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Global Policy Watch

Key Public Policy Developments Around the World From Covington & Burling LLP

This Week in Congress – July 27, 2015

Posted in Congressional Action

Highway funding remains at an impasse in Congress this week, as the House and Senate continue to debate how to extend funding for the program and for how long that extension should last.  The House already passed a five-month extension, but the Senate is attempting passage of a long-term bill.  Meanwhile, the July 31 expiration date of the current program is approaching.

The Senate formally proceeded to consideration of a three-year, roughly $40 billion highway bill on Thursday by a vote of 51-26 after a 62-36 vote to invoke cloture on the motion to proceed to the bill, and remained in session over the weekend to begin consideration of amendments.  Majority Leader Mitch McConnell filed cloture on two amendments that were offered to the bill on Friday: his own amendment to repeal the Affordable Care Act and an amendment by Senator Mark Kirk (R-IL) and Senator Heidi Heitkamp (D-ND) to reauthorize the Export-Import Bank.  Even though the House has voted more than 50 times to repeal the Affordable Care Act in part or in full, the Senate has not gone on record in the 114th Congress to overturn President Obama’s signature law.  It is unlikely that the Majority Leader’s amendment will garner enough support, given that Republicans control 54 seats in the chamber and the amendment would need 60 votes to pass.  Conversely, even though several conservative Republican Senators oppose reauthorization of the Export-Import Bank, the Kirk amendment is expected to pass because of strong Democratic support for the agency.  The charter of the Export-Import Bank expired at the end of last month, and the highway bill has been viewed as the must-pass vehicle to which the Senate could attach reauthorization language.  House leaders oppose the Senate effort to add the reauthorization of the Bank to the highway bill, while President Obama is demanding it be included in any highway reauthorization bill sent to him for signature.

At this point, Leader McConnell is seeking to block any other non-germane amendments from coming up before a final vote on the highway bill.  Majority Leader McConnell has “filled the tree,” preventing other amendments from being offered, but he is likely working with the bill managers for an agreement on the number of germane amendments that can be considered before moving towards final passage.  Leader McConnell also proposed an amendment that would extend the highway program for two months if a deal on the longer-term bill cannot be achieved.

House Republican leadership is strongly opposed to the Senate highway bill.  The House passed its own bill two weeks ago that would provide for a five-month extension of the current highway program, using $8 billion in offsets, largely from enhanced tax-compliance measures, that will supplement Highway Trust Fund receipts derived from the gas tax.  Republican leadership supported the short-term measure, hoping the extension will allow Congress more time to negotiate a longer-term reauthorization before the December deadline contained in the House bill.  Should the Senate pass its long-term reauthorization this week, chances for passage in the House are slim.  House Republicans and Democrats alike have voiced concerns about the funding offsets currently included in the Senate bill.  House conservatives are also opposed to resurrecting the charter for the Export-Import Bank, should it be included in the Senate bill.  The Senate may be forced to take up the short-term House extension if a strategy for the long-term bill is not reached, especially given the congressional calendar- the current program has a July 31 deadline and congressional recess is scheduled to begin for the House of Representatives at the end of this week.  How House leaders will respond to a two-month extension of the highway program, if that is all the Senate can pass, is unclear at this point.  Given that a two-month extension would end concurrent with the end of the fiscal year, given how few days Congress will be in session in September and how much needs to be done to keep the government open past the end of the month (discussed below), House leaders may continue to insist on their five-month extension of the program.  And how the Export-Import Bank fits into the highway dynamic further complicates the discussion.  As a result, it should be a very interesting week as House members look to their August recess (the Senate is scheduled to be in session for the first week of August).

The House is scheduled to return on Monday, and take up 17 bills under suspension of the rules.  More than half these bills are from the Homeland Security Committee, while two each are from the Resources, Judiciary, and Veterans Affairs Committees, with the remaining three bills from other committees.  On Tuesday the House is expected  to take up H.R. 427, the Regulations from the Executive in Need of Scrutiny (REINS) Act of 2015, a bill that aims to increase transparency in the federal regulatory process.  The REINS Act would require federal agencies to submit any major rule with an annual economic impact of $100 million or more to Congress for approval before the rule could take effect.  This legislation passed the House previously in 2011 and 2013 but it stands no chance of passage in the Senate and is opposed by the President.  When debate on the REINS Act is completed, the House will consider H.R. 1994, the VA Accountability Act, an oversight and reform proposal for the Department of Veterans Affairs.  Among other provisions, this bill would further curtail employee-appeal rights for VA employees faced with termination.  Another veterans bill that the House may consider this week prior to the August recess is the VA Budget and Choice Improvement Act, legislation to direct the Secretary of Veterans Affairs to develop a plan to consolidate VA programs  that furnish hospital and medical care to veterans at non-VA facilities into a single, new program.  Finally, the House floor schedule leaves room for the chamber to consider the conference report on the National Defense Authorization Act if the House-Senate conference is able to complete its work on the legislation.

Congressional leaders acknowledged this week what has been clear all along, that efforts to pass appropriations bills to fund the government past the end of the fiscal year on September 30 have failed.  Speaker of the House John Boehner (R-OH) conceded to reporters last week that Congress will have to pass a continuing resolution (CR) to fund the government when the current fiscal year ends.  Speaker Boehner acknowledged that there are limited legislative days on the calendar in September when Congress returns from the August recess, and there is not nearly enough time to wrap up the annual appropriations process in both chambers.  Even though the House Appropriations Committee has cleared all 12 of the annual appropriations bills, only half of those bills have been approved by the full House and a seventh bill was pulled from the floor due to a dispute over the Confederate battle flag.  The Senate Appropriations Committee has also been successful in marking up the 12 annual bills, but Senate Republicans have been unable to bring a single funding measure to the floor due to a Democratic filibuster focused on the funding levels in the bills.  Republican majorities in both chambers worked under the spending limits established in the 2011 sequester, but Senate Democrats have blocked the entire appropriations process due to objections of those spending limits and so-called “budget gimmicks” that increased only defense funding for FY 2016.  Further, President Obama has pledged to veto any appropriations measure at current funding levels.  Congressional Democrats have been pushing for a bipartisan summit to negotiate a new budget framework, but Republicans have not indicated a willingness to work out a deal to increase the spending caps.  Even though a CR will be necessary to avoid a government shutdown this fall, it remains unclear how long the extension will last and how leadership and appropriators in both chambers will come to agreement.

Iran remains a major focus of congressional scrutiny this week.  As established by the Iran Nuclear Review Act (P.L. 114-17), the House and Senate have 60 days to review and consider the multilateral nuclear agreement, reached by international negotiators earlier this month, and ultimately vote for approval or disapproval.  The 60-day clock started on July 20, when the Administration officially presented the agreement to Congress.  After testifying before an intense hearing in the Senate Foreign Relations Committee last week, Secretary of State John Kerry, Secretary of Energy Ernest Moniz, and Secretary of the Treasury Jacob Lew will appear as witnesses before the House Foreign Affairs Committee on Tuesday morning.  The House Select Intelligence Committee will also have a closed session on Tuesday to discuss Iran issues, while the House Armed Service Committee will hold a Wednesday hearing on the regional implications of the Iran deal.  Congressional Republicans have been highly critical of the terms reached by international negotiators and the Islamic Republic.  Press reports indicate Speaker Boehner has stated that the House will do “everything possible” to block the Iran nuclear deal.  While House Republicans may have enough votes to pass a resolution of disapproval to block the deal should the majority decide not to support it, Senate Republicans would have to peel off a number of Democrats in order to be able to invoke cloture and pass a disapproval resolution.  And if a disapproval resolution can be passed by both chambers, President Obama has pledged to “veto any legislation that prevents the successful implementation of this deal.”  It is not clear whether enough Democrats in either the Senate or the House would support an effort to override a presidential veto.  One core problem for opponents of the deal in Congress is that the President and his international partners secured United Nations Security Council approval for the deal last week.  In effect, the international sanctions that wrought havoc on the Iranian economy and forced Iran to the negotiating table will come to an end.  Even if Congress rejects the deal and can somehow override the President’s veto, which as noted is highly unlikely, the impact of U.S. rejection of the deal will be marginal at best, and Iran has effectively prevailed in vindicating its interests.  Whether the deal in fact will make the region safer, only time will tell, and proponents of the deal have the hope of success as their basic argument.

Also possible for upcoming consideration in the Senate is a comprehensive energy reform bill, set to be considered by the Senate Energy and Natural Resources Committee this Tuesday.  The bipartisan measure was introduced last week by Committee Chairwoman Lisa Murkowski (R-AK) and Ranking Member Maria Cantwell (D-WA).  Assuming the bill is approved by the Committee, as is likely given the bipartisan agreement, the bill is a candidate for floor consideration after the August recess.

