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.

Senate Passes $1.8T Spending And Tax Extender Package

On Friday the U.S. Senate passed a $1.15 trillion omnibus spending bill for fiscal year 2016 that includes tax, trade, health care, labor, energy, cybersecurity, environmental and immigration policy measures, alongside a $622 billion tax package extending several expiring tax breaks and making tax policy changes.

Senators voted 65-33 to pass the omnibus Consolidated Appropriations Act, 2016, and the Protecting Americans from Tax Hikes Act, both parts of a package agreed to earlier in the week by negotiators. The omnibus bill provides a total of $1.149 trillion in discretionary funding in fiscal 2016, while the PATH Act includes a broad range of so-called tax extenders, either extending or making permanent several tax incentives.

The omnibus bill had passed the House earlier Friday morning with broad bipartisan support, 316-113, even after lawmakers had picked at aspects of the sweeping bill in earlier floor speeches. The tax extender bill had separately passed Thursday in a 318-109 vote, and the package will now go to President Barack Obama to be signed into law.

Overall, the omnibus bill provides $1.067 trillion in base level discretionary funding for fiscal 2016 — $548 billion for defense spending and $518 billion for nondefense spending — as well as $73.7 billion in Overseas Contingency Operations, or OCO funding, meant for war-related expenses, rolling in all 12 annual appropriations bills typically passed each year by Congress.

The tax extenders bill would extend a range of existing tax credits and incentives, both for businesses and individuals, either for two years, five years or in some cases permanently, including a research and development credit, production credits for renewable fuels — with other renewable energy incentives included in the omnibus — and the child tax credit and Earned Income Tax Credit.

Both bills also contain a number of policy “riders,” for instance collectively putting moratoriums on two unpopular Affordable Care Act taxes: the 2.3 percent medical device excise tax and the “Cadillac” tax, an excise on high-cost health insurance plans, as well as a provision providing health care and compensation funding for 9/11 first responders.

Other policy provisions in the omnibus bill include a revised version of the Cybersecurity Information Sharing Act, recently passed by the Senate, giving certain legal protections to companies that share information on cyberattacks with the government or among themselves.

And there also clauses to alter or restrict contentious environmental rules, such as the scope of the EPA’s Clean Water Act authority, and make over energy policy, including the removal of restrictions on the Overseas Private Investment Corporation and U.S. Export-Import Bank funding overseas coal-fired plants in low-income countries, and the lifting of a decades long ban on U.S. exports of crude oil.

Policy measures in the tax extenders bill include changes to the treatment of real estate investment trusts, such as restricting certain tax-free spinoffs of real property into REITs, among other alterations, and the bill also seeks to “rein in” the IRS in response to recent scandals, such as the targeting of conservative groups that applied for nonprofit status, according to its sponsors.

That would include prohibitions on IRS employees using personal email accounts for official business, the ability to terminate IRS employees found to have taken politically motivated actions in their official capacity and allowing organizations to appeal if their tax-exempt status is revoked or denied.

With the bills passed, lawmakers head off on their winter recess.

Capitol Hill Monday-Highway Funding

Members return to Capitol Hill Monday with fiscal year 2016 appropriations on the agenda and a looming highway authorization deadline on the calendar. Congress faces a Friday deadline to complete work on the highway and infrastructure legislation because the current extension expires on Nov. 20 at midnight. Even though members were largely back in their districts last week, staff for House and Senate conferees appointed to a bicameral conference committee were working to resolve differences between the versions of the long-term highway and infrastructure authorization bills passed by both chambers. While both versions of the bill reauthorize the highway program for six years, they both provide funding only for the first three years, requiring Congress to come up with the remaining three years of financing. In addition, differences remain in the ways each chamber pays for the programs. Press reports indicate there is optimism that the bicameral committee will produce the conference report on a long-term bill that can be passed by both chambers and sent to the president for signature before the end of the week. Nevertheless, it is likely House and Senate leadership would move quickly to pass another short-term extension of current authorization until the conference committee can complete its work should unforeseen delays take place.

Appropriations for 2016 will also be on the agenda this week, even though the fiscal year is already well underway. Passage of the Bipartisan Budget Act in October established topline allocations for discretionary programs, a breakthrough that is allowing the stalled appropriations process to move forward. Now that a satisfactory budget framework has been established, House and Senate leadership are strategizing on how to complete appropriations work before a Dec. 11 expiration of current funding, but there does not yet appear to be any clear process for moving forward. Last week the Senate took up and unanimously passed its first appropriations bill this year, the Military Construction and Veterans Affairs bill. The House has already passed six of the 12 annual spending bills and was considering a seventh when it was abruptly pulled from the floor.

