Congressional Overview Congress Passes Short-Term Highway Bill Extension

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1 Volume 15 Issue 2 Congressional Overview It s been an interesting spring on Capitol Hill. Following the President s release of his proposed FY 16 budget, appropriators have been busy. The House and Senate passed their fiscal budgets in March. House Republican Appropriations leaders are serious about trying to compromise with Democrats to get as many spending bills as possible to the President s desk this year. That said, obtaining the Senate Democrats buy-in may be key to successful FY 16 appropriations negotiations. In May, Senate Democrats indicated they would be offering little help on Republican bills. While no appropriations bills have passed Congress (it s still too early in the process), the House appropriations defense subcommittee plans to markup the FY 16 Defense Bill next week. The House also plans to take up two appropriations bills on its floor next week (the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act; and the Commerce, Justice, Science, and Related Agencies Appropriations Act). The Senate, meanwhile, plans on marking up two appropriations bills per week over the next five weeks. It is likely to take up its first appropriations bill in June. However, Senate Democrats are expected to oppose the motion to proceed with any appropriations bills because the bills are at the sequester-level caps. Meanwhile, the Senate had a tumultuous spring that included a drag-out fight over human trafficking and Loretta Lynch s appointment as Attorney General. The fight centered around a provision that could expand federal prohibitions on abortion funding in a bill (that originally had bipartisan support) which would help victims of human trafficking. Senate Majority Leader Mitch McConnell (R-KY) refused to put Lynch s nomination on the Senate floor until the human trafficking bill was passed. The Senate ultimately passed the legislation through compromise and confirmed Lynch as the new U.S. Attorney General, more than five months after she was nominated by the President. Congress Passes Short-Term Highway Bill Extension Congress passed a bill that will extend highway funding (which was slated to expire this Sunday, May 31) that extends highway funding through July 31. The House passed the bill mid May and sent it to the Senate, which passed the bill last week to put it on President Obama s desk. While the President hasn t signed the legislation yet, he is expected to sign it into law prior to the May 31 deadline. This stopgap bill gives Members of Congress more time to come up with a longer-term extension as they grapple with finding money to pay for roads and transit programs. Authored by House Transportation and Infrastructure Chairman Bill Shuster (R-PA) and House Ways and Means Committee Chairman Paul Ryan (R-WI), the bill will increase funds and provide $24.99 billion (up from the $19.97 billion that is currently available through May 31). While Members of Congress are examining various methods to fund a highway bill, there are two main proposals making rounds: raising the federal gas tax and using revenue from repatriated corporate earnings. The federal gas tax (currently at 18.4 cents per gallon) hasn t been raised to keep up with inflation since 1993, and it is no longer sufficient to fund the U.S. Highway Trust Fund. Taking inflation into account, the gas tax has actually gone down 39 percent since It has been over a decade since Congress last passed a long-term transportation bill, and since 2003, it has passed 23 short-term extensions. It remains to be seen if Congress can use these next two months to buck the

2 trend and come up with a long-term solution, or if it continues its trend of passing short-term, stopgap fixes. House Appropriations Committee Approves FY 16 Transportation, Housing and Urban Development Bill The House Appropriations Committee approved a $55.3 billion Transportation, Housing and Urban Development spending bill by a vote of This came after the panel rejected several Democratic amendments, including increased capital funding for Amtrak and surface transportation. Also defeated was an attempt to strike policy riders related to increasing truck size and weight. Democrats tied the deadly Amtrak accident in Philadelphia, which occurred earlier in May, to a need for more funding. The House plans to take up the bill on its floor next week. Senate Moves Forward with "Fast Track" Trade Bill On May 22, the Senate moved forward on a "fast track" trade bill after overcoming a Democratic filibuster of the bill. Under a deal reached by leadership, the Senate took stand-alone votes last week on a customs enforcement bill, as well as a non-controversial measure on sub-saharan Africa trade preferences, before starting debate on the trade promotion authority (TPA) bill. The trade legislation, widely supported by Senate Republicans as well as the Obama Administration, will let the president get his trade deals approved by Congress with a simple majority vote. Now the bill moves to the House of Representatives. House Republican leaders do not plan on bringing the bill to the floor next week as they are still gathering support. The bill has drawn support from the business lobby, but it has also drawn opposition from several labor, environmental and other groups. House leadership remains confident that the bill will pass the House. House Votes to Maintain Pay Freeze for Members of Congress On May 19, the House voted on a measure that would provide funding for legislative branch programs, including congressional offices, Capitol Police and the Library of Congress. It maintains a pay freeze for members of Congress, which has been in place since The measure also contains a provision directing the Capitol Police not to enforce a rule that prohibits sledding on the Capitol grounds. The bill is the third FY 16 appropriations measure to hit the House floor this year. Last month, the House passed appropriations for the Department of Veterans' Affairs and military construction projects, the Department of Energy and Army Corps of Engineers. The GOP's Options for Healthcare Law Repeal As the House and Senate await the Supreme Court ruling on King vs. Burwell (the case challenging the availability of healthcare law subsidies) the GOP has three options. One is to use reconciliation, which allows legislation to bypass the usual 60-vote threshold in the Senate, both to repeal the healthcare law, and to respond to the court decision, but that bill would be vetoed. A second option is to use reconciliation for repeal of the healthcare law, and separately move a response to King vs. Burwell through regular legislation. If the attempt to repeal the law satisfies conservatives, Republicans might be able to unite around a more modest package to replace the subsidies with a GOP alternative without endorsing the healthcare law. The third option would be to use reconciliation only for the King vs. Burwell legislation. Using reconciliation would facilitate its passage through the Senate, but some conservatives would object strenuously to giving up the use of reconciliation to put a repeal bill on President Obama s desk. House Committee Passes 21st Century Cures Act On May 21, the House Energy and Commerce Committee passed the 21st Century Cures Act, which includes an overhaul of the Food and Drug Administration s regulatory authority as well as new funding for the National Institutes of Health (NIH). The bill was approved by the Health Subcommittee the prior week. Reps. Fred Upton

