The Week Ahead in the European Parliament – January 13, 2017

Summary

Next week is an important plenary in Strasbourg, as Member of the European Parliaments (“MEPs”) will elect their future President, Vice-Presidents, and Quaestors. New elected officials will remain in office for two and a half years. Though the official list of candidates running for the Presidency will only be announced on Monday, a number of MEPs have already announced their candidacy. This includes Eleonora Forenza (GUE/NGL, Italy), Jean Lambert (Greens/EFA, UK), Gianni Pittella (S&D, Italy), Laurenţiu Rebega (ENF, Romania), Helga Stevens (ECR, Belgium), Antonio Tajani (EPP, Italy) and Guy Verhofstadt (ALDE, Belgium).

Elections of the President and Vice-Presidents are expected to take place on Tuesday. Elections of Quaestors, and the MEP assignment to the various parliamentary committees is scheduled for Wednesday.

A number of important topics will be debated next week. On Wednesday, in the presence of Commission President, Jean-Claude Juncker, and Council President, Donald Tusk, MEPs will debate and address the prospective challenges facing the EU in the fields of investment and growth, EU-Russian relations, Brexit and security.

On the same day, Maltese Prime Minister Joseph Muscat will attend the plenary and outline the priorities of the Maltese Presidency. The Maltese Presidency of the Council of the EU started in January 2017. The presentation will be attended by the Commission President.

On Thursday, a plenary vote is expected on a motion for a resolution introduced by the Economic and Monetary Affairs Committee (“ECON”) and the Civil Liberties, Justice and Home Affairs Committee (“LIBE”) against the proposal for a delegated regulation supplementing the Fourth Anti-Money Laundering Directive, that identifies new high-risk third countries with strategic deficiencies in respect of anti-money laundering and countering terrorist financing. The Parliament calls on the Commission to Continue Reading

EU Policy Update

Brexit, the EU’s Response, and a Focus on Defense

On December 15, at the end of their traditional end of the year European Council, the 27 “remaining” EU heads of state or government had a short meeting, without Theresa May, to set out how the EU will handle the Brexit process once the UK has notified it of its intent to leave the Union.

They issued a seven-point statement addressing the procedural arrangements they have decided, on their side, for the implementation of Article 50 of the Lisbon treaty.  They did not, however, address the substance of the negotiations, the first step on which must be made by the UK.  The British Prime Minister confirmed, in the margins of the Council, that she intends to trigger Article 50 at the end of March 2017.  For Covington’s full analysis, please see the Global Policy Watch blog post on this topic by Jean De Ruyt and Sebastian Vos, available here.

At the end of 2016, EU defense policy received significant attention from policymakers in Brussels. On November 14, the Foreign Affairs Council endorsed the EU Global Strategy in the area of Security and Defense (see here); on December 30, the European Commission presented an European Defense Action Plan (see here); and the EU heads of States and Governments held a discussion on defense policy during their last summit on December 15, covering the EU “global strategy” in the areas of security and defense, the so called “European Defense Action Plan”, and the implementation of the common set of proposals that follow up on the EU-NATO Joint Declaration signed in Warsaw in July 2016 (see the Council Conclusions here).

This European focus on defense issues is caused by an increased awareness of the geopolitical uncertainties around Europe, and a political consensus that has emerged on the industrial benefits of a strong defense sector for the broader economy.  Among the initiatives announced, the most significant is the creation of a European Defense Fund that would include two distinct financing structures—a “research window” and a “capability window”.  The research window would fund collaborative defense research projects at the EU level, with an initial budget of € 90 million until 2020, and € 500 million per year after 2020.  The capability window would support the joint development of defense capabilities—i.e., military assets—financed through the pooling of national contributions of those Member States that decide to participate.  The European Commission has high hopes for this capability window, expecting it to mobilize around € 5 billion a year.

Tech and Digital Single Market Policies

On January 10, 2017, the European Commission published their proposal for a Regulation on Privacy and Electronic Communications (“ePrivacy Regulation”) and a “Communication on Building a European Data Economy” (see the proposed Regulation here, the Communication here, Fact Sheet here, and Commission Press Release here).

The new ePrivacy Regulation updates the 2009 ePrivacy Directive and ensures that it reflects the changes introduced by the new General Data Protection Regulation (“GDPR”).  Among other things, the proposal addresses consent rules and obligations for the processing of communications data, access to data on a user’s device, the use of cookies, access to metadata, and spam and direct marketing communications.

The ePrivacy Regulation will apply to traditional as well as new providers of electronic communications Continue Reading

Global Policy Watch: Tensions Building Up in Cross-Strait and U.S.-China Relations

Cross-Strait Relations

In her year-end press conference on December 31, 2016, Taiwan President Tsai Ing-wen focused on her administration’s domestic policy agenda but also noted Beijing’s increasing pressure on Taiwan since she took office on May 20. Beijing has cut off high-level communications between the two sides (while maintaining ties with the former KMT party), and applied economic sanctions, including measures to reduce Chinese tourism and certain agricultural imports from Taiwan. Beijing has continued to insist Tsai and the Democratic Progressive Party accept the “One China” principle despite public opposition in Taiwan.