Cybersecurity legislation is also of interest on Capitol Hill this week. There are two hearings scheduled in the House: the Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection and Security Technologies meets on Tuesday to discuss best practices and the House Select Intelligence Committee meets Thursday for a hearing on global cybersecurity threats. On the other side of the Capitol, Senate Republican leadership has indicated they would like to bring to the floor the Cybersecurity Information Sharing Act (CISA), a bill that would encourage greater exchange of public and private data on hackers, before the recess, once consideration of the highway bill is completed.  The House has passed its version of CISA earlier this year.

A detailed hearing schedule for the House and Senate is included below:

Tuesday, July 28, 2015

House Committees

Congressional Budget Process
House Budget
Full Committee Hearing
10 a.m., 210 Cannon Bldg.

HHS Policy Review
House Education and the Workforce
Full Committee Hearing
10 a.m., 2175 Rayburn Bldg.

Defense Department Anthrax Shipments
House Energy and Commerce – Subcommittee on Oversight and Investigations
Subcommittee Hearing
10 a.m., 2123 Rayburn Bldg.

FCC Oversight
House Energy and Commerce – Subcommittee on Communications and Technology
Subcommittee Hearing
10:15 a.m., 2322 Rayburn Bldg.

Dodd-Frank Assessment
House Financial Services
Full Committee Hearing
10 a.m., 2128 Rayburn Bldg.

Iran Nuclear Deal
House Foreign Affairs
Full Committee Hearing
10 a.m., 2172 Rayburn Bldg.

Heroin Abuse
House Judiciary – Subcommittee on Crime, Terrorism, Homeland Security and Investigations
Subcommittee Hearing
10 a.m., 2141 Rayburn Bldg.

Coastal Zone Management Law
House Natural Resources – Subcommittee on Energy and Mineral Resources
Subcommittee Oversight Hearing
10 a.m., 1334 Longworth Bldg.

Interior Department Law Enforcement Issues
House Natural Resources – Subcommittee on Oversight & Investigations
Subcommittee Oversight Hearing
10:30 a.m., 1324 Longworth Bldg.

Ex-Im Bank
House Oversight and Government Reform
Full Committee Hearing
10:30 a.m., 2154 Rayburn Bldg.

Intelligence Report and Iran Issues
House Select Intelligence
Full Committee Closed Hearing
10 a.m., HVC-304 Capitol Visitor Center

Space Exploration
House Science, Space and Technology
Full Committee Hearing
10 a.m., 2318 Rayburn Bldg.

Maritime Measures
House Transportation and Infrastructure – Subcommittee on Coast Guard and Maritime Transportation
Subcommittee Hearing
10 a.m., 2253 Rayburn Bldg.

Medicare Regulations and Rural Health
House Ways and Means – Subcommittee on Health
Subcommittee Hearing
10 a.m., 1100 Longworth Bldg.

Financial Services Bills
House Financial Services
Full Committee Markup
2 p.m., 2128 Rayburn Bldg.

Iran-North Korea Relations
House Foreign Affairs – Subcommittee on Asia and the Pacific; House Foreign Affairs – Subcommittee on Terrorism, Nonproliferation, and Trade; House Foreign Affairs – Subcommittee on the Middle East and North Africa
Subcommittees Joint Hearing
3 p.m., 2172 Rayburn Bldg.

Cybersecurity Best Practices
House Homeland Security – Subcommittee on Cybersecurity,  Infrastructure Protection and Security Technologies
Subcommittee Hearing
2 p.m., 311 Cannon Bldg.

Sanctions, Divestment and Boycotts
House Oversight and Government Reform – Subcommittee on National Security
Subcommittee Hearing
2 p.m., 2247 Rayburn Bldg.

Multiemployer Pension Plan Issues
House Ways and Means – Subcommittee on Select Revenue Measures
Subcommittee Hearing
2 p.m., 1100 Longworth Bldg.

Senate Committees

Crude Oil Export Issues
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
10 a.m., 538 Dirksen Bldg.

Business Meeting (20 Agenda Items)
Senate Energy & Natural Resources
Full Committee Business Meeting
10 a.m., 366 Dirksen Bldg.

Diplomatic Security Training Facility
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., 342 Dirksen Bldg.

Intelligence Issues
Senate Select Intelligence
Full Committee Other Event
2:30 p.m., 219 Hart Bldg.

Joint Committees

Dynamic Scoring
Joint Economic
Full Committee Hearing
2 p.m., 216 Hart Bldg.

Wednesday, July 29, 2015

House Committees

Dodd-Frank and Global Derivatives
House Agriculture
Full Committee Hearing
10 a.m., 1300 Longworth Bldg.

Iran Deal’s Regional Implications
House Armed Services
Full Committee Hearing
10 a.m., 2118 Rayburn Bldg.

ISIS and the Role of Women
House Foreign Affairs
Full Committee Hearing
10 a.m., 2172 Rayburn Bldg.

TSA and Aviation Security
House Homeland Security
Full Committee Hearing
10 a.m., 311 Cannon Bldg.

Internet Connectivity Issues
House Judiciary – Subcommittee on Courts, Intellectual Property and the Internet
Subcommittee Hearing
10 a.m., 2141 Rayburn Bldg.

Endangered Species Act Consultation
House Natural Resources
Full Committee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

EPA Management Issues
House Oversight and Government Reform
Full Committee Hearing
9 a.m., 2154 Rayburn Bldg.

NRC Licensing Process
House Science, Space and Technology – Subcommittee on Energy
Subcommittee Hearing
9 a.m., 2318 Rayburn Bldg.

Benghazi Events
House Select Committee on Benghazi Attack
Full Committee Hearing
10 a.m., HVC-210 Capitol Visitor Center

Veterans Affairs Measures
House Veterans’ Affairs
Full Committee Markup
10:30 a.m., 334 Cannon Bldg.

Pakistan and Minority Rights
House Foreign Affairs – Subcommittee on Africa, Global Health, Global Human Rights and International Organizations
Subcommittee Hearing
2 p.m., 2200 Rayburn Bldg.

Press Rights in the Americas
House Foreign Affairs – Subcommittee on the Western Hemisphere
Subcommittee Hearing
3 p.m., 2172 Rayburn Bldg.

Senate Committees

Bankruptcy Overhaul
Senate Banking, Housing and Urban Affairs – Subcommittee on Financial Institutions and Consumer Protection
Subcommittee Hearing
10 a.m., 538 Dirksen Bldg.

Wireless Broadband Spectrum
Senate Commerce, Science and Transportation
Full Committee Hearing
10:30 a.m., 253 Russell Bldg.

North Korea and National Security
Senate Foreign Relations – Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy
Subcommittee Hearing
10 a.m., 419 Dirksen Bldg.

Higher Education Renewal and Campus Assaults
Senate Health, Education, Labor and Pensions
Full Committee Hearing
9 a.m., 216 Hart Bldg.

Government Affairs Nomination and Measures
Senate Homeland Security and Governmental Affairs
Full Committee Markup
10 a.m., 342 Dirksen Bldg.

Shipyards Practices
Senate Armed Services – Subcommittee on Readiness and Management Support
Subcommittee Hearing
2:30 p.m., 232A Russell Bldg.

Substance Abuse in Native Communities
Senate Indian Affairs
Full Committee Oversight Hearing
2:15 p.m., 628 Dirksen Bldg.

IRS Targeting Overview
Senate Judiciary – Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts
Subcommittee Hearing
2 p.m., 226 Dirksen Bldg.

Homeless Veterans Issues
Senate Veterans’ Affairs
Full Committee Hearing
2:30 p.m., 418 Russell Bldg.

Thursday, July 30, 2015

House Committees

Avian Flu Response
House Agriculture – Subcommittee on Livestock and Foreign Agriculture
Subcommittee Hearing
8:30 a.m., 1300 Longworth Bldg.

U.S. Border Violence
House Oversight and Government Reform
Full Committee Hearing
9 a.m., 2154 Rayburn Bldg.

U.S. Power Supply Vulnerabilities
House Science, Space and Technology – Subcommittee on Oversight; House Science, Space and Technology – Subcommittee on Energy
Subcommittees Joint Hearing
9 a.m., 2318 Rayburn Bldg.

Global Cybersecurity Threats
House Select Intelligence
Full Committee Hearing
9 a.m., HVC-210 Capitol Visitor Center

Senate Committees

Corporate Tax Code
Senate Homeland Security and Governmental Affairs – Permanent Subcommittee on Investigations
Subcommittee Hearing
9:30 a.m., 342 Dirksen Bldg.

Intelligence Issues
Senate Select Intelligence
Full Committee Other Event
2:30 p.m., 219 Hart Bldg.

Ghana Set to Ban Non-Degradable Plastics

Posted in Africa

According to news reports, the Ghanaian Ministry of Environment, Science, Technology and Innovations will “sanction a directive in two weeks” banning the production and importation of non-degradable plastic products.

