Window On Washington - August 17, 2020, Vol. 4, Issue 33

Outlook for This Week in the Nation’s Capital

Congress. Senate Majority Leader Mitch McConnell (R-KY) said Thursday the Senate is now in recess and will not hold votes until Sept. 8, though Senators will be called back on 24 hours’ notice if a stimulus deal has been reached. The House planned to be in recess until Sept. 14, but yesterday Speaker Nancy Pelosi (D-CA) announced that she is considering bringing the chamber back into session, likely as early as Saturday, Aug. 22, for a vote on legislation regarding the unfolding crisis at the U.S. Postal Service (USPS). As a result of Postmaster General Louis DeJoy’s policy changes, USPS is dealing with slowed delivery, a removal of equipment, reduced operating hours, and decreased overtime eligibility. House Democratic Leader Steny Hoyer (D-MD) is expected to announce the final House schedule on a members-only conference call later this morning. The House Oversight Committee also announced their plans to hold an emergency hearing next Monday, Aug. 24 on the mail delays and concerns about potential White House interference.

Next COVID Package Negotiations. The four key negotiators, Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows, Pelosi, and Senate Minority Leader Chuck Schumer (D-NY) have not met in person since the talks officially collapsed two weeks ago. Seeking a breakthrough, Mnuchin and Pelosi spoke by phone last Wednesday, where Pelosi offered to meet in the middle with a $2 trillion package that was proposed the week prior, but the conversation did nothing to break the stalemate. Negotiations remain at a standstill heading into these next two weeks, in which the Democratic Party then the Republican Party will hold their respective presidential nominating conventions. Additionally, while many have predicted there will be lawsuits over President Trump’s coronavirus relief executive orders, congressional Democrats aren’t rushing to court and will likely let state officials or private parties spearhead the legal challenges, which could take months to resolve. The Republican-controlled Senate has no plans to file a lawsuit either.

2020 Elections. Today is the first day of the Democratic National Convention, which will largely take place online through Thursday. Nightly keynote speeches will be given by former first lady Michelle Obama tonight, former second lady Jill Biden on Tuesday, and former President Barack Obama on Wednesday. Former Vice President and presumptive Democratic presidential nominee Joe Biden announced Senator Kamala Harris (D-CA) as his running mate last Tuesday, and she will speak during prime time on Wednesday. On Thursday, Biden will formally accept the Democratic party's presidential nomination.

Last Week in the Nation’s Capital

CONGRESS

Budget & Appropriations

Senate Backlash on Pandemic Aid Sets Up September Stopgap Fight: The next deadline to force action is Sept. 30, when Congress has to pass a continuing resolution to keep federal agencies operating at least through the November elections. Combining stopgap funds and pandemic relief into one bill could be a less painful vote for Republicans than separate votes on each. (Roll Call)

OMB Gives Some Assurance to Democrats on FY20 Funds: House Democrats said they received assurance from the Office of Management and Budget (OMB) that the White House won’t attempt to rescind federal funding once the fiscal year comes to a close at the end of September. However, Democrats are still looking for confirmation that the administration won’t attempt to withhold or slow the flow of funds. (Clark Hill Insight)

Health

McConnell Urges White House, Democrats to Restart Coronavirus Relief Negotiations: Senate Majority Leader Mitch McConnell (R-KY) has not joined in the talks but set down a marker last month when the Senate GOP released its pandemic aid bill. (CNBC)

Labor & Workforce

Labor Department Plan to Replace Fiduciary Rule Catches Flak from All Sides: Many Democratic lawmakers have blasted the proposal both for relying on the five-part test, for choosing not to include a private right of action that would allow clients to sue if they felt like their adviser violated the rule, and for advancing the rule so quickly. Last month, Sen. Patty Murray (D-WA) sent a letter to the acting head of the Employee Benefits Security Administration asking for a public hearing on the proposal and an extension of the comment period, requests that the department did not grant. (American Banker)

Banking & Housing

Democrats Fight to Give 'Severely Underfunded' Business Rescue New Life: Unlike the PPP, the $70 billion Economic Injury Disaster Loan program relies on loans and grants directly from the government, not private banks. Businesses reported lengthy wait times to secure aid, and in the face of overwhelming demand, the Small Business Administration imposed caps on money going out well below limits set by Congress. The SBA's inspector general last month also said there was evidence of widespread abuse. (Politico)

Tax Reform

GOP Finance Chairman Raises Concerns About Trump Push to Make Payroll-Tax Deferral Permanent: Senate Finance Committee Chairman Chuck Grassley (R-IA) said last Tuesday that he would only support making President Trump's payroll-tax holiday permanent if it was coupled with a larger reform to ensure the long-term solvency of Social Security. (The Hill)

Transportation

Smaller Airports May See Schedule Cuts After Sept. 30: The pandemic relief law that required airlines to continue service for smaller markets expires on Sept. 30, along with airlines' payroll support, which may lead to increase job losses and fewer flights to some smaller cities without an extension or new deal. (Roll Call)

