The House and Senate will be in recess the week of November 21, 2011. The House will meet on Tuesday, November 29, 2011. The Senate will convene at 1:00 p.m. on Monday, November 28, 2011. Following any Leader remarks, the Senate will resume consideration of S.1867, the “Department of Defense Authorization Act.” At 5:00 p.m., the Senate will consider the nomination of Christopher Droney, of Connecticut, to be United States Circuit Judge for the Second Circuit. At approximately 5:30 p.m., the Senate will conduct a roll call vote on confirmation of the Droney nomination.
- First FY2012 Appropriations Minibus Signed into Law. On Thursday, November 17, the House adopted the first FY2012 minibus appropriations conference report by a vote of 298 to 121. Hours later the Senate also approved the measure by a vote of 70 to 30 and the President signed it into law via autopen on Friday, November 18. As previously reported, the package combined the Agriculture, Commerce-Justice-Science, and Transportation-Housing appropriations bills and provides a total of $128 billion in discretionary funding, which adheres to the spending cap established in the Budget Control Act (P.L. 112-25). The measure also includes another FY2012 Continuing Resolution (CR) which will fund all other federal operations through December 16. Over 100 House Republicans voted against the measure because it did not utilize the lower spending cap put forth in the House Budget Resolution (H. Con. Res. 34) and because of concerns over federal mortgage loan provisions.
- Second FY2012 Appropriations Minibus Stalls in the Senate. Movement on the second FY2012 appropriations minibus, slated to combine the Energy and Water (H.R. 2354), Financial Services (S. 1573), and State-Foreign Operations (S. 1601) spending bills, came to a halt last week. Senate Majority Leader Harry Reid (D-NV) was unable to secure unanimous consent to combine the three measures. With amendments amassing and a point of order proposed by Senator Jim DeMint (R-SC), the final procedural roadblock came up over a provision regarding U.S. financial institutions doing business in Cuba. Appropriators will now move towards an omnibus measure including the nine remaining spending bills instead of pushing for smaller packages in an effort to resolve the FY2012 appropriations process by the end of the year. With 101 Republicans voting against the first minibus, House leaders will need to retain Democratic support to pass an omnibus package, especially because there may be broader Republican opposition to the controversial Labor-HHS-Education, State-Foreign Operations, and Interior-Environment bills.
- House Vote on Balanced Budget Amendment. On Friday, November 18, the House rejected a balanced budget amendment (H.J. Res. 2) by a vote of 261 to 165. Despite having 242 co-sponsors, the measure fell short of the two-thirds majority required for passage. In addition to mandating an annual balanced budget, the amendment would have required three-fifths majority of Congress to raise the debt ceiling. The vote was required as part of the Budget Control Act (P.L. 112-25).
- Education Research Programs. On Wednesday, November 16, the House Education and the Workforce Subcommittee on Early Childhood, Elementary, and Secondary Education held a hearing titled “Education Research: Identifying Effective Programs to Support Students and Teachers.” During the hearing, members learned how education research informs curriculum development, teacher training and student achievement. Members also used the hearing to determine how specific research requirements (or lack of requirements) would make education research more effective and applicable to schools and teachers.
- Balanced Budget Amendment. On Thursday, November 17, Democrats and education advocates criticized a joint resolution (H.J. Res. 2) offered by Representative Bob Goodlatte (R-VA) that proposes a balanced budget amendment to the Constitution. Democrats are concerned that the proposed amendment would require significant cuts to key education programs, including the Pell grant program.
- “Race to the Top.” On Wednesday, November 16, the Department of Education announced that the nine round-two finalists could apply for a share of the $200 million made available for round three of the “Race to the Top” program. Those finalists are Arizona, California, Colorado, Illinois, Kentucky, Louisiana, New Jersey, Pennsylvania, and South Carolina. To receive round-three funds, the nine finalists must submit applications detailing how such funding would advance an existing portion of their Race to the Top plan, including their proposals on science, technology, engineering, and mathematics (STEM) education. The Department will offer awards ranging from $12 million to $49 million, depending on state population.