Like many countries, Ghana’s rapid development has put significant pressure on sanitation management systems in the country’s urban centers.  However, the issue became a national priority when waste-clogged drains and gutters contributed to last month’s tragic floods in the capital city of Accra.  The proposed ban follows weeks of comments from President John Mahama, Vice-President Kwesi Amissah-Arthur and the general public about the role that plastic waste in particular played in the disaster.  Ghana will be joining a host of other African countries that have instituted similar measures to curb or outright ban the import, manufacture and/or use of plastics especially very thin plastics.  The list of countries that have instituted similar measures includes  Botswana, Burundi, Kenya, Mauritania, Tanzania, Rwanda, Senegal, South Africa, and Uganda.

This post can also be found on Cov Africa, the firm’s blog on legal, regulatory, political and economic developments in Africa.

This Week in Congress – July 20, 2015

Posted in Congressional Action

Congress will be focusing on two major deadlines this week, as members stare down the July 31 expiration of the current highway program and start the clock, set by bipartisan legislation approved earlier this year on review and consideration of the multilateral nuclear deal reached last week with Iran.

The Senate is scheduled to return on Tuesday with a cloture vote scheduled on H.R. 22, the legislative vehicle for the Senate version of a multi-year highway-funding reauthorization. The current extension expires July 31, leaving Congress once again scrambling to produce a long-term reauthorization that is adequately funded, or continue enacting short-term extensions.  The House unexpectedly trumped the Senate by moving first on a highway bill last week, passing legislation by a vote of 312-119.  The House-passed bill would provide for a five-month extension of the current program, using $8 billion in offsets, largely from enhanced tax-compliance measures, that will supplement Highway Trust Fund receipts derived from the gas tax.  Republican leadership supported the measure, hoping the short-term extension will allow Congress more time to negotiate a longer-term reauthorization in the coming months.

Across the Capitol, Senate Majority Leader Mitch McConnell (R-KY) is aiming for the Senate to produce a multi-year proposal, which is strongly supported by Senate Democrats, who have threatened to oppose another short-term extension of the highway program.  Republicans and Democrats are engaged in talks to find sufficient support for such a bill.  Last week, Senate Finance Committee Chairman Orrin Hatch (R-UT) offered offsets of $80 billion to pay for a six-year highway bill.  Many of the components of the proposal were immediately attacked by different senators.  Included among Chairman Hatch’s offsets was a proposal to save $32 billion from changes to federal employee retirement programs, which was promptly attacked by Democratic senators, and a proposal to save $17 billion from a reduction in interest paid to banks by the Federal Reserve, which was promptly opposed by Fed Chairman Janet Yellen and Senate Banking Committee Chairman RIchard Shelby (R-AL). Although other portions of Chairman Hatch’s proposed offsets are less controversial, with an increase in the federal gas tax off the table due to opposition from Republican leaders in both chambers, it remains unclear if the Senate can reach a consensus before July 31 on the funding for a long-term highway bill.  If not, it is likely to follow the House and approve an extension to the end of the year, during which time leaders in both chambers will continue to look for funding mechanisms, including the possibility of some type of international corporate tax reform, to cover the cost of a long-term highway bill.

As has been widely discussed for weeks, the Senate highway bill is the likely vehicle for consideration of the reauthorization of the Export-Import Bank, which technically expired at the end of June.  In a test vote last month, more than 60 senators voted in favor of extending the Bank’s charter, showing that Bank proponents have the votes needed to cut off a filibuster, which has been threatened by Senator Ted Cruz (R-TX), a vocal critic of the Bank.  Inclusion of the Bank’s reauthorization will make a short-term highway bill more palatable to Democrats in both chambers. House Republican Majority Leader Kevin McCarthy (R-CA) and House Ways and Means Committee Chairman Paul Ryan (R-WI) have expressed their opposition to including the reauthorization of the Export-Import Bank in the highway bill.

The House has a very light schedule this week and its upcoming agenda is unknown, largely due to patent-litigation reform and Interior Appropriations measures being scrapped from floor consideration.  As highlighted in last week’s column, the House has not yet found a strategy for moving forward with consideration of the Interior-Environment Appropriations bill, which ended prematurely in a dispute over the Confederate battle flag.  Also noteworthy is the continued absence of the patent-litigation reform bill, H.R. 9, from the floor schedule.  H.R. 9 had initially been included for July action in Majority Leader Kevin McCarthy’s planned schedule for the month after a lopsided vote in favor of the bill in the Judiciary Committee..  Press reports indicate that rising opposition to the bill from various industries has weakened support for the bill and resulted in a postponement of the bill’s consideration until after the August recess in order to allow bill sponsor, Judiciary Committee Chairman Bob Goodlatte (R-VA) to rebuild support for the measure, which had passed in the previous Congress with 325 votes in favor.  With little on the House schedule and a short-term extension of the highway program passed, it may be a strategic move for House leadership to adjourn for the scheduled August recess at the end of this week instead of the following week to preclude the Senate from sending a new version of the highway bill, with the Export-Import Bank extension included in it, back to the House for consideration.  Such a maneuver would force the Senate simply to accept the short-term, House-passed highway bill and leave supporters of the Export-Import Bank in both chambers struggling to find another must-pass vehicle for their effort to restore the Bank’s charter, which would have to await September, at the earliest.

The House is scheduled to return on Tuesday and take up four non-controversial bills under suspension of the rules.  On Wednesday, the House will turn to H.R. 1734, the Improving Coal Combustion Residuals Regulation Act of 2015.  The bill would eliminate the implementation issues associated with the Environmental Protection Agency’s final rule on coal ash and set up enforceable state permitting programs. After that bill, the House is expected to take up H.R. 1599, the Safe and Accurate Food Labeling Act of 2015.  This legislation would require a national standard for labeling laws related to genetically-modified organisms (GMOs) in foods, rather than the patchwork of state laws that have been enacted or are under consideration by state legislatures across the country.

The VA Accountability Act, H.R. 1994, an oversight and reform proposal for the Department of Veterans Affairs, may also be considered by the House this week.  Among other provisions, this bill would further curtail employee-appeal rights for VA employees faced with termination.  Additionally, there is potential for the House to take up a bill tackling comprehensive energy policy, currently being crafted by the House Energy and Commerce Committee, and legislation to increase transparency in the federal regulatory process.  Two other items that could be considered this week, depending on whether bicameral conference committees can wrap up their work, are the conference report on customs enforcement legislation and the conference report on the National Defense Authorization Act.

Off the floor, much of the debate on the Hill this week will be centered on the Iran Nuclear Agreement, reached by international negotiators last week.  The Obama Administration will be ramping up its lobbying efforts to drum up congressional support for the agreement. Press reports indicate that Vice President Joe Biden and the President’s deputy National Security Advisor, Ben Rhodes, have already begun briefings with Democratic members, who will be crucial to congressional approval of the agreement.  As established by the Iran Nuclear Review Act (P.L. 114-17), the Administration has five days to certify the international agreement and present it to Congress.  The House and Senate then have 60 days to review and consider the agreement, and ultimately vote for approval or disapproval.  President Obama has pledged to “veto any legislation that prevents the successful implementation of this deal.”  While House Republicans may have enough votes to pass a resolution of disapproval to block the deal should the majority decide not to support it, Senate Republicans would have to peel off a number of Democrats in order to pass a disapproval resolution.  And if a disapproval resolution can be passed by both chambers, it is not clear whether enough Democrats in either the Senate or the House would support an effort to override a presidential veto.  Even though a vote is not expected until members return from recess in September, both chambers will start their review of the deal this week.  The Senate Foreign Relations Committee is scheduled to hold a hearing on Thursday, with Secretary of State John Kerry, Secretary of Energy Ernest Moniz, and Secretary of the Treasury Jacob Lew appearing as witnesses.  Prior to the hearing, it is expected that Secretaries Kerry, Moniz, and Lew will hold a closed-door briefing of the nuclear agreement for all Senators.  On Wednesday, the House Financial Services Committee will meet to discuss the Iran agreement and its potential effect on terrorist financing.

Immigration policy will be the focus of other committee activity this week, following the fatal shooting of a San Francisco woman over the Fourth of July weekend by a person with a felonious history who was in the country illegally and who is reported to have been deported from the U.S. five times.  The Senate Judiciary Committee will meet on Tuesday to discuss immigration enforcement and public safety, while the House Judiciary Subcommittee on Immigration and Border Security will hold a Thursday hearing on sanctuary cities, i.e., those communities that have policies in place declining to assist or actively defying federal immigration laws and orders. San Francisco is one such city.

The Senate Armed Services Committee on Tuesday will take up the nomination of General Mark A. Milley, to be Chief Of Staff of the Army.  With the Army about to shrink from 490,000 to 450,000 soldiers, its smallest size since World War Two, Gen. Milley will face a daunting task if he is confirmed, as is expected.

Finally, there is a the prospect that a conference committee will be organized on legislation to reauthorize the Elementary and Secondary Education Act (ESEA), also known as No Child Left Behind.  Both chambers have now passed reauthorization legislation, a significant accomplishment, given that Congress has been unable to generate a rewrite of NCLB since its expiration in 2007.  The conference committee will have many difficult issues to work out, because the bills are very different, with the House having passed with only Republican support a measure that strictly limits the federal role in schools, while the Senate was able to produce a much more bipartisan product.

