For the week of July 21-25, 2014, the Senate passed a number of judicial nominations and engaged in debate over legislation to eliminate tax benefits for U.S. companies that send jobs overseas. The House passed targeted education tax initiatives and higher education reforms.
This week, the House is likely to vote on legislation addressing the immigration crisis at the Southwest border and authorizing a lawsuit against President Obama (see below for both). The Senate will continue its debate over legislation to eliminate tax benefits for U.S. companies that send jobs overseas and vote on House-passed legislation to provide additional short-term funding to the Highway Trust Fund.
Senate Appropriators Try to Avoid Redundancies in Energy Efficiency Programs. The Senate Appropriations Committee released the Fiscal Year (FY) 2015 Energy & Water spending bill and report this week. The report highlighted several concerns that appropriators had regarding the government’s energy efficiency efforts. Noting that there is the potential for “overlap and duplication” among federal programs focused on improving the energy efficiency of buildings, the report calls on DOE to lead a study of “the government-wide array of energy efficiency programs to include specific actions to eliminate or consolidate programs.” Unfortunately, the release of this bill and report is a further sign that regular order has again collapsed. The Energy-Water subcommittee approved the $34.2 billion bill in June, but the bill was never brought before the full committee for mark-up due to expected amendments targeting EPA policies. While Congress will look to larger spending measures to keep the government funded past September, it is likely that this particular issue will continue to be an area of concern for appropriators.
Hydronic Systems at West Point. Officials at the U.S. Military Academy at West Point, N.Y. knew they had a problem in recent years as dozens of cadets became very ill and missed classes. They soon learned that the main culprit for these outbreaks was the fact that almost half of the Cadets were living in uncomfortable, crowded dorm rooms. Fortunately, thanks to the US Army Corps of Engineers help is on its way. The Corps is currently blasting over 100,000 cubic yards of rock to make way for the construction of new barracks. The look of the new structure will fit in well with the rest of the 200-year-old campus, but will feature major advances in water and energy efficiency. The new barracks will be 287,000 square feet in size, have six floors, and provide living space for 650 Cadets. The barracks will save taxpayers $44 thousand annually thanks largely to a solar hot water system and a radiant heating and cooling system. During the winter the radiant system that is being installed at the New Cadet Barracks works by circulating heated water through tubing in the floor, while during the warmer months the radiant system works very much the same way, except the water is chilled and circulated through the same tubing. The construction of the barracks is expected to be completed in Summer 2016. Radiant floors in a dorm room…sounds nicer than my college days!
ABLE Act Making Progress. Two weeks ago, we wrote about the ABLE Act, legislation that would establish 529 savings accounts for those with disabilities. The legislative wheels are now in faster motion. This week, a Senate Finance Committee panel held a hearing entitled “Saving for and Uncertain Future: How the ABLE Act can Help People with Disabilities and their Families.” This hearing was another boost to the ABLE Act, which already enjoys widespread bipartisan support in both the House and Senate. Senator Bob Casey (D-PA) met with a UBS group this week, and it is likely our firm will strongly support the measure. Senator Casey and the House sponsor of the bill, Congressman Ander Crenshaw (R-FL), have made significant progress on this bill, and we expect it to pass the House and Senate and be enacted into law by year’s end.
Immigration Now Top Voter Issue. A Gallup poll just released concluded that “immigration/illegal aliens” are now the “top concern” of a plurality of registered voters who participated in its survey, displacing the health of the economy and Washington dysfunction as earlier top concerns. Moreover, the same poll showed that voter support for granting legal citizenship to those in the U.S. illegally has dropped by five points—from 73% to 68%. The new focus on this issue puts pressure on lawmakers and President Obama to do something constructive in this space soon, but don’t hold your breath. A short-term measure to help address the nearly 60,000 kids who have entered the country illegally at southern border locations is still caught up in gridlock over its cost and how it is paid for. Also, a comprehensive immigration bill, which provides for a pathway to citizenship for most of those in the U.S. illegally, is not going anywhere in this election year. If anything, the latest change in voter sentiment helps increase urgency for the short-term measure and likely takes a little pressure off of Republicans to pursue a longer-term plan.
Detroit Slows Effort to Shut Off Water to Poor Residents. Members of Michigan’s congressional delegation took to the floor this week to lambast the Detroit Water and Sewerage Department for an aggressive shutoff campaign that has left an unknown number of Detroiters without water. On Monday morning, the department announced that it's calling a 15-day halt to its campaign that has suffered from weeks of public protest as well as harsh words from the United Nations, the federal judge overseeing Detroit's bankruptcy and local media. While access to water is an essential human right, the department faces major challenges. It currently has about 137,000 delinquent residential accounts totaling about $75 million, and about 10,000 delinquent commercial accounts worth about $23 million. This is a just symptom of the larger challenges Detroit is facing as 38% of its residents live in poverty and the city faces an unemployment rate that is twice the national average. However, city residents are not without friends. This week a convoy of Canadians brought gallons of water to residents who had their water shut off and a new nonprofit campaign has started where charitable individuals can help pay the water bill of Detroiters in need.