Chairmen of the House Appropriations Subcommittees whose bills have not yet been considered by the full House have scheduled “listening sessions” with representatives who do not serve on the Appropriations Committee to get input on the remaining spending measures, according to press reports. New Speaker of the House Paul Ryan has reportedly polled the members of his conference on whether to resume consideration of individual spending bills or proceed with an omnibus bill, and apparently there was widespread support for developing a single omnibus spending bill.

Even without an established year-end plan, the Senate is likely to move forward with its second appropriations bill this week. Senators resume legislative business on Monday with a vote on a judicial nominee. Following this vote, it is expected that Senate Majority Leader Mitch McConnell will schedule the Transportation, Housing and Urban Development, and Related Agencies (T-HUD) Appropriations Act for consideration during the remainder of the week. The bill approved by the Senate Appropriations Committee provides roughly $56 billion in discretionary spending for programs and functions within the Departments of Transportation and Housing and Urban Development.

The House returns on Monday with votes expected on 14 bills under suspension of the rules. Votes are also expected on motions to concur with Senate amendments to two bills, one related to disaster and recovery assistance programs and the other to commercial exploration of space resources.

On Tuesday, the House is expected to take up H.R. 511, the Tribal Sovereignty Act, subject to a rule. This legislation amends the National Labor Relations Act to provide that any enterprise or institution owned and operated by an Indian tribe and located on its lands is not considered an employer. This bill would prevent the National Labor Relations Board from exercising jurisdiction over tribal businesses operated on tribal lands. The House may also vote on a motion to go to conference with the Senate on legislation to reauthorize the Elementary and Secondary Education Act (ESEA). Press reports indicate that House and Senate committee chairmen and ranking members have resolved differences between the Senate- and House-passed versions of the bill and reached a preliminary agreement on a conference report. We can expect consideration of the education bill before Congress adjourns for the year in December.

During the remainder of the week, the House is expected to consider three pieces of legislation reported out of the Financial Services Committee, each subject to a rule: H.R. 1737, which would nullify guidance provided by the Consumer Financial Protection Bureau in 2013 regarding indirect auto lending; H.R. 1210, legislation to modify Qualified Mortgage rules established by the Dodd-Frank Act (P.L. 111-203); and H.R. 3189, which would require reforms at the Federal Reserve in an effort to increase transparency and accountability.

Congressional committees resume a busy hearing and markup schedule this week, with a number of high-profile events occurring on Tuesday. U.S. Attorney General Loretta Lynch will be making her inaugural appearance before the House Judiciary Committee on Tuesday morning for a Justice Department oversight hearing. (General Lynch’s scheduled October appearance before the committee was rescheduled.) The House Energy & Commerce Subcommittee on Communications and Technology also meets Tuesday morning to conduct oversight of the Federal Communications Commission. The Senate Health, Education, Labor and Pensions Committee is scheduled to consider President Obama’s nomination of Dr. Robert M. Califf to become the next commissioner of the U.S. Food and Drug Administration. A joint hearing of House and Senate Homeland Security Subcommittees will take place in the afternoon to examine ongoing issues at the troubled Secret Service. Also occurring on Tuesday, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law is scheduled to consider the “State of Competition in the Pharmacy Benefits Manager and Pharmacy Marketplaces,” with representatives from local, corporate and online pharmacies scheduled to testify about increasing

The House Veterans Affairs Subcommittee on Health meets Tuesday morning for a legislative hearing on 10 veterans health bills, while the full Veterans Affairs Committee will meet Wednesday to discuss the VA’s Plan to Consolidate Community Care Programs, submitted to Congress on Oct. 30. The Subcommittee on Economic Opportunity meets Wednesday afternoon to review the VA’s On-the-Job Training and Apprenticeship Program. The Senate Veterans Affairs Committee also meets on Wednesday to review five pieces of legislation on veterans’ health and benefits.

There are again numerous House hearings this week focused on international activities in the Middle East and the campaign against the Islamic State. A joint hearing between the House Homeland Security and House Foreign Affairs Committees is scheduled for Wednesday morning to discuss terrorist sanctuaries. The hearing will likely also focus on the Russian passenger jet that crashed in the Sinai Peninsula last month and reports that a terrorist attack is the most likely cause of the disaster. The House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade will meet Tuesday afternoon on the topic of terrorist financing, while a House Judiciary Subcommittee on Immigration and National Security will meet Thursday to discuss the Syrian refugee crisis and its impact on the security of the U.S. Refugee Admissions Program. These hearings and other key congressional hearings are listed below.

Martin J. Milita, Jr. Esq., is senior director at Duane Morris Government Strategies, LLC.

Duane Morris Government Strategies (DMGS) supports the growth of organizations, companies, communities and economies through a suite of government and business consulting services. The firm offers a range of government relations and public affairs services from its Washington DC offices and multiple state capitols, including lobbying, grant writing; development finance consulting, media relations management, grassroots campaigning and community outreach. Mr. Milita works at the firm’s Trenton and Newark New Jersey offices.

