House Natural Resources Committee is tentatively scheduled to hold a hearing on the recently-released Joint Investigation Team report into the Deepwater Horizon disaster, but had not yet gotten a commitment from the Administration to make witnesses available when we went to press. (That hearing had previously been scheduled on September 23.)

    REGULATORY ACTIVITY

    • BOEMRE Reorganization. The Bureau of Ocean Energy Management, Regulation and Enforcement will officially split into two separate bureaus – the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) – effective October 1, completing the reorganization of the former Minerals Management Service into three new bureaus (including the previously separated Office of Natural Resources Revenue). The direct final rule is expected to be noticed in the Federal Register on October 18. Interior Secretary Ken Salazar had previously announced that current BOEMRE Director Michael Bromwich will lead the new BSEE and current BOEMRE Senior Advisor Tommy Beaudreau will lead the new BOEM.


    Financial Services

    LEGISLATIVE ACTIVITY

    • Senate Confirms Nomination of Insurance Member on FSOC. On Monday, September 26, the Senate unanimously confirmed the nomination of Roy Woodall to be the independent member of the Financial Stability Oversight Council with Insurance Expertise. Mr. Woodall will serve a six-year term as a voting member on the Council. The Senate Banking, Housing and Urban Affairs Committee voted to endorse Mr. Woodall’s nomination on September 8.   
    • Joint Economic Committee to Discuss Economic Outlook. On Monday, October 3, the Joint Economic Committee will hold a hearing to discuss the U.S. economic outlook. Federal Reserve Chairman Ben Bernanke is the sole hearing witness. At the hearing, Chairman Bernanke is expected to defend the Federal Reserve’s most recent efforts to reduce unemployment and support economic recovery.
    • House Financial Services Subcommittee to Address Transparency at the Federal Reserve. On Tuesday, October 4, the House Financial Services Subcommittee on Domestic Monetary Policy and Technology will hold a hearing to assess transparency at the Federal Reserve. The hearing is titled, “Audit the Fed: Dodd-Frank, QE3, and Federal Reserve Transparency,” and will focus on the results of the Government Accountability Office audit of the Federal Reserve’s emergency lending programs. Witnesses expected to testify at the hearing include Orice Williams Brown, Director of Financial Markets and Community Investment; Robert Auerbach, author of “Deception and Abuse at the Fed;” and Mark Calabria, Director of Financial Regulation Studies at the Cato Institute.
    • Senate Banking Subcommittee to Address Household Debt. On Tuesday, October 4, the Senate Banking, Housing, and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection will hold a hearing titled, “Consumer Protection and Middle Class Wealth Building in an Age of Growing Household Debt.” Witnesses in attendance at the hearing will include Mr. Atif Mian, Associate Professor of Economics and Finance at the University of California, Berkeley; Ms. Katherine Porter, Professor of Law at the University of California-Irvine School of Law; Mr. Robert Lawless, Professor of Law at the University of Illinois College of Law; Mr. Ray Boshara, Senior Advisor to the Federal Reserve Bank of St. Louis; Mr. Douglas Fecher, President and CEO of Wright-Patterson Federal Credit Union; Ms. Ida Rademacher, Vice President for Policy and Research at the Corporation for Enterprise Development; and Ms. Susan Weinstock, Project Director, Safe Checking in the Electronic Age, The Pew Charitable Trusts.
    • Senate Banking Subcommittee to Address the Budget Deficit. On Wednesday, October 5, the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy will hold a hearing on the economic implications of the federal budget deficit. Some of the witnesses that will testify at the hearing include Ms. Maya MacGuineas, President, Center for a Responsible Federal Budget; Mr. Roger Altman, Chairman, Evercore Partners; and Mr. William Johnstone, President and Chief Executive Officer, Davidson Companies.
    • House Financial Services Subcommittee to Discuss Housing Crisis. On Thursday, October 6, the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity will hold a hearing on the Obama Administration’s response to the housing crisis.
    • House and Senate to Review FSOC Annual Report. On Thursday, October 6, the Senate Banking, Housing, and Urban Affairs Committee and the House Financial Services Committee will hold hearings to review the First Annual Report of the Financial Stability Oversight Council. The only witness who will testify in both hearings is the Honorable Timothy Geithner, Secretary of the Department of Treasury.
    • Senate Homeland Security and Government Affairs Committee to Discuss Speculation. On Thursday, October 6, the Senate Committee on Homeland Security and Government Affairs, Permanent Subcommittee on Investigations will hold a hearing on excessive speculation and compliance with the Dodd-Frank Act. The hearing will focus on speculation in the commodities markets and implementation of the Dodd-Frank Act’s provisions on speculative position limits for futures, options and swap contracts for oil and other commodities. Hearing witnesses will include Gary Gensler, Chairman of the Commodity Futures Trading Commission, as well as other experts on the issue.