3 (R-MI) and Dianna DeGette (D-CO), who co-authorized the bill, have stated that the bill will pass the House by June. While the bill has widespread support by democrats and republicans, the question remains on how the bill s authors plan to offset the costs (particularly $10 billion in NIH funding). Rep. Upton s office says the bill will be fully paid for and more details will be unveiled soon. Its future in the Senate remains unclear with several senators stating that their version of the legislation will move at a much slower pace. Now that the legislation has passed the committee, it awaits its turn to be brought onto the House floor for a discussion and vote. FY 16 Defense Authorization Bills Indicate Congress is Concerned about U.S. Space Superiority On May 15, the FY 16 Defense Authorization Bill passed the House, and on May 21, the Senate Armed Services Committee approved their version of the bill. The Senate bill would require the President to create a policy for deterring adversaries who might threaten U.S. satellites or use their own satellites to imperil U.S. interests. The bill would also mandate that the Defense Secretary have a senior adviser on such matters. Alternatively, the House s legislation contains initiatives affecting the U.S. military in space, including a requirement for the Pentagon to plan for at least one space-based missile defense program. The new provisions in both bills clearly reflects growing congressional concern that potential foes, led by China and Russia, are increasingly capable of negating America s superiority in space, either by using their own satellites to wage war on Earth or by directly attacking U.S. satellites. House Ways and Means Committee Chairman Ryan Looking into Tax Overhaul in 2015 On May 7, Rep. Paul Ryan (R-WI), Chair of the House Ways and Means Committee, said that he s looking to develop a broad business tax package this summer that would help all businesses no matter how they are structured, including those that provide pass-through income to owners, such as S corporations, partnerships and sole proprietors. The measure could allow repatriation of foreign corporate profits that could encourage private investment in infrastructure, helping to meet goals for a multiyear surface transportation reauthorization. A tax overhaul still faces big hurdles because the parties remain deeply divided on whether the effort should focus on corporations (as argued by Democrats), or on the owners of pass-through businesses. Finally, Rep. Ryan said that he has his eye on a fall-back plan for moving a tax break extension package by early fall. NLRB Data for 2014 vs The National Labor Relations Board (NLRB) conducted slightly more resolved representation elections in 2014 than it did the previous year. Additionally, the total number of elections held and number of elections won by unions slightly increased. The NLRB conducted 1,425 elections in 2014, up from 1,374 in 2013, an increase of 51 elections. Unions won 977 of the elections held last year, up from 890 wins in The union win rate also rose last year, to 68.6 percent from 64.8 percent in However, the number of workers eligible to vote in the elections fell from 126,676 in 2013, to 93,084 in Unions organized 60,394 workers through NLRB elections last year, down from 89,798 in The NLRB statistics do not reflect the full extent of organizing conducted by unions, since many of them organize through other methods including neutrality and card-check recognition agreements. The union win rate in decertification elections also fell slightly between 2013 and 2014, from 38.5 percent in 2013 to 36.5 percent last year. In 2014, unions prevailed in 65 of 178 decertification elections held. By comparison, in 2013, unions won 77 of 200 decertification elections. AFL-CIO Unions won 491 Elections. The unions affiliated with the AFL-CIO won 491 of 741 elections held in 2014 (or 66.3 percent), compared with 2013, when they won 402 of 632 elections (63.6 percent). The unions in the Change to Win federation won 312 NLRB elections, or 62 percent of the 503 elections they participated in last year. In 2013, they won 323 of 551 elections, for a win rate of 58.6 percent.