A full schedule of House and Senate hearings is detailed below:

Monday, July 20, 2015 

Senate Committees 

Milwaukee School Program
Senate Homeland Security and Governmental Affairs
Full Committee Field Hearing
July 20, 6 p.m., Krier Center, St. Marcus Lutheran School, 2215 N. Palmer St., Milwaukee, Wis.

Tuesday, July 21, 2015

House Committees

VA Procurement Issues
House Veterans’ Affairs – Subcommittee on Oversight and Investigations
Subcommittee Hearing
4 p.m., 334 Cannon Bldg.

D.C. Metro Safety Assessment
House Oversight and Government Reform – Subcommittee on Government Operations; House Oversight and Government Reform – Subcommittee on Transportation and Public Assets
Subcommittees Joint Hearing
5 p.m., 2154 Rayburn Bldg.

Senate Committees

Army Chief of Staff Nomination
Senate Armed Services
Full Committee Confirmation Hearing
9:30 a.m., 216 Hart Bldg.

Immigration Enforcement and Public Safety
Senate Judiciary
Full Committee Hearing
10 a.m., 226 Dirksen Bldg.

Labor Department Issues
Senate Health, Education, Labor and Pensions – Subcommittee on Employment and Workplace Safety
Subcommittee Hearing
2:30 p.m., 430 Dirksen Bldg.

U.S. Ambassador Nominations
Senate Foreign Relations
Full Committee Confirmation Hearing
2:30 p.m., 419 Dirksen Bldg.

Wednesday, July 22, 2015 

House Committees

Agriculture Department Oversight
House Agriculture
Full Committee Hearing
10 a.m., 1300 Longworth Bldg.

Federal Reserve Proposals
House Financial Services – Subcommittee on Monetary Policy and Trade
Subcommittee Hearing
10 a.m., 2128 Rayburn Bldg.

Social Cost of Carbon
House Natural Resources
Full Committee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

Tax Compliance and Small Businesses
House Small Business
Full Committee Hearing
11 a.m., 2360 Rayburn Bldg.

Brownfields Program
House Transportation and Infrastructure – Subcommittee on Water Resources and Environment
Subcommittee Hearing
10 a.m., 2167 Rayburn Bldg.

Veterans Health Measures
House Veterans’ Affairs – Subcommittee on Health
Subcommittee Markup
10 a.m., 334 Cannon Bldg.

MedPAC Issues
House Ways and Means – Subcommittee on Health
Subcommittee Hearing
10 a.m., B-318 Rayburn Bldg.

Broadband Infrastructure Investment
House Energy and Commerce – Subcommittee on Communications and Technology
Subcommittee Hearing
2:30 p.m., 2322 Rayburn Bldg.

Iran Deal and Terrorism Financing
House Financial Services
Full Committee Hearing
2 p.m., 2128 Rayburn Bldg.

U.S. Commerce in Africa and Middle East
House Foreign Affairs – Subcommittee on the Middle East and North Africa
Subcommittee Hearing
2 p.m., 2172 Rayburn Bldg.

The Crisis in Burundi
House Foreign Affairs – Subcommittee on Africa, Global Health, Global Human Rights and International Organizations
Subcommittee Hearing
2 p.m., 2200 Rayburn Bldg.

Land Use Bills
House Natural Resources – Subcommittee on Indian, Insular and Alaska Native Affairs
Subcommittee Hearing
2 p.m., 1334 Longworth Bldg.

Senate Committees

Financial Stability Oversight Council
Senate Banking, Housing and Urban Affairs – Subcommittee on Securities, Insurance and Investment
Subcommittee Hearing
10 a.m., 538 Dirksen Bldg.

Transportation Department Nomination
Senate Commerce, Science and Transportation
Full Committee Confirmation Hearing
10 a.m., 253 Russell Bldg.

Higher Education Reauthorization
Senate Health, Education, Labor and Pensions
Full Committee Hearing
10 a.m., 430 Dirksen Bldg.

U.S. Electric Grid Issues
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., 342 Dirksen Bldg.

Judiciary Nominations
Senate Judiciary
Full Committee Confirmation Hearing
10 a.m., 226 Dirksen Bldg.

Tax Compliance Overhaul
Senate Small Business and Entrepreneurship
Full Committee Hearing
10 a.m., 428A Russell Bldg.

Supreme Court Activism
Senate Judiciary – Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts
Subcommittee Hearing
1:30 p.m., 226 Dirksen Bldg.

Indian Gaming Issues
Senate Indian Affairs
Full Committee Oversight Hearing
2:15 p.m., 216 Hart Bldg.

Indian Affairs Measures
Senate Indian Affairs
Full Committee Markup
2:15 p.m., 216 Hart Bldg.

Medicare Provider Enrollment Fraud
Senate Special Aging
Full Committee Hearing
2:15 p.m., 562 Dirksen Bldg.

Thursday, July 23, 2015

House Committees

Obama Administration’s Overtime Proposal
House Education and the Workforce – Subcommittee on Workforce Protections
Subcommittee Hearing
10 a.m., 2175 Rayburn Bldg.

Banking Capital and Liquidity Issues
House Financial Services
Full Committee Hearing
10 a.m., 2128 Rayburn Bldg.

‘Sanctuary Cities’
House Judiciary – Subcommittee on Immigration and Border Security
Subcommittee Hearing
10 a.m., 2141 Rayburn Bldg.

National Parks Outlook
House Natural Resources – Subcommittee on Federal Lands
Subcommittee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

Water Management Bills
House Natural Resources – Subcommittee on Water, Power and Oceans
Subcommittee Hearing
10:30 a.m., 1334 Longworth Bldg.

National Park Service Concessions
House Oversight and Government Reform – Subcommittee on the Interior
Subcommittee Hearing
9 a.m., 2154 Rayburn Bldg.

Ex-Im Bank
House Oversight and Government Reform
Full Committee Hearing
Noon, 2154 Rayburn Bldg.

EPA Renewable Fuel Mandate
House Science, Space and Technology – Subcommittee on Energy; House Science, Space and Technology – Subcommittee on Oversight
Committee Joint Hearing
10 a.m., 2318 Rayburn Bldg.

Ongoing Intelligence Activities
House Select Intelligence – Department of Defense Intelligence and Overhead Architecture Subcommittee
Subcommittee Hearing
9 a.m., HVC-304 Capitol Visitor Center

Small Businesses and App Technology
House Small Business – Subcommittee on Health and Technology
Subcommittee Hearing
10 a.m., 2360 Rayburn Bldg.

IRS Audit Selection Process
House Ways and Means – Subcommittee on Oversight
Subcommittee Hearing
10 a.m., 1100 Longworth Bldg.

U.S.-South China Sea Security
House Foreign Affairs – Subcommittee on Asia and the Pacific
Subcommittee Hearing
2172 Rayburn Bldg.

Terrorism and U.S.-Russia Relations
House Foreign Affairs – Subcommittee on Europe, Eurasia and Emerging Threats
Subcommittee Hearing
2 p.m., 2255 Rayburn Bldg.

Mexico and North American Energy
House Foreign Affairs – Subcommittee on the Western Hemisphere
Subcommittee Hearing
2 p.m., 2200 Rayburn Bldg.

Senate Committees

U.S. Bank Holding Companies
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
9:30 a.m., 538 Dirksen Bldg.

Finance Nominations
Senate Finance
Full Committee Confirmation Hearing
10 a.m., 215 Dirksen Bldg.

Health Information Technology
Senate Health, Education, Labor and Pensions
Full Committee Hearing
10 a.m., 430 Dirksen Bldg.

General Services Administration Nomination
Senate Homeland Security and Governmental Affairs
Full Committee Confirmation Hearing
10 a.m., 342 Dirksen Bldg.

Iran Nuclear Agreement Review
Senate Foreign Relations Committee
Full Committee Hearing
TBD

Friday July 24, 2015

House Committees

Hazardous Waste E-Manifest Law Implementation
House Energy and Commerce – Subcommittee on Environment and the Economy
Subcommittee Hearing
9 a.m., 2322 Rayburn Bldg.

Health Law State Insurance Marketplaces
House Energy and Commerce – Subcommittee on Oversight and Investigations
Subcommittee Hearing
9:15 a.m., 2123 Rayburn Bldg.

DATA Act Implementation
House Oversight and Government Reform – Subcommittee on Information Technology
Subcommittee Hearing
9:30 a.m., 2154 Rayburn Bldg.

Public and Private Sector Cybersecurity
House Science, Space and Technology – Subcommittee on Research and Technology; House Science, Space and Technology – Subcommittee on Oversight
Subcommittees Joint Hearing
9 a.m., 2318 Rayburn Bldg.