    REGULATORY ACTIVITY

    • CFTC Delays Open Meeting. The CFTC has delayed until October 18 an open meeting previously scheduled for October 4. Although the Commission had not officially released an agenda for the October 4 open meeting, the agency was expected to take up position limits and a rulemaking governing clearinghouses. The position limits rulemaking and is considered to be one of the most contentious rulemakings under the Dodd-Frank Act. The Commission had already previously delayed the meeting once.

    Health Care

    LEGISLATIVE ACTIVITY

    • House GOP Labor-HHS Bill. As the House cleared a short term extension to fund the government through October 4, House Republicans released draft text of the 2012 Labor- Health and Human Services spending bill. The bill takes the predictable whack at health care reform funding, including a provision to halt all funding for implementation until ninety days after the ACA challenges are resolved. The bill would provide $153.4 billion in discretionary spending, up from the $139.2 billion originally proposed in the budget resolution, but $4 billion less than current spending. Provisions include an overall $290 million reduction to CMS, cutting $15 million for the Independent Payment Advisory Board, blocking funding to the Center for Consumer Information and Insurance Oversight and zeroing out funding for Title X. The bill does, however, include a proposal matching the Senate bill to provide $268 million for children’s hospital graduate medical education and increases NIH funding by $1 billion.

    REGULATORY ACTIVITY

    • Regulations. HHS announced that they will extend the comment period for two proposed regulations, including the proposed rule to implement the Affordable Insurance Exchanges (“Exchanges”) and the proposed rule to implement standards for States related to reinsurance and risk adjustment, and for health insurance issuers related to reinsurance, risk corridors, and risk adjustment. The comment period for both proposed rules, which would have ended on September 28, 2011, is extended to October 31, 2011.
      CMS (through the Innovation Center) also released a solicitation for health care payer organizations to participate in the Comprehensive Primary Care initiative (CPC), a multi-payer model designed to improve primary care. Interested organizations must submit a nonbinding letter of intent (LOI) by November 15, 2011 and an electronic application by January 17, 2012.

    OTHER HEALTH NEWS

    • ACA Lawsuits. Movement on lawsuits challenging elements of the Affordable Care Act picked up steam this week with the National Federation of Independent Businesses and twenty-six states filing separate petitions to the U.S. Supreme Court seeking a review of the August 12 decision of the Eleventh Circuit Court of Appeals that found the individual mandate unconstitutional. This follows a petition filed in July to review a decision in the Sixth Circuit Court of Appeals that upheld the constitutionality of the individual mandate. The Obama Administration has also weighed in, with the Justice Department asking the Supreme Court to hear the appeal of the Eleventh Circuit Court decision. The mounting pressure increases the likelihood that the Supreme Court will hear the case in its next term, with a potential ruling during the 2012 elections.
    • MedPAC Meeting. The Medicare Payment and Advisory Commission will hold a public meeting Thursday and Friday, October 6-7 at the Ronald Reagan Building. The agenda includes panels on moving forward from the sustainable growth rate, coordinating care for dual eligible beneficiaries through the PACE program, quality care in rural areas, improving payment and care under Medicare’s inpatient psychiatric benefit, reforming Medicare’s benefit design and potentially preventable hospital admissions and emergency department visits. Comments from stakeholders may also be submitted for consideration.
    • IOM Report on Geographic Adjustments in Medicare. The Institutes of Medicine released the second edition of the phase one report on Geographic Adjustment Factors in Medicare Payment which expands on recommendations made in an earlier report for improving how the Medicare program calculates geographic practice cost indexes. The report makes four additional recommendations on methods to set the work adjustment, calculate labor expenses in the practice expense, and use cost share weights.