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House Panel Advances $579B Defense Funding Bill For 2016

A House panel on Tuesday advanced its nearly $579 billion Pentagon spending bill for 2016, leaving the legislation effectively unchanged from a draft version, including a contentious clause allowing the use of billions of dollars in wartime funding to circumvent sequestration-level spending caps.

The House Appropriations Committee agreed by voice vote to send the fiscal year 2016 Defense Appropriations Act on to the full House, after a two-hour markup hearing that ultimately saw it adopt only two amendments.

The adopted amendments included one with minor technical changes put forward by Defense Subcommittee Chairman Rodney Frelinghuysen, R-N.J., and another put forward by Rep. Barbara Lee, D-Calif., to offer a “sense of Congress” that it has the constitutional duty to debate and then determine whether to authorize any use of U.S. military force against the Islamic State group. That amendment passed in a 29-22 vote.

Overall, the bill provides $578.6 billion in discretionary funding for the U.S. Department of Defense, $24.4 billion up on FY2015 and about $800 million up on the presidential budget request. About $88.4 billion of this would come from Overseas Contingency Operations, or OCO, funding — referred to by the committee as Global War on Terrorism funding — which is supposed to be used to fund war spending.

Of that overall funding, $116.7 billion would go to procurement, $12.5 billion more than in 2015, with planned acquisitions including two DDG-51 guided missile destroyers and three Littoral Combat Ships for the U.S. Navy, 65 F-35 Lightning II jet fighters across the services — among other jet acquisitions — and a number of large aircraft, including 16 P-8A Poseidons and 12 KC-46 tankers.

Pentagon research and development efforts would receive $67.9 billion, a $4 billion increase, much of which is intended to support aircraft development, including the continued development of the F-35 and the RQ-4 Triton Unmanned Aerial Vehicle, a new U.S. Air Force bomber and the next-generation Joint Surveillance Target Attack Radar System command and control plane.

The bill would also provide a 2.3 percent pay raise for troops, higher than the 1.3 percent increase suggested in the administration’s proposal, and would maintain funding for the A-10 close air support aircraft, which has been put on the chopping block by the Air Force several times in recent years, drawing strong pushback from lawmakers in both chambers, who argue that there is no adequate replacement available for the “Warthog.”

Although the bill, unlike other House appropriations bills put forward for 2016 so far, meets and even exceeds the presidential budget request, it has drawn criticism from both Democratic lawmakers and the administration, particularly for its extensive use of OCO funding — about $38 billion more than requested in the presidential budget — to get around the strict sequester budget cap.

The White House had yet to issue an official policy statement on the legislation as of Tuesday, but has previously threatened to veto the similar 2016 National Defense Authorization Act, which is used to authorize budget authority for the DOD, citing its heavy use of OCO funds, among other factors.

House Approves Bicameral 2016 Budget Deal

Thursday the US House of Representatives agreed to a $1.12 trillion bicameral 2016 budget deal that seeks to repeal the Affordable Care Act and broadly cut federal spending over the long-term, with the exception of defense spending.

House lawmakers voted 226-196 on the measure — officially, a conference report to accompany the Senate budget resolution — which was brought to the floor quickly after House and Senate negotiators announced Wednesday that they had reached a final compromise between their competing budget plans. The Senate is expected to vote on the plan on Monday.

The plan is intended to “get Washington’s fiscal house in order” through imposing necessary limits on spending while still ensuring investment in national priorities and shoring up national defense and other important programs, House Budget Committee Chairman Tom Price, R-Ga., said on the House floor Thursday. (Credit AP).

But the compromise deal, put together with limited Democratic input, was slammed by Democratic House lawmakers, who criticized its spending priorities and alleged use of “gimmicks” to help bolster defense spending, among other issues.

Under the compromise budget resolution, federal discretionary spending for fiscal year 2016 would be $1.12 trillion, closer to the proposed House budget than the Senate one, which had floated a discretionary spending level of about $1.16 trillion.

Baseline defense spending would be capped at $523 billion and nondefense spending at $493 billion, with an additional $96 billion going toward defense Overseas Contingency Operations, or OCO, funding. Overall spending, including mandatory programs and interest on outstanding debt, would be about $3.87 trillion.

Over the long-term, the compromise budget seeks to bring the federal budget back into surplus by 2024 and ensure those surpluses continue by calling for a constitutional balanced budget amendment.

This would be the result of more than $5 trillion in planned spending cuts over the next decade, across a wide variety of federal programs, although defense spending would receive a significant boost over that period.

