Congress: Action avoids shutdown

Congress put together a compromise measure Wednesday that should avoid a government shutdown at the end of the week.

The continuing resolution that passed both chambers of Congress Wednesday would keep the government funded at current levels through Dec. 9 and includes funding to fight the spread of the Zika virus, provides aid to flood-ravaged areas in Maryland and Louisiana, and delivers funds for the U.S. Department of Veterans Affairs and military construction. Senate Democrats had voted down the same measure Tuesday in protest over the exclusion of funding for the Flint water crisis, which House leaders then added to a water projects bill as a satisfactory alternative.

Leaders on both sides of the Senate cast Wednesday’s vote as a necessary compromise to buy lawmakers enough time to negotiate an omnibus appropriations bill to keep the government funded this year.

Although all 12 bills normally used to fund the government have been cleared by the House and Senate Appropriations committees, partisan fights over gun control measures, funding to fight the spread of the Zika virus and protections for LGBT contractors have derailed efforts in both chambers. Several of the bills have passed one or the other chamber, but none have been sent to President Barack Obama’s desk.

Earlier attempts to pass legislation in the Senate funding anti-Zika efforts have been blocked by Democrats who objected to the levels of funding — previous efforts have been either completely or partially offset by cuts elsewhere — or riders reducing funding for Planned Parenthood’s affiliate in Puerto Rico.

Wednesday’s vote also put reauthorization of major programs like the EB-5 visa program back on track.

The last time a series of separate spending bills passed on time was 1996.

Commentary on Debate: How to Fix America’s Infrastructure

Monday night’s presidential debate included some instructive moments even for their repetitiveness; other moments were mere distracting distortions.

We have been writing about the need to upgrade America’s infrastructure it seems almost weekly. But only tangentially was the issue raised during the debate. Donald Trump, among his bill of particulars defining the trouble the Obama administration has ushered in over the past eight years, mentioned the sorry state of U.S. airports and compared them unfavorably to similar facilities in Asia.

“Our airports are like from a third-world country. You land at LaGuardia, you land at Kennedy, you land at LAX, you land at Newark and you come in from Dubai and Qatar and you see these incredible — you come in from China — you see these incredible airports and you land — we’ve become a third-world country,” Trump observed.

As Kim Day, the CEO of Denver International Airport, noted in an Op-Ed forThe Denver Post on the 20th anniversary of the local airport’s opening: “DIA is an economic powerhouse for Colorado, growing its initial annual economic impact of $3.1 billion to an estimated $26.3 billion in 2013. The airport supports nearly 190,000 jobs, and is on track to be even more impactful in the years to come.”

It’s not a perfect picture, of course, as cost overruns for project expansions, including a new train station and a hotel, well illustrate.

Nevertheless, a decision made 27 years ago to spend more than $2 billion on a new airport — the only major new one built in the U.S. since 1974 — has helped diversify Colorado’s economy and spurred broader growth.

Airports are certainly one area in which we can use an upgrade. We also need more and newer bridges, roads, and tunnels. And we need to upgrade the electrical grid. And we need to improve and update our port facilities.

The problem with the United States’ infrastructure is much broader than failing airports and bridges. The nation’s roads are congested and full of potholes. In 2014, the typical urban commuter spent 42 hours stuck in traffic, up from 20 hours in 1984. Americans consumed over three billion gallons of gas as they sat in grid­lock for almost seven billion hours, at a cost of $160 billion in wasted fuel and time.

Hydration is absolutely essential, and yet we continue to ignore the state of the infrastructure that delivers it to us. In its 2013 Report Card for America’s Infrastructure, the American Society of Civil Engineers gave our “drinking water” assets a “D.”

According to Professor Robert Glennon of the University of Arizona:

Our water infrastructure consists of approximately 54,000 drinking water systems, with more than 700,000 miles of pipes, and 17,000 wastewater treatment plants, with an additional 800,000 miles of pipes. A 2012 report of the American Water Works Association concluded that more than a million miles of these pipes need repair or replacement. That’s why communities across the nation suffer 240,000 water main breaks per year. The major cause of pipe failure is age.