    International, Defense, Homeland Security

    • Trade and Currency Developments. In the next several days, the White House may submit the Free Trade Agreements (FTAs) with Colombia, Panama and South Korea for Congressional consideration. If so, the Obama Administration will have decided that the House Republican Leadership has provided sufficient assurances that renewal of the Trade Adjustment Assistance (TAA) program will pass the House and be sent to the Senate in conjunction with the FTAs. The TAA vote may have to occur first to spur the Administration to submit the agreements and start the clock on their consideration under “fast-track.” In that case, the House Leadership likely would enact a rule conditioning enrollment of TAA on the subsequent passage of the FTAs. Once the House sends the TAA/FTA package to the Senate, the largest remaining hurdle simply will be scheduling floor time, since the Senate is expected to pass TAA and all three FTAs with ample margins. Meanwhile, Senate Majority Leader Harry Reid (D-NV) plans to bring up S. 1619, legislation intended to threaten sanctions against allegedly “misaligned” currencies, such as China’s. The White House has not yet taken a position on the bill, introduced by Senator Sherrod Brown (D-OH), despite past opposition to similar legislation.
    • Pakistan/Afghanistan Developments. Admiral Mike Mullen, the retiring Chairman of the Joint Chiefs of Staff, ruffled feathers within the U.S. national security community and the Pakistani Government on his way out the door this past week. Admiral Mullen told the Senate Armed Services Committee that the extremist Haqqani Network is “a veritable arm” of Pakistan’s Inter-Services Intelligence (ISI). Therefore, according to Admiral Mullen, the ISI is “exporting violence” against U.S. interests in Afghanistan, given the recent attacks in Kabul launched from Haqqani-run safe havens in Pakistan. Admiral Mullen qualified his remarks in a subsequent interview, adding that “elements” of the ISI are to blame and that “we enjoy in ways a very positive relationship in some areas….” Nevertheless, other Senior Administration officials believe the Admiral overstated the ISI-Haqqani connection. In fact, White House Spokesman Jay Carney said so publicly on Wednesday, noting Admiral Mullen’s comments were “…not language that I would use.”  The White House and Foggy Bottom are concerned about the ensuing fallout in Pakistan. Indeed, General Ashfaq Kayani and the rest of the Pakistani military leadership have been subject to renewed domestic criticism for their cooperation with U.S. forces, given Admiral Mullen’s public rebuke of Pakistan’s intelligence service.
    • Libya Developments. Following a visit to Tripoli on Thursday, four early Senate Republican supporters of the NATO campaign against former Libyan strongman Muammar Gaddhafi provided some bipartisan cover for the Obama Administration’s Libya policy. Senator Mark Kirk (R-IL), Senator Marco Rubio (R-FL), Senator Lindsey Graham (R-SC), and Senator John McCain (R-AZ) met with National Transitional Council (NTC) officials on Thursday. Senator Kirk and Senator McCain proclaimed themselves satisfied with the security of Gaddhafi-era chemical weapons stockpiles and the technocratic, pro-Western orientation of the NTC’s senior leadership. In a notable comment following months of Congressional-Executive friction on Libya, Senator Kirk particularly singled out the White House for its approach, saying, “Unquestioned kudos go to the President and his team.” Many Republican Members, and for that matter many Democratic Members, do not share the interventionist views of the Senate foursome that visited Libya, but perhaps the Libya campaign, as it nears a successful conclusion, will open up just a bit of bipartisan breathing room for the Obama Administration’s foreign policy team.
    • Homeland Security Developments. On September 21, the House Homeland Security Committee (HHSC) marked up and reported out transportation security and border security legislation. The HHSC approved Congresswoman Candace Miller’s (R-MI) land border security bill, H.R. 1299, and Congressman Henry Cuellar’s (D-TX) border security legislation, H.R. 915, which would establish a Border Enforcement Security Task Force program. The Committee also reported out Congresswoman Sheila Jackson Lee’s H.R. 1165, which would establish an Ombudsman at the Transportation Security Administration (TSA).