DHS & Immigration

Schumer Calls for Wolf, Cuccinelli to Step Down After Watchdog Says Their Appointments Violate Law: Senate Minority Leader Chuck Schumer (D-NY) is calling for acting Homeland Security Secretary Chad Wolf and acting Deputy Secretary Ken Cuccinelli to step down after a government watchdog found that their appointments violated federal law. (The Hill)

Judiciary/Justice

Judiciary Seeks Funding and Laws to Protect Federal Fudges: The federal courts will press Congress for legislation and funding for additional safety measures after a gunman attacked the family of U.S. District Judge Esther Salas last month in New Jersey, killing her son and wounding her husband. (Roll Call)

Shaheen Asks for Watchdog Probe into Census Bureau Schedule: Sen. Jeanne Shaheen (D-NH), the ranking Democrat on the Senate Commerce-Justice-Science Appropriations Subcommittee, pushed Monday for an investigation into the decision to cut off census counting a month early, arguing that the administration had meddled in the plan for political gain. (Roll Call)

Cyber

Lawmakers Introduce Bill Designating $28 Billion to Secure State and Local IT Systems: A coalition of lawmakers in the House and Senate on Thursday introduced legislation entitled the “State and Local IT Modernization and Cybersecurity Act” which would funnel federal funds into strengthening state and local information technology systems, following increased stress on these systems during the COVID-19 pandemic. (The Hill)

Agriculture

House Ag Committee Requests Research on Beef Supply Chain: House Agriculture Committee leaders are asking USDA and university researchers to examine beef supply chains after months of meatpacking plant closures, fluctuations in cattle and retail beef prices, and bipartisan concern about growing consolidation in the meat sector. (Politico)

Environment & Interior

Democrats Unveil Bill to Penalize Gas Producers for Blowouts Ahead of Trump Methane Rollback: Sens. Chris Van Hollen (D-MD) and Ed Markey (D-MA) unveiled a bill last Thursday that aims to hold natural gas producers liable for major leaks with new financial penalties and reporting requirements, and comes the same day that the Trump administration finalized rolling back methane regulations. (The Hill)

EXECUTIVE BRANCH

Budget and Appropriations

Trump Signals Openness to Compromise on USPS Funding: President Donald Trump suggested last Friday that he would be open to approving additional funding for the U.S. Postal Service if congressional Democrats agree to his administration’s coronavirus relief proposals. (Politico)

Health/HHS/NIH/CDC

CDC’s Chief of Staff and Deputy Chief of Staff Jointly Depart: Kyle McGowan, the CDC’s chief of staff, and Amanda Campbell, the deputy chief of staff, both announced their departures in emails to colleagues last Friday morning. (Politico)

HHS Chief Information Officer Abruptly Resigns: HHS' chief information officer, José Arrieta, resigned unexpectedly Friday. Arrieta told senior leaders that he would stay on for up to a month to help with the transition. He departs just four months after the department stood up the public data sharing hub HHS Protect, and a little over a year since he took over as chief information officer. (Politico)

U.S. Health Chief Offers Taiwan ‘Strong’ Support in Landmark Visit: HHS Secretary Alex Azar offered President Donald Trump’s strong support for democratic Taiwan last Monday. Azar is the highest-level U.S. official to visit Taiwan in four decades, a trip condemned by China which claims the island as its own. (CNBC)

CDC Asks 4 States and a City to Draft Coronavirus Vaccine Distribution Plans: The CDC and the Department of Defense and other agencies began working with officials in California, Florida, Minnesota, North Dakota and Philadelphia this week to develop plans to transport and store vaccine and prioritize which individuals will get the first doses. The proposals will consider each location’s racial and ethnic makeup and population density. (Washington Post)

Labor & Workforce

Weekly Jobless Claims Fall Below 1 Million for First Time Since March: The number of new applications for unemployment insurance fell below 1 million last week for the first time since the first wave of coronavirus lockdowns, the Labor Department reported last Thursday. (The Hill)

White House Says Majority of Coronavirus Job Losses Will Be Temporary: According to a report released last Thursday from the White House Council of Economic Advisers, about 80% of job losses related to the pandemic will not be permanent. (Fox Business)

Department of Education

DeVos' Sexual Misconduct Rule Went into Effect Last Friday After Legal Blocks Fail: A federal judge refused a multi-state effort to strike down Education Secretary Betsy DeVos' new Title IX rule, clearing the path for the policy to take effect last Friday. (Politico)

Banking & Housing/HUD

Mortgage Refinancing Will Be More Expensive as Fannie Mae and Freddie Mac Raise Fees: Consumers will have to pay more to refinance their mortgages after Fannie Mae and Freddie Mac announced that they are raising fees for lenders on the loans. (CNBC)

Fed Announces Reduced Borrowing Costs for Municipal Issuers: The Federal Reserve said Tuesday it would reduce borrowing costs in its Municipal Liquidity Facility, an emergency lending program for state and local government issuers. (Bloomberg)