Since the widely publicized phone call between President-elect Trump and Tsai in early December, Taiwan’s Defense Minister has asserted that Beijing has stepped up military pressure by increasing the frequency of PLA bomber exercises around Taiwan.  In late December, São Tomé and Príncipe, one of the remaining 22 countries maintaining diplomatic relations with the Republic of China (Taiwan), announced its decision to sever ties with Taiwan and resume ties with China in a ceremony held in Beijing.  In advance of Tsai’s planned visit to four of Taiwan’s Central American diplomatic allies in January, the Chinese Foreign Ministry urged U.S. officials not to allow her to transit through the United States in order “not to give any false signals to Taiwan independence forces, and through concrete actions safeguard overall U.S. China relations and peace and stability in the Taiwan Strait.”  In response to the media, the U.S. State Department spokesman noted such transits were based on “longstanding U.S. practice, consistent with the unofficial nature of (U.S.) relations with Taiwan.”  Tsai subsequently stopped over in Houston and met with Senator Ted Cruz and Governor Abbott on January 7 on the way to Guatemala and is scheduled to stop in San Francisco on the way back to Taiwan.

U.S.-China Relations

Shortly after the U.S. election and in anticipation of new U.S. trade enforcement actions under the Trump administration, Chinese media (Global Times) warned that “China will take a tit-for-tat approach then. A batch of Boeing orders will be replaced by Airbus.  U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted.  China can also limit the number of Chinese students studying in the U.S.  Trump as a shrewd businessman will not be so naïve.  None of the previous presidents were bold enough to launch an all-out trade war against China.”  Following this, in mid-December, a Chinese ship seized an unmanned underwater drone deployed by and in the presence of a U.S. Navy ship in international waters.  The Pentagon told journalists there was “no precedent for this in recent memory,” and the United States issued a formal diplomatic protest to demand the drone’s return. Trump himself got involved tweeting: “China steals United States Navy research drone in international waters — rips it out of water and takes it to China in unprecedented act,” and when China offered to return the drone, “we should tell China that we don’t want the drone they stole back.- let them keep it!”  Although China eventually returned the drone a few days later and blamed the United States for hyping up the incident, this action clearly has escalated tensions.

Meanwhile, the White House announced that President Obama signed the 2017 National Defense Authorization Bill into law on December 23, which includes a section lifting a previous ban and allowing civil officials at the level of Assistant Secretary of Defense or above and general officers on active duty in the Department of Defense to conduct a program of senior military exchanges in Taiwan. In addition, the U.S. Senate and House issued a Joint Explanatory Statement regarding the Act expressing strong support for U.S.-Taiwan security ties.

Tensions expected to build up further

Given the developments summarized above, it would be reasonable to expect increased tensions in cross-Strait and U.S.-China relations. For Beijing, there is purportedly no national goal more important than that of returning Taiwan to the mainland’s control.  This goal ultimately requires changing the status quo which has served as the basis for Taiwan’s continued political existence since 1949.  Under the 1979 Taiwan Relations Act (TRA), the United States committed to assist Taiwan in maintaining “a sufficient self-defense capability” in order to sustain this status quo after switching diplomatic ties from Taiwan to Beijing.  Hence,  Beijing’s efforts to change the status quo, by other than peaceful means,  would be challenged not only in Taiwan but in the United States as well.

Additionally, it increasingly appears that the incoming Trump administration may in fact challenge China, initially on trade and investment issues. If so, we should expect significantly stronger responses against China with respect, for example, to its currency controls, export subsidies, industrial policies and continued restrictions and actions against foreign companies’ operations in China.  This may eventually also lead on the U.S. side to greater scrutiny specifically of growing Chinese investments in the United States not only in terms of national security considerations but also in terms of economic security and reciprocity.  While an “all-out trade war” still seems unlikely, retaliatory measures taken by both sides will probably have a significant impact on bilateral trade and investment, especially if China does retaliate in a “tit-for-tat” manner as is expected.

In sum, U.S.-China bilateral trade issues, compounded by differences over Taiwan, seem likely to intensify early in the Trump Administration. This could easily spill over to other issues in the political and security arena, especially given China’s increasingly assertive policies in the East and South China Seas.  Thus, while the Trump Administration’s Asia policy remains unclear at this time, the potential for increased tensions in U.S.-China relations is real and growing.

This Week in Congress – January 9, 2017

Republican leaders in Congress plan to take the initial steps towards repealing and replacing Obamacare this week, hoping to deliver on the campaign promises made by most Republicans over the past six years and by President-elect Trump during the 2016 election cycle.

Both chambers are expected to begin their consideration of the Fiscal Year (FY) 2017 budget resolution, the legislative vehicle that will provide for the repeal of Obamacare.  Adoption of a budget is a necessary precondition to a reconciliation bill, which Republicans plan to use as the vehicle to repeal Obamacare.  Reconciliation instructions in the budget resolution would direct congressional committees to develop legislation that would repeal a number of spending authorizations, taxes, and programs established through the health care law.   This repeal legislation can then move through a fast-track process and can pass the Senate with only a simple majority, rather than the traditional 60-vote threshold because the bill is not subject to a filibuster.  Republican leaders are proceeding with the intent of sending legislation to President-elect Trump for signature upon his inauguration.  Moving to repeal President Obama’s signature legislative achievement with no replacement legislation ready is causing some Republicans to express reservations about the speed with which Congress is moving.  Whether these members are able to slow the train will become a focus in the coming weeks.

The Senate is expected to begin the week with votes on amendments to its version of the budget resolution, S. Con. Res. 3.  A successful procedural vote last week initiated 50 hours of debate on the measure.  The debate time is set to expire on Wednesday, after which the chamber will begin an extended sequence of back-to-back votes on the amendments.  The first vote is scheduled for Monday evening, on an amendment offered by Senator Rand Paul (R-KY) that would revise the underlying resolution in order to balance the budget by 2024 while still providing for the repeal of Obamacare.  A second vote is scheduled for Tuesday afternoon on an amendment offered by former Democratic presidential candidate Senator Bernie Sanders (I-VT) that would prevent the Senate from taking up any legislation that would cut Social Security, Medicare, and Medicaid benefits.  It is unclear at this point how many Senate amendments will receive a vote during the course of debate.  Senate Democrats have filed upwards of 20 amendments as of this writing.  Many of these propose to keep the Senate from considering any reconciliation legislation that would repeal insurance mandates, or, much like the Sanders amendment, would reduce Medicare, Medicaid, or Social Security benefits, or roll back funding for disease prevention efforts, reduce healthcare tax credits, or other vulnerable provisions of the Patient Protection and Affordable Care Act.  Consideration of amendments and final passage of the budget resolution are expected to take up the majority of the Senate floor schedule this week.