    Super Committee

    While its members have been in ongoing closed-door meetings, the Super Committee has not held a public hearing since September 13. Although the committee is expected to resume public hearings, none have been announced for this week.


    Tax

    LEGISLATIVE ACTIVITY

    • Tax Reform in Super Committee Deliberations. While the Super Committee met twice last week in extended closed-door sessions, no details have emerged on any progress toward an agreement. Whether, and to what degree, tax provisions will be included in any final agreement remains an open question. Although the Super Committee continues to be briefed on tax reform options, it remains unlikely that the Super Committee will be able to include fundamental reform in any agreement given the truncated timeframe of its proceedings. Other possible options include setting up a process whereby fundamental reform could be compelled next year, or including various piecemeal tax provisions in a final product and leaving reform to be dealt with at a later point in time. However, disagreements over policy outcomes and revenue targets continue to persist.
    • Tax Reform Hearings. Hearings on fundamental tax reform continue on both the House Ways & Means and Senate Finance Committees. The following hearings are scheduled for next week:

      October 6: House Ways & Means Committee hearing on “Moving from Unemployment Checks to Paychecks: Assessing the President’s Proposals to Help the Long-Term Unemployed”

      October 6: Senate Finance Committee hearing on “Tax Reform Options: Incentives for Homeownership”


    TechComm

    LEGISLATIVE ACTIVITY

    • Spectrum. The House Communications and Technology Subcommittee is expected to mark up spectrum legislation as soon as next week.  Although the Subcommittee has not officially announced the hearing, it could take place on October 4. With Subcommittee Chairman Greg Walden (R-OR) poised to take up a bill, that would allow House Energy and Commerce Committee Chairman Fred Upton (R-MI) to move the measure before October 14, the date when House and Senate committees transmit their recommendations to the Joint Select Committee on Deficit Reduction, where Upton is a member. The Joint Select Committee is charted with reducing the deficit by $1.5 trillion over 10 years. Spectrum legislation, which would give the Federal Communications Commission the authority to hold incentive auctions, could be an attractive vehicle for raising auction proceeds to offset the deficit.

      It is unclear how much Walden’s spectrum measure has changed since his panel last convened a hearing this past summer and floated a discussion draft. But the markup and later work of the full Energy and Commerce Committee will give the Joint Select Committee another approach to spectrum reform to consider. The Senate Commerce Committee earlier this year passed S. 911.
    • Hearings. The House Energy and Commerce Committee, Subcommittee on Commerce, Manufacturing, and Trade, will hold a hearing on October 5 at 9:00 a.m. titled, “Protecting Children’s Privacy in an Electronic World.”

    REGULATORY ACTIVITY

    • FCC Open Meeting. At its September 22 open meeting, the FCC: 1) approved a Notice of Proposed Rulemaking to accelerate the development and deployment of Next Generation 911 (NG911) technology; and 2) heard a report from the Public Safety and Homeland Security Bureau on a cost study on Next Generation 911 network connectivity costs, titled, “A Basis for Public Funding Essential to Bringing a Nationwide Next Generation 911 Network to America’s Communications Users and First Responders.” The report and its findings are available on the FCC website.
    • NTIA. NTIA completed its evaluation of whether it can repurpose the 1755-1850 MHz spectrum band for commercial broadband use and is now working with federal partners to finalize the report. The agency intends to make its evaluation publicly available in coming weeks. NTIA selected the band as a priority for analysis based on a variety of factors, including industry interest and its potential for commercial use within 10 years. NTIA is evaluating bands on a rolling basis in order to respond to the June 28, 2010, Presidential Memorandum that directed the Secretary of Commerce, working through NTIA, to collaborate with the FCC to make available a total of 500 MHz of federal and nonfederal spectrum during the next 10 years for mobile and fixed wireless broadband use.
    • Federal Trade Commission (FTC)/Privacy. On October 11, FTC Chairman Jon Leibowitz will keynote an event at the National Press Club called “Yes, They Really Know It’s You: How the Digital Collection of Personal Information Harms Consumers and Citizens.” The event precedes the release of a privacy study conducted by a numerous groups including the Center for Digital Democracy, Consumers Union, the ACLU, Consumer Federation of America, US PIRG, World Privacy Forum, Consumer Watchdog and Privacy Rights Clearinghouse.