- No Child Left Behind State Waivers. On Tuesday, November 15, Colorado, Florida, Georgia, Indiana, Kentucky, Massachusetts, Minnesota, New Jersey, New Mexico, Oklahoma and Tennessee filed requests for waivers from key provisions of No Child Left Behind (NCLB). These requests were based on local plans to institute college- and career-ready standards, develop accountability systems with a focus on low-performing schools, and create systems for assessing principals and teachers.
Since the President’s announcement in September, 39 states, Washington D.C. and Puerto Rico have signaled their intent to request waivers. States will have additional opportunities to request waivers in mid-February 2012 and later in the spring.
- American Energy and Infrastructure Jobs Act. House Speaker John Boehner (R-OH) and Natural Resources Committee Chairman Doc Hastings (R-WA) will introduce a bill in coming weeks that would “link new American energy production” (in areas such as Alaska’s Arctic National Wildlife Refuge and by incentivizing shale production) to fund “high-priority infrastructure projects” and create more jobs.
- Gulf of Mexico Lease Sales. The Bureau of Ocean Energy Management will accept public comment on proposed oil and gas lease sales in nearly 658,000 OCS acres of the Eastern Planning Area, as announced in the 2012-2017 Oil and Gas Leasing Program. Comments on the call for information are due December 20; comments on the Notice of Intent to prepare an Environmental Impact Statement for two Eastern Gulf sales currently scheduled for 2014 and 2016 are due January 4, 2012. Information collected will be used to identify and evaluate potential areas for development, to determine any possible environmental impacts or conflicts in those areas, and to develop future lease terms and conditions.
State Department’s Bureau of Energy Resources. The newly established bureau will help strengthen U.S. capacity to coordinate energy-related diplomacy issues to better protect national security and economic interests. Among the goals are to “stimulate market forces for transformational policies in alternative energy, electricity, development and reconstruction” to ensure market demand for green technologies and where the U.S. has a competitive advantage.
- Water Supply. On Thursday, December 8, the Senate Committee on Energy and Natural Resources, Subcommittee on Water and Power will hold a hearing concerning opportunities and challenges to address domestic and global water supply issues.
- Proposed Fuel Economy Standards. EPA and The National Highway Traffic Safety Administration have issued a Notice of Proposed Rulemaking (NPRM) for Fuel Economy and Greenhouse Gas emissions regulations for model year 2017-2025 light-duty vehicles (cars and light trucks). The agencies expect the proposal to save Americans more than $1.7 trillion at the pump and an average of more than $8,000 per vehicle by 2025; reduce America’s dependence on oil by an estimated 12 billion barrels and reduce oil consumption by 2.2 million barrels per day by 2025 (enough to offset approximately a quarter of the current level of foreign oil imports); and eliminate six billion metric tons in greenhouse gas emissions over the life of the programs.
The proposal follows President Obama’s announcement in July that the administration and 13 major automakers representing more than 90 percent of all vehicles sold in the U.S. have agreed to build on the first phase of the national vehicle program. There will be an opportunity for the public to comment on the proposal for approximately 60 days. In addition, the U.S. Department of Transportation and EPA plan to hold several public hearings around the country to allow further input.
The National Automobile Dealers Association in a statement Wednesday said: "This regulation gambles that millions of consumers will be able to afford thousands more for generally smaller, more expensive vehicles that may not meet their needs."
- Fuel Economy Guide (2012). EPA and the U.S. Department of Energy (DOE) have released the 2012 Fuel Economy Guide in effort to provide consumers with information to choose more efficient new vehicles. Fuel economy leaders within each vehicle category – from two-seaters to large SUVs – include widely available products such as conventional gasoline models and clean diesels. Each vehicle listing in the guide provides an estimated annual fuel cost. The estimate is calculated based on the vehicle’s miles per gallon (mpg) rating and national estimates for annual mileage and fuel prices. The online version of the guide allows consumers to input their local gasoline prices and typical driving habits to receive a personalized fuel cost estimate.
EPA and DOE will provide online updates of fuel economy information as more 2012 vehicles become available. Printed editions of the guide will be available in dealer showrooms.