Compounding the busy floor activity in the Senate is a busy hearing schedule with several committees beginning their official “advice and consent” role on the cabinet nominations of the President-elect.  There are nine nomination hearings on the calendar, scheduled to begin on Tuesday of this week.  Although several of the hearings may be contentious, the prospect for blocking any of the nominees is slight, given the Democrats’ decision in 2014 to eliminate the 60-vote threshold for executive branch nominees.

Senator Jeff Sessions (R-AL) will appear before his colleagues on the Judiciary Committee on Tuesday over his nomination to serve as Attorney General; the committee will hear from outside witnesses on Wednesday.  On Tuesday afternoon, the Homeland Security and Governmental Affairs Committee will hold its hearing on Gen. John Kelly, nominated to be Secretary of Homeland Security.  Rep. Mike Pompeo (R-KS) is scheduled to testify before the Intelligence Committee on Wednesday regarding his nomination to serve as Director of the Central Intelligence Agency.  Also on Wednesday, Elaine Chao, former Secretary of Labor under President George W. Bush (and the wife of Senate Majority Leader Mitch McConnell), will appear before the Committee on Commerce, Science and Transportation on her nomination to serve as the Secretary of Transportation.  Betsy DeVos is scheduled to testify before the Health, Education, Labor & Pensions Committee regarding her qualifications to serve as Secretary of Education.  The Foreign Relations Committee will also meet on Wednesday on the nomination of Rex Tillerson to serve as Secretary of State.  On Thursday, Dr. Ben Carson will testify before the Committee on Banking, Housing, and Urban Affairs on his nomination to be Secretary of Housing and Urban Development, and Wilbur Ross will appear before the Committee on Commerce, Science, and Transportation on his qualifications to serve as Secretary of Commerce.  Also scheduled on Thursday is an appearance by Gen. James Mattis before the Armed Services Committee regarding his nomination to serve as Secretary of Defense.

Besides the nomination hearings, National Intelligence Director James Clapper, FBI Director James Comey, Adm. Michael Rogers, Commander of US Cyber Command, and CIA Director John Brennan are scheduled to testify before the Intelligence Committee on Tuesday regarding Russian intelligence activities.  This appearance follows their testimony before the Senate Armed Services Committee last week and the release of a declassified intelligence report on Friday which concluded Vladimir Putin had a direct role in Russia’s cyber hacking during the 2016 election cycle.

Across the Capitol, the House is scheduled to convene on Monday when it plans to take up five bills under suspension of the rules, four within the jurisdiction of the Energy and Commerce Committee and one within the jurisdiction of the Science, Space, and Technology Committee.  These are bills the House passed in the previous Congress.

On Tuesday, members will take up an additional nine bills, which had passed the chamber in the prior Congress, under suspension of the rules.  The House will then begin consideration, under a rule, of several bills related to regulatory reforms.  The first of these is H.R. 79, the Helping Angels Lead Our Startups (HALOS) Act, introduced by Small Business Committee Chairman Steve Chabot (R-OH).  This bill would require the Securities and Exchange Commission to revise its general solicitation regulations to provide carveouts for certain activities related to startup investment and financing pitches.  This legislation passed the House in 2016.

During the remainder of the week, the House will take up three additional regulatory reform bills, each subject to a rule.  H.R. 5, the Regulatory Accountability Act of 2017, introduced by Judiciary Committee Chairman Bob Goodlatte (R-VA), is a package of six regulatory reform bills that passed the House during the 114th Congress.  Largely aimed at preventing the development of new federal regulations, the legislation would require federal agencies to provide greater justification for any proposed regulations and to choose the lowest-cost rulemaking alternative to meets statutory objectives.  Also among the provisions are a repeal of the Chevron and Auer doctrines that would end judicial deference to an agency’s interpretation of governing statutes and an agency’s interpretation of its own regulations. The bill would also prevent new rules with billion-dollar annual costs from taking effect until courts can resolve litigation challenging their promulgation.

Additionally, members will consider H.R. 78, the SEC Regulatory Accountability Act, legislation that would specify new requirements for the Securities and Exchange Commission to meet when developing or amending regulations.  Action is also expected on H.R. 238, the Commodity End-User Relief Act, a reauthorization of the Commodity Futures Trading Commission (CFTC), an independent agency charged with regulating futures and options markets related to commodities, through 2021.  The bill also proposes some controversial changes that would limit the agency’s ability to impose Dodd-Frank Act derivatives rules and requires the CFTC to analyze the costs and benefits of all new rules.  During House consideration of this bill last year, President Obama issued a veto threat over the legislation.

Finally, the House may also begin its consideration of an FY 2017 budget resolution this week.

Because the House of Representatives is still finalizing committee assignments for the 115th Congress, there are currently no official hearings scheduled in the chamber this week.  The full schedule of events for the Senate this week is included  below:

 
Tuesday, January 10, 2017

Senate Committees

Civilian Control of the Armed Forces
Senate Armed Services
Full Committee Hearing
9:30 a.m., SH-216

Backpage.com’s Knowing Facilitation of Online Sex Trafficking
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., SD-342

Attorney General Nomination
Senate Judiciary
Full Committee Hearing
9:30 a.m., SR-325

Russian Intelligence Activities
Senate Select Intelligence
Full Committee Hearing
1 p.m., SD-106

Intelligence Matters
Senate Select Intelligence
Full Committee Hearing (CLOSED)
2:30 p.m.

