Capital Thinking ~ June 3, 2013
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
335
On Slideshare
335
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
1
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Patton Boggs Capital Thinking Weekly Update | June 3, 20131 of 20June 3, 2013
  • 2. Patton Boggs Capital Thinking Weekly Update | June 3, 20132 of 20Capital Thinking: ContentsGeneral Legislative .......................................................................................................3Agriculture and Food....................................................................................................3Budget and Appropriations..........................................................................................4Cybersecurity................................................................................................................4Defense..........................................................................................................................5Education ......................................................................................................................7Energy ...........................................................................................................................7Environment..................................................................................................................9Financial Services.......................................................................................................10Health Care..................................................................................................................11Homeland Security......................................................................................................13Immigration .................................................................................................................15International ................................................................................................................16Tax ...............................................................................................................................19
  • 3. Patton Boggs Capital Thinking Weekly Update | June 3, 20133 of 20General LegislativeThe Senate will convene today, Monday, June 3, at 2:00 pm and begin a period of morningbusiness. Thereafter, the Senate will resume consideration of S. 954, the Farm Bill, provided thatalfalfa amendment S.A. 987, offered by Senator Jerry Moran (R-KS) and food aid amendment S.A.1079, offered by Senator Chris Coons (D-DE) will be in order, and that the Senate will proceed tovotes on those amendments at 5:30 pm.Today, Monday, June 3, the House will meet at 2:00 pm for legislative business, and votes will bepostponed until 6:30 pm. Legislation Considered Under Suspension of the Rules will include: (1)H.R. 1919 – Safeguarding America’s Pharmaceuticals Act of 2013, as amended; (2) S. 622 – AnimalDrug and Animal Generic Drug User Fee Reauthorization Act of 2013; (3) H.R. 126 – Corolla WildHorses Protection Act; (4) H.R. 1206 – Permanent Electronic Duck Stamp Act of 2013; and (5) H.R.885 – San Antonio Missions National Historic Park Boundary Expansion Act of 2013.On Tuesday, June 4 and Wednesday, June 5, the House will meet at 10:00 am for morning hourand 12:00 pm for legislative business. On Thursday, June 6, the House will meet at 9:00 am forlegislative business, and last votes are expected no later than 3:00 pm. On Friday, June 7, novotes are expected. Also on the House calendar for the week are (1) H.R. 671 – Ruth Moore Act of2013 (Suspension, 40 minutes of debate); (2) H.R. 2216 – Military Construction and VeteransAffairs, and Related Agencies Appropriations Act, 2014 (Subject to a Rule); and (3) H.R. 2217 –Department of Homeland Security Appropriations Act, 2014 (Subject to a Rule).Agriculture and FoodLEGISLATIVE ACTIVITY Farm Bill Timeline. The Senate will resume consideration of the Farm Bill (S. 954) today, Monday,June 3. Two roll call votes are scheduled at 5:30 pm: S.A. 987 (alfalfa crop insurance program) andS.A. 1079 (food aid). Senate Majority Leader Harry Reid (D-NV), Senate Minority Leader MitchMcConnell (R-KY), Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), and SenateAgriculture Committee Ranking Member Thad Cochran (R-MS) are expected to unveil an amendmentpackage today or tomorrow, Tuesday, June 4. A final vote on the Farm Bill could likely take placelater in the week.The House is expected to consider the Farm Bill on the floor the week of June 17.Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Dana Weekes, at 202-457-6307, or dweekes@pattonboggs.com.
  • 4. Patton Boggs Capital Thinking Weekly Update | June 3, 20134 of 20Budget and AppropriationsLEGISLATIVE ACTIVITY House Appropriations Action. On Friday, May 31, House Majority Leader Eric Cantor (R-VA)released the House legislative agenda for June which includes consideration of four FY 2014appropriations bills: Military Construction-Veterans Affairs (MilCon-VA); Homeland Security; Defense;and Agriculture. The MilCon-VA (H.R. 2216) and Homeland Security (H.R. 2217) bills are both on theHouse schedule this week, while the Agriculture and Defense Appropriations Subcommittees willmark up their bills on Wednesday, June 5. Anticipated Senate Appropriations Action. Senate Appropriations Chairwoman Barbara Mikulski(D-MD) intends to release her committee’s 302(b) allocations in the coming weeks and anticipates amarkup of the Military Construction-Veterans Affairs bill in mid-June. In the meantime, theappropriations subcommittees will continue FY 2014 budget request hearings this week. Sequestration Amendments. Following the recent emergency legislation that enabled the FederalAviation Administration (FAA) to transfer funding within its programs in order to avert furloughs andprevent the closure of 149 contract towers, lawmakers have been calling for Congress to provideother agencies similar flexibility. Particularly in the Senate, a number of measures have beenproposed that would give federal agencies varying degrees of flexibility to allocate funds acrossbudget accounts. None of these proposals have secured sufficient bipartisan support to move forwardas a stand-alone bill, in part because the White House and Democrats continue to push for a fullsequestration replacement package. However, we anticipate that floor amendments will be offeredduring House and Senate consideration of FY 2014 appropriations bills.Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Pam Welsh, at 202-457-6493 or pwelsh@pattonboggs.com.CybersecurityLEGISLATIVE ACTIVITY House Homeland Security Committee Legislation. The House Homeland Security Committee isdrafting legislation that will codify the cybersecurity roles and responsibilities of the Department ofHomeland Security (DHS) as well as address other key aspects of cyber. This is the last of the cyberbills the House is expected to move through the chamber to complete its list of cybersecuritypriorities. The committee is currently working with stakeholders to finalize its draft bill and is expected
