Washington Bulletin 1/22

January 23, 2018
Washington Update

On Capitol Hill

Shutdown Extends Into Third Day as Senate Fails to End Impasse

Lawmakers failed to negotiate an end to the government shutdown Sunday, January 21 despite a bipartisan effort to broker a deal, raising the political stakes as federal agencies begin closing at the start of their normal workweek.

Many more Americans will begin feeling the repercussions of a shutdown that officially began at 12:01 a.m. Saturday after most government offices had stopped work for the weekend. The widening disruption intensifies frantic efforts by Republicans and Democrats to blame one another for the deadlock and may harden the determination of lawmakers to gain leverage from the moment.

Senate Majority Leader Mitch McConnell(R-KY) scheduled a vote for noon Monday, January 22 that could end the shutdown just as it begins to take hold, but it’s unclear whether enough Democrats will support an immigration deal he offered late Sunday.

Sen. McConnell and Democratic leader Senator Chuck Schumer (D-NY) met Sunday after a bipartisan group of more than 20 Senate moderates spent the day trying to work out a funding deal to prevent the shutdown from extending into the week.

But when McConnell stepped to a podium on the Senate floor shortly after 9 p.m. Sunday, January 21, it was not to announce a deal. It was to say the Senate would vote Monday to advance a plan that would fund the government through early February.

Investors took the news of the impasse in stride. Futures on the S&P 500 Index dipped just 0.1 percent as of 1:16 p.m. in Tokyo Monday, and benchmark 10-year Treasuries were little changed.

Step Back

Sen. McConnell offered a concession to Democrats by saying it was his “intention” to permit a Senate a vote on an immigration measure after Thursday, February 8 if the  government was still funded.

Democrats, who had sought firmer guarantees from McConnell, weren’t willing to accept his terms.

But the move was enough for two key Republicans — Senators Jeff Flake (R-AZ) and Lindsey Graham (R-SC) — to change their position in support of McConnell for the government to reopen.

House Majority Leader Kevin McCarthy (R-CA) told colleagues that the chamber will take up whatever the Senate passes. The measure likely will clear the House. Over the weekend, President Donald Trump remained off stage as lawmakers shuttled back and forth to try to reach an agreement.

President Trump did make some phone calls on Sunday, January 21, speaking with the second-ranking Republican leaders in both chambers of Congress about the impasse, White House press secretary Sarah Huckabee Sanders said in a statement emailed to reporters Sunday.

White House legislative director Marc Short expressed frustration late Sunday that the shutdown would carry into a third day, and reiterated the White House would not negotiate on immigration while the government remains closed.

On Capitol Hill, the main action came from a group of bipartisan senators, including Graham, who said they were coalescing behind a plan to fund the government through Thursday, February 8 along with a commitment to quickly take up immigration legislation to protect some young undocumented immigrants from deportation.

Republican Senator Susan Collins (R-ME) said late that she was hopeful Democrats would get on board to reopen the government, but that it might require fleshing out the offer made by Sen. McConnell.

She will reconvene the bipartisan group Monday, January 22 before the next scheduled vote to discuss the path ahead.

Democrats and some Republicans want language protecting people in the Deferred Action for Childhood Arrivals, or DACA, program, as part of a must-pass spending bill to ensure they get signed into law. Some Republicans have opposed such a move, calling it amnesty.

Trump decided in September to end an Obama-era initiative that shielded them from deportation, effective in March, although he said Congress should act to protect them. The U.S. counts 690,000 people currently enrolled in DACA.

For many Democrats, McConnell’s vague promise to hold an immigration vote likely won’t be enough to persuade them to vote to end the shutdown.

 

Partisan Battle Lines Drawn on Water Infrastructure Bill

The outlines of an upcoming partisan fight over Congress’ biennial water resources bill are becoming clear after a series of hearings on Capitol Hill last week.

Republicans indicated they want the bill to speed up the protracted federal approval process for water projects, with a specific focus on curtailing years-long environmental reviews. Democrats, however, signaled that their favored solution to an infrastructure backlog totaling tens of billions of dollars is to simply allocate more funding to these projects.

If the two parties can’t reach an agreement, dozens of dams, locks, levees, and other infrastructure projects across the country may get stalled.

Two-Year Cycle

Congress traditionally passes water resources bills every two years. But from 2001 through 2013, it only passed this legislation once. Since then, the biennial schedule has been restored.

Water resources bills typically grant authorization to numerous infrastructure projects across the country required for construction on those projects to proceed.

Ever since Congress banned legislation that directs funding to a specific project, also known as an earmark, water resources bills are one of the only opportunities for lawmakers to steer funding directly to their districts.

Republicans will not let this session of Congress end without passing another water bill, stated Rep. Garret Graves (R-LA), chairman of the Transportation & Infrastructure subcommittee that handles water issues.