      On September 27, Representatives Joe Barton (R-TX) and Ed Markey (D-MA) wrote Chairman Leibowitz urging the Commission to investigate the use of “supercookies” to track consumer activity online. The letter comes after recent reports that some companies install these files that track a users personal data including previously visited website without permission and that they are harder to detect and remove than regular “cookies.” Representatives Barton and Markey said, “We believe that an investigation of the usage of supercookies would fall within the FTC’s mandate as stipulated in Section 5 of the Federal Trade Commission Act with respect to protecting Americans from ‘unfair and deceptive acts or practices.” 

      On September 15, FTC announced proposed revisions to its rules governing the Children’s Online Privacy Protection Act. The Commission has proposed adding new ways in which parents can consent to the collection of their children’s personal information. It also wants to add to confidentiality and security requirements for personal information handled by service providers or third parties. The FTC also wants to boost its oversight of self-regulatory “safe harbor programs” by requiring annual audits of those programs. The announcement was praised by Representative Markey, who earlier this year introduced amendments to the 1998 law with Representative Barton and Senate Commerce Committee Chairman John Rockefeller.


    Transportation

    LEGISLATIVE ACTIVITY

    • SAFETEA-LU Reauthorization:
      • SAFETEA-LU is extended for six months. On Friday, September 16, the President signed a six-month extension of SAFETEA-LU through March 31, 2012. The extension was “clean,” making no policy changes and continued funding from the Highway Trust Fund (HTF) at current levels. The measure was packaged with an extension of the Federal Aviation Administration (FAA) and included an extension of the 18.4 cent federal gas tax.
      • Transportation enhancements. The Senate was able to move the six-month extension after a deal was struck with Senator Tom Coburn (R-OK) over his proposed amendment to end the requirement that states spend 10 percent of their Surface Transportation Program (STP) funding on “transportation enhancements,” such as bicycle and pedestrian paths.
      • Mica cleared to seek additional revenue. House Republican leaders recently gave House Transportation and Infrastructure Committee Chairman John Mica (R-FL) license to seek up to $100 billion in additional revenue to fund a six-year reauthorization bill at close to current funding levels. This is a departure from Mica’s previous proposal for a six-year bill tied to projected revenues paid into the HTF. This recent action signifies the House Republican leaders’ newfound commitment to passing a reauthorization bill as a part of their jobs agenda. It also increases the likelihood that the House produces a bill over the next few months.
      • Next steps. The House and Senate Committees with jurisdiction over reauthorization will spend the next few months finalizing their bills and grappling with the HTF’s large revenue shortfall. Additionally, the Super Committee will continue their work to identify at least $1.2 trillion in deficit reduction, which could potentially address transportation revenue. Back in July, the Gang of Six proposed spending on infrastructure as a part of their plan to cut the deficit and raise the debt ceiling. The Gang’s plan pressed that “[t]ax reform must be estimated to provide $1 trillion in additional revenue to meet plan targets and generate an additional $133 billion by 2021, without raising the federal gas tax, to ensure improved solvency for the Highway Trust Fund.” The Super Committee may take this recommendation into account as their work continues.
    • Transportation Appropriations. On Wednesday, September 21, the Senate Appropriations Committee passed its Transportation-HUD Appropriations (T/HUD) bill. The House T/HUD Appropriations Subcommittee passed its version of the bill on September 8. Here are the key highlights from the House and Senate bills:
      • Highway Trust Fund Programs. The Senate FY2012 T/HUD bill follows the six-month extension of SAFETEA-LU and sets the obligation limitation at current levels. The House bill was marked-up before the six-month extension was passed and it follows the House Budget Resolution (and House draft reauthorization bill) in cutting HTF obligations by 34-36 percent to stay within long-term projected HTF revenues. However, the House appropriators also said that they would be wiling to increase these funding levels if an authorization was passed at higher levels, which was done by the six-month extension. The final T/HUD appropriations legislation for FY2012 may ultimately track the extension and continue current funding levels for Highway Trust Fund programs.
      • Discretionary Programs. For all discretionary appropriations, the Budget Control Act (the debt ceiling bill) set an overall cap for FY2012 at approximately 1.5 percent below FY2011 enacted levels. For Transportation-HUD appropriations, this ceiling translates into $55 billion in discretionary appropriations for FY2012.
    • New Starts Mass Transit Projects. The Senate FY2012 T/HUD bill provides $1.955 billion for New Starts, in contrast to the House's $1.554 billion level. Furthermore, the Senate bill includes a provision that takes the Bus Rapid Transit (BRT) projects recommended for funding in the President's FY2012 Budget and funds them through a separate account. These New Start BRT projects would still be subject to rigorous New Starts requirements, even though they are funded from a different account. During the week of September 26, the House Appropriations Committee released the Full Committee Draft Report of their FY2012 T/HUD bill. The Report included the Committee’s recommendation for funding the following Capital Investment Grants (a combination of existing Full Funding Grant Agreements (FFGAs) and other projects pending from the President’s FY2012 budget proposal):