Disease and death follow from poorly conceived and maintained water infrastructure.

The root of the crisis is clear: the United States has underinvested in its infrastructure. The federal gas tax is the main source of federal funding for roads, bridges, and subways. But Washington has not increased that tax, of 18.4 cents per gallon, since 1993; in real terms, its value has thus fallen by over 40 percent. Expert groups such as the American Society of Civil Engineers, business associations such as the U.S. Chamber of Commerce, and unions such as the AFL-CIO have all called for trillions of dollars of new investment. But Washington has failed to act.

The problems that plague American infrastructure are deep-seated and complex. Yet there is a way out. Washington and the public must recognize that world-class infrastructure does not come cheap. High-quality infrastructure is vital to global economic competitiveness, and the United States is falling behind. The United States invests less than two percent of its GDP in infrastructure; Europe, by contrast, invests five per­cent. Furthermore, the bureaucratic system that oversees public infrastructure spending has become hopelessly “siloed,” with separate agencies at each level of government dedicated to different modes of transport. Each has its own stakeholders, champions, and opponents. It’s a wasteful, inefficient system. Henry Petroski, a professor of civil engineering and history at Duke University in his book “The Road Taken”, claims reforming it will require several steps.

Firstly, governments should eliminate silos. A unified department should merge the federal highway, transit, aviation, maritime, and railroad administrations; the Army Corps of Engineers, which controls investment in ports; and the Environmental Protection Agency’s water programs, which provide federal funding for sewer systems and drinking water. This unified department of infrastructure should incentivize state and local authorities to make smarter choices with federal funding. For instance, it could coordinate the timing of different projects, such as a sewer-line expansion and a road repair, so that the government has to dig only once. It should also consider instituting a so-called corridor-based approach, similar to the one the United Kingdom uses, in which the government evaluates a set of projects designed to solve a particular problem and chooses the most cost effective among them. For example, to improve the flow of people between Washington, D.C., and New York City, policymakers should compare the costs and benefits of investing in highways, high-speed rail, increased airport capacity, and more efficient freight rail and shipping to decide how best to solve the problem, rather than doling out funds to each of the various transportation agencies without coordination.

The United States has reached a fork in the road. It can let its infrastructure crumble, its bridges collapse, and its roads grow ever more congested. While Government at all levels has a tenuous debt-and-deficit situation, government entities can nevertheless also borrow at historically low rates. It makes sense accordingly to lock in cheap money to pay for infrastructure investments with long economic tails. Finally, policymakers should not fear the private sector. Good ideas frequently come from sources outside the government. Cities and states should allow both the public and the private sectors to submit unsolicited proposals for innovative infrastructure projects. Of course, these projects would have to be rigorously and publicly evaluated. But the fact that private companies are motivated by profit is no reason for the government to ignore them.

Congress: one possibility is a short-term CR

After three weeks of negotiations to produce a bipartisan continuing resolution to keep the government running beyond the end of this month and into December, Senate Majority Leader Mitch McConnell, R-Ky., last week took action by offering legislation to fund the government, largely at current levels, through Dec. 9. The bill is generally consistent with Democratic demands for a “clean” CR without policy riders. The majority leader’s bill includes bipartisan provisions that have long been part of CR discussions, such as the $1.1 billion in funding for Zika virus eradication efforts, $37 million for opioid abuse assistance, and $500 million in emergency assistance for communities affected by flooding and other natural disasters. Democrats expressed immediate opposition to the Republican bill, claiming that several issues were unresolved. In particular, Leader McConnell’s bill does not include emergency funding for communities facing drinking water contamination issues, such as the lead pollution in the drinking water in Flint, Michigan, a provision Senate Democrats have actively pursued since the summer.

