U.S. Fast-Track Trade Bill Gains Dem Ally As House Vote Looms

The U.S. House of Representatives starts debate over crucial legislation to renew Trade Promotion Authority, with one Democratic lawmaker breaking from his party’s core ranks on Wednesday to back the bill.

Rep. Rick Larsen, D-Wash., is one of just a handful of Democrats in the lower chamber calling for passage of the bill to reinstate TPA, also known as fast-track, which he touted as a benefit both for his constituency and the nation more broadly.

The U.S. Senate comfortably passed the TPA bill on Friday after a fairly even-keeled debate that saw the defeat of a handful of amendments, including a controversial proposal to beef up the legislation’s language on currency manipulation by trading partners.

But the true test has always been in the House; drawn lines on the bill have thus far revealed an uncertain future.

In departing with his fellow Democrats, Larsen said he felt the bill tackled his colleagues’ primary concerns about the White House’s trade agenda, specifically their fears about the effect of massive regional trade pacts on rules governing labor and the environment. (Credit AP).

“In terms of protections for workers and the environment, I strongly believe any trade agreements the U.S. makes with other countries must uphold these core values,” he said. “The 2015 TPA bill puts these values front and center in the administration’s trade negotiations by requiring trading partners to put in place and enforce labor and environmental standards.” (Credit AP).

In exchange for allowing Congress to set negotiating objectives, TPA calls for lawmakers to hold amendment-free votes on trade agreements once they are completed, a provision that has long roiled opponents who feel the process is a subversion of core Democratic values.

But like many of the legislation’s champions, Larsen said that while lawmakers still won’t be able to amend trade agreements on the floor, there are provisions for turning off fast-track protection for deals that aren’t up to snuff in the eyes of Congress. (Credit AP).

“I think there are other mechanisms in the 2015 TPA bill that give Congress necessary oversight to hold the administration accountable,” he said. “TPA contains an off-switch. If Congress is not satisfied the administration is upholding our core values to protect workers and the environment, then members can vote to make an agreement ineligible for TPA.” (Credit AP).

NJ Out-of-Network Consumer Protection Act

The “Out-of-Network Consumer Protection, Transparency, Cost Containment, and Accountability Act.” [(Senator Joseph Vitale (D-19), Assemblyman Gary Schaer (D-36), Assemblyman Troy Singleton (D-7), and Assemblyman Graig Coughlin (D-19)] would implement sweeping legislation to reform various aspects of the New Jersey health care delivery system by: increasing transparency in pricing for health care services; enhancing consumer protections; creating an arbitration system to resolve certain health billing disputes; containing rising costs associated with out-of-network healthcare services; and, measuring success accordingly.

The  legislation would enhance employee rights and protections as patients and save an estimated $1.0 billion according to the sponsors. Others, including the New Jersey Association of Counties, (NJAC) are concerned that the measure may initially increase the costs of health benefits plans as the bill would impose an annual surcharge on all plans to fund operation and administrative expenses of a Healthcare Price Index (HPI). In summary, the HPI would: identify and electronically publish the list of median in-network paid commercial claims for the payment range as established under the bill; and, make healthcare data available to the State to improve healthcare quality, reduce healthcare costs, and increase pricing transparency.  Although in general it appears that the bill does directly apply to counties enrolled in the State Health Benefits Plan (Atlantic, Camden, Gloucester, Hudson, Mercer, Ocean, Salem, Sussex, and Warren), the annual surcharge imposed by the legislation would in fact impact all health benefit plans and counties.

Hence several recommendations have been put forth:  1) use an existing federal database on medical care to eliminate the need for a New Jersey specific HPI and corresponding surcharge; or, 2) establish  a New Jersey specific HPI as called for under the bill, but eliminate the surcharge, allocate a one-time State appropriation to establish the Health Price Index Fund, and dedicate monies collected from violations of the Act to the Fund for operation and administrative expenses.  NJAC is further seeking a clarification on whether the surcharge would impact health benefit plan expenses under the looming “Cadillac Tax” for high-cost employer-sponsored health benefits coverage set to begin 2018 at $10,200 for individual coverage and $27,500.000 for all other coverage tiers.

Bipartisanship Breaks Out

For a Congress best known for years of rancor, the extent of cooperation surrounding the he 21st Century Cures Act — coming on the heels of the bipartisan “doc fix” — suggests that Capitol Hill may really be focusing on legislating. Last Thursday’s  51-0 vote to advance the Cures Act to the full U.S. House of Representatives was an important milestone for a fast-evolving bill.