President Buhari Comes to Washington

Posted in Africa, International Strategy

Next week, Nigeria’s President Muhammadu Buhari travels to Washington for a two-day visit, which culminates in an Oval Office meeting with President Obama on July 20.  Buhari is expected to travel light — not on luggage, but advisors.  Since he has appointed no ministers as of yet, only a handful or two of advisors is expected to make the trip.  Dubbed an “official working visit,” the meeting of the two presidents comes at an important time for Nigeria with its faltering economy and a renewed Boko Haram now teaming up with ISIS.  These two important issues promise to be front and center in the discussions.

What else will be on the agenda?  A lot of the spade work was done last week in Nigeria.  Deputy Secretary of State Tony Blinken, along with senior officials from the Departments of State, Defense, and Treasury spent a few days in Nigeria with their Nigerian counterparts hammering out an agenda for the Obama meeting.  Blinken explained to the Nigerian press that the U.S. wanted to hear from the new government what assistance needs it has and its ideas on future engagement, rather than the U.S. offering up expanded programs, especially in the North.  Insecurity and underdevelopment in the Northeast states need careful thought as a winning strategy against Boko Haram has to encompass more than a military campaign.  Rather, local governments need to govern better, health care and education need to be significantly expanded and improved, and the youth need jobs.  Finding funds for these priorities will prove difficult, however, given Nigeria’s financial crisis.

Corruption in the public sector will no doubt be discussed.  President Buhari campaigned on a promise of rooting out corruption, and the energy sector seems to be his first target.  Approximately, 200,000 barrels per day are lost through “bunkering” and subsequent illegal sales.  Some have even speculated that the president will retain control of the Petroleum Ministry and the oil portfolio, as he did when he was head of state in the early 1980s.

A fourth topic on the agenda will be transparency and accountability of government.  In a highly decentralized federal system, such as Nigeria’s, state governments and local government authorities control substantial budgets, yet oversight of local spending remains weak.  A strong vibrant civil society can often serve as a check on government, and so the two sides may use the visit to explore ideas on cooperation in that area.  As for the downturn in the economy, the parties will seek ways of accelerating the diversification of the economy.  Oil revenue accounts for 70 percent of overall government revenue, and with oil prices still in the $50 a barrel range, Nigeria is experiencing a fiscal crisis that affects not just the federal government, but also state governments, which rely on national pass-downs to pay salaries and other expenses.  Former Nigerian Ministers Adesina and Aganga pursued smart policies and good programs to grow the agricultural and industrial sectors, but more is needed to diversify further.

The power sector is on the brink of crisis, as new deals have stalled.  Private developers are anxiously sitting on the sidelines watching what happens with the $900 million, 450 MW, Azura-Nedo project.  The project was about to close at the end of 2014, but the former Attorney General decided not to authorize a sovereign guarantee to back the project.  Five Power Africa private sector partners have invested millions of dollars to date to develop a project whose fate is unclear.  This issue may rise to the level of the two presidents, both of whom are committed to expanding access to power for the tens of millions who lack reliable power in Nigeria.

It is a rich and full agenda, and the hope is that the visit will pave the way for improved cooperation on many fronts.

Welcome to Washington, President Buhari.

 

This post can also be found on Cov Africa, the firm’s blog on legal, regulatory, political and economic developments in Africa.

There will be no Grexit

Posted in EU Law and Regulatory

After 17 hours of uninterrupted negotiations, the European Council reached, minutes before the opening of the European markets, on Monday July 13, an agreement to launch negotiations for a third bailout program for Greece.

Despite the loss of trust in the country’s leaders, despite a referendum in which more than 61 %  rejected the reform plan which was supposed to conclude the second bailout program, despite the anger of some EU heads of government, the political will to keep the Eurozone together triumphed in the end.

Even if some difficult steps still need to be made, one can be reassured as from now that Greece will receive enough help and will enforce enough reforms to be able to stay in the Eurozone.

The agreement contains various elements:

  • The most central is a set of reforms the Greek Parliament is supposed to adopt in order to allow the negotiation of a new bailout program of 82 to 86 Billion Euros. These reforms – touching the pension system, the VAT levels go much further than those which were asked for the completion of the second program. (The full text can be found here.)
  • Greece had also to accept the setting up of a 50 Billion Euro fund where assets will be stored. It will be established in Athens (and not in Luxembourg as originally suggested) but under EU oversight . Half of its resources will be used to recapitalize Greek banks , the rest should help the privatization process which had brought very disappointing results under the previous bail outs.
  • Apart from the bailout support, Greece will also receive 35 billion Euros in financial aid to revive its economy. This was an important contribution of Jean Clade Juncker’s Commission to the package.
  • There is “no question” of debt relief but an opening to an extension of the deadlines for reimbursement.
  • One of the last sticking points, which prolonged the negotiation until the early morning was the participation of the IMF in the new bailout; Tsipras did not want it but Greece will have to” request IMF support, (monitoring and financing) as from March 2016”.
  • The ECB announced soon after the decision was made that it would decide on an extension of the Emergency Liquidity Facility loans only after the vote in the Greek Parliament, which means that the Greek banks will remain closed until then.
  • The most serious unknown at this stage is indeed the reaction in Greece. Part of Syriza will probably reject the agreement but Tsipras had been careful to enlist the support of the mainstream parties which will vote in favor in order to keep the country in the Euro.
  • The trust was so low that, as part of the agreement, the Greek Parliament will need to vote the most sensitive reforms this week probably Wednesday) , before any other decision can be made.

Several other Parliaments in the EU will also need to agree on the package. Angela Merkel seems to be sure to get the agreement of the Bundestag.  The most negative in the whole negotiation was Finland which counts a Eurosceptic party (“the true Fins”) in the government. The perspective of a decision on the bailout by qualified majority (in emergency circumstances the decision can be made with a 85% majority in the ESM) probably helped and the agreement in the European Council could be announced as unanimous.

The Eurogroup – the meeting of the finance ministers of the Eurozone – will meet (as from today) to monitor the process and find a way to give Greece a “ bridge credit” in order  to face its immediate needs.

This Week in Congress — July 13, 2015

Posted in Congressional Action

The first week back from July 4 recess showed that not all the fireworks were set off during Independence Day, as the House’s consideration of the Interior-Environment Appropriations bill was ended prematurely in a dispute over the Confederate battle flag.  Despite the fracas, the House finished last week with a strong bipartisan vote in favor of the 21st Century Cures Act.

This week, the House returns on Monday and will tackle six bills under suspension of the rules, primarily from the Small Business Committee.  On Tuesday, the House marches through 14 suspension bills, all of them having been reported by the Financial Services Committee.  On Wednesday and Thursday, the House will tackle H.R. 2898, the Western Water and American Food Security Act of 2015, introduced by Rep. David Valadao (R-CA).  The bill provides a response to the drought afflicting the west, especially California, source of much of the country’s food.  Of interest to note is the absence on the agenda of the patent-litigation reform bill, H.R. 9.  That bill had been included for action this week in Majority Leader Kevin McCarthy’s planned floor schedule for the month.  While a similar bill passed last Congress with 325 votes, the failure to consider the bill as scheduled this week may portend underlying issues with the bill, or it may be due to something as simple as a delay in getting a score from the Congressional Budget Office.  Nonetheless, its absence from this week’s schedule is worthy of note.

The Senate resumes consideration on Monday of S. 1177, the Every Child Achieves Act, the bipartisan bill developed by Education Committee chairman, Senator Lamar Alexander (R-TN), and the committee’s ranking member, Senator Patty Murray (D-WA), to reauthorize the Elementary and Secondary Education Act (ESEA), also known as No Child Left Behind.  Last week, the chamber worked its way through amendments to the bill.  The chamber’s work on this legislation reflects another instance of Leader Mitch McConnell’s effort to restore regular order to the workings of the body, after several years of dysfunction.  This week, the Senate is expected to complete its consideration of the bill.  Last week, the House passed its version of the bill to reauthorize the ESEA.  Senate passage will allow both chambers to begin the process of reconciling the two bills, which are quite different.

Upon completion of the Every Child Achieves Act, the Majority Leader has signaled his intention to turn to consideration of the highway bill.  The current program, operating under a short-term extension passed earlier in the spring, expires at the end of July and must be renewed.  Congress will not go into its August recess, the height of road building and repair season, without extending the program.  As has been the case for many years now, the challenge is figuring out how to pay for the infrastructure programs included in the highway bill.  Proposals to raise the gas tax have not won support from Republican leaders in either chamber.  The leading proposal has been to use receipts from the repatriation of earnings being held overseas by American companies due to the non-competitively high U.S. corporate tax rate.  This repatriation option has numerous proponents, but many senators want to reserve the funds from a repatriation for broader tax reform.  In the face of this stalemate, Leader McConnell has again expressed his expectation that the Senate will have to adopt another short-term renewal, to be paid for from general receipts.  Although Democrats have resisted another short-term extension, they are likely to have few viable alternatives.