These cuts include the repeal of the ACA in order to “start over with patient-centered reforms,” Republican budget negotiators said Wednesday, with a policy statement in the budget plan arguing the health care bill is “unaffordable, intrusive [and] overreaching.”

Planned cuts and changes to federal funding would not be limited to discretionary spending, with changes planned for mandatory spending programs such as Social Security and Medicare, although a plan to effectively privatize Medicare by using a voucher system, included in the House budget, was removed from the final bicameral plan.

Although not binding and not strictly necessary for the congressional spending process, the budget resolution is intended to be used as broad template for the appropriations bills Congress considers each year.

It also offers the congressional majority the benefits of using the budget reconciliation process, allowing the passage of certain spending-related policy measures without the opportunity of filibuster by the minority party.

The House has already started its appropriations process and began debate on Wednesday on 2016 funding bills covering military construction and the U.S. Department of Veterans Affairs, as well as energy and water development, having used its own budget plan as a guide to allow the process to move forward before lawmakers had agreed to the bicameral deal.

House- and Senate-the first order of business.

When they return after the Easter-Passover recess, the first order of business in the US Congress  is likely to be the reconciliation of differences between House- and Senate-passed Fiscal Year 2016 budget resolutions.

While both chambers have passed largely similar proposals, differences exists between both chambers over how deeply to cut domestic spending. In addition, Republican defense and deficit hawks continue to disagree over how much money to provide the Department of Defense.

The 2011 budget agreement and deficit reduction sequester established spending caps on defense funding, which many Republican defense hawks argue do not provide adequate defense spending, especially given the current perilous global security situation. Fiscal conservatives argue that any increase in spending for DOD should be offset. The military funding issue and the scope of domestic funding cuts are expected to consume much of the debate as House and Senate conference committee members work out a path toward a joint budget resolution, which must be enacted by both chambers in order to permit them to take up a reconciliation bill. A reconciliation bill can carry lots of unrelated provisions, but lurking in the background is the proposed repeal of the Affordable Care Act (Obamacare) in both chambers’ budgets, a provision that will prompt a veto of any likely reconciliation bill.

Senate Passes 2016 Budget in a “vote-a-rama.”

Senators voted 52-46 on the fiscal year 2016 budget resolution after a nearly day-long session that began Thursday morning and stretched well into early Friday, with lawmakers considering more than 50 individual amendments and a package of noncontroversial measures, part of a process colloquially known as the “vote-a-rama,” following three previous days of debate in which senators had agreed to 11 proposed amendments.

Among the nearly 30 amendments approved by senators on Thursday and Friday were measures to roll back the estate tax and provide “middle class tax relief,” as well as a pair of amendments seeking to block a carbon tax and removing a block on highway funds for states who don’t submit implementation plans for proposed U.S. Environmental Protection Agency regulations.

Democratic lawmakers saw several of their proposed amendments pass, including a proposal to expand access to paid sick days for workers, as well as a measure seeking to recognize same-sex marriage for the purposes of Social Security and veterans’ benefits, with 11 GOP senators joining the minority in that vote.

The rejected measures included two proposals to increase defense spending beyond the increases already set out in the budget, a measure to increase the federal minimum wage, and moves to cut clauses written into the resolution that would slash more than a trillion dollars in federal Medicaid and Medicare funding over the next decade.

Further, senators rejected a bid to close purported tax loopholes related to “offshoring,” presumably to leave the proposal for a more comprehensive tax reform effort.

The Senate’s final vote came after the House of Representatives on Wednesday approved its own proposed budget plan in a largely party-line vote, after a single day of debate which saw it consider only a limited series of proposed amendments, including alternative budget plans put forward by progressive and conservative caucuses.

House lawmakers took up only one amendment, proposed by House Budget Committee Chairman Tom Price, R-Ga., seeking to remove the requirement that $20 billion of $613 billion in proposed defense funding be made contingent on finding offsets elsewhere in the budget — publicly criticized by several GOP lawmakers as making that funding effectively illusory — and then adding an additional $2 billion in defense funding.

The Senate budget plan provides about $1.16 trillion in discretionary funding for FY16, with mandatory funding bringing total spending up to around $3.8 trillion.

Over the long term, it seeks to eliminate the federal deficit and reach a planned surplus in 2025, through about $5.1 trillion in spending cuts spread across a variety of both discretionary and mandatory federal programs — including the full repeal of the Affordable Care Act — with the exception of defense spending, which would be ramped up.

The House plan is similar, although more aggressive in its planned cuts and intended timeline to eliminate the federal deficit, with $5.5 trillion in planned cuts to reach a surplus beginning in 2024.

While the two chambers’ budget plans — which are subject to further reconciliation — do not actually implement any specific spending measures, they are meant to be used by appropriators as a guide when setting down FY16 appropriations bills later this year.