“This really kind of blows your mind considering all the angst and animosity and other kinds of … engagements that we have,” said Rep. Bobby Rush, D-Ill., who labeled Thursday’s hearing a “lovefest.” (Creddit AP).

Moreover, a 49-page amendment approved as part of Thursday’s vote at the Energy & Commerce Committee addressed a key concern by earmarking $550 million over five years to help the U.S. Food and Drug Administration fulfill new duties created by the bill. Those include development of new “biomarkers” to gauge drug effectiveness, enhanced incorporation of patient perspective into approval decisions, and grants to study so-called continuous drug manufacturing that could reduce production costs.

In addition, the amendment would exempt from budget sequestration the user fees paid by drug and device makers to support FDA reviews and inspections. Sequestration only kicks in if spending caps are exceeded, but the Cures bill now provides peace of mind for companies that complained about private money being locked away in 2013 because of political spending fights.

“FDA user fees were never intended, I think, to be part of the sequester,” Rep. Fred Upton, R-Mich., said on Thursday. (Credit AP).

Other substantive provisions were notable for their omission, including possible changes to dial back use of the 340B drug discount program by hospitals and clinics. Any such change could have alienated Democrats and jeopardized bipartisan support, and the provision’s absence won praise.

One provision would delay so-called reinsurance subsidies that go to health insurance plans in Medicare Part D in order to partly offset the costs of unusually expensive policyholders. The proposal stems from a 2013 inspector general’s report that found delays of certain advance payments would allow Medicare to generate more interest income — roughly $110 million in 2009 alone.

The current financial impact of that step is not yet public, but trade group America’s Health Insurance Plans reacted angrily on Thursday, saying that it “strongly opposes” the idea. Elsewhere, a new section starting in 2020 would cap Medicaid reimbursement for durable medical equipment at the amount paid under Medicare’s new competitive bidding program. The section is based on a provision in next year’s budget blueprint for the U.S. Department of Health and Human Services, which predicted $4.3 billion in savings over 10 years.

Nevertheless, Rep. Joe Barton, R-Texas, suggested that the vote was historic against any backdrop, and perhaps unprecedented in his nearly three decades on the Energy & Commerce Committee.

“I don’t think we’ve ever had a major bill — major bill — that didn’t have somebody … that voted no,” Barton said. “This is a real achievement.” (Credit AP).

Senate Moves One Step Closer To ‘Fast-Track’ Passage

The U.S. Senate voted Thursday to set an end to debate on a bill to revive the White House’s Trade Promotion Authority, following a hold-up mainly caused by disputes on proposed amendments regarding foreign currency manipulation and Export-Import Bank reauthorization, setting up a possible final vote for Friday.

Senators voted 62-38 on cloture for the bill, H.R.1314 — a previously unrelated House bill used by the Senate as a vehicle for the trade legislation — after a potential delay on the vote failed to come to pass, with Sen. Rand Paul, R-Ky., ending a filibuster regarding the renewal of the NSA’s domestic surveillance program just before midnight on Wednesday.

The bill would restore TPA, or “fast-track” authority, which last expired in 2007, allowing lawmakers to help craft the administration’s trade negotiating objectives in exchange for the White House receiving an amendment-free, up-or-down vote from Congress once any trade deal is struck.

Senators from both parties had voted 65-33 to move forward with formal debate on the bill on May 14, after Democratic lawmakers lifted an ongoing filibuster related to concerns that their other trade priorities would be left behind when party leaders struck a deal for the Senate to also consider other trade legislation alongside the TPA bill.

These other bills, regarding preferential tariff treatment for developing countries and enhancements for the government’s customs and trade remedy enforcement efforts — including controversial language on foreign currency manipulation — easily passed.

As debate on the TPA legislation has continued, Senate Majority Leader Mitch McConnell, R-Ky., has come in for criticism over the amendment process. More than 200 amendments have been put forward by senators, but only a limited number have been put on the Senate calendar, with just two receiving a vote so far.

These included a proposal to provide $575 million in additional funding for Trade Adjustment Assistance, or TAA, a cluster of federal programs providing benefits to trade-displaced workers that are also up for renewal in the TPA bill. That amendment was rejected, while another requiring the U.S. to consider a potential trade partner’s religious tolerance when negotiating deals passed.