He said there wasn’t much activity on this in 2017 because lawmakers were waiting to see what would be in the White House’s yet-unreleased infrastructure proposal and whether they could tack a water resources bill onto a larger vehicle.

Graves said this wait-and-see approach won’t last long into 2018. Lawmakers will begin to draft a standalone water resources bill on their own if the White House doesn’t put forth its infrastructure plan by the end of March, he said. Graves added that he’d want to formally introduce a standalone bill by no later than the end of June.

Red Tape or Money

But what should be in that bill? At this point Democrats and Republicans aren’t seeing eye to eye. Both parties agree, however, that there is an unacceptable backlog of construction projects at the Army Corps of Engineers, the main federal agency that builds and manages navigation and flood control infrastructure.

The Corps has estimated that its backlog totals nearly $100 billion, more than 20 times its annual budget. Maj. Gen. Donald Jackson, the number two military officer at the Corps, said that if Congress continues to fund his agency at current levels it would take 100 years to complete all of the construction projects it has in the backlog.

Where the parties diverge is in the solution to this problem. Republicans at the House hearing, as well as in a pair of Senate hearings on Jan. 17, were focused on reducing the costs of building water infrastructure by shortening the amount of time it takes the Corps and other agencies to issue permits. Graves noted that it now takes an average of six years for the Corps to develop an environmental impact statement for a single project.

Democrats, however, said it would be impossible to build and maintain infrastructure without significantly increasing the amount of money Congress contributes.

Sen. Tom Carper (D-DE), the top Democrat on the Senate Environment and Public Works Committee, apologized to the head of the Army Corps at Wednesday, January 17 hearing for his complicity in underfunding the agency.

Creative Financing

But ultimately, even some Democrats acknowledged the cost of the infrastructure backlog is too high for Congress to handle on its own. Several said they were interested in giving the Corps more authority to partner with the private sector on projects.

These types of partnerships will likely play a large role in the White House’s upcoming infrastructure proposal. President Trump has said he wants to stimulate $1 trillion in spending on roads, bridges, airports and other projects in part by leveraging federal dollars.

But the White House is reportedly looking to do this largely by investing only $200 billion in taxpayer dollars, with the rest coming from new tax incentives, streamlining the permitting process, and partnerships with private companies.

 

Water Infrastructure Needs- House Water Subcommittee Hearing

The House Transportation and Infrastructure Subcommittee on Water Resources and Environment held a hearing to examine America’s water resources infrastructure and how the Army Corps of Engineers is lacking funding to complete current projects and begin new projects to address America’s water infrastructure needs. Chairman Graves addressed the needs of the country, highlighting the difference in number of backlogs in Corps projects to annual appropriated funds for projects. As discussed above the committee estimated $100 billion in the Army Corps’ authorized projects when the annual appropriated funds yielding $5-6 billion. Annually, the appropriated funds only add $2 billion to new construction. Chairman Graves emphasized the need to address these integral projects to improve America’s water infrastructure, noting that 99% of the country’s imports and exports come through America’s seaports.

Among the panel of witnesses, Major General Ed Jackson, Deputy Commanding General of Civil and Emergency Operations and James Dalton, Director of Civil Works represented the Army Corps of Engineers. In their testimony, the Army Corps representatives highlighted the Corps is working to complete guidance for 198 provisions from the 2014 WRRDA, which represents 98% of the total provisions from 2014. Form the 2016 WRRDA the Corps has completed guidance for 176 provisions, which represented 85% of the total provisions in 2016. “The way we use our water resources can affect the Nation’s economy, its environment, and public safety. The Corps stands ready to help in addressing the water resources challenges of the 21st century.” A link to their testimony can be found here.

Water Infrastructure Needs and Challenges- Senate Hearing

The Senate Committee on Environment and Public Works held another hearing to examine the needs and challenges facing water infrastructure. The Committee addressed the challenges faced by the Bureau of Reclamation and the Army Corps of Engineers in tackling these issues with revolving budget restrictions. Chairman John Barrasso (R-WY) addressed public safety concerns, such as ice jams created from flooding in Wyoming. Many communities depend on Army Corps of Engineers projects, and the Corps must work together with the Bureau of Reclamation to face the challenges presented. Ranking Member Thomas Carper (D-DL) addressed the costs imposed from extreme weather which totaled $300 billion dollars in 2017. Additionally, over 70% of Army Corps of Engineering projects have shifted to maintenance leaving the Corps’ infrastructure at risk of exceeding its lifespan.

Ryan A. Fisher, Principal Deputy Assistant Secretary of the Army for Civil Works and Acting Assistant Secretary of the Army for Civil Works represented the Army Corps of Engineers at the hearing. In his testimony, Mr. Fisher explained infrastructure the Corps currently maintains, including: 13,00 miles of coastal navigation channels, 12,00 miles of inland waterways, 715 dams, 241 locks, and 14,700 miles of levees. The Corps dedicated a significant amount of its recourses to maintaining its key infrastructure and continues to make significant progress in the regulatory program of WRRDA. The Corps focuses on projects with the greatest economic, environmental, and public safety risk to the nation, completing 85% of projects from WRRDA 2016. A link to his testimony can be found here.