- Congress Passes Legislation Raising FHA Loan Limits. On Thursday, November 17, the House and Senate passed legislation H.R. 2112, a mini-bus spending bill that includes approval of higher loan limits for mortgages backed by the Federal Housing Administration. The legislation passed after the House eliminated the provision to approve higher loan limits for mortgages backed by Fannie Mae and Freddie Mac. President Obama signed the legislation on November 18.
- Congress Sets 2012 CFTC Budget at $205 Million. Congress denied the President’s request to raise the CFTC budget for 2012 to $308 million, approving instead a $205 million budget for the agency on November 17. The budget was approved as part of the mini-bus spending bill for the Departments of Agriculture, Justice and Commerce.
- Congress Approves Legislation Requiring FDIC Study. On Thursday, November 17, the Senate approved the legislation, previously passed by the House, to require the FDIC to conduct a study regarding the effect of bank failures, including the effect of loss-sharing agreements on the surviving banks, the treatment of private equity firms, and the incentives for banks to participate in loss-sharing agreements to modify loan terms for borrowers who owe more than their homes are worth.
- Senate Legislation to Help Start-Up Companies. On November 8, Senators Patrick Toomey (R-PA) and Tom Carper (D-DE) introduced bipartisan legislation titled “The Private Company Flexibility and Growth Act.” The bill would raise the SEC shareholder registration threshold from 500 to 2,000 for community banks and small companies, excluding employees from the cap, and would exempt banks from registration.
- Volcker Rule Criticized. House Democrats sent a letter to the Federal Reserve on November 16, claiming that the proposed Volcker rule, which places trading restrictions on financial institutions, is “unnecessarily complex” and contains loopholes that would allow banks to continue engaging in risky activities.
- Government Accountability Office Issues Report on Dodd-Frank Implementation. The Government Accountability Office (GAO) recently issued a report examining the rules published relating to the Dodd-Frank Act up through July 21, 2011. By looking at the agencies’ regulatory analyses, their consultation processes, and some of the tangible impacts of the rules, the GAO concluded that Dodd-Frank implementation needs additional analyses and coordination to avoid duplicative or conflicting rules.
- CFTC Commissioner Unveils New Test to Define High Frequency Trading. On Tuesday, November 15, CFTC Commissioner Scott O’Malia unveiled a seven-part test to define high-frequency trading. According to Commissioner O’Malia, the set of attributes is an effort to advance the debate regarding a rulemaking on high-frequency.
- CFTC Auditing All Clearing Futures Commission Merchants. In the wake of MF Global, the CFTC has announced that it will audit all clearing futures commission merchants to ensure customer funds are properly segregated. Chairman Gensler has recused himself from this matter so CFTC Commissioner Jill Sommers will lead the investigation. The Justice Department and SEC are also investigating the situation, and the FBI has expressed interest in the issue as well.
- FDA Spending Bill. The minibus that includes spending for the Food and Drug Administration (FDA) moved from conference committee to approval by the House and Senate, and stands ready for the Presidents signature. The FDA package includes a $50 million increase from current levels and $2.5 billion in total discretionary funding.
- Senate VA Hearing. The Senate Committee on Veterans’ Affairs has scheduled a hearing on Wednesday, November 30 at 10:00 a.m. entitled “VA Mental Health Care: Addressing Wait Times and Access to Care.”
- Regulations. This week, the Center for Medicare and Medicaid Innovation (the “Innovation Center”) at the Centers for Medicare and Medicaid Services (CMS) announced the Center’s new “Health Care Innovation Challenge” initiative. The $1 billion funding opportunity is intended to support innovative projects that test new methods of delivering high-quality care and reducing costs for those enrolled in Medicare, Medicaid and CHIP. Objectives of the program are to “engage a broad set of innovation partners to identify and test new care delivery and payment models that originate in the field and that produce better care, better health and reduced cost through improvement for identified target populations; identify new models of workforce development and deployment and related training and education that support new models either directly or though new infrastructure activities; and support innovators who can rapidly deploy care improvement models within six months of the award through new ventures or expansion of existing efforts to new populations of patients in conjunction with other public and private sector partners.” Awards will range from $1 to $30 million for a three-year period, and applicants must submit a letter of intent by December 19, 2011 to be eligible for consideration. Applications are due January 27, 2011 and awards will be announced as soon as March 30, 2012.