As has been widely discussed for weeks, the highway bill, which is must-pass legislation, is the likely vehicle for consideration of the reauthorization of the Export-Import Bank, which technically expired at the end of June.  In a test vote last month, more than 60 senators voted in favor of extending the Bank’s charter.  Inclusion of the Bank’s reauthorization will make a short-term highway bill more palatable to Democrats in both chambers.

Last week the Armed Services Committee held a confirmation hearing for Marine Corps General Joe Dunford to be chairman of the Joint Chiefs of Staff.  The hearing went well, and the committee could seek to consider and report the nomination this week, although no markup is currently scheduled.  If General Dunford is reported by the committee, prompt action by the full Senate is possible, though a confirmation vote is more likely next week.

This week committees on both sides of the Capitol will hold a number of high-profile hearings.  On Tuesday, the House Foreign Affairs Committee has scheduled a hearing on the Iran Nuclear Agreement, which was supposed to have been achieved by last week but, as of this writing, remains under negotiation.  Also on Tuesday, a Foreign Affairs Subcommittee will hold a hearing on the EU Outlook, a topic garnering unusual attention in light of the Greek debt crisis and the potential for Greece to default and be forced out of the Euro.  Staying with the Foreign Affairs Committee, two of its subcommittees will hold a hearing on Thursday on U.S.-China Nuclear Cooperation.

Federal Reserve Board Chairman Janet Yellen provides her semi-annual testimony to the House Financial Services Committee on Wednesday and to the Senate Banking Committee on Thursday.  Senate Banking also holds an oversight hearing on Wednesday with Consumer Financial Protection Bureau Director Richard Cordray.

Secretary of Homeland Security Jeh Johnson appears before the House Judiciary Committee on Tuesday.  On Wednesday, that committee will hear from Howard Shelanski, the Director of the little-known but singularly powerful White House Office of Regulatory Affairs (OIRA), which oversees the federal government’s regulatory apparatus.  The OIRA Director also appears before the Regulatory Affairs Subcommittee of the Senate Homeland Security and Governmental Affairs Committee on Thursday.

Other hearings of note this week include a two-part hearing on criminal justice reform in the House Oversight Committee, a hearing on radicalization in the House Homeland Security Committee, a hearing on welfare reform in the House Ways & Means Committee, a hearing on the Export-Import Bank in the House Oversight Committee, and a hearing of a Senate Commerce subcommittee on Wednesday looking into international soccer issues, in the wake of the recent indictment of FIFA officials.

On committee’s markup agendas, the House Appropriations Committee will mark up the Homeland Security appropriations bill on Tuesday.  The bill contains language that would block any funds from implementing President Obama’s November 2014 executive actions, currently enjoined by the courts, to postpone indefinitely the deportation of immigrants in the country illegally. On Wednesday, the Senate Commerce Committee will mark up the highway-safety portion of the highway bill just as the bill is likely to come to the floor.

A list of scheduled committee hearings for the week follows.

Monday, July 13, 2015 

Senate Committees 

Traffic Congestion and Commerce Issues
Senate Small Business and Entrepreneurship
Full Committee Field Hearing
July 13, 3:30 p.m., Livingston Parish Council Chamber, 20355 Government Blvd., Livingston, La.

Tuesday, July 14, 2015

House Committees

Fiscal 2016 Appropriations: Homeland Security
House Appropriations
Full Committee Markup
10:15 a.m., 2359 Rayburn Bldg.

Broadband Infrastructure Investment
House Energy and Commerce – Subcommittee on Communications and Technology
Subcommittee Hearing
10 a.m., 2322 Rayburn Bldg.

Pipeline Safety
House Energy and Commerce – Subcommittee on Energy and Power
Subcommittee Hearing
10:15 a.m., 2123 Rayburn Bldg.

Federal Reserve Oversight
House Financial Services – Subcommittee on Oversight and Investigations
Subcommittee Hearing
10 a.m., 2128 Rayburn Bldg.

Iran Nuclear Agreement
House Foreign Affairs
Full Committee Hearing
10 a.m., 2172 Rayburn Bldg.

Maritime Border Security
House Homeland Security – Subcommittee on Border and Maritime Security
Subcommittee Hearing
10 a.m., 311 Cannon Bldg.

DHS Oversight
House Judiciary
Full Committee Oversight Hearing
10 a.m., 2141 Rayburn Bldg.

Seismic Surveying in Outer Continental Shelf
House Natural Resources – Subcommittee on Energy and Mineral Resources
Subcommittee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

Federal Land Management Bills
House Natural Resources – Subcommittee on Federal Lands
Subcommittee Hearing
10:30 a.m., 1334 Longworth Bldg.

Criminal Justice Reforms
House Oversight and Government Reform
Full Committee Hearing
9:45 a.m., 2154 Rayburn Bldg.

Commercial Weather Data
House Science, Space and Technology – Subcommittee on Environment
Subcommittee Hearing
10 a.m., 2318 Rayburn Bldg.

Health Care Measures
House Veterans’ Affairs – Subcommittee on Health
Subcommittee Hearing
10 a.m., 334 Cannon Bldg.

Medicare Prescription Drug Program
House Energy and Commerce – Subcommittee on Oversight and Investigations
Subcommittee Hearing
2 p.m., 2322 Rayburn Bldg.

Tunisia Political Assessment
House Foreign Affairs – Subcommittee on the Middle East and North Africa
Subcommittee Hearing
2 p.m., 2172 Rayburn Bldg.

European Union Outlook
House Foreign Affairs – Subcommittee on Europe, Eurasia and Emerging Threats
Subcommittee Hearing
2 p.m., 2200 Rayburn Bldg.

Weapons of Mass Destruction
House Homeland Security – Subcommittee on Cybersecurity, Infrastructure Protection and Security Technologies; House Homeland Security – Subcommittee on Emergency Preparedness, Response and Communications
Subcommittees Joint Hearing
2 p.m., 311 Cannon Bldg.

Senate Committees

Armed Services Nominations
Senate Armed Services
Full Committee Confirmation Hearing
9:30 a.m., G50 Dirksen Bldg.

Disease Research
Senate Commerce, Science and Transportation – Subcommittee on Space, Science and Competitiveness
Subcommittee Hearing
10 a.m., 253 Russell Bldg.

Islanded Energy Systems
Senate Energy and Natural Resources
Full Committee Hearing
10 a.m., 366 Dirksen Bldg.

Intelligence Briefing
Senate Select Intelligence
Full Committee Closed Briefing
2:30 p.m., 219 Hart Bldg.

Small Business Energy Development and Manufacturing
Senate Small Business and Entrepreneurship
Full Committee Hearing
2:30 p.m., 428A Russell Bldg.

Wednesday, July 15, 2015

House Committees

Land Grant Universities
House Agriculture
Full Committee Hearing
10 a.m., 1300 Longworth Bldg.

Monetary Policy and Economic Assessment
House Financial Services
Full Committee Hearing
10 a.m., HVC-210 Capitol Visitor Center

U.S. Counterterrorism Assessment
House Homeland Security
Full Committee Hearing
10 a.m., 311 Cannon Bldg.

Fracking on Federal Lands
House Natural Resources – Subcommittee on Energy and Mineral Resources
Subcommittee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

Criminal Justice Reforms
House Oversight and Government Reform
Full Committee Hearing
10 a.m., 2154 Rayburn Bldg.

National Weather Service Misconduct Allegations
House Science, Space and Technology
Full Committee Hearing
10 a.m., 2318 Rayburn Bldg.

Small Businesses’ Drone Use
House Small Business
Full Committee Hearing
11 a.m., 2360 Rayburn Bldg.

VA Employee Disciplinary Issues
House Veterans’ Affairs
Full Committee Markup
10 a.m., 334 Cannon Bldg.

VA Unemployability Benefits
House Veterans’ Affairs
Full Committee Hearing
10:30 a.m., 334 Cannon Bldg.

TANF Renewal and Welfare Proposals
House Ways and Means – Subcommittee on Human Resources
Subcommittee Hearing
10:30 a.m., 1100 Longworth Bldg.

SNAP Strategies
House Agriculture – Subcommittee on Nutrition
Subcommittee Hearing
1:30 p.m., 1300 Longworth Bldg.

Office of Information and Regulatory Affairs
House Judiciary – Subcommittee on Regulatory Reform, Commercial and Antitrust Law
Subcommittee Oversight Hearing
3 p.m., 2141 Rayburn Bldg.

Tribal Land and Economic Development
House Natural Resources – Subcommittee on Indian, Insular and Alaska Native Affairs
Subcommittee Hearing
2 p.m., 1324 Longworth Bldg.

Interior Department Cybersecurity
House Oversight and Government Reform – Subcommittee on Information Technology; House Oversight and Government Reform – Subcommittee on the Interior
Committee Joint Hearing
2 p.m., 2154 Rayburn Bldg.

Senate Committees

Consumer Financial Protection Bureau Report
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
10 a.m., 538 Dirksen Bldg.