      Signed Full Funding Grant Agreements:

      Salt Lake City Weber County, UT    $52,050,000
      Dallas Northwest Southeast LRT, TX   $80,320,000
      New York East Side Access, NY    $113,520,000
      New York Second Avenue Subway, NY   $154,980,000
      Salt Lake City Mid Jordan LRT, UT   $78,890,000
      Seattle University Link, WA    $101,930,000
      Dulles Extension to Wiehle Ave, VA   $94,930,000
      Central Corridor LRT, MN    $98,440,000
      Hartford New Britain Busway, CT    $45,000,000
      Central Florida Commuter Rail, FL   $37,480,000
      RTD Eagle Denver, CO     $198,190,000
      Anticipated Full Funding Grant Agreements:
      Houston North Corridor, TX (10/11)   $94,260,000
      Houston Southeast Corridor, TX (10/11)   $94,260,000
      Salt Lake City Draper LRT, UT (9/11)   $106,180,000
      Small Starts:
      Oakland East Bay, CA     $25,000,000
      San Francisco Van Ness, CA    $30,000,000
      Grand Rapids, Division Avenue BRT, MI   $12,890,000
      Jacksonville JTA BRT North Corridor, FL   $6,440,000
      Mesa, Central Mesa LRT Extension, AZ   $37,500,000
      Fresno Area Express Blackstone, CA   $17,800,000
      El Peso Mesa Corridor, TX    $13,540,000
      King County Park and Ride E Line, WA   $21,630,000
      King County Park and Ride F Line, WA   $15,880,000
    • TIGER. While the House T/HUD bill zeroed out the TIGER program for FY2012, the Senate bill provides $550 million – an increase of $23 million from FY2011.
    • Sustainable Communities Initiative. The House FY2012 T/HUD bill also eliminated funding for the Sustainable Communities Initiative, while the Senate bill provides $90 million in funding.
    • High Speed Rail. Although the House FY2012 T/HUD bill provided no funding for the High Speed Rail (HSR) program, an amendment offered during the Senate Appropriations Committee mark-up restored $100 million in funding for HSR. This amount is primarily a symbolic measure since it barely addresses the actual cost of the program.
      • Comparing the House and Senate FY2012 T/HUD Bills. The House and Senate bills were written to meet the same spending cap, which was just shy of the FY2011 spending level. However, due to accounting measures used for FY2011 that are not available for use in FY2012, the Appropriations Committees were required to make program cuts in order to meet their target. Accordingly, the differing cuts represent differing priorities. For example, the Senate bill increases discretionary transportation, but cuts programs at the Department of Housing and Urban Development (HUD) and rescinds previous HUD appropriations, while the House appropriators cut TIGER, New Starts and Amtrak, and also cut HUD programs to a similar degree, but did not propose rescinding old HUD appropriations.