Wednesday, January 11, 2017

Senate Committees

Secretary of Transportation Nomination
Senate Commerce, Science and Transportation
Full Committee Hearing
10:15 a.m., SR-253

Secretary of State Nomination
Senate Foreign Relations
Full Committee Hearing
9:15 a.m., SD-106

Education Secretary Nomination
Senate Health, Education, Labor and Pensions
Full Committee Hearing
10 a.m., SD-430

Attorney General Nomination
Senate Judiciary
Full Committee Hearing
9:30 a.m., SR-325

CIA Director Nomination
Senate Select Intelligence
Full Committee Hearing
10 a.m., SH-216

Secretary of Homeland Security Nomination
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
2 p.m., SD-342

Intelligence Briefing
Senate Select Intelligence
Full Committee Briefing (CLOSED)
1 p.m., SH-219

Thursday, January 12, 2017

Senate Committees

Secretary of Defense Nomination
Senate Armed Services
Full Committee Hearing
9:30 a.m., SD-G-50

Secretary of Housing and Urban Development Nomination
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
10 a.m., SD-538

Secretary of Commerce Nomination
Senate Commerce, Science and Transportation
Full Committee Hearing
10 a.m., SR-253

Providing an Exception to the Defense Secretary Seven Years Rule
Senate Armed Services
Full Committee Business Meeting
TBA

The Week Ahead in the European Parliament – January 6, 2017

Summary

Happy New Year!

Next week is a committee and political group week in the European Parliament. Only a few committee meetings are scheduled, as MEPs will spend most of their time with their political group preparing for the plenary week in Strasbourg on January 16 – 19.

The various political groups are likely to discuss their voting strategy in the parliamentary mid-term elections, scheduled for the next plenary in Strasbourg. MEPs are expected to elect the Parliament President, fourteen Vice-Presidents, five quaestors (responsible for looking after the administrative and financial interests of MEPs), and the members of the various parliamentary committees.

On Monday, Commissioner Günther Oettinger will be questioned by the Budget Committee (“BUDG”), the Budgetary Control Committee (“CONT”), and the Legal Affairs Committee (“JURI”) on his new Budget and Human Resources portfolio, which was transferred to him as of January 1, 2017, following the resignation of former Commission Vice-President Kristalina Georgieva. Thus far, the Commission President, Jean-Claude Juncker, has only granted the Georgieva’s portfolio to Commissioner Oettinger, without promoting him to the position of Commission Vice-President. Until January, Commissioner Oettinger was responsible for the Digital Economy and Society portfolio. This portfolio has been temporarily transferred to Commission Vice-President  Andrus Ansip, currently the Commission Vice-President for Digital Single Market.

On the same day, the Foreign Affairs Committee (“AFET”) will hold discussions with Nicholas Westcott, EEAS Managing Director Middle East and North Africa, on EU-Morocco relations after the CJEU ruling in case C-104/16P, Council v Front Polisario, delivered on December 21, 2016. The CJEU has found that the Association and Liberalization Agreements concluded between the EU and Morocco do not apply to Western Sahara. See the judgment  here, and a press release here.

The Maltese Presidency of the Council of the EU started on January 1, and will last until June 30, 2017. The priorities of the new Maltese Presidency in the field of security and justice, and support to EU business, will be on the agenda of the JURI Committee, and the Civil Liberties Committee (“LIBE”). On Thursday, the JURI Committee will hear Owen Bonnici, Maltese Minister for Justice, Culture and Local Government, and Christian Cardona, Minister for Economy, Investment and Small Business, on the Priorities of the Maltese Presidency. On the same day, the LIBE Committee will also hear Owen Bonnici, and Carmelo Abela, Maltese Minister for Home Affairs and National Security. Continue Reading

New Executive Branch Ethics Rules on Gifts and Procedures for New Hires, Appointees, and the Presidential Transition

The start of 2017 brings two changes to the federal Office of Government Ethics (“OGE”) rules for executive branch officers and employees.

First, important changes to the executive branch gift rules went into effect this week.  We detailed those changes in this alert.

Second, OGE’s overhaul of the Executive Branch Ethics Program regulations (5 C.F.R. Part 2638) also took effect at the start of the year.  Most of these rules address the operation of ethics programs at federal agencies and their relationship with OGE.  There are several rules that should be of interest to prospective or incoming agency officials.  Some highlights:

  • Certain high-level appointees must participate in a briefing on their “immediate ethics obligations,” usually within fifteen days of their appointment, including the individual’s financial conflicts and recusal obligations, and a plan to comply with the requirements of their ethics agreement.
  • Agency written job offers must now include a notice of the ethics rules and laws that will apply should the offeree accept employment, instructions on how to get more information on ethics, and any applicable timeframes for receiving training or completing a financial disclosure.
  • Employees who become supervisors will receive written information about agency ethics, in addition to the normal training requirements.
  • A year before the Presidential election, each agency must assess whether it has sufficient ethics staff to support the presidential transition. The regulation also explains that OGE will offer training on counseling incoming and outgoing employees and officials, and assist the transition with preparing for nominations and any new ethics initiatives.

These requirements are especially relevant as Inauguration Day approaches and the incoming administration begins the hiring and appointment process.  Individuals considering entering the administration should also consider our guidance on financial disclosures, interacting with the transition, and the appointee vetting process.