Nevertheless, McConnell’s bill does not yet appear to have the 60 votes of support necessary to advance on Tuesday, when a procedural vote on the bill is scheduled to occur. Beyond the Democratic opposition, Republican senators are not united behind the bill. Senator Lindsey Graham, R-S.C., told reporters he would vote “no” because the bill does not contain a rider, supported by Democrats, to fix the quorum provisions of the Export-Import Bank so that it may approve loans even in the absence of a board quorum. Other Republicans, led by Sen. Ted Cruz, R-Texas, have been pushing to include in the CR a provision to prevent the transfer of internet governance from the Commerce Department’s National Telecommunications and Information Administration to the ICANN, an international nonprofit organization. That provision is not included in Leader McConnell’s bill.

So, one possibility is a short-term CR into the first week of October if the parties are close to a deal by the end of the week but lack the time to get it fully enacted by midnight on Friday.

Congress: CR Saga goes on.

Yesterday, Majority Leader Mitch McConnell, R-Ky., offered up what he called a “clean” continuing resolution to keep the government funded through Dec. 9, saying it was the result of bipartisan negotiations, including funds to fight the spread of the Zika virus, money for the Department of Veterans Affairs and military construction, and aid for flooded communities in Maryland, Louisiana and others. The bill also includes some funds for an anti-opioid bill and the Toxic Substances Control Act passed earlier this year.

McConnell’s measure backed off provisions that would have prohibited transition of the Internet Assigned Numbers Authority to a multinational entity, as well as restrictions on the Puerto Rican affiliate of Planned Parenthood accessing federal funds.

Some Democrats however zoomed in on the lack of aid for Flint, Michigan, with Sen. Barbara Mikulski, D-Md., saying her caucus could not support the “Republican only” bill. Mikulski said that although communities like those in Louisiana desperately need aid, Flint should not be put to the back of the line.

Mikulski said that the Senate should take up Flint aid in the stopgap bill, rather than wait for the House to possibly take up the $200 million in Flint aid included in the Water Resources Development Act the Senate passed last week.

The $9.4 billion bill, which includes Flint aid, authorizations for Army Corps of Engineers projects and grants for local communities’ water projects, has to be reconciled with the $5 billion House bill that focuses mostly on Army Corps projects.

McConnell set a procedural vote on his version of the continuing resolution for Tuesday, and said he intends for the Senate to pass the stopgap funding measure before the government would have to shut down at the end of the week.

Although all 12 bills normally used to fund the government have been cleared by the House and Senate appropriations committees, partisan fights over gun control measures, funding to fight the spread of the Zika virus, and protections for LGBT contractors have derailed efforts in both chambers. Several of the bills have passed one or the other chamber, but none have been sent to President Barack Obama’s desk.

Previous efforts to pass legislation funding anti-Zika efforts in the Senate have been blocked by Democrats who objected to the levels of funding — previous efforts have been either completely or partially offset by cuts elsewhere — or riders reducing funding for Planned Parenthood or federal disbursements to Puerto Rico.

 

House Passes Bill Easing Lawsuits Against New Regulations

The U.S. House of Representatives passed a bill Wednesday to allow lawsuits to delay major rulemaking even though the White House has threatened to veto the measure over its potential impact on environmental, financial and other regulations.

Backers of the bill claim it will give industries a chance to challenge major rules before they go into effect, and before companies have to potentially spend billions of dollars to comply with them. Before the 244-180 vote in favor, Rep. Bob Goodlatte, R-Va., referred to the estimated $10 billion in costs from the Environmental Protection Agency’s power plant emission rules, which were overturned by the 2015 Supreme Court decision in Michigan v. EPA, saying the measure would allow for substantive review of unelected bureaucrats’ actions.

The bill’s main backer, Rep. Tom Marino, R-Pa., said the passage of the bill into law would help businesses and communities avoid the high cost of laws that ultimately fail in the courts.

Marino’s REVIEW Act of 2016 would require the Office of Management and Budget to designate all rules having more than $1 billion as “high impact,” a designation that would be published along with the final rule. Such rules would be subject to an additional 60-day delay before taking effect and stayed from taking effect during the course of any and all litigation challenging them.

Many Democrats objected that the bill would delay serious consideration of necessary rules mandated by statute. Rep. John Conyers, D-Mich., further said that the bill would allow for judicial gamesmanship, where industries could challenge the rule to delay any cost of compliance.