OTHER HEALTH NEWS
- It’s Official. The United States Supreme Court officially announced that it has granted review of a decision U.S. Court of Appeals for the Eleventh Circuit that ruled against the constitutionality of the individual mandate established by the Affordable Care Act. The challenge was brought by Florida and twenty six states as well as the National Federation of Independent Business (NFIB), and while the court determined that Congress exceeded its powers under the Constitution in establishing an individual mandate, the court also ruled that the constitutionality of the individual mandate could be severed from the rest of the law. The Supreme Court will consider the issue of severability and will hear arguments on mandatory expansion of the Medicaid program as required by the Affordable Care Act.
- IOM Meetings. The Institute of Medicine will host “Alzheimer’s: An Epic Challenge for the Baby Boom Generation” on November 30, 2011 in Philadelphia, PA.
International, Defense, Homeland Security
- Asia and Australia Developments. President Obama’s participation in the Bali summit of the Association of Southeast Asian Nations (ASEAN) caps an intensely busy stretch of Asian-oriented commercial, diplomatic, and security activity for the Administration. On the commercial side, on Thursday, November 17, the White House announced a $35 billion order of Boeing aircraft by Indonesia’s Lion Air, a $2.4 billion Boeing order from Singapore Airlines, and a $1.3 billion sale of General Electric’s jet engines to Indonesia’s Garuda Airlines. Meanwhile, U.S. multinationals watched closely as President Obama encouraged Indian Prime Minister Manmohan Singh to further open India’s retail market. On the diplomatic front, the President announced Secretary of State Hillary Clinton will visit Burma (also known as Myanmar) December 1 and 2, in response to the country’s former military rulers loosening of their iron grip on Burmese society. Burmese opposition leader Aung San Suu Kyi told the President Thursday, November 17 that she supports the United States entering into a limited engagement policy with the country, including the junta-backed government of newly elected President Thein Sein. Suu Kyi’s party plans to re-engage in Burma’s political process itself, challenging Sein’s party in by-elections next month, after Sein modified the country’s election law to allow Suu Kyi’s National League for Democracy to participate. China also has signaled its support for Washington’s new engagement policy with its longtime partner. However, Beijing is reportedly less pleased with President Obama and Australian Prime Minister Julia Gillard’s joint announcement Wednesday that groups of 250 U.S. Marines will rotate through military bases in Australia’s Northern Territory as part of an expanded U.S. military presence in the region. Australia’s conservative opposition and the government of the Philippines, among others, welcomed the decision. Philippines President Benigno Acquino’s government also expressed its appreciation for President Obama’s statement that ASEAN is the “premier area” for discussing the region’s maritime boundary disputes. The Philippines prefers multilateral negotiations regarding the territorial disputes in the South China Sea, whereas the Chinese government has stated that it desires continued bilateral discussions. In another security-related development, the Administration announced that Brunei will purchase 12 Blackhawk helicopters from the U.S.-based Sikorsky Corporation, a division of United Technologies. The procurement, valued at $325 million, is one of the largest ever by Brunei’s military, and it could double in size with a second phase.
- Foreign Assistance Developments. Certain Senate Republicans are resistance calls by many of their GOP House colleagues for wholesale cuts to the U.S. foreign aid budget. Among those advocating for more targeted reductions are Senate State Department/Foreign Operations Appropriations Subcommittee Ranking Member Lindsey Graham (R-SC), fellow Subcommittee Member Dan Coats (R-IN), Senate Foreign Relations Committee Members Bob Corker (R-TN), Marco Rubio (R-FL) and Johnny Isakson (R-GA), and Senate Armed Services Committee Ranking Member John McCain (R-AZ). The joint advocacy for a comprehensive “national security budget” by Secretary Clinton, Secretary of Defense Leon Panetta, and Chairman of the Joint Chiefs of Staff Martin Dempsey appears to have had some impact, as select fiscal hawks in the Senate have resisted disproportionate cuts to the Department of State’s budget. The initial result was bipartisan support in the Senate Appropriations Committee for a State Department/Foreign Operations bill that would appropriate $5 billion more than its House counterpart. Although subsequent minibus, omnibus, and Super Committee discussions mean the foreign assistance budget remains highly vulnerable to further cuts, a core group of Senate Republicans remain open to forming common cause with their Democratic colleagues to mitigate those reductions.