This Week in Congress – January 3, 2017

The 115th session of Congress will convene in the U.S. Capitol this week and, for the first time since 2006, Republicans will control both legislative chambers and the executive branch of government. The GOP retained its majority in the House and Senate in November’s election, and the unexpected (at least based on the pre-election polling) election of Donald Trump to serve as the 45th President of the United States provides the Republican party at least two years of unified government in Washington, D.C. Despite Hillary Clinton’s win in the popular vote nationally, Republican congressional leaders have expressed their view that the election outcome provides them with an electoral mandate for their agenda and they plan to waste no time in pursuing significant policy changes. Members will commence legislative business this week facing an ambitious conservative agenda for 2017 that seeks to shrink the government and reverse many of the policies set by the Obama Administration over the past eight years.

This first week of the new session will largely be administrative and ceremonial. The first day of the new Congress, established as January 3 by the 20th Amendment to the Constitution, includes the administration of the oaths of office, formal leadership elections, and the adoption of the rules for the House. The first votes of the new Congress will be roll call votes to elect the leaders in both chambers. In the House, members are expected to re-elect current Speaker of the House Paul Ryan. In the Senate, Senator Orrin Hatch (R-UT) is expected to be re-elected as President Pro Tempore, a largely ceremonial post held by the senior member of the majority party. The House is also expected to pass a package of rules changes to govern the activities of the chamber for the next two years (the Senate is considered a continuing body and does not have to re-adopt its rules every two years). On Friday, the House and Senate are scheduled to meet for a Joint Session of Congress to count and certify the electoral college ballots for President and Vice President of the United States.

In addition to the administrative proceedings in the House this week, there are several legislative items that will be considered under suspension of the rules. On Tuesday, members will consider two pieces of legislation from the Veterans Affairs Committee. On Friday the House will consider five bills from the Oversight and Government Reform Committee and a resolution from the Natural Resources Committee.

Following disposition of the suspension bills, the House is expected to take action on three additional measures. The first two items are bills that target new or recently issued federal regulations. First, members will take up the Regulations from the Executive in Need of Scrutiny Act of 2017 (REINS Act). The bill would require federal agencies to submit any major rule, i.e., those 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, 2013, and 2015 but did not move in the Senate and is opposed by President Obama. Consideration of the REINS Act will be subject to a rule.

The second item up for consideration is the Midnight Rules Relief Act, subject to a rule. “Midnight regulations” refer to agency regulations issued during a President’s final days in office. Such rules have been highly controversial at the end of the past several administrations, with Democrats crying foul prior to the onset of the Clinton and Obama presidencies and Republicans doing the same prior to the start of the George W. Bush administration and now the incoming Trump administration. The legislation would amend the Congressional Review Act (CRA) to allow en bloc disapproval of multiple regulations issued by a President in his final year in office. Under current law, Congress is authorized to use the CRA to disapprove of one regulation at a time. This legislation passed the House previously in November by a vote of 240-179.

Finally, the House may vote on a resolution of disapproval regarding the recently adopted United Nations Security Council Resolution 2334 condemning Israeli settlements in the West Bank and East Jerusalem. The UN resolution stated that Israeli settlements in the West Bank “had no legal validity, constituting a flagrant violation under international law and a major obstacle to the vision of two States living side-by-side in peace and security.” The resolution was adopted by the UN Security Council by a vote of 14-0, with the United States abstaining from the vote. The abstention has provoked anger among Israel’s allies on Capitol Hill.

No legislative action is currently scheduled for the Senate floor this week. The Senate is likely to spend the first weeks of the new session focused primarily on confirmation hearings for Donald Trump’s Cabinet nominees, with hearings in several committees already scheduled for the week of January 9.

Currently, there is a single hearing on the Senate schedule this week. The Senate Armed Services Committee will hold a hearing Thursday morning on “Foreign Cyber Threats to the United States.” The focus of the hearing will be the recent confirmation of Russian cyber hacking during the 2016 election. Last Thursday the Obama Administration imposed sanctions against Russia in retaliation for the attacks and expelled more than 30 diplomats from the United States. Armed Services Committee Chairman John McCain (R-AZ) has condemned the Russian cyberattacks as an “act of war” and is one of several Republican members calling for the creation of a special congressional committee to investigate Russia’s hacking, as well as other cybersecurity threats to the United States. National Intelligence Director James Clapper and National Security Agency Director Admiral Michael Rogers are among the witnesses scheduled to provide testimony before the committee.

Other congressional committees are expected to begin their official business next week, once committee membership is finalized. House and Senate Democrats have announced the committee assignments for the 115th session of Congress, but the Republican majorities in both chambers have yet to release their official rosters. Deliberations over Republican conference assignments and notices of member designations can be expected this week.

 

Thursday, January 5, 2017

Senate Committees

Foreign Cyber Threats to the United States
Senate Armed Services
Full Committee Hearing
9:30 a.m., G-50 Dirksen SOB

Congress asserts itself

The article below was published in The Hill on December 27th.

Congress, and particularly the House of Representatives, appears poised to assert itself in a way not seen for decades.

The legislative branch is seen by some as a weak institution, important mostly for its ability to influence the agencies of the executive branch (where the real power is). “The legislative branch,” says Rep. Trey Gowdy (R-S.C.), “was designed to be and at one point was the most powerful of the three branches. It is without question the weakest of the three branches now. Part of that is because we’ve allowed that to happen.”

Congress still has tremendous power, if it can find a way to use it. It can declare war, defund or eliminate agencies, curtail the jurisdiction of the Supreme Court, and remove presidents from office. However, the “power of the purse” has been lost to “mandatory” spending. Huge swaths of legislative authority have been delegated to regulatory agencies. Partisanship has made effective oversight of the executive branch virtually impossible. In Machiavellian terms, Congress is neither feared nor loved.