  • 5. Patton Boggs Capital Thinking Weekly Update | June 3, 20135 of 20to introduce the bill in the coming weeks. At the same time, the Senate continues to have discussionswith stakeholders and is expected to begin its legislative efforts in earnest in the next few weeks aswell. Supply Chain Working Group. The House Energy & Commerce Subcommittee on Communicationsand Technology recently launched a bipartisan working group focused on securing the componentsthat make up the communications supply chain. The group will be co-chaired by House IntelligenceCommittee Chairman Mike Rogers (R-MI) and Subcommittee Ranking Member Anna Eshoo (D-CA).The working group will be holding stakeholder outreach meetings to gain an understanding of whatsteps can be taken to protect the U.S. telecommunications infrastructure from cyber threats.EXECUTIVE BRANCH ACTIVITY U.S. and China Discussions on Cybersecurity. President Barack Obama is scheduled to meet withChina’s President Xi Jinping this week in California to discuss cybersecurity, among other issues.Last week, a Department of Defense (DOD) Science Board report was leaked to the media thatdetailed how Chinese hackers had compromised the blueprints for a large number of critical weaponssystems. While the Pentagon has defended the capabilities of its weapons systems and has takensteps to protect its resources from cyber criminals, cybersecurity is still a major concern of the ObamaAdministration and is likely to be discussed as part of the meetings with President Xi. NIST Cybersecurity Framework. Last week, the National Institute of Standards and Technology(NIST) held its second workshop to discuss the “Cybersecurity Framework” that it was tasked withdeveloping as part of the President’s February Executive Order (EO). NIST will be holding two moreworkshops during the weeks of July 15 and September 9 to gather feedback from stakeholders on thestandards for critical infrastructure that will be included in the framework. According to the EO, a draftversion of the framework is due in October and a final version should be released by February 2014.Contact InformationFor additional insights about likely policy developments, please feel free to contact the authors of thissection: Norma Krayem, 202-457-5206 or nkrayem@pattonboggs.com; or Amy Davenport, at 202-457-6528 or adavenport@pattonboggs.com.DefenseEXECUTIVE AND LEGISLATIVE BRANCH ACTIVITY Pentagon Budget. This Wednesday, June 5, the House Armed Services Committee will mark up itsversion of the National Defense Authorization Act (H.R. 1960). That same day, the House DefenseAppropriations Subcommittee will also mark up, in a closed session, a spending bill for theDepartment of Defense (DOD). It is expected the House will largely ignore the spending limitsenacted by the Budget Control Act of 2011, which requires across the board spending cuts.
  • 6. Patton Boggs Capital Thinking Weekly Update | June 3, 20136 of 20While top military officials have been stressing the escalating damage from sequestration toreadiness, such as fighter jets grounded for lack of training and maintenance and ships at anchor,lawmakers appear willing to wait and watch on whether to rescind the sequester. Currently,Republicans take the position they will only trade mandatory cuts to additional discretionary cuts andcontinue to stand firm against raising taxes. Democrats maintain any deal with the Republicans has tobe 50 percent cuts and 50 percent revenue. Cybersecurity. Last week the media widely reported on a DOD Science Board report that highlightedChina’s purported access to data from Pentagon weapons programs and other defense technologies.The Chairman of the Joint Chiefs of Staff is poised to approve new rules empowering the U.S. militaryto counter direct cyber attacks. The new cyber rules are expected to be in the Standing Rules ofEngagement (SROE) and will allow the U.S. military to respond quickly and defensively to cyberattacks, without having to get approval from the National Security Council. New Proposal on Contractor Executive Compensation Cap. According to a statement lastThursday, May 30 by Joe Jordan, Administrator of the Office of Federal Procurement Policy (OFPP),the statutory formula governing the amount of executive compensation government contractors canclaim as reimbursable costs would be repealed under legislation the administration will propose thisweek. In lieu of the statutory formula, the proposal would tie the reimbursement cap to the presidentsannual salary, currently $400,000. The new cap would apply to all civilian and defense cost-reimbursement contracts. In accordance with the statutory formula, the compensation cap wasincreased to $763,000 for FY 2011 and is set to be increased to more than $950,000 for FY 2012. This Week’s Hearings:o Tuesday, June 4: The Senate Armed Services Committee will hold an oversight hearing titled“Pending Legislation Regarding Sexual Assaults in the Military.”o Wednesday, June 5: The House Armed Services Committee will hold the full Committee markupof its National Defense Authorization Act (H.R. 1960). It is open to the public and streamed liveonline.o Wednesday, June 5: The House Appropriations Subcommittee on Defense will mark up aspending measure for DOD. This hearing is closed to the public.Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Stacy Swanson, at 202-457-5627 or sswanson@pattonboggs.com.