After over two months of increasingly intense Super Committee deliberations, there still appear to be three potential outcomes as the Committee nears its deadline of November 23: (1) the Super Committee could fail to reach a deal, leading to a $1.2 trillion sequestration beginning in 2013; (2) the Super Committee, spurred on by House and Senate Leadership, could reach a $1.2 trillion or greater deal; or (3) the Leaders and Super Committee could agree on a “mini-deal” that does not reach the $1.2 trillion goal, triggering a more manageable sequestration process. By most accounts, however, Super Committee discussions have not progressed materially, and dynamics will have to change considerably if a deal is to be reached. While both sides continue to discuss proposals that range in magnitude from several hundred billion to over one trillion in projected savings, major disagreements persist with respect to tax increases and entitlement spending cuts.
Last week, Republicans floated a proposal that included approximately $500 billion in revenue raisers over 10 years and, in so doing, for the first time opened the door to including revenue derived from tax increases for deficit reduction. The plan would instruct the Congressional tax writing committees to report legislation next year that lowers individual rates across-the-board (marginal rates would range from 8 to 28 percent), while maintaining current policy on capital gains and dividends (15 percent rate) and estate tax ($5 million exemption; 35 percent rate). As measured against a current policy baseline, the proposal would raise roughly $250 billion for purposes of deficit reduction by significantly limiting itemized deductions. The proposal also targeted a 25 percent corporate tax rate, to be paid for by reducing tax expenditures on the corporate side of the Tax Code. The plan also included an additional $240 billion of revenue to be raised through the sale of government assets, the imposition of certain user fees and changes in the manner tax brackets are indexed for inflation (linking to a “chained CPI” formula). In exchange for putting these revenue raisers on the table, the Republican proposal requested approximately $750 billion in spending cuts over 10 years, to be comprised of further discretionary spending cuts, Medicare and Medicaid spending reductions, various mandatory spending cuts including agriculture subsidies and moving to a “chained CPI” for purposes of calculating social security cost of living adjustments.
Super Committee Democrats dismissed the Republicans’ plan on the grounds that they believe it would make the Tax Code less progressive and, when scored against a current law baseline, would increase the deficit by several trillion dollars while preserving the Bush tax cuts for upper-income earners. Several Committee Democrats have offered their own proposal that would create a process for tax reform, beginning with a $350 billion “down payment” in miscellaneous revenue provisions, likely including various corporate tax increases. “Fast track” tax reform would compel an additional $650 billion, for a total of $1 trillion of net tax increases for deficit reduction and, should Congress fail to enact legislation by January 1, 2013 that meets the tax reform framework, a trigger creating $650 billion in new revenue would go into effect (approximately half from a limitation on itemized deductions for upper-income taxpayers and half from a deficit reduction charge on income tax liability before application of tax credits). The Democrats' plan also included $1 trillion in spending cuts-- $400 billion of which would come from entitlement programs -- but would not take effect until either tax reform is enacted or the tax trigger is implemented. Super Committee Republicans have summarily rejected this proposal.
The Super Committee must vote on a proposal by November 23 to maintain “fast track” procedures of any legislation they report. Whether the Super Committee holds a markup next week in part depends on the Committee reaching a deal, though it is possible that the Committee could still meet even if no deal is reached in order to consider competing proposals.
- Tax Reform in Super Committee Deliberations. Significant partisan divide over policy outcomes and revenue targets continues to persist. Whether, and to what degree, tax provisions will be included in any final agreement is still unknown. It remains highly unlikely that the Super Committee will be able to actually include fundamental reform in its final proposal. Short of this, possible options include establishing a process, like that included in recent proposals by Super Committee members, whereby fundamental reform could be compelled next year, and/or including various piecemeal tax provisions in the final legislative product while leaving fundamental reform to be dealt with at a later point in time.