This may be about to change. Congress now has the leadership, the desire, and a plan for reasserting itself. Two key prerequisites remain: unity and a willing partner in the White House.

Speaker Paul Ryan has tremendous moral authority because he is a bona fide conservative who didn’t want the job. He cares deeply about America’s poor and has put real effort into finding new and better solutions for them. He is a serious policymaker who communicates well and does not play games. He is a walking antithesis of the congressional stereotype, and that makes new things possible—including entitlement reform.

Under his leadership, the House has developed an agenda it calls A Better Way. It is more detailed than 1994’s Contract with America and it is genuinely aspirational. It does not look or sound like a set of campaign promises. Rather, it is a true representation of what House Republicans would like to do should they ever have the chance. They now have that chance.

The A Better Way agenda declares, with an accusatory tone, that “liberty itself is at stake when any of the branches [of government] violates the separation of powers.” But it also admits that liberty “is likewise in jeopardy when a branch fails to exercise its power.” Congress, says this official agenda of House Republicans, has let its “power atrophy—thereby depriving the people of their voice.” The Republican Congress wants its power back.

The agenda is more than aspirational, however. It is also a plan. Alongside proposals for fighting poverty, reforming healthcare, and bolstering the economy are specific ideas for restoring Congress’s Article I powers and for checking the power of the executive. They include a rewrite of the Administrative Procedures Act, new “best drafting practices” to avoid ambiguity in legislative text, expedited judicial action on suits against the executive for failure to enforce statutes, new powers for agency inspectors general, the end of Chevron deference (judicial deference to agency interpretations of statute), and enactment of the REINS Act—which would require congressional sign-off before major regulations can take effect.

To accomplish this “Article I restoration” agenda, Republicans will need to be unified. Much has been made of divisions in the Republican Congress. They are, indeed, a diverse group. There are libertarians like Thomas Massie, moderates like Charlie Dent, family-values conservatives like Vicki Hartzler, defense hawks like Mac Thornberry, and fiscal hardliners like Dave Brat. This diversity is what a majority party looks like. They are unified, however, in their desire to reassert Congress’s constitutional powers.

Republicans will also need a willing partner in the White House to sign those parts of the agenda that require a presidential signature. Surprisingly to some, the Trump administration may have the closest ties to Congress in memory. Vice President-elect Mike Pence is a popular alumnus of House Leadership. Trump has also chosen Elaine Chao, the well-credentialed wife of Senate Majority Leader Mitch McConnell, to be his Transportation Secretary. Sen. Jeff Sessions, Rep. Ryan Zinke, Rep. Mike Pompeo, and Mick Mulvaney are among what appears to be a lengthening list of legislators headed to the Trump administration.  Reps. Lou Barletta, Marsha Blackburn, Jim Bridenstine, Kevin Cramer, Randy Forbes, Scott Garrett, Duncan Hunter, Peter King, Tom Marino, and Thomas Massie, are all rumored to be under consideration for high-level posts. Democratic Sen. Heidi Heitkamp is also evidently under consideration.

Congress will begin early next year using devices already in its toolbox—budget reconciliation and the Congressional Review Act—to cancel or reverse many of the policies of the Obama administration. This will, for the most part, be a partisan exercise made possible by one election. Whether Congress as an institution can durably regain its place as the first branch of government will depend partly on a willing partner in the White House. It will also depend on Republicans’ ability to stay unified, to focus on what is achievable, to actually legislate and appropriate, and—perhaps most importantly—to convince the country that they are acting on principle rather than partisanship.

 

Six Months After the Brexit Referendum: Preparations in Brussels

On Thursday, December 15, at the end of the traditional end-of-year European Council, the 27 “remaining” heads of state or government of the EU had a short meeting, without Theresa May, to set out how the Brexit process would be handled by “the 27,” once the UK has notified its intent to leave the EU.

This was only their second meeting on this issue since the Brexit referendum. Even if Brexit dominates all conversations in the “Brussels bubble,” and is the topic of hundreds of policy papers and seminars, there has not been any discussion among the 27 remaining Member States since the European Council held a week after the June 23 referendum (see the Global Policy Watch Blog of July 5, 2016, here) . The leaders have indeed remained faithful to the rule they had set themselves in that meeting: “no negotiation without notification”.

They had also stressed, at the time, that any agreement would have to be based on a balance of rights and obligations, and that access to the Single Market required acceptance of all four freedoms, including the free movement of people. This essential principle was reconfirmed in the statement published after Thursday’s dinner (see here).

The 27 do not in that statement address the substance of Brexit. It is for the UK to fire the first salvo, by triggering Article 50 of the Treaty on European Union, hopefully by the end of March next year. They only express their impatience to see the process start by the end of March 2017, enabling them to “begin to tackle the uncertainties arising from the prospect of the UK’s withdrawal”.

Procedural Arrangements for the Negotiation

The most substantive contribution of the statement is the seven-point annex, in which procedural arrangements for the Article 50 negotiation are set out:

  • Step One: guidelines Set by the European Council

According to Article 50, after having received the notification from the UK Prime Minister, the European Council must adopt “guidelines” for the negotiation. The statement gives an indication of what these guidelines should include: a “definition of the framework” and “the overall positions and principles that the EU will pursue throughout the negotiation”.

The text adds that these guidelines will be updated, if necessary, in the course of the negotiation. The European Council will remain “permanently seized” – but, as indicated below, the negotiation itself will be dealt with by the Council of Ministers, in this case the so called “General Affairs Council” in which Member States are represented by their Foreign or Europe Minister.