  • 7. Patton Boggs Capital Thinking Weekly Update | June 3, 20137 of 20EducationLEGISLATIVE ACTIVITY Student Loan Interest Rates. As the Senate continues consideration of the Farm Bill, there may bediscussion on an amendment (S.A. 976) that would extend the 3.4 percent fixed student loan interestrate for two years, although consideration of this issue will likely take place separate from the FarmBill. This week, the Senate will likely vote on two student loan interest rate proposals. The first bill(identical to the Farm Bill amendment) would freeze the 3.4 percent student loan interest rate for twoyears in order to force Congress to address the issue during the reauthorization of the HigherEducation Act. The second bill is the House-passed student loan interest rate bill that would create amarket-based variable interest rate and peg it to the 10-year Treasury note. To pass, each bill willlikely require a 60-vote threshold. However, given the stark differences in addressing this issue, bothbills will likely fail, which would place pressure on the Senators to work on a bipartisan solution beforethe July 1 deadline. This Week’s Hearing:o Tuesday, June 4: The House Science, Space and Technology Committee will hold a hearingtitled "STEM (Science, Technology, Engineering and Math) Education: The AdministrationsProposed Re-Organization." Department officials, including John Holdren, the director of theOffice of Science and Technology Policy, will testify about the Administration’s proposedreorganization and consolidation of STEM education programs in the FY 2014 Budget.Contact InformationFor additional insights about likely policy developments, please feel free to contact the authors of thissection: Amy Budner Smith, at 202.457.6154 or abudnersmith@pattonboggs.com; and Dana Weekes, at202-457-6307 or dweekes@pattonboggs.com.EnergyLEGISLATIVE ACTIVITY This Week’s Hearings:o Tuesday, June 4: The Senate Energy and Natural Resources Committee will explore ways toimprove federal wildland fire management.o Thursday, June 6: The Senate Energy and Natural Resources Committee will review theprograms and activities of the U.S. Department of the Interior (DOI).
  • 8. Patton Boggs Capital Thinking Weekly Update | June 3, 20138 of 20o Thursday, June 6: The House Natural Resources Committee will hold a legislative hearing on theOffshore Energy and Jobs Act (H.R. __), draft legislation released by Chairman Doc Hastings (R-WA).EXECUTIVE BRANCH ACTIVITY FERC. Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff has submitted hisresignation letter to President Barack Obama. He will remain at FERC until his replacement isconfirmed by the Senate. Hydraulic Fracturing (HF). DOI has issued its revised proposed rule to regulate HF activities onfederal and tribal lands. Comments will be accepted through June 24, unless pressure from Congressand other stakeholders leads to an extension, potentially of an additional 90 days. A final rule isexpected after DOI considers this latest round of public comments; a target date for finalization is notyet certain. Nuclear. The Nuclear Regulatory Commission’s (NRC) Advisory Committee on Reactor Safeguardswill meet on Wednesday, June 5 to Friday, June 7 in Rockville, Maryland. NRC will also be issuingthe final License Renewal Interim Staff Guidance this week for Updated Aging Management Criteriafor Reactor Vessel Internal Components for Pressurized Water Reactors. NPR-A. The Bureau of Land Management will issue a call for nominations and comments, due bymid-July, on tracts for oil and gas leasing for the 2013 National Petroleum Reserve – Alaska leasesale. USEITI. The U.S. Extractive Industries Transparency Initiative (EITI) Multi-Stakeholder GroupAdvisory Committee will next meet on June 12-13 to discuss the legal context for revenuedisclosures, consideration of sub-national payments, and discussions on scope and materiality; it willalso meet on July 23-24 to discuss criteria and components for the U.S. draft candidacy applicationfor EITI. Pipelines. The FERC is updating regulations governing the form, composition, and filing of rates andcharges by interstate oil pipelines for transportation in interstate commerce. The Pipeline andHazardous Materials Safety Administration (PHMSA) will host a pipeline safety workshop on June 19-20 in Richardson, Texas to discuss ways to improve public awareness outreach. PHMSA will alsohost an August 7 public workshop on a proposed pipeline “Integrity Verification Process,” to presentinformation on several new mandates and to seek comment from interested stakeholders.Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Tanya DeRivi, at 202-457-6504 or tderivi@pattonboggs.com.