- Withholding Law Sent to Obama’s Desk. On November 16, following a House vote (422-0) on a Senate-modified version, Congress sent to the President’s desk legislation (H.R. 674) repealing a three percent withholding tax on the payments private companies derive from government contracts, which absent such legislation would take effect in 2013. The President has indicated strong support for the legislation and is expected to sign it into law.
The legislation is fully paid for by replacing the Modified Adjusted Gross Income (MAGI) calculation for determining eligibility for premium subsidies for the health insurance exchanges included in the Affordable Care Act and for determining Medicaid eligibility beginning in 2014, with the income formula used in all other federal programs. The bill includes an amendment by Senator John Tester (D-MT) that provides a variety of benefits to veterans and provides employers with tax credits of up to $9,600 for hiring unemployed veterans. While originally viewed as a tax compliance measure, the three percent withholding is now considered a policy that would disrupt cash flow to private business and consequently threaten jobs, thereby reducing economic growth.
- Ways and Means Holds Hearing on Camp Proposal for International Tax Reform. On November 18, the House Ways and Means Subcommittee on Select Revenue Measures held a hearing to examine Chairman Dave Camp's (R-MI) international tax reform discussion draft. The hearing focused on policy choices confronting lawmakers as they consider transitioning to a territorial tax system while lowering the corporate tax rate.
- Tax Reform Hearings Next Week. No hearings are scheduled for next week, as Congress is in recess.
The Senate Finance Committee postponed a hearing scheduled in October on Tax Reform Options: Capital Investment and Manufacturing. It is possible that this hearing will be rescheduled later this year. The previously announced witnesses for that hearing were: Dr. Jane Gravelle, Senior Specialist in Economic Policy, Congressional Research Service, Library of Congress; Douglas Holtz-Eakin, Ph.D., President, American Action Forum; Dr. Robert D. Atkinson, President, Information Technology and Innovation Foundation; Dr. J.D. Foster, Norman B. Ture Senior Fellow, Economics of Fiscal Policy, The Heritage Foundation; Dr. Michelle Hanlon, Associate Professor of Accounting, Massachusetts Institute of Technology, Sloan School of Management.
- IRS Signals Year-End Release of FATCA Proposed Rules. On November 17, an IRS official indicated that proposed regulations under the Foreign Account Tax Compliance Act (FATCA) should be issued toward the end of the year. The law imposes broad requirements on foreign financial institutions to report U.S.-owned accounts to the IRS. Along with regulations, the IRS is expected to issue a draft agreement for foreign financial institutions to voluntarily begin reporting.
- FCC Process Reform. On November 16, the House Communications and Technology Subcommittee approved two bills aimed at increasing “transparency, predictability, and consistency” at the FCC. Sponsored by Subcommittee Chairman Greg Walden (R-OR), the two bills are part of a larger Republican opposition to certain FCC actions, including passage of the net neutrality rules and the agency’s review of the merger of Comcast, NBC and Universal, which was approved with a series of conditions.
Together, the bills would:
- Require the Commission to identify a market failure, consumer harm, or regulatory barriers to investment before adopting economically significant rules. After identifying the issue, the FCC would need to demonstrate that the regulation’s benefits outweigh its costs.
- Require the Commission to establish performance measures for all program activities.
- Apply to the Commission the regulatory reform principles that President Obama endorsed in his January 2011 Executive Order.
H.R. 3309, the “Federal Communications Commission Process Reform Act,” passed on a party line vote of 14-9. Subcommittee Chairman Walden noted that the legislation would bring increased transparency and accountability to the Commission. However, Subcommittee Ranking Member Anna Eshoo (D-CA) expressed concern that the bill’s provisions would lead to a less effective FCC. Meanwhile, Energy and Commerce Committee Ranking Member Henry Waxman (D-CA) voiced concern that H.R. 3309 “alters fundamentally the FCC’s ability to review transactions to ensure that they are in the public interest.” By comparison, H.R. 3310, the Federal Communications Commission Consolidated Reporting Act of 2011 passed by voice vote. Ranking Member Eshoo noted the need for streamlining reports, but cautioned the subcommittee to consider the full ramifications before moving forward. Of the bill, Ranking Member Waxman said with some clarifications, “it should be possible to craft a bipartisan bill that streamlines FCC reporting requirements and that could be reported unanimously out of Committee and sail through the House.”