  • Step Two: Negotiating Directives Adopted by the Council of Ministers

After the guidelines are adopted, the Commission will present a “recommendation” on the basis of which the Council of Ministers will adopt negotiating directives. These will deal with the substance of the negotiation, and will confirm the arrangements described hereunder, setting up the respective roles of the Commission and the Council in the negotiation.

According to Article 50, these directives should “take account of the framework for [the UK’s] future relationship with the Union”. However, the statement does not say anything about this delicate question.  The ball, on this point, is squarely in the UK’s court: it is first for the UK government to decide which status it wants, before anything can be said about this in the mandate (which, as outlined above and in the statement, may be “amended and supplemented as necessary”).

  • Who Will Negotiate on Behalf of the Union?

As prescribed by the Treaty, the “withdrawal” negotiation itself will be conducted by the European Commission, under the procedure of Article 218 (3) of the Treaty on the Functioning of the EU, which applies to agreements between the EU and third countries. As confirmed by the statement, the chief negotiator for the EU will be the French ex-Commissioner Michel Barnier, who was responsible for financial services in the last Barroso Commission.  To this end, he has already constituted a team of experts.

As agreed since the start of the process, the text confirms that representatives of the President of the European Council will be present and participate, “in a supporting role”, in all negotiation sessions, alongside the European Commission’s representatives. Less than a week after the referendum, the Secretary General of the Council Jeppe Tranholm Mikkelsen appointed one of his deputies, Didier Seeuws, who was Chief of Staff to the former President of the European Council Herman Van Rompuy, to lead a Brexit Council taskforce. Through him, the members of the European Council will thus have direct access to the negotiation, which should reassure some of the 27 (and the British) that the process is not overly in the hands of the Commission.

The statement adds that, “to ensure transparency and build trust”, a representative of the rotating presidency could be “integrated” into the Commission’s team. This was added at the strong request of the Maltese Presidency, which lobbied hard to play a role in the Brexit process. However, the rotating presidency will not preside the working party in which representatives of the Member States will ensure the monitoring of the negotiation; this group will rather have a permanent chair. However, it will function under the Committee of Permanent Representatives, which is presided by the rotating presidency – and which will play its usual role of preparing the meetings of the Council and the European Council.

  • When Will There Be Meetings at 27? 10 Downing Street now seems to have accepted this. In presenting the agenda of the December European Council, Theresa May’s spokeswoman noted that the meetings at 27 “were not a cause of concern” for the UK: “those remaining in the EU also need to have discussions about how they are going to handle the departure process. That is reasonable. We would expect that.
  • The British Prime Minister expressed some annoyance, during the October meeting of the European Council, that her 27 colleagues had already started meeting without her. The statement makes clear that this will happen often in the future: in the European Council, the Council and its preparatory bodies, those members who represent the UK “will not participate in the discussions or in the decisions concerning it”. A mechanism, probably managed by Coreper, will be put in place to decide what should from now on be discussed at 27.
  • The Role of the European Parliament

The European Parliament will not participate in the talks. Under the EU Treaties, it is only supposed to give its consent after the negotiation has been concluded, as is the case for third country agreements concluded by the EU under Article 218 of the Treaty on the Functioning of the EU, to which Article 50 refers.  Nevertheless, the President of the European parliament, Martin Schulz, has personally appointed the President of the liberal group (“ALDE”), Guy Verhofstadt, as the Parliament’s “negotiator”.  Verhofstadt and Schulz were not pleased at being excluded from the meeting of the 27 on December 15, and conducted a major offensive – through the media – to be given a place at the table.  They even threatened to conduct separate negotiations with the UK!

The leaders, who had made major efforts to present a united front in the preparatory process, agreed at the last minute to modify their text to include representatives of the Parliament in the meetings of the working group and of Coreper dealing with Brexit. For the rest, the Parliament will be informed regularly of progress in the talks by the negotiator and the rotating presidency, as is usual.  The statement even recalls that the President of the Parliament will be invited to be heard at the beginning of the European Council meetings, which is a long-established rule for all such meetings.

 The Timing of the Talks

The negotiator for the EU, Michel Barnier, raised some eyebrows in London when he said during a press conference at the beginning of December that the talks would last only 18 months – and not the two years mentioned in Article 50 of the Treaty. This assessment is based on the following calculation:

  • The preparation of the guidelines and the negotiating directives is expected to take at least two and a half months. The earliest time for the beginning of the negotiation itself, if Article 50 is triggered at the end of March, is therefore the end of June 2017. Unless Theresa May’s letter includes requests which are too ambitious for the 27 to swallow, major substantive problems are not anticipated at this stage of the procedure. The fact that the French presidential elections will take place during this period (April 23 to May 7) should not be a real obstacle – unless of course Marine Le Pen is elected, and already seeks to disturb the process at this early stage.
  • The negotiation itself will start before the German elections, but will continue for more than a year thereafter. Everyone counts on a reelection of Angela Merkel, who would then help the UK swallow the pill of the Brexit deal. It will indeed be a very tough awakening for those who thought that Brexit would bring financial bonuses for the UK: on top of the technical issues related to the withdrawal from EU policies, there will be difficult discussions about the likely continuation of budget contributions after the UK’s exit.

Unless a major breakthrough happens in a parallel negotiation on the UK’s new status (see below), the risk during this period is that political pressure in the UK from the “Leavers” becomes too strong and either paralyzes the talks, or forces a unilateral withdrawal of the UK from the Union.

  • If this scenario can be avoided, the negotiation for the withdrawal treaty needs to be concluded early enough to allow Westminster and the European Parliament to give their consent. It is reasonable to leave a margin of 3 months for this at the end of the process. In order to avoid an automatic withdrawal at the end of the 2 years, the negotiation itself needs to be concluded by the end of 2017 – so after 18 months.
  • What if this timing is not respected? This would then be to the disadvantage of the UK only. Indeed, Article 50 deliberately makes it difficult for the outgoing country: to prolong the negotiation beyond two years, unanimous agreement of the other EU members is required – which means that the UK would then either be out without a proper treaty, or obliged to accept the potential of being “blackmailed” by a single member state.