4 OSHA Issues Final Construction Confined Spaces Rule OSHA issued a final rule on May 5 to increase protections for construction workers in confined spaces. Manholes, crawl spaces, tanks and other confined spaces are not intended for continuous occupancy, and they are difficult to exit in an emergency. People working in confined spaces face life-threatening hazards, including toxic substances, electrocutions, explosions and asphyxiation. Last year, two workers asphyxiated while repairing leaks in a manhole, the second when he went down to save the first, which is not uncommon in confined spaces asphyxiation cases. The rule will provide construction workers with protections similar to what manufacturing and general industry workers have had for more than two decades, with some differences tailored to the construction industry. These include requirements to ensure that multiple employers share vital safety information and to continuously monitor hazards; a safety option made possible by technological advances after the manufacturing and general industry standards were created. This rule emphasizes training, continuous worksite evaluation and communication requirements to further protect workers' safety and health. Download FCA s Safety Alert on the topic for more information on the rule. EPA Releases Proposed Rule for Renewable Fuel Standards for 2014, 2015 and 2016 On Thursday May 28, the Environmental Protection Agency (EPA) proposed renewable fuel standards (RFS) for 2014, 2015 and This comes after numerous biofuel producers asked President Obama for a high level White House meeting on the EPA s 2014, 2015 and 2016 renewable fuel mandates. In the letter requesting the meeting, the producers said they were deeply concerned that the EPA would issue a rule similar to one the agency withdrew last year (which called for cutbacks in the 2014 mandates for both conventional ethanol and advanced biofuels in the RFS program). Per the biofuel producers, the proposed rule and the ongoing delays in setting a final target for 2014 have led to decreased investment in the domestic advanced biofuels industry. On the other end of the spectrum, oil trade groups urged the EPA to retain the cuts to the program as it had previously proposed. Congress created the current RFS in 2007 as a means of increasing energy independence and reducing the carbon dioxide footprint of transportation fuel. Survey Claims President Obama s Numbers Better than his Potential Replacements On May 5, an NBC/Wall Street Journal survey claimed that President Obama's numbers are better than his potential replacements. In this latest survey, pollsters asked whether people felt positively or negatively toward Obama and six candidates or potential candidates to replace him: Republicans Jeb Bush, Ted Cruz, Rand Paul, Marco Rubio, and Scott Walker, plus Democrat Hillary Clinton. While 47 percent of adults said they viewed Obama positively compared with 40 percent who view him negatively, none of the 2016 candidates scored better than even. Clinton broke even in the poll, with 42 percent viewing her positively and 42 percent viewing her negatively. Each of the Republican candidates, who also comprise the top-five most likely GOP nominees, had at least as many people viewing them negatively as positively. U.S. Shale Gas Companies are Ready to Drill After slashing the number of drilling rigs for months, U.S. shale-oil companies say they are ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices. Last week, shale-oil companies said they would ramp up output if U.S. prices hold at recent levels, while other drillers said they would open the taps if U.S. benchmark West Texas Intermediate (WTI) reaches $70 a barrel. WTI settled at $60.50 on Wednesday, while global benchmark Brent settled at $ An increase in U.S. production, coupled with rising output by suppliers such as Russia and Brazil, could put a cap on the 40 percent rally in crude prices since March, and even push them lower later in the year. One factor will

5 be whether shale companies can quickly pump more oil. Shale producers drill into oil-rich rock horizontally and then break it up with water and sand to extract the fuel. The cost to get oil out of these wells varies widely, but producers can stagger outlays by drilling then waiting to pump the oil when market prices are optimal or extraction costs are lower. For this reason, U.S. shale companies are increasingly being seen as so-called swing producers that, as a group, can boost production when prices are high and cut back when prices fall. The implication for global oil markets is that with the U.S. shale producers response, the world would have some counterbalance against big market swings in either direction, but that new flexibility has not been fully tested in a major market downturn. As prices fell last year, shale companies began furiously decommissioning rigs. Following 22 consecutive weeks of aggressive cuts, the industry is left with 930 fewer rigs, a 58 percent cut from their 1,609 peak in October. The International Energy Agency said it expects U.S. shale-oil output growth to slow by 80,000 barrels a day this month. Meanwhile, other global producers, including the Organization of the Petroleum Exporting Countries, have not reined in production at all, and in many cases are pumping more. Finally, U.S. production grew by 1 million barrels a day each year since 2011 to surpass 9 million barrels a day last year.