The White House issued a veto threat Tuesday, saying the bill would slow agency processes mandated by law, harm efforts to address public safety hazards and “promote unwarranted litigation, introduce harmful delay, and, in many cases, thwart implementation of statutory mandates and execution of duly enacted laws.”

 

In Congress: A Continuing Resolution dominates.

House and Senate leaders continue to negotiate the details of a continuing resolution (CR) to keep the government running beyond the end of this month and into December, through the November election. The details of the funding deal will dominate any other activity occurring in either chamber this week.

Nevertheless, House members will turn their attention to H.R. 3438, the REVIEW Act, legislation to postpone the effective date of high-impact rules pending judicial review. The legislation would require federal agencies to postpone the implementation of any rule imposing an annual cost on the economy of at least $1 billion if a petition seeking judicial review of that regulation is filed within 60 days of the rule taking effect. Under the bill, implementation would be postponed until any judicial review is resolved. Consideration of H.R. 3438 in the House will be subject to a rule. The bill is another in a series of House Republican bills designed to enhance oversight and transparency of the regulatory process, but the bill stands no prospect of Senate consideration either prior to the recess or in the lame duck session.

The House will then consider two bills related to the Obama administration’s recent admission of $1.7 billion cash payment for a claims settlement to the government of Iran. H.R. 5931, the Prohibiting Future Ransom Payments to Iran Act, would prohibit an administration from making future cash payments to the government of Iran. The House will also consider H.R. 5461, the Iranian Leadership Transparency Act. This legislation would require the U.S. Department of Treasury to provide reports in 2017 and 2018 to the Congress on the financial assets held by specified Iranian political and military leaders. The reports would describe how the assets were acquired and any unclassified portions of those reports would be posted on the Treasury’s website in multiple languages. Consideration of each bill will be subject to a rule.

This week the House also continues its work on the Republican “innovation agenda,” with consideration of H.R. 5719, the Empowering Employees through Stock Ownership Act. This legislation would allow employees at certain startups who own stock in their companies to defer paying taxes on their investments for seven years or until the company stock becomes tradable on an established market. The bill also provides exclusions for specific groups of employees, such as CEOs. Consideration of H.R. 5719, which was favorably reported by the House Ways and Means Committee on a voice vote, will be subject to a rule.

The final item on the floor agenda scheduled for this week, other than potential consideration of a CR, is H.R. 1309, the Systemic Risk Designation Improvement Act of 2015. H.R. 1309 would amend the Dodd-Frank law to alter the process by which federal regulators determine which bank holding companies should be designated as systemically important financial institutions. Under current law, all banks with consolidated assets exceeding $50 billion are automatically designated as SIFIs. H.R. 1309 would repeal the automatic designation for such bank holding companies and establish a process under which such firms would be designated on a case-by-case basis. Consideration of the bill will be pursuant to a rule.

The House also aims to consider the CR in the event agreement is reached on the legislation and the Senate acts on it favorably. Once the House passes the CR, it too plans to adjourn until after the elections.

Why did NJ Lawmakers Advance Bill To Fight Corporate Inversions?

A New Jersey Senate committee on Monday advanced legislation to prohibit awarding state contracts and development subsidies to companies that seek to reduce their taxes through so-called inversion transactions.

The Senate’s State Government, Wagering, Tourism and Historic Preservation Committee signed off on Senate Bill S-1513, which would deny such taxpayer support to companies that engage in corporate inversions, a deal structure that sees a U.S. corporation merge with a foreign company and relocate its tax residence in a foreign jurisdiction in an effort to trim its U.S. corporate tax burden.

The legislation now heads to the Senate Budget and Appropriations Committee for further consideration.

Under the legislation, any company incorporated or previously incorporated in the U.S. that becomes incorporated in a foreign country or becomes a subsidiary of a corporation incorporated in a foreign country for the primary purpose of avoiding U.S. taxes would be disqualified from receiving state contracts and subsidies. That rule also would apply to funds from independent state authorities.

It is unclear why legislators think such a law would benefit New Jersey as corporate inversions take place because of the federal tax code rather than state.