House Lawsuit Against POTUS. The lawsuit to be filed by House Speaker John Boehner (R-OH) against President Obama for executive overreach inched forward this week as it was approved by the House Rules Committee. The committee action this week effectively clears the measure for consideration by the full House next week. It will certainly pass the House given the strong Republican majority there and will likely be the top story out of Washington next week. In the past, lawsuits have been filed against sitting presidents by individual Members of Congress or groups of members, but we believe this is the first time the House as an institution has filed such a suit. Those past lawsuits have been thrown out in court because they were determined to lack “standing,” but a lawsuit from a majority in the House will likely force stronger consideration of it by judges. If a judge does consider the lawsuit, its resolution is not imminent and the action will not change the ongoing friction between many in Congress and the President over how laws passed by Congress are implemented and what authority the President has in taking action relevant to those laws (and more generally).
Avoiding a Government Shutdown. The summer months on Capitol Hill are often spent finalizing the funding bills for government agencies for the next fiscal year, which begins on October 1. Since Congress is out of session for all of August and a week in September, there are few days left to finish this work. The House to date has passed more than half of its funding bills, while the Senate has passed none. Therefore, a “continuing resolution” to fund the government beyond October 1 under current funding levels will have to be enacted, and the House will do this after the summer break. This helps House Republicans from taking blame for a potential government shutdown if the spending resolution is not enacted by October 1. Republicans have generally lost the political battle of being associated with threats of or actual government shutdowns in the past, which is one reason why House Republicans are taking action soon. This year, more pressure will be on the Senate in any shutdown debate, and the 36 senators up for re-election (many in very competitive seats) will bear the political brunt of any threatened shutdown. The Senate will consider its continuing resolution later in September.
Future of Internet Taxes. The House passed the “Internet Tax Freedom Act (ITFA),” which is a permanent extension of the current prohibition on Internet access taxes and on discriminatory taxes on e-commerce. The current ban on these taxes is due to sunset on November 1. The ball is now in the Senate’s court to act on this bill. While most senators want to extend the ban on taxes for Internet access, there are some senators from both parties who want to attach separate legislation dubbed the Marketplace Fairness Act (MFA) to it that would give states the authority to collect sales tax from out-of-state online retailers. The MFA passed the Senate last year but has not been taken up by the House. Adding the MFA to the ITFA will likely make the passage of just the latter bill too contentious so senators are contemplating a back-up plan—a two-month extension of the ban on Internet access taxes—in the hope that after the election they will be able to somehow find a better consensus on how to deal with both bills. This e-tax drama will continue through the rest of the year. We are confident the ban on Internet access taxes will be extended, but the question is for how long and whether the MFA will also be enacted as a part of a package.
Revisiting Patent Trolls. Earlier this year, efforts for major bipartisan reforms to combat patent trolls failed after the Senate decided not to take up legislation to address this growing problem. Patent trolls are known to search out broadly defined patents, often buying them from bankrupt companies or small-time investors. They then send vaguely worded letters notifying companies of patent infringement and offer a license for a certain fee. Researchers estimated that this costs American businesses $29 billion in 2011 alone. With the failure of the Senate to address this problem, the House is now taking a new tact to address patent trolls. The House is returning to a scaled back draft of legislation to address patent trolls by increasing transparency and accountability in patent demand letters. The draft will also give the Federal Trade Commission the authority to levy fines on fraudulent practices. This modest legislation has passed a House Energy and Commerce subcommittee and will easily pass the House in September. However, the dysfunction in the Senate will likely prevent its passage this year. We see it as a 2015 issue.
California Residents Face Contaminated Water Due to Cross Connection Issue. This week health officials in Madera County issued a warning to residents living in an area mobile home park that they should not drink the water because of fecal contamination. Officials believe the water was contaminated through a cross connection at the water line from the septic system. County workers posted fliers on residents' doors warning them not to drink the water as well as left phone messages saying "do not attempt to treat the water yourself, by boiling, filtering or disinfecting as it will not make the water safe.” Some residents seemed less concerned than others. "We probably drank some of it, and my gal here also drank some," said longtime resident Robbie Robinson, 48. "Right now it apparently hasn't hurt us, yet. I hope not.” The county says the contamination problem is being addressed and should be resolved in just a few days. They say they will notify local residents when the water is clean and safe to drink. That is one county health warning that I hope to never find posted to my home door.
Dain Hansen is vice president of government relations for The IAPMO Group, Washington, D.C. He can be reached at [email protected], 202/414-6177.