  • 9. Patton Boggs Capital Thinking Weekly Update | June 3, 20139 of 20EnvironmentLEGISLATIVE ACTIVITY This Week’s Hearings:o Tuesday, June 4: The Senate Committee on Energy and Natural Resources will hold a fullcommittee hearing intended to identify ways to improve federal wildland fire management.o Tuesday, June 4: The House Committee on Natural Resources will hold a full committee hearingto address species conservation concerning tribal, state and local stewardship in conjunction withfederal “sue-and-settle” practices.o Wednesday, June 5: The House Committee on Oversight and Government Reform,Subcommittee on Energy Policy, Health Care and Entitlements, will hold a hearing to examine therole of the U.S. Environmental Protection Agency (EPA) in the renewable fuel standard. Thespecific focus will be on fuel blends.o Wednesday, June 5: The House Committee on Science, Space and Technology will hold a jointsubcommittee hearing by the Subcommittee on Research and Subcommittee on Technologyconcerning federal efforts to reduce the impacts of windstorms. Witnesses will include Dr. ErnstKiesling, Research Faculty, National Wind Institute, Texas Tech University; Ms. Debra Ballen,General Counsel and Senior Vice President, Public Policy, Insurance Institute for Business &Home Safety; Dr. David Prevatt, Assistant Professor, Department of Civil and CoastalEngineering, University of Florida.o Thursday, June 6: The Senate Committee on Energy and Natural Resources will hold a fullcommittee hearing to review programs and activities of the U.S. Department of the Interior (DOI).REGULATORY ACTIVITY Gulf Coast Restoration. The U.S Department of Commerce, the lead agency for the Gulf CoastEcosystem Restoration Council, has issued its “Draft Initial Comprehensive Plan: Restoring the GulfCoast’s Ecosystem and Economy” and accompanying “Draft Programmatic EnvironmentalAssessment” for public comment. The Draft Plan provides a framework to implement a region-widerestoration effort in order to restore the Gulf Coast region following the Deepwater Horizon oil spill.The Council is also hosting a series of public engagement sessions in each of the five impacted GulfStates from Monday, June 3 to June 17 for public input on the Draft Plan. The Draft Initial Plan andthe Draft Programmatic Environmental Assessment documents, as well as details concerning theJune public engagement sessions can be accessed here. Comments are due June 24. Public Water Systems. The following information pertains to states, local and tribal governments,private and municipal owners or operators of public water systems. EPA has released a final rule
  • 10. Patton Boggs Capital Thinking Weekly Update | June 3, 201310 of 20approving alternative testing methods for use in measuring the levels of contaminants in drinkingwater and compliance with national primary drinking water regulations. EPA is making 84 additionalmethods available for analyzing drinking water samples. The EPA intends for this to be an expeditedapproach in order to provide public water systems, laboratories and primacy agencies with moretimely access to new measurement techniques and greater flexibility in the selection of analyticalmethods. The new methods, along with previously expedited methods in 40 CFR Part 141 AppendixA to Subpart C and on EPA’s drinking water methods, are listed here. Motor Vehicles. The EPA is extending the public comment period to July 1, which previously was toend on June 13, for its proposed rule concerning “Control of Air Pollution From Motor Vehicles: Tier 3Motor Vehicle Emission and Fuel Standards.”Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Sarah Vilms, at 202-457-5248 or svilms@pattonboggs.com.Financial ServicesLEGISLATIVE ACTIVITY This Week’s Hearings:o Tuesday, June 4: The Senate Banking Committee will hold a hearing titled “Iran Sanctions:Ensuring Robust Enforcement, and Assessing Next Steps.”o Wednesday, June 5: The Senate Banking Subcommittee on Housing, Transportation, andCommunity Development will hold a hearing titled “Long Term Sustainability for ReverseMortgages: HECM’s Impact on the Mutual Mortgage Insurance Fund.”o Wednesday, June 5: The Senate Banking Subcommittee on Economic Development will hold ahearing titled “State of the American Dream: Economic Policy and the Future of the MiddleClass.”o Wednesday, June 5: The House Financial Services Subcommittee on Capital Markets andGovernment Sponsored Enterprises will hold a hearing titled “Examining the Market Power andImpact of Proxy Advisory Firms.”o Thursday, June 6: The House Small Business Subcommittee on Investigations, Oversight, andRegulations will hold a hearing titled “Financing Americas Small Businesses: Innovative Ideas forRaising Capital.”
  • 11. Patton Boggs Capital Thinking Weekly Update | June 3, 201311 of 20EXECUTIVE BRANCH ACTIVITY President Announces Two SEC Nominations. President Obama has nominated Kara Stein andMichael Piwowar to serve as Commissioners of the Securities and Exchange Commission (SEC).Both of the President’s nominees are veteran Hill staffers that are very well liked and respected. KaraStein, currently legal counsel and senior policy adviser to Sen. Jack Reed (D-RI), would fillCommissioner Elisse Walter’s seat, set to be vacated by the end of this year. Michael Piwowar, chiefeconomist for the Senate Banking Committee since 2009, would replace Commission Troy Paredes,whose term ends in June. This Week’s Meetings:o Tuesday, June 4: The Federal Deposit Insurance Corporation (FDIC) will meet in open session toconsider a final rule on the Definition of “Predominantly Engaged in Activities that are Financial inNature or Incidental Thereto” § 201(b).o Wednesday, June 5: The SEC will hold an open meeting to consider a recommendation topropose amendments to certain rules under the Investment Company Act that govern theoperation of money market funds and related amendments to Form PF under the InvestmentAdvisers Act.Contact InformationFor additional insights about likely policy developments, please feel free to contact the authors of thissection: Caroline Cauley, at 202-457-6625 or ccauley@pattonboggs.com; Mara Giorgio, at 202-457-6522or mgiorgio@pattonboggs.com; and Matt Kulkin, at 202-457-6056 or mkulkin@pattonboggs.com.Health CareLEGISLATIVE ACTIVITY E&C SGR Reform Draft and Hearing. House Energy & Commerce Committee staff unveiled a draftlegislative framework for repeal of the Sustainable Growth Rate (SGR) formula. The proposedframework would repeal and replace the SGR and provide an undefined period of stable payments. Itwould also include the development of quality measures for competency assessments – theSecretary would develop cohorts of providers and develop sets of measures or “competencies” withineach cohort. The measures would be published before being proposed in notice and commentrulemaking. The framework also includes an opt-out option for providers to be paid under alternativepayment models. Under this option, the Secretary would publish a list of approved models in whichproviders could participate and would develop a process by which stakeholders could propose newpayment models for consideration. The framework leaves blank any discussion of funding specifics.The proposal leaves open many issues; interested parties may submit feedback on the proposed