Transportation and Consumer Protection Measure
Senate Commerce, Science and Transportation
Full Committee Markup
10 a.m., 253 Russell Bldg.

Maritime Border Security
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., 342 Dirksen Bldg.

International Soccer Overview
Senate Commerce, Science and Transportation – Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security
Subcommittee Hearing
2:30 p.m., 253 Russell Bldg.

Indian Country Juvenile Justice
Senate Indian Affairs
Full Committee Oversight Hearing
2:15 p.m., 628 Dirksen Bldg.

Diabetes Research
Senate Special Aging
Full Committee Hearing
2:15 p.m., G-50 Dirksen Bldg.

Thursday, July 16, 2015

House Committees

U.S.-China Nuclear Cooperation
House Foreign Affairs – Subcommittee on Asia and the Pacific; House Foreign Affairs – Subcommittee on Terrorism, Nonproliferation, and Trade
Subcommittees Joint Hearing
9 a.m., 2172 Rayburn Bldg.

Federal Air Marshal Assessment
House Homeland Security – Subcommittee on Transportation Security
Subcommittee Hearing
10 a.m., 311 Cannon Bldg.

Senate Committees

Monetary Policy Report
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
2:30 p.m., 538 Dirksen Bldg.

Wildlife Poaching
Senate Foreign Relations – Subcommittee on Africa and Global Health Policy
Subcommittee Hearing
2 p.m., 419 Dirksen Bldg.

Forest and Timber Issues
Senate Energy and Natural Resources – Subcommittee on Public Lands, Forests and Mining
Subcommittee Hearing
2:45 p.m., 366 Dirksen Bldg.

Regulatory Process
Senate Homeland Security and Governmental Affairs – Subcommittee on Regulatory Affairs and Federal Management
Subcommittee Hearing
2 p.m., 342 Dirksen Bldg.

Intelligence Briefing
Senate Select Intelligence
Full Committee Closed Briefing

The last act of the Greek crisis negotiations?

Posted in EU Law and Regulatory

The latest chapter of the Greek crisis, which started with the electoral victory of the left wing Syriza party in January 2015, is reaching its close. The final deadline for reaching an agreement in principle to negotiate a new bailout has been set for Sunday, 12 July by the European Council.

This last chance given to Tsipras by his European colleagues, despite the resounding “no” in last Sunday’s referendum, does not raise much optimism in Brussels. One, and possibly the only, positive outcome of the referendum may be that the other mainstream Greek political parties have formally decided to support his negotiations. The Greek Prime Minister is now less dependent on the extremist wing of his party and he will have more flexibility in obtaining approval for difficult reforms at home. Tsipras even promised to have some measures on pensions and taxes approved as early as next week.

For the first time, the European institutions and the major Member States are seriously considering the option of Greece exiting the euro. This could happen soon after Sunday’s deadline, if the Eurozone Member States and the European institutions refuse to give Greece the aid it badly needs. In contrast to the crisis in 2010, the financial stability of the euro area as a whole is not in question. The financial markets remain quiet, with the spread between the German and Italian/Spanish 10 year bonds growing only modestly in the last few days. So far the Greek case has not spilled over to other Member States. Additionally, on 16 June 2015, the European Court of Justice upheld the European Central Bank’s Outright Monetary Transactions program (‘OMT’), allowing the bank to fully implement the program if needed.

It is unlikely that EU Member States will agree to address the fundamental issue of debt relief. Most economists, and even the IMF, consider the Greek debt to be unsustainable. Nonetheless, some EU countries are not yet prepared to address it. This includes not only Germany but also the new Member States, most of them poorer than Greece, and also countries like Ireland and Portugal, which had to implement painful austerity programs. However, this is mainly a political issue rather than a substantive financial problem, because no significant reimbursement is due to the other Member States before 2023 under the EFSM and the ESM arrangements.

Most experts consider that an orderly Grexit will be very difficult to implement. There is no legal basis in the EU Treaties to expel Greece from the euro, and Greece will probably not accept a formal decision to do so. Instead, it is more likely that a Grexit will be triggered by the collapse of the Greek banking system if the ECB ends the emergency lending to Greek banks. Moreover, it is difficult to plan for a Grexit while negotiations are still ongoing because any Grexit preparations will risk creating a self-fulfilling prophecy.

The wider implications for Europe of a potential Grexit will be far reaching in several respects:

  • A Grexit will damage the image of the EU in the world. And the credibility of the Eurozone will suffer when it is realised that membership is not irreversible.
  • Politically it will be a mark on the political legacy of German Chancellor Angela Merkel who, since the beginning of the Eurozone crisis in 2010, has favoured respect for the treaty commitments including implementation of the rules. A break up of the Eurozone is a great failure politically as Germany is the biggest supporter European integration.
  • The Eurozone countries have contributed in a massive way and in particular Germany, to financially support Eurozone countries in need, in particular Greece. Eurozone countries will need to write off huge amount of loans which will create a heated public debate in Member States and will feed the negative sentiment towards the euro in Member States.
  • At an institutional level, a Grexit will bolster calls for further fiscal and monetary integration of the Eurozone to prevent a new crisis.
  • It will also accelerate the establishment of a two-speed Europe, with the members of the Eurozone at its core and other Member States on the periphery.
  • A Grexit will also put Greece at risk of a severe humanitarian crisis, with an enormous brain drain of young people as it struggles to cope with an influx of immigrants from the Middle East and North Africa. A Grexit may also destabilise the Balkan region.

If a Grexit leads to a Greek departure from the European Union (which is still mainly a theoretical possibility), the geopolitical impact could be dramatic.

A Reauthorized U.S. Export-Import Bank is Central to U.S. Commercial Success in Africa

Posted in Africa, Congressional Action, International Strategy

If the U.S. Export-Import Bank (Ex-Im) is not reauthorized, U.S. efforts to deepen commercial ties to Africa will be significantly impeded. Not only would this put U.S. companies at a commercial disadvantage to companies from the European Union, China, Russia, India and elsewhere, it would impact negatively on the contribution that many American companies make to economic development on the continent through job creation, technology transfers and skills development.

Last month’s extension of the African Growth and Opportunity Act (AGOA) for ten years ushers in a new era of stability and predictability in U.S.-African commercial relations. Without Ex-Im’s renewal, however, AGOA’s impact will not be fully realized.

According to the Commerce Department, the U.S. exports about $22.5 billion worth of manufactured goods to Sub-Saharan Africa. This translates into support for about 120,000 jobs in the U.S. According to Ex-Im’s annual report, the agency approved more than $6.3 billion in financing for U.S. exports to Africa over the last five years, including a record of $2.1 billion of authorizations in FY 2014.

The loan guarantees financed the sale of nearly 300 GE electric-diesel locomotives from its plant in Erie and Grove City, PA., to South Africa, supporting nearly 2,500 jobs in Pennsylvania and other states. The guarantees also supported the sale of Boeing aircraft to Ethiopian Airlines, Kenya Airways and the Angolan national airlines, making Boeing the market leader on the continent and supporting more than 5,400 jobs in the U.S. In fact, in 2013, Ex-Im financed 188 transactions in Africa from small, medium and large U.S. companies to 35 of the 49 countries in Sub-Saharan Africa.

Critics charge that Exim is a “corporate welfare slush fund,” or a “bridge to nowhere,” in the words of Representative Jim Jordan (R-OH). Such criticisms are hard to sustain, however, given that Ex-Im generated a surplus of $674.7 million for U.S. taxpayers in 2014 and, since 1992, a surplus of $7 billion for the U.S. Treasury. In short, for every dollar that Ex-Im invests in a transaction, taxpayers receive $1.71 in return.

The reality is that Ex-Im supports U.S. exports to markets that few other U.S. financial institutions will finance. The agency is extremely important to U.S. competitiveness globally, and, especially, in the emerging markets.

Hopefully, there is a light at the end of the tunnel. Press reports indicate that there are now enough votes in the Senate to reauthorize Ex-Im. Majority Leader, Senator Mitch McConnell, said that he will permit the vote to take place. The expectation is that supporters in the Senate will try to attach Ex-Im reauthorization to the “must-pass” bill replenishing the Highway Trust fund.

China, the Middle East and the Global Economy–Where Might the “Silk Road” Lead?

Posted in China

China clearly wants to use its enormous financial capacity to secure access to resources, to create good jobs for its huge population, to enhance its strategic clout and to spur global growth in ways that shore up growth at home.  Certainly, this is true of China’s engagement with the Middle East, from which it obtains over half of the oil and gas which helps feed a fast-growing energy demand.  China’s recent launch of ambitious — some say grandiose — plans for a new land and maritime “Silk Road” economic corridor of infrastructure and finance to better link Asia, the Middle East and Europe to China is core to this approach.  China seeks to accomplish this golden vision without intruding upon or becoming overly enmeshed in the complex political divisions, rivalries and conflicts which permeate the Middle East.   Yet, those very complexities have long impeded economic growth and diversification in a region that remains one of the least economically-integrated and diversified in the world.