 

In the Administration

Breaking the Family Immigration `Chain’

The president has called for limiting “chain migration,” broadly referring to family-based immigration, as part of any deal to extend the Deferred Action for Childhood Arrivals (DACA) program. The White House began winding down the DACA program in September 2017 though a court order has forced the administration to continue renewing DACA petitions while litigation is pending.

Democrats have indicated possible openness to changes for family-based visas, but want legislation to protect DACA recipients in exchange for supporting any spending bill. As a result, the debate over immigration policies has been a major point of contention in negotiations to fund the government, and will remain a factor during the government shutdown.

The U.S. family-based immigration system allows citizens and lawful permanent residents (green card holders) to sponsor certain relatives for immigration. If those relatives earn green cards or citizenship themselves, they are able to petition for their eligible family members to immigrate, creating a “chain.”

While DACA shields individuals who were brought to the U.S. illegally as children, it doesn’t provide lawful permanent residence or a path to citizenship on its own, which prevents recipients from sponsoring family members.

How Family Immigration Works

There is no annual limit on the number of immigrant visas that can be granted to immediate relatives of U.S. citizens — spouses, unmarried children younger than 21, and parents.

U.S. law limits visas granted to certain relatives at 226,000 annually, although that cap can be exceeded if total family immigration, including individuals not subject to the cap, is less than 480,000.

Eligible relatives subject to the cap are prioritized into categories called “preferences,” based on the immigration status of the family member present in the U.S. and the type of familial relationship.

Preference Eligibility Cap
First Unmarried adult children of citizens 23,400
Second (A) Spouses and minor children of permanent residents 87,900
Second (B) Unmarried adult children of permanent residents 26,300
Third Married children of citizens 23,400
Fourth Siblings of adult citizens 65,000

Unused immigrant visas from a higher preference can continuously roll over to the next preference until all visas for the year have been filled.

U.S. law also limits each country to 7 percent of all immigrants subject to family or employment-based caps. This limitation has created backlogs and significant wait times for immigrants from countries like Mexico, China, Philippines, and India, which have some of the highest rates of immigration to the U.S.

As one example, the State Department is currently processing visas for the fourth preference, siblings of adult citizens, from the Philippines that were approved for immigration on or before Sept. 1, 1994.

Family sponsorship accounts for about two-thirds of legal immigration to the U.S. each year, exceeding 67 percent in the third quarter of 2017, according to data from the Homeland Security Department.

Administration Proposed Changes

The White House is seeking to limit family-based immigration to spouses and children of U.S. citizens only, eliminating all family-based preference categories. Siblings, parents, and adult children would no longer be eligible for immigration based solely on their family ties.

Family preferences would be replaced by a “merit-based” system that awards immigrant visas on the basis of skills and economic contributions, rather than family connections.

Legislative Options

A broader immigration measure (H.R. 4760), introduced by Judiciary Committee Chairman Bob Goodlatte (R-Va.) and other House Republicans, included language to eliminate family-based preferences. The legislation would also lower the overall number of family-based immigrant visas granted every year.

A Senate “gang of six” immigration proposal would eliminate the second preference for unmarried adult children of permanent residents, according to a summary of the measure.

The measure also would grant conditional permanent resident status for individuals brought to the country illegally as children, but would prohibit them from sponsoring their parents for permanent immigration. Parents would be eligible for three-year renewable legal status with work authorization, similar to DACA.

Pivotal NAFTA Talks Said to Start Early, Be Longest Round Yet

The NAFTA talks that are set to begin in Montreal will start on Sunday, January 21 two days earlier than planned and last for nine days as teams from the U.S., Canada and Mexico push to deliver results for a cabinet ministers’ meeting on the final day.

Two full days have been tentatively reserved for reports to chief negotiators, who handle some of the toughest issues. Talks will begin with energy, investment, financial services, agriculture and other issues on the agenda, according to one of the people. Rules of origin — one of the thorniest subjects, related to manufactured goods such as cars — will be reserved for the final days of talks, as in previous rounds.

The U.S. is running out of patience with Canadian and Mexican resistance to key American proposals, according to two other people familiar with the matter. The U.S. is serious about its threat to withdraw if there’s no breakthrough on proposals the Trump administration has made that are intended to rebalance trade, said one of the people, who spoke on condition of anonymity because the negotiations aren’t public. The Trump administration wants to see serious counteroffers to U.S. demands like tightening content requirements for cars.

The tension between the U.S. and its trading partners, especially Canada, sets up a pivotal round of talks. With the negotiations on home turf, Justin Trudeau’s Liberal government will want to be seen standing up to Canada’s bigger neighbor and its Republican president. For its part, the U.S. won’t be happy with merely procedural discussions on how to address the administration’s toughest demands.