  • 12. Patton Boggs Capital Thinking Weekly Update | June 3, 201312 of 20framework by June 10 to SGRComments@mail.house.gov. The committee will hold a hearing on theproposal on Wednesday, June 5 (see This Week’s Hearings below). Chairman Upton intends to passa bill out of Committee, and possibly through the full House, by the end of the summer. This Week’s Hearings:o Tuesday, June 4: The House Committee on Education and the Workforce will hold a hearing titled"Reviewing the Presidents FY 2014 Budget Proposal for the U.S. Department of Health andHuman Services." The Honorable Kathleen Sebelius, Secretary of HHS, will testify.o Wednesday, June 5: The House Energy & Commerce Committee will hold a hearing on Medicarephysician payment overhaul legislation.REGULATORY ACTIVITY Wellness Programs Final Rule. The Internal Revenue Service (IRS), U.S. Department of Labor(DOL), and U.S. Department of Health and Human Services (HHS) released the Incentives forNondiscriminatory Wellness Programs in Group Health Plans Final Rule. This document containsfinal regulations, consistent with the Affordable Care Act (ACA), regarding nondiscriminatory wellnessprograms in group health coverage. Specifically, these final regulations increase the maximumpermissible reward under a health-contingent wellness program offered in connection with a grouphealth plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost ofcoverage. The final regulations further increase the maximum permissible reward to 50 percent forwellness programs designed to prevent or reduce tobacco use. These regulations also include otherclarifications regarding the reasonable design of health-contingent wellness programs and thereasonable alternatives they must offer in order to avoid prohibited discrimination.OTHER HEALTH NEWS Medicare Trustees Report. The Medicare Trustees released a report on Friday, May 31 thatpredicted that the Medicare trust fund will be solvent until 2026, which is two years beyond what thetrustees projected last year. The report found lower-than-expected growth of Medicare spending in2012, lower projected spending in many categories, and reflected an expectation that the federalhealth care law will reduce growth in Medicare Advantage spending more than previously anticipated. MedPAC Appointments. The Government Accountability Office (GAO) made its appointments to theMedicare Payment Advisory Commission (MedPAC). Jon Christianson, PhD, was appointed as a newmember, along with reappointments of Scott Armstrong, Katherine Baicker, PhD, Herb Kuhn, MaryNaylor, PhD, RN, and Cori Uccello, FSA. Medicaid State Readiness Report. The Urban Institute and Robert Wood Johnson Foundationreleased a report on state readiness for Medicaid expansion. The brief examines how eight states arealtering their Medicaid managed care programs as they move into the home stretch of implementingthe ACA. In particular, the report draws on the experiences of eight states (Maryland, Michigan,Minnesota, New Mexico, New York, Oregon, Rhode Island, and Virginia) participating in the RobertWood Johnson Foundation’s State Health Reform Assistance Network and the related health reform
  • 13. Patton Boggs Capital Thinking Weekly Update | June 3, 201313 of 20implementation monitoring and tracking project.The report describes how these states are revamping their Medicaid managed care programs andhow they are preparing the programs to provide coverage to new enrollees under health reform, andlook into health plan and health care stakeholders’ perceptions of the changes and preparations. Thereport concludes that states with Medicaid managed care programs seem well-positioned to handlethe ACA Medicaid expansion. OIG Health Reports. The Office of Inspector General (OIG) released two reports last Tuesday, May28. In the first report, “Improvements are Needed To Ensure Provider Enumeration and MedicareEnrollment Data Are Accurate, Complete, and Consistent,” OIG states that inaccurate, incomplete,and inconsistent provider data coupled with insufficient oversight place the integrity of the Medicareprogram at risk and present vulnerabilities in all health care programs. OIG recommends that theCenters for Medicare & Medicaid Services (CMS) should require Medicare Administrative Contractorsto implement program integrity safeguards for Medicare provider enrollment as established in theProgram Integrity Manual. Additionally, CMS should require more verification of National Plan &Provider Enumeration System (NPPES) enumeration and Provider Enrollment, Chain, and OwnershipSystem (PECOS) enrollment data. Finally, CMS should detect and correct inaccurate and incompleteprovider enumeration and enrollment data for new and established records.In the second report, “Medicare Could Save Millions by Implementing a Hospital Transfer PaymentPolicy for Early Discharges to Hospice Care,” OIG estimated that Medicare could have saved $602.5million for calendar years 2009 and 2010 by applying a hospital transfer payment policy for earlydischarges to hospice care. CSHSC Report on Geographic Variations in Medical Spending. The Center for Studying HealthSystem Change released a report on geographic variations in medical spending. The report suggeststhat at least 75 to 85 percent of the difference between high-cost and low-cost areas can beexplained by taking patient health into consideration.Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Eugenia Edwards, at 202-457-5622 or eedwards@pattonboggs.com.Homeland SecurityLEGISLATIVE ACTIVITY Budget and Appropriations. On May 22, the House Appropriations Committee approved the FY2014 Homeland Security appropriations bill, which provides $38.9 billion in discretionary funding tothe U.S. Department of Homeland Security (DHS) overall: $35 million below the president’s request,$618 million below the fiscal 2013 enacted amount and $981 million above the current post-