Fed's Main Street Program Sees Largest Weekly Increase So Far: Data released last Thursday by the Fed showed Main Street loans held by the central bank rose by $131 million to $226 million as of Wednesday from $95 million a week earlier. (Reuters)

Tax Reform/IRS

White House Says No Plan to End Payroll Tax Permanently: White House officials said the administration has no plans to do away with the payroll tax despite President Donald Trump saying he would seek a permanent repeal if he wins another term. (Bloomberg)

Transportation/DOT

$9.6B Worth of Infrastructure Projects Delayed or Canceled During COVID-19: According to a report released by the American Road & Transportation Builders Association, 16 states announced project delays or cancellations worth approximately $5 billion, while another 20 local governments and authorities have scratched or put off projects worth another $4.54 billion. In addition, at least 44 states, transportation authorities and local governments have projected declining revenues. (Construction Dive)

Trade

Trump's Swift, Sweeping China Offensive: Even at the height of Trump's trade war, his administration never hit China as hard, as fast, and on as many fronts as it is right now. (Axios)

Space/NASA & NOAA

U.S. Space Force’s First Space Doctrine Signals Expansive Plans: Eight months after President Trump signed the FY2020 National Defense Authorization Act that founded Space Force as part of the Air Force, it now has its own doctrine, separate from the other military services. Defense of the nation’s satellite assets are a key mission area that is emphasized. (Space Policy Online)

Satellite Servicing Industry Seeks Interface Standards: As another satellite life extension spacecraft is readied for launch, both developers and customers of such systems called for the creation of standard interfaces to support servicing of future spacecraft. NASA agrees that this is needed and is helping by soliciting and evaluating designs from industry for grapple fixtures and requiring common servicing hardware in Space Act agreements. (Space News)

Defense/DOD

‘No Lines on the Battlefield’: Pentagon’s New War-Fighting Concept Takes Shape: The Chairman of the Joint Chiefs of Staff, General Hyten, has laid out a vision in which every force can both defend itself and have a deep-strike capability to hold an enemy at bay, built around a unified command-and-control system, rather than the usual service by service roles. (Defense News)

Pentagon Picks SpaceX and ULA to Remain its Primary Launch Providers: The Department of the Air Force announced Aug. 7 that incumbents United Launch Alliance and SpaceX have been selected to launch national security satellites for the U.S. military and intelligence agencies for five years starting in 2022, edging out Blue Origin and Northrop Grumman in the four-way competition known as the National Security Space Launch Phase 2 Launch Service Procurement. (Space News)

Trump Weighs Replacing Mark Esper at Pentagon After Election: President Donald Trump has privately said that he intends to replace Secretary of Defense Mark Esper after the November election, according to people familiar with internal discussions. (Bloomberg)

DHS & Immigration

Stalled Stimulus Talks Could Mean Thousands of Furloughs and Halt US Immigration System: The federal agency responsible for granting citizenship, providing immigration benefits and processing visa applications could furlough two-thirds of its workforce at the end of the month after negotiations over the next stimulus package stalled. (CNN)

GAO Finds Chad Wolf, Ken Cuccinelli are Ineligible to Serve in Their Top DHS Roles: The Government Accountability Office — Congress' independent investigative arm — concluded that after the resignation of Secretary Kirstjen Nielsen in April 2019, an improper succession occurred, with Kevin McAleenan taking on the position. McAleenan then altered the order of succession for other officials to succeed him after his departure. (Politico)

Judiciary/DOJ

Graham Says FBI Chief 'Committed to Being Helpful' After Trump Criticism: Sen. Lindsey Graham (R-SC) offered public support for FBI Director Christopher Wray last Thursday, hours after President Trump appeared to seek distance from the agency chief. (The Hill)

Justice Department v. Yale: The Justice Department told Yale University last Thursday that it had to change its admissions policies to no longer consider race and ethnicity because of violations of Title VI of the 1964 Civil Rights Act. (Inside Higher Ed)

Agriculture/USDA

USDA Announces More Eligible Commodities for CFAP: USDA Secretary Sonny Perdue announced last Tuesday additional commodities that are covered by the Coronavirus Food Assistance Program (CFAP) and that the deadline to apply for the program is extended to September 11th. (USDA Press Release)

EPA & DOI

EPA Finalizes Rollback of Obama-Era Oil and Gas Methane Emissions Standards: The Environmental Protection Agency (EPA) last Thursday finalized rescinded standards for methane emissions in the oil and gas industry and foreshadowed similar actions for other pollutants. The two finalized rules rescind standards that specifically regulate methane emissions from oil and gas production, processing, transmission and storage. (The Hill)

Interior Finalizes Public Lands Agency HQ Move Out West Over Congressional Objections: Grand Junction, Colorado, officially became the headquarters for the Bureau of Land Management (BLM) last Monday, capping a move that has cost the agency nearly 70 percent of its Washington, D.C.-based employees. (The Hill)

Department of Energy

Trump Administration Declares War on Showerheads: A new proposed change to Department of Energy water compliance rules regarding 2.5 gallon per minute nozzles coincides with remarks President Donald Trump made last month about showerheads. (Popular Mechanics)