In conjunction with the legislative effort to reform FCC processes, the House Energy and Commerce Committee this week released a report on The Workload of the Federal Communications Commission based on FCC data. The report includes data on the number of complaints, petitions, applications, and other items pending before the agency, its work meeting internal deadlines and deadlines established by statute, and its work reviewing transactions under the Communications Act of 1934.
- Stop Online Piracy Act. On November 16, the House Judiciary Committee held hearing on H.R. 3261, the Stop Online Piracy Act. The bill, sponsored by Committee Chairman Lamar Smith (R-TX), aims to improve the protection of intellectual property online and combat the distribution of counterfeit goods online. In particular, the bill gives the Attorney General authority to seek injunctions against foreign – or “rogue” – web sites that steal and sell American “innovations” and products; increases criminal penalties for individuals who traffic in counterfeit medicine and military goods; and improves coordination between American IP enforcement agencies. The bill also provides a process by which individual rights holders may seek limited injunctive relief against rogue websites – both foreign and domestic. The bill has bipartisan support from Committee members, including Intellectual Property Subcommittee Chairman Bob Goodlatte (R-VA), Ranking Member John Conyers (D-MI) and Representative Howard Berman (D-CA).
Four of the five witnesses at the hearing support the bill, including Register of Copyrights Maria Pallante, as well as representatives from Pfizer, the Motion Picture Association of America, MasterCard and the AFL-CIO – describing the bill as “a measured approach” to the problem of online privacy and characterizing criticism of the bill as hurting the internet as “overstated.”
The sole opposition witness was Google policy counsel, Katherine Oyama, who said that the bill was overbroad and that “as long as there is money to be made pushing pirated and counterfeit products, tech-savvy criminals will find ways to sell these products online. And ordering ISPs and search engines to ‘disappear’ websites will not change this fundamental reality.” Her argument fell on deaf ears with Chairman Smith who criticized Google in his opening statement – “[G]iven Google’s record, their objection to authorizing a court order to a search engine to not steer consumers to foreign rogue sites is more easily understood.” Google recently reached a settlement with the Department of Justice, agreeing to forfeit $500 million it earned by selling ads to Canadian online pharmacies that illegally imported drugs into the United States.
Not all Committee members supported the bill or the process. Representatives Dan Lungren (R-CA) and Sheila Jackson-Lee (D-TX) expressed concern that, because of the provisions that would block certain domain names, the bill was not referred to the House Homeland Security Committee. House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) and Zoe Lofgren (D-CA) also told the panel that they are working on an alternative measure that would potentially create an avenue for copyright holders to seek injunctions against infringing sites through the International Trade Commission and would interrupt the flow of money to these rogue sites, saying it was a model “that actually will work – follow the money.”
On the other side of Capitol Hill, Senator Ron Wyden (D-OR) continues to say that he will block the Senate’s version of online anti-piracy legislation - S. 968, the PROTECT IP Act – if it comes to the floor for consideration. Senate proponents are now waiting for the House to act.
- Migration to Narrowband. Representative Steve Rothman (D-NJ) introduced a bill, H.R. 3430, on Wednesday, November 16 that would direct the FCC to extend the final deadline by two years for private land mobile radio licensees to migrate to narrowband technology. In December 2010, the FCC announced that all public safety and business industrial land mobile radio systems operating in the 150-512 MHz radio bands must cease operating using 25 kHz efficiency technology on January 1, 2013, and begin operating using narrowband technology, at least 12.5 MHz efficiency. H.R. 3430 would extend that deadline to January 1, 2015. The bill has been referred to the House Energy and Commerce Committee.