  • 14. Patton Boggs Capital Thinking Weekly Update | June 3, 201314 of 20sequestration level. The bill provides $817 million less in infrastructure protection that the presidentrequested to penalize DHS for failing to implement chemical security programs in the wake of theTexas fertilizer plant explosion. The Senate Appropriations Committee has not yet moved forward onthe FY 2014 DHS bill. Comprehensive Immigration Reform. On May 21, the Senate Judiciary Committee approved by avote of 13-5 the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744),which included a number of amendments to address some of the Republicans’ concerns aboutadequate border security. Senate Majority Leader Harry Reid (D-NV) expects to begin floor debatethe week of Monday, June 10 and plans to hold a vote on the bill by the end of June. Efforts continueto secure the 60 votes needed to move ahead with the bill. The bipartisan Gang of Eight in the Househas reached an agreement in principle on a comprehensive bill, but there are still hurdles to reachinga final deal. In the meantime, House Judiciary Committee Chairman Robert Goodlatte (R-VA) isplanning to hold hearings on portions of the immigration bill in his committee. This Week’s Hearings:o Tuesday, June 4: The Senate Judiciary Subcommittee on Crime, Terrorism, Homeland Security,and Investigations will hold an oversight hearing titled “The Department of Justice’s Handling ofKnown or Suspected Terrorists Admitted into the Federal Witness Security Program.”o Tuesday, June 4: The House Homeland Security Subcommittee on Emergency Preparedness,Response, and Communications will hold a hearing titled “Emergency MGMT 2.0: How#SocialMedia & New Tech are Transforming Preparedness, Response, & Recovery #Disasters#Part 1 #PrivateSector.”o To Be Determined: The House Appropriations Subcommittee on Homeland Security hasannounced that it will reschedule the March 6 hearing on the U.S. Customs and Border ProtectionBudget and Management, but it has not yet finalized a date. U.S. Customs and Border ProtectionDeputy Commissioner David Aguilar will testify.EXECUTIVE BRANCH ACTIVITY TSA Airport Scanners. Transportation Security Administrator John Pistole has informed HouseHomeland Security Committee Chairman Michael McCaul (R-TX) and Ranking Member BennieThompson (D-MS) that the agency will meet its extended deadline of June 2013 to phase out“backscatter imaging” airport body scanners that many lawmakers believe invade travelers’ privacyand could cause health problems. The agency has already begun installing privacy software thatenables machines to produce only a generic body outline.Contact InformationFor additional insights about likely policy developments, please feel free to contact the authors of thissection: Alexis Early, at 202-457-5105 or aearly@pattonboggs.com; and Norma Krayem, at 202-457-5206 or nkrayem@pattonboggs.com.
  • 15. Patton Boggs Capital Thinking Weekly Update | June 3, 201315 of 20ImmigrationLEGISLATIVE ACTIVITY Senate. The Senate Judiciary Committee voted the Border Security, Economic Opportunity, andImmigration Modernization Act (S. 744) out of committee on May 22 by a vote of 13-5. SenateMajority Leader Harry Reid (D-NV) expects to open Senate floor debate the week of Monday, June10, and plans to hold a vote three weeks later before the July 4 congressional recess. Senators areexpected to offer a number of amendments, and the bipartisan Gang of Eight is working to addressconcerns and block amendments that either party would consider a “poison pill.” The upper chambercontinues to disagree over border security measures, the path to legalization, and high-skilled visareform versus protections for U.S. workers. Sen. Orrin Hatch (R-UT) – a member of the SenateJudiciary Committee and Ranking Member of the Senate Finance Committee – continues to expressconcerns that certain taxation provisions fall under Finance Committee jurisdiction, and he may notsupport final passage until that issue is addressed. House of Representatives. The Gang of Eight members of the House of Representatives continueto report that they have reached a deal “in principle” for a bipartisan bill, but doubts remain because abill has not yet been introduced. They have not yet resolved whether undocumented immigrantsseeking legalization will be required to purchase health insurance on the open market while theyawait permanent status. Current law does not allow them to purchase it under the benefits orexchanges of the Affordable Care Act (ACA), but it does not require them to purchase insuranceprivately. Republicans are seeking to add that requirement to the immigration bill to ensure thatimmigrants prove they will not become a public charge once legalized. Energy & CommerceCommittee Ranking Member Henry Waxman (D-CA) is opposing this effort to require theundocumented to buy insurance at what Democrats fear will be unaffordable market rates. Democratsargue this provision would violate deals they made to pass the ACA and would create an impossiblehurdle to legalization for many undocumented immigrants.However, House Judiciary Committee Chairman Robert Goodlatte (R-VA) has followed through onhis plans to take up piecemeal bills that address discrete aspects of the immigration system. Hiscommittee already held hearings on the Agricultural Guestworker Act (H.R. 1773) to reform thetemporary agricultural worker program and the Legal Workforce Act (H.R. 1772) to implement the E-Verify system and discourage hiring of undocumented immigrants. The committee will likely hold ahearing on the Supporting Knowledge-based Immigrants & Lifting Levels of STEM Visas Act (SKILLSAct, H.R. 2131), co-sponsored by Chairman Goodlatte and committee member Rep. Darrell Issa (R-CA). Speaker John Boehner (R-OH) has indicated that all immigration bills will proceed through theJudiciary Committee, and he has also warned that the House will not simply take up a bill passed inthe Senate.