Nine amendments are currently pending, including further proposals regarding currency manipulation, a proposal to eliminate TAA from the bill entirely, and another seeking a waiver of the TPA on any trade deal with an investor-state dispute clause, among others.

Hatch has also moved to put several other proposed amendments on the Senate calendar, while other proposals, such as the disputed clause reauthorizing the U.S. Export-Import Bank, also continue to float around.

The TPA bill has been supported by an unusual coalition of lawmakers from both parties, as well as the White House, which has been steadily pressing for fast-track protection in order to swiftly pass the massive Trans-Pacific Partnership accord. It described the authority in a policy statement as a “vital tool” for the passage of such deals, which the administration argued will “expand economic opportunities,” among other benefits.

Thursday’s cloture vote allows for up to 30 further hours of debate, meaning a vote on final passage will most likely occur on Friday afternoon. Senators are then scheduled to take a week-long recess for Memorial Day, but McConnell has signaled they could also be in over the weekend to take votes on a number of other pending bills.

Virginia May Publicly Finance Highway Expansion

Virginia may elect to publicly finance the expansion of a heavily traveled interstate in metropolitan Washington, D.C., and keep the toll revenue to be used for other regional transportation projects. An analysis released this week shows that the state could save up to $500 million in upfront costs by expanding Interstate 66 via a design-build contract while retaining the estimated $200 million to $500 million in toll revenue over 40 years, reported The Washington Post.

Virginia’s  Public-Private Transportation Act became law in late March.

“As we work to get taxpayers the greatest value for every dollar they spend on this project, this analysis shows that there is merit to considering moving forward with a design-build contract,” Virginia Transportation Secretary Aubrey Layne said. “Our administration would welcome a private partner on I-66, but they must propose the best deal for Virginia. Until we receive a better private proposal, these preliminary numbers indicate that a public finance option may be in the best interest of Virginia taxpayers.” (Credit AP).

Layne said the figures were generated by leading  public- and private-sector financial analysts using the same rigor he uses investing his own money. He said he’s confident the numbers are solid but thinks it’s important to “throw them out there for everybody to take shots. … If you’ve got a better deal, we’d like to hear about it.” (Credit AP).

The proposed expansion project, which Layne described as probably the most important transportation project in the state, would feature new toll and carpool lanes 25 miles west of the Capital Beltway.

Layne said keeping the project under state control would not be without risks. First, approval from the state’s General Assembly would be needed in some variations of the plan. Second, state leaders would have to budget $400 million to $600 million in upfront public funding. Estimates peg the state’s upfront cost at $900 million to $1 billion if a P3 is initiated.

Virginia has long been hospitable to handing over public transportation projects to private companies, like it did with new toll lanes on Interstate 95 and the Beltway, and a tunnel being built in Hampton Roads.

Layne said the state has had a good partnership on P3s that developed a network of Northern Virginia toll and carpool lanes, though there are some long-term risks. For instance, under certain circumstances, the state would have to pay the contractor if too many people carpool.

Del. S. Chris Jones (R-Suffolk), chair of the House appropriations committee, praised the secretary’s approach toward the highway expansion. “He’s taking the right approach. The P3 process was always supposed to compare what the public option would cost versus the private option,” he said. “The objective is to make sure that we get the best value for the taxpayers’ investment. Whether that’s going the P3 route or the state doing it on its own, I’m agnostic in that regard. ”

Jones championed legislation this year that establishes the requirements for a finding of public interest and requires such a finding prior to an initiation of a P3 procurement. The bill also establishes the Transportation Public-Private Partnership Advisory Committee to determine whether a highway or rail project meets the finding of public interest. According to a VDOT announcement, Layne has requested the advisory committee hold a meeting to review and consider procurement options within the next 45 days.

$579 billion draft Defense budget draft.

A House panel issued its $579 billion draft Defense budget earlier this week, that includes pay raises for troops, saving the A-10 Warthog and billions of dollars in wartime funding to circumvent sequestration caps.

Those measures, along with increased funding for research and acquisitions such as the F-35 Lightning II Joint Strike Fighter, go against President Barack Obama’s request, particularly the subcommittee’s use of $88.4 billion in wartime funding. In using those funds to get around the sequestration cap, the $579 billion budget proposal for fiscal year 2016 is a $24.2 billion increase over this year and $800 million above the administration’s request.