Some fear that China may succeed, and undercut the influence of the US and others who would promote rule-of-law, competition-based commerce, transparency and good governance in the region.  Others — focused on the current pressures of extremism and instability on the region and nearby — hope that China’s new Silk Road, influence and self-interest will help to distract (if not dissuade) regional players from their aggressive focus on differences and zero-sum advantages.  It must be understood that China is acting strategically to mitigate and diversify away from risk of moving fuel and goods through unstable, unsecured or unfriendly corridors.  From that, China will not be deterred.  Rather than speculate or hope about the impacts, we might best start with understanding as far as possible what the strategy entails, and what factors drive and affect it.

China’s oil imports, especially from Russia, have risen dramatically in recent years, in part to diversify from Middle East and African sources.  But China can see that Russia uses oil and gas like a baseball bat, powerfully and with intent.  The two also compete for influence in Central Asia.  Not coincidentally, China re-launched its Silk Road initiative in 2013 in Central Asia, after Russia rejected China’s offer of a Shanghai Cooperation Organization only to form its own Eurasian Customs Union without China.  China also hopes that promoting trade (and related infrastructure) between its under-developed westernmost provinces which border Central Asia (and where Muslim Uighur minorities live) and Central Asia and the Middle East will, among other things, help to ease serious domestic tensions involving Uighur minorities.  Notably, the U.S. has its own commerce-based Central Asia “New Silk Road” initiative involving Afghanistan, similar to China’s in some respects, including, for example, investment in regional power grids.

China plans new land and water routes that would knit together four continents, potentially involving 65 countries and 4 billion people.  China hopes that Silk Road investments will deliver an additional $2.5 trillion in trade within 10 years.  If so, there might just be some opportunity and diverse benefits for the U.S., the EU and the global economy.  The land route is to run from central China to the border with Kazakhstan, then southwest to Iran before passing through Iraq, Syria and Turkey.  The new Silk Road would cross the Bosphorus and continue through Europe — Bulgaria, Romania, the Czech Republic, Germany and the Netherlands, and south to Venice where it is to converge with the planned maritime route running from Fujian through other southern Chinese ports before crossing the Malacca Strait via Kuala Lumpur and the Indian Ocean to Nairobi then around the Horn of Africa into the Mediterranean to end in Greece.  China aims to create networks of infrastructure — railway, ports, power, pipelines and internet — and to promote use of its renminbi currency (now the world’s second-most used) and financial system in regions through which the Silk Road runs.  In April, China established a renminbi clearance center in Qatar, which supplies 20 percent of China’s natural gas, to provide the region with access to China’s currency and foreign exchange markets.

Already China’s trade with the Middle East has increased more than 600% in the past decade to well over $200 billion per year.  In 2015, China became the world’s largest crude oil importer, and its imports from the Middle East are expected to double in 20 years.  With U.S. crude purchases sharply down, the Middle East also has turned towards China.  Since 2012, almost every leader of a major Middle East country has visited China, and billions of dollars in China’s investments and products are visible in Egypt, Saudi Arabia and throughout the region.  As yet, China’s leaders have studiously avoided travel to the region.  Chinese conglomerate CITIC Ltd. has just ponied up $113 billion for investment in the Silk Road.  The China Development Bank and its Export-Import Bank (along with the new Asian Infrastructure Investment Bank) are set to help finance key project components, just as Congress pulls the plug on U.S. Exim-Bank.

Nonetheless, China will face challenges.  China’s plan for a large, energy-relevant port in the Crimea has already been derailed.  China’s disengaged stance in the fight against ISIS is causing some heartburn.  In 2012, Chinese flags were burned in Arab capitals when China vetoed calls for Assad’s removal in Syria.  There is discomfort for some in the region with China’s treatment of its Muslim Uighurs, and — for those still hoping for an Arab Spring — its penchant for autocracy.   Recently, there has also been concern that Iraqi and Syrian militants may have gotten ahold of Chinese anti-aircraft weapons.  In fact, China is expanding its military cooperation in the broader Middle East, including with Turkey and Pakistan (which has Chinese nuclear technology) and already is a major arms supplier, in some cases to regional rivals.  Early July rumors of Chinese troops in Pakistani Kashmir (and plans for the Indian Ocean) unsettle India and others.  China’s resources come with few obvious strings attached, but also — as Africa discovered — with undoubted pressure to favor Chinese companies and interests.  Yet, China is one of 6 nations negotiating the Iran nuclear deal.  China’s economic clout and engagement could provide new leverage for peace and stability, if China chooses to use that leverage.

Thus far, China has mostly been given a “pass” from the politics of the Middle East — ISIS, peace-keeping and Sunni-Shia and other complexities.  However, many are watching China’s Middle East moves carefully.  Moreover, China has yet to gain the full support from the countries of this fractious region for its strategic investment plans.  Regardless, in the Middle East ambitious plans often founder when regional players begin to defend their own interests and risks.  China’s massive investments in regional integration could go forward and bear good fruit globally, if there is sufficient partnership with the U.S., Europe and others focused on the shared benefits of a stable, growing Middle East.

China may be tempted by its sense of uniqueness to try to go it alone in the region and to duck its thorny politics, but ultimately neither money nor power can buy love, loyalty and harmony. The Middle East, in particular, has proven that time and again.  Rather than hope or speculate on China’s motives, policymakers and the private sector had better engage them on how shared efforts could bring inclusive growth and stability to regions where it is long overdue.

China’s New National Security Law

Posted in China

The Chinese government made headlines around the world on July 1 when the Standing Committee of the National People’s Congress passed a sweeping new national security law (see official Chinese version here). The scope of the law, China’s most comprehensive piece of national security legislation to date, is broad. It covers issues of political security, military security, economic and financial security, social and cultural security, nuclear security, ecological security, and more. The final version of the law makes clear that the country’s leadership sees its security interests as extending far beyond the physical borders of mainland China, reaching to the depths of the sea, into outer space, and perhaps most importantly, into cyberspace.

The 84 articles of the law are divided into seven chapters that (1) set out guiding principles; (2) define national security; (3) describe the functions and responsibilities of the National People’s Congress and the various branches of government; (4) articulate the key elements of the national security regime (such as intelligence collection, risk assessment, conducting national security reviews, and responding to states of emergency); (5) outline mechanisms for allocating resources to national security work; (6) lay out obligations for  citizens and corporations to assist the government in protecting national security; and (7) close with supplementary provisions.

Beyond setting out a broad, vague definition of national security and defining a scope of coverage that touches nearly every aspect of China’s politics, economics, and society, the law’s implications for national security reviews of investments are far-reaching. Consistent recent regulations and legislative trends, Article 59 maintains the need for national security review for “foreign investments that infringe upon, or may infringe upon, national security.” However, it then goes further, also mandating national security reviews for investments involving “key materials and technologies,” “internet or information technology products and services,” “construction projects that implicate national security,” and “other major projects and  events.” How these apparently new national security review requirements will be implemented, and by which agencies, remains to be seen.

The Chinese government has hailed the national security law as an opportunity to replace an outmoded legal framework for handing security-related matters with one that is more in tune with 21st century challenges presented by globalization and information technology. These are surely challenges common to both the Chinese government and other governments around the world. Meanwhile, critics — including a particularly broad array of foreign governments, businesses, and human rights groups — see the legislation within the context of the broader consolidation of power that has characterized President Xi Jinping’s tenure (see New York Times article on the subject here).

In order to understand the import of the law, one must understand how it fits into the broader ecosystem of China’s unique legal system. A quick look at the text of the national security law shows that it is long on policy exhortations and short on details. This is not unusual in China, where national legislation is generally followed by a series of implementing rules issued by relevant government agencies under the purview of the executive State Council.

Given the wide scope of this law, we expect that a large number of government agencies regulating various sectors of the Chinese economy and polity will issue implementing measures in the months (or years) ahead. Clear, well-crafted rules could, in theory, create increased transparency to a realm that has thus far remained hidden from view, potentially constraining official discretion as called for by the Fourth Plenum of China’s Communist Party in 2014. However, recent trends and the far reaching nature of the new law suggest that it may instead serve as a legal basis for stronger restrictions on foreign business interests (as well as social and political interests) in the country, and for asserting China’s interests internationally.

Foreign companies are advised to closely monitor the process of drafting and issuing implementing rules by government agencies regulating sectors of interest to them, taking every opportunity to engage with policymakers wherever possible to ensure that their interests as responsible stakeholders in the country’s development are carefully considered. Furthermore, foreign governments negotiating trade and investment agreements — most notably, the United States, which is negotiating a bilateral investment treaty with China — should examine the impact that broad definitions of national security could have on the interpretation of security-related exceptions to agreements under negotiation.

To learn more about the content of the new national security law, read the Covington e-alert on the topic here.

Material for this post was supplied by Ashwin Kaja of Covington & Burling LLP.