  • 16. Patton Boggs Capital Thinking Weekly Update | June 3, 201316 of 20Contact InformationFor additional insights about likely policy developments, please feel free to contact the authors of thissection: Alexis Early, at 202-457-5105 or aearly@pattonboggs.com; and Kristin Wells, at 202-457-6422 orkwells@pattonboggs.com.InternationalEXECUTIVE AND LEGISLATIVE BRANCH ACTIVITY Syria. During last week’s Congressional recess, Senator John McCain (R-AZ) slipped over theTurkish border into Syria to meet with the leaders of the Free Syrian Army. Syrian opposition leadersreportedly called on the United States to increase its support by providing heavy weapons, institutinga no-fly zone and employing airstrikes against the Syrian regime and Hezbollah forces that areincreasingly active in Syria. Free Syrian Army Gen. Salem Idris said in an exclusive interview withTHE DAILY BEAST, “We need American help to have change on the ground; we are now in a verycritical situation.”Also last week, tension ratcheted up over possible Russian arms sales to the Assad regime and theEuropean Union’s (EU) recent decision to lift its embargo on arming the rebels in advance of the earlyJune international peace conference in Geneva. The Syrian opposition still has yet to confirm itsattendance. Iran. Last week, the U.S. Government eased its restrictions on the sale of mobile phones and othercommunication devices and software to Iranian citizens. The U.S. Department of the Treasuryjustified the action, saying “The people of Iran should be able to communicate and access informationwithout being subject to reprisals by the government.” The Government of Iran and those individualslisted on the Treasury Department’s “specially designated nationals” remain barred from exportlicenses. This move comes just weeks ahead of the June 14 elections in Iran. This Tuesday, June 4,the Senate Banking, Housing, and Urban Affairs Committee will hold a hearing on this issue (SeeThis Week’s Hearings below.) U.S.-China Heads of State Summit. Later this week, Chinese President Xi Jinping will meet withPresident Obama in California. The agenda is expected to include North Korea, Iran, Syria, the SouthChina Sea, economic relations and cyber security. Last week, the media widely reported on a U.S.Department of Defense Science Board report that highlighted China’s purported access of data onPentagon weapons programs and other defense technologies. Counterterrorism. On May 23, just before the Congressional recess, President Barack Obama gavea national security policy speech at the National Defense University. The President noted that whilethe core of al-Qaeda in Afghanistan and Pakistan is “on the path to defeat”, there has been anemergence of various al Qaeda affiliates. President Obama further defended as effective hisAdministration’s use of “lethal, targeted action against al Qaeda and its associated forces, including
  • 17. Patton Boggs Capital Thinking Weekly Update | June 3, 201317 of 20with remotely piloted aircraft commonly referred to as drones.” He said, “Where foreign governmentscannot or will not effectively stop terrorism in their territory, the primary alternative to targeted lethalaction would be the use of conventional military options.”The President affirmed U.S. targeted strikes are legal but cautioned “America’s legitimate claim ofself-defense cannot be the end of the discussion.” President Obama also shared that hisAdministration has devised a framework that governs U.S. use of force against terrorists, noting theframework was formally codified in a Presidential Policy Guidance he signed the day before thespeech. Terrorism Reports. Last Thursday, May 30, the State Department released its annual 2012 CountryReports on Terrorism. The Report notes a resurgence of Iran’s state sponsorship of terrorism andincreased Hezbollah terrorist activity, which includes both reportedly engaged in a “broad range ofsupport to the Assad [Syria] regime.” While the Report also reflects al-Qaeda leadership losses, itnotes terrorist threats are increasingly decentralized and geographically dispersed. Trade. Last week, the Office of the United States Trade Representative (USTR) and the InteragencyTrade Policy Staff Committee chaired a public hearing on U.S. negotiating objectives for the proposedTransatlantic Trade and Investment Partnership (TTIP) agreement. USTR and other agencies areengaged in a 90-day consultation process regarding the proposed TTIP agreement. This Thursday,June 6, the Senate Finance Committee will hold its confirmation hearing for Michael Froman to be theU.S. Trade Representative.Also last week, the World Organization for Animal Health upgraded the United States’ risk status forbovine spongiform encephalopathy (BSE) to “negligible.” Montana Senator and Senate FinanceCommittee Chairman Max Baucus (D-MT) lauded the news, saying “having the top safety rating willhelp us to tear down the remaining barriers to American beef exports and ensure that our tradingpartners abide by science-based standards.” Western Hemisphere. Vice President Biden wrapped his trip last week to the Western Hemispherewith a final stop in Brazil. He reaffirmed U.S. engagement with its neighbors in the Westernhemisphere. The White House also announced President Obama will host Brazilian President DilmaRousseff for an official State Visit and State Dinner on October 23. Middle East Peace. Despite Secretary Kerry’s recent visit to Israel to discuss the Middle East Peaceprocess, Israel announced additional settlement construction plans after his departure from theregion. The U.S. Government maintains continued construction by Israel in East Jerusalem iscounterproductive to the peace talks. Nominations and Departures. President Obama has announced his intention to nominate thefollowing individuals: James Entwistle to be U.S. Ambassador to Nigeria; Douglas Lute to be the U.S.Permanent Representative on the Council of the North Atlantic Treaty Organization; Victoria Nulandto be Assistant Secretary of State for European and Eurasian Affairs; and Kara Stein to beCommissioner of the Securities and Exchange Commission. This week, the Senate Foreign RelationsCommittee will hold confirmation hearings (See This Week’s Hearings below for specifics.)