House Appropriations Defense Subcommittee Chairman Rodney Frelinghuysen, R-N.J., said in a statement that the panel’s bill would meet the needs of the American military in the next year. The bill heads for a closed-doors markup on Wednesday.

“This legislation recognizes that it is an increasingly dangerous world and we must guarantee that our military and intelligence community have the strength and capability to meet the rise of Islamic terror groups and other emerging threats and deter would-be aggressors like Iran, China and Russia and North Korea,” Frelinghuysen said. “I am proud that we have kept faith with the brave men and women, and their families, who selflessly serve our country.” (Credit AP).

The bill tees up fights over the specifics passed in the broader National Defense Authorization Act passed last week. Representatives voted 269-151 for the bill, H.R. 1735, which sets out broad funding limits and priorities for the DOD and certain programs at the U.S. Departments of Energy and State for fiscal year 2016.

The House’s passage of the broader NDAA came in the face of a veto threat from the Obama  and the subcommittee’s draft contains many of the same provisions for the DOD.

Among other clauses, the bill would revive funding for the A-10 Warthog close air support aircraft, the intended retirement of which has been a perennial source of fighting between the administration and Congress in recent years.

The bill would also give troops a 2.3 percent pay raise, higher than the 1.3 percent requested by the administration.

In addition to the increases, the draft language would cut outlays for foreign currency fluctuations, as well as health programs. The statement accompanying the bill’s release said that the funding for those programs, $31.7 billion, would be sufficient.

“While below the current year, this level is sufficient to meet the entire scope of all estimated needs and requirements in the next fiscal year,” the statement said, explaining the cut to health programs. (Credit AP).

House Passes Iran Nuclear Deal Review Bill

The US House of Representatives on Thursday passed legislation allowing Congress to review any nuclear agreement reached between the executive branch and Iran, as well as a bill to impose sanctions on any financial institution that does business with terrorist group Hezbollah.

Lawmakers easily agreed to both bills, voting 400-25 in favor of H.R. 1191, the Iran Nuclear Agreement Review Act, and passing H.R. 2297, the Hezbollah International Financing Prevention Act, in a 423-0 vote, with House Foreign Affairs Committee Chairman Ed Royce, R-Calif., describing the Review Act as a way to keep pressure on Iran as nuclear negotiations continue.

“This legislation [will] ensure that Congress is positioned to effectively and decisively judge and constrain President Obama’s nuclear deal with Iran, should a bad deal be struck,” Royce said on the House floor Thursday. (Credit AP).

Under the terms of the review bill, first passed by the Senate on May 7 — with senators using an unrelated bill previously passed by the House as a legislative vehicle — Congress would have 30 days to review any deal reached between Iran and the administration regarding Iran’s nuclear program and then pass a resolution either approving or rejecting the deal.

The bill would also require the White House to keep Congress in the loop regarding Iran’s ongoing activities, including regular reports on the country’s support of terrorist groups, among other issues. President Barack Obama would retain veto power over any resolution that Congress reaches.

The legislation had stalled in the Senate amid opposition led by Sen. Tom Cotton, R-Ark., who had previously stated his opposition to any nuclear deal being reached with Iran. Cotton was the only ‘no’ vote in the 98-1 tally in the Senate.

Cotton had held the legislation up with various proposed amendments that he had been a sponsor of, including a clause requiring Iran to recognize Israel’s right to exist — an amendment that some House lawmakers had also urged their leaders to consider before the bill was brought to the House floor.

Another proposed Cotton amendment would have required that any nuclear deal be considered a treaty, subject to the approval of two-thirds of the Senate, a stance he reiterated following the bill’s passage in the Senate.

The current proposed framework for a nuclear deal with Iran, which involves several other world powers in addition to the U.S., would see Iran heavily reduce the number of centrifuges in use at its nuclear facilities and make other changes to some of those centrifuges, limiting its ability to make weapons-grade nuclear material.

In exchange, some current U.S. and European Union sanctions on the country would be lifted, subject to continued compliance with the deal.

Under the Hezbollah Financing Prevention Act that also passed the House on Thursday, banks and other financial companies that knowingly do business with the Islamist militant and political group — officially considered by the U.S. and several other countries to be a terrorist group — its television station al-Manar TV, or any agent acting on its behalf would be subject to U.S. sanctions, among other provisions.

Although Hezbollah is based in Lebanon, Iran has been a major funding source for the group since its inception in the 1980s, with Royce describing the country as a “radical state sponsor of terrorism” on Thursday.