What About the Negotiation Over the Future UK-EU Relationship?

There is nothing in the statement about the future status of the UK, or even about the way this will be negotiated. The issue however has been much discussed behind the scenes, as has the need – or not – for a transition period after the withdrawal takes place.  The issue is very sensitive indeed, and difficult to address before the UK has itself decided what kind of status it wants.

Nothing in Article 50 prevents the negotiation on the future relationship between the UK and the EU to proceed in parallel with the withdrawal negotiation. As mentioned above, Article 50 even states that the withdrawal negotiation should be conducted “taking account of the framework” for the future relationship.

Even if the two negotiations are conducted to a certain extent in parallel, it will be impossible to conclude an agreement on the UK’s future status before the end of the 2 years. The withdrawal agreement (if decided in time) only requires a qualified majority in the Council, but the decision on the new status will require unanimity, and probably ratification by the national parliaments.

Several reliable British sources, including the UK Permanent Representative to the EU, have mentioned much longer periods. The UK Permanent Representative, Sir Ivor Rogers, in a leaked report to Whitehall, even suggested a period of 10 years – and, though this looks a little provocative, it gives an indication of the current mood in Brussels on this matter.

This is why most analysts, increasingly also in the UK, accept that, to avoid the UK “falling off a cliff edge” at the end of the two years, a transition period will be needed to bridge the gap.

The implications of this concept are difficult to assess – we are here in totally unchartered waters – but have been discussed at length in the corridors of the European Council and in Whitehall.

What can be said at this stage is that the transition period will not constitute a new status or a new relationship. During the transition, the UK will be out of the EU, but committed to its obligations as a member of the internal market, including the free movement of people and a contribution to the budget.  A progressive withdrawal, as some envisage, will not be easy to put in place, and its precise timing will be difficult to fix.

But no position on this can be expected from the 27 before they know what the UK really wants – on which, at the moment, they are in the dark.

The next act will indeed be played out in London. After the UK Supreme Court delivers its judgment on the Article 50 case (R (Miller) v Secretary of State for Exiting the EU – see the UK Supreme Court’s case details here, and its dedicated website here), the government will need to prepare its starting position and – unless the court agrees to let the government trigger article 50 with no passage through Parliament, which is unlikely – present it to Parliament.

This should happen in February, so that the UK Prime Minister’s deadline of end March can be respected – which is the hope of most actors on both sides of the Channel.

The Week Ahead in the European Parliament

Summary

Next week is a constituency week for Members of the European Parliament (“MEPs”). MEPs will go back to their home country to deal with national issues, or in their parliamentary delegations to work on non-EU countries-related matters.

This week was, however, important as many initiatives were adopted by the Parliament.

On Tuesday, December 13, the three EU institutions issued a joint declaration outlining the legislative priorities for 2017. These outline six priority areas, namely (i) fostering jobs, growth and investment in the EU (including the modernization of the Trade Defense Instruments, the enhancement of waste management in a circular economy, and the completion of the Banking Union); (ii) the EU social dimension (including many initiatives in the field of youth employment and social security coordination); (iii) better protection of EU citizens, through stronger EU borders and the fight against terrorism; (iv) migration policy, including the reform of the Common European Asylum System, the Legal Migration Package, and the External Investment Plan; (v) delivering on the commitments in the digital single market field, with a focus on copyright and telecoms reform, geo-blocking, the modernization of data privacy rules, and also moving forward with the reform of the Audiovisual Media Services Directive; and (vi) following up on and improving the Energy Union and climate policy, through the implementation of the 2030 climate and energy framework and the Clean Energy package. See the joint declaration here.

On Thursday, the plenary voted in favor of a resolution on Pediatric Medicines (see the resolution here). The resolution calls on the European Commission to urgently take any regulatory initiatives required to enhance the situation in the pediatric medicine field; to renew the funding of projects aimed at supporting high-quality pediatric clinical research under the Horizon 2020 program, after an assessment of the current initiatives in this field; to ensure that EU Member States take appropriate initiatives to support research and development, as well the availability of medical products for pediatric use; and, finally, to reinforce the role of the European network for pediatric clinical research.

On the same day, the Parliament’s Committee on the Environment, Public Health and Food Safety (“ENVI”) voted in favor of a legislative proposal aimed at amending the EU Emissions Trading Scheme (“ETS”). The legislative proposal (see here) includes new modifications, such as more flexible rules to align free allowances with production figures, as well as new funding mechanisms to foster innovative technologies and facilitate investments in modernizing energy systems. It also provides proposals to prevent so-called “carbon leakage”, whereby companies transfer their production to countries with lower or less ambitious climate measures. The vote in plenary has been scheduled for the first week of February 2017.

During the Thursday’s plenary, the Parliament also passed a resolution on support for Thalidomide victims. Thalidomide is a drug first marketed in the late 1950s to treat multiple diseases, such as morning sickness, coughs, insomnia and even colds. This drug, however, had significant side effects on pregnant women, and caused the malformation, and even the death, of thousands of babies. The resolution calls on the Commission to put in place EU programs aimed at supplementing the Member States’ actions in helping victims of Thalidomide and their families. See the resolution here.

Please note that due to the three coming parliamentary weeks being, respectively, a constituency week, a holiday week and a constituency week, the next edition of the Week Ahead in the European Parliament will be published on January 6, 2017.

Meetings and Agenda

·         No official meetings in the European Parliament are planned before January 9, 2017.

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