- FCC Open Meeting. The FCC has released a tentative agenda for its November 30 open meeting, when the Commission will:
- Consider a Report and Order that allocates spectrum in the 413-457 MHz band and adopts service and technical rules to allow the use of new types of implanted medical devices that use functional electric stimulation to, among other things, restore sensation, mobility, and function to paralyzed limbs and organs; and
- Receive a report from staff on the Commission’s recent broadband adoption efforts, including a “first-of its-kind national effort to address the barriers to broadband adoption, digital literacy and the employment skills gap.”
- House Action: On Thursday, November 17, House Speaker Boehner, House Transportation and Infrastructure Committee Chairman John Mica, and other House Republican leaders held a press conference to announce that an "American Energy and Infrastructure Jobs Act", to be introduced with bill number H.R. 7, will be moved through the House by the end of 2011 and will include a five-year surface transportation reauthorization bill combined with legislation expanding offshore oil and gas drilling, expanded oil shale production, and Arctic National Wildlife Reserve (ANWR) oil exploration. The energy provisions, most notably ANWR, have proved very controversial in the past and there are already signs of significant opposition in the House and Senate, mostly but not exclusively from Democrats.
- Timeline: Speaker Boehner did not specify the timeline for introduction and mark-up, announcing only that the House would be moving forward in the "weeks ahead" and that he was hopeful that the House will be able to pass the bill before the end of the year. There has been speculation that the Transportation and Infrastructure Committee may mark-up as early as the week of December 5, but Chairman Mica said only that he would hold a mark-up "in the coming weeks."
- Spending Level: Neither Speaker Boehner nor Chairman Mica confirmed the spending level, with a press release stating only that "the measure provides responsible infrastructure funding." When asked how much the energy legislation will raise for transportation, Speaker Boehner replied that not all of the details were available yet. Reports have noted that the CBO scoring of the energy bills indicates that, on their own, they will generate far less revenue than needed to make up for the shortfall in the Highway Trust Fund and maintain current funding levels over a five year period.
- Senate Action: As reported in last week’s Capital Thinking, on Wednesday, November 9, the Senate Environment and Public Works Committee (EPW) marked up a bi-partisan two-year highway reauthorization bill known as “MAP 21.” The Committee did not formally report the bill because the Senate Finance Committee has yet to identify the $12 billion in additional revenue needed to maintain current funding levels for two-years. At the mark-up, Senate Finance Committee Chairman Max Baucus (D-MT) said that he is continuing to work to find the additional revenue and pledged that he would do so, and that it would be bi-partisan. Indications are that the Banking Committee is making preparations to mark-up the transit title in early December, as early as the first week.
- Transportation Appropriations. On Thursday November 17, Congress passed the minibus appropriations act including the Transportation-HUD bill. Here are the key highlights:
- Federal-aid Highways (limitation on obligations): $39.1 billion, the annualized level of contract authority under the latest extension of SAFETEA-LU ($1.96 billion less than FY2011).
- Federal-aid Highways (Emergency Relief): $1.662 billion from the general fund for emergency relief highways (compared to $0 in FY2011). Also waives the per-State, per-disaster cap of $100 million for certain disaster events that occurred in FY2011 including Hurricane Irene and flooding of the Missouri River.
- FTA Formula and Bus Grants: $8.361 billion, the amount funded under the latest extension of SAFETEA-LU.
- FTA Capital Investment Grants (New Starts and Small Starts): $1.955 billion ($358 million more than FY2011).
- Full Funding Grant Agreements (FFGAs) - existing: $1.369 billion
- Projects entering into a FFGA in the 2012 calendar year: $510 million
- Small Starts: $35.481 million
- BRT Projects: The bill shifts funding for BRT Capital Investments Grants included in the President's FY2012 Budget Proposal to the Bus and Bus Facilities program, freeing those New Starts funds for rail projects.
- New Starts Share of FFGAs: The conference agreement maintains the maximum New Starts share of an FFGA at 60 percent. The FY2012 House T/HUD bill included a provision that would have limited the New Starts share to 50 percent.
- National Infrastructure Investments (TIGER): $500 million ($27 million less than FY2011).
- High Speed Rail: No funds are provided for High Speed Rail.
- Grants for Energy Efficiency and Greenhouse Gas Reductions (TIGGER): No funds were provided for TIGGER (compared to $49.9 million in FY2011).