  • 18. Patton Boggs Capital Thinking Weekly Update | June 3, 201318 of 20Last week, Chairman of the President’s Council of Economic Advisers Alan Krueger announced hewill return to the private sector. The President has yet to announce his replacement. This Week’s Hearings:o Monday, June 3: The House Foreign Affairs Subcommittee on Global Human Rights will hold ahearing on the anniversary of the 1989 Tiananmen Square tragedy. The Administration is notscheduled to testify.o Tuesday, June 4: The Senate Banking, Housing, and Urban Affairs Committee will hold a hearingtitled “Iran Sanctions – Ensuring Enforcement and Assessing Next Steps.” Scheduled to testifyfrom the Administration are: Under Secretary of the Treasury for Terrorism and FinancialIntelligence David Cohen, Under Secretary of State for Political Affairs Wendy Sherman, andUnder Secretary of Commerce for Industry and Security Eric Hirschhorn.o Tuesday, June 4: The House Foreign Affairs Subcommittee on Global Human Rights will hold ahearing titled “Continuing Repression by the Vietnamese Government.” The Administration is notscheduled to testify.o Wednesday, June 5: The Senate Foreign Relations Committee will hold a confirmation hearingfor Dr. Tulinabo Salama Mushingi to be U.S. Ambassador to Burkina Faso and Catherine Russellto be Ambassador-at-Large for Global Women’s Issues.o Wednesday, June 5: The House Foreign Affairs Subcommittee on the Middle East and NorthAfrica will hold a hearing titled “A Crisis Mismanaged: Obama’s Failed Syria Policy.” TheAdministration is not scheduled to testify.o Wednesday, June 5: The House Foreign Affairs Subcommittee on Asia and the Pacific will hold ahearing titled “U.S. Relations with Vietnam.” Acting Assistant Secretary of State for East Asianand Pacific Affairs Joseph Yun and Deputy Assistant Secretary of State for Democracy, HumanRights and Labor Daniel Baer are scheduled to testify.o Thursday, June 6: The Senate Foreign Relations Committee will hold a hearing titled “LaborIssues in Bangladesh”. Assistant Secretary of State for South and Central Asian Affairs RobertBlake is scheduled to testify.o Thursday, June 6: The Senate Foreign Relations Committee will hold a confirmation hearing forGeoffrey Pyatte to be U.S. Ambassador to Ukraine.o Thursday, June 6: The Senate Finance Committee will hold a confirmation hearing for MichaelFroman to be the U.S. Trade Representative.
  • 19. Patton Boggs Capital Thinking Weekly Update | June 3, 201319 of 20Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Stacy Swanson at 202-457-5627, or sswanson@pattonboggs.com.TaxLEGISLATIVE ACTIVITY Tax Writing Committee Meetings Continue. The Senate Finance Committee has continued itsseries of closed-door committee meetings on tax reform, recently issuing their latest Option Paper onMay 23 – this one on Economic Security. The closed-door meetings are intended to facilitatediscussion among senators in an attempt to find where agreement on policy exists. The sessions areexpected to include discussion on most major policy elements of tax reform.In this latest paper, when reviewing the tax rules that affect the economic security of Americans, thecommittee stated that the aim is to: simplify the taxation of retirement savings and health insurance,minimize the disruption to business practices and employee expectations inherent in any fundamentaltax reform, increase the number of people with enough resources for an adequate standard of livingin retirement, and expand access to health insurance. For a full recap of the issues presented, thecommittee released an option paper available here.The Economic Security Option Paper was the seventh topic covered by the committee. Thecommittee is expected to release ten Option Papers. The final three are likely to come in the next fewweeks. A list of all the Option Papers currently published is available here. CBO Report Says Tax Expenditures Benefiting Wealthiest Americans. Last week theCongressional Budget Office (CBO) released a report that the wealthiest Americans benefit mostfrom ten of the largest tax expenditures. The CBO estimated that more than 50 percent of the largesttax expenditures benefit the top fifth of U.S. households based on income. House Budget Committeeranking member Chris Van Hollen (D-MD) and House Ways and Means ranking member Sandy Levin(D-MI) argued the report confirms that additional revenue to pay down the federal debt and offsetsequestration spending cuts can be obtained by eliminating or limiting tax preferences that benefit thewealthy. This Week’s Hearings:o Tuesday, June 4: The House Ways and Means Committee will hold a hearing with organizationstargeted by the Internal Revenue Service for their personal beliefs.o Wednesday, June 5: The House Ways and Means Committee will hold a hearing on how SocialSecurity protects the benefits of those who cannot protect themselves.
  • 20. Patton Boggs Capital Thinking Weekly Update | June 3, 201320 of 20o Thursday, June 6: The Senate Finance Committee will hold a Hearing to consider the Nominationof Michael Froman to be the U.S. Trade Representative.Contact InformationFor additional insights about likely policy developments, please feel free to contact the author of thissection: Joseph Urso, at 202-457-5349 or jurso@pattonboggs.com.