Washington Bulletin 1/8

January 9, 2018
Washington Update

On Capitol Hill

Congress Braces for the New Year

The House returns from a two-week break on Monday with lawmakers facing an approaching deadline to fund the government past Friday, January, 19.

Senate Minority Leader Chuck Schumer (D-N.Y.) last week reiterated his party’s demand to attach an immigration compromise to the spending bill. Democrats’ cooperation on a bill could ease passage through the Republican-controlled House and Senate.

Senate Republicans angling for bipartisan immigration legislation said yesterday they’re optimistic a deal can be struck soon, but it will come down to how much President Donald Trump is willing to compromise on his own wish list.

At a White House meeting with GOP senators last week, Trump said lawmakers have “a good shot” at getting legislation to his desk that he’ll sign. Still, he continued to push for several ideas that face opposition from Democrats and some Republicans, including building a wall at the U.S.-Mexico border.

Sen. Lindsey Graham (R-SC) said at the meeting there’s a real chance that GOP and Democratic negotiators can agree on a plan to boost border security while also protecting as many as 800,000 young undocumented immigrants from deportation. He stressed to the president that compromise is the key to unlocking decades of gridlock on immigration policies. “There is a deal to be had; if you want it bad enough we will get it,” Graham said. “It will be good for the country, everyone has to give a little bit. But I have never been more optimistic about an immigration reform proposal making it to the president’s desk than I am now.”

Trump has invited lawmakers of both parties to the White House next week to discuss immigration issues, Press Secretary Sarah Huckabee Sanders said yesterday.

Debt Limit

Congressional leaders will seek to lift the U.S. debt limit in February by attaching a measure to a spending bill. The Congressional Budget Office estimated in November that the Treasury could use extraordinary measures to extend the deadline through late March or early April.


A long-term, likely five-year, extension of funding for the Children’s Health Insurance Program (CHIP) will probably be part of the next spending bill. Lawmakers are working to reach a deal in coming weeks as part of a spending package.


Congress will also be looking to pass a disaster relief package early this year. The House passed disaster aid legislation on Thursday, December 21, but senators have not said when or if they will take up the House bill. When the chamber does vote on an aid package, the ranking member of the Senate Agriculture Committee, Sen. Debbie Stabenow (D-MI), said she will oppose the proposal if it includes any provision that would use funds from the Supplemental Nutrition Assistance Program to offset disaster relief. Sen. Stabenow said that the savings from the new system designed to prevent recipients from collecting benefits in multiple states would offset other agriculture disaster relief funding.


In the Administration

Infrastructure at a Crossroads

President Trump expressed misgivings about his administration’s infrastructure plan Friday, January 5, at Camp David, telling Republican leaders that building projects through public-private partnerships is unlikely to work — and that it may be better for the government to pursue a different path.

Then on Saturday, January 6, Gary Cohn, the president’s chief economic adviser, delivered a detailed proposal on infrastructure and public-private partnerships that seemed to contradict the president. He said the administration hoped $200 billion in new federal government spending would trigger almost $1 trillion in private spending and local and state spending, according to people familiar with his comments. Cohn seemed to present the plan as the administration’s approach, although the president had suggested such an approach might not work.

The seemingly contradictory statements, made within 24 hours of each other, show the uncertainty of the administration’s approach to its top legislative priority in 2018. Trump and his White House have been determined to pitch an infrastructure plan in 2018, despite Republican misgivings about the cost, a rapidly rising deficit and a preference to consider other matters first.

In a statement Sunday night, deputy White House press secretary Lindsay Walters said: “The President’s infrastructure vision is very clear and is based around 2 main goals: leveraging federal funds as efficiently as possible in order to generate over $1 trillion in infrastructure investment and expediting the burdensome and lengthy permitting process.”

Republicans are loath to spend $1 trillion on infrastructure, as the deficit is expected to grow considerably after the tax plan passed in December. Trump did not specifically delineate how he would pay for the projects without the partnerships.

During the campaign, President Trump promised a $1 trillion infrastructure plan that he said would create millions of jobs through a combination of investments from the federal government and private companies. Staff members at the White House have spent months assembling a package of ideas, though his first budget just allocated $20 billion a year over 10 years for the mostly unspecified projects.

In September, though, President Trump began musing to Democrats and others that the public-private partnership idea might not work. He referenced at least once, for example, some projects in Indiana that he believed did not work out the way the private sector had promised. In 2014, then-Gov. Mike Pence arranged a deal with Isolux Corsan, a Spanish construction firm, to extend a stretch of interstate in the southern part of Indiana. The firm had turned in the lowest bid but never completed a project in the United States before, and it fell behind schedule. The state of Indiana had to eventually dissolve the partnership and issued public debt to finish the project, though it still remains incomplete.

President Trump’s repeated complaints about the effectiveness of public-private partnerships have infuriated and surprised some administration aides who have worked on the plans for months. They were hoping to propose a package of infrastructure goals later this month, though that timetable remains fluid.

Democrats have often said they would support more infrastructure spending, and many labor unions have also said they would like to work with President Trump on these plans. But they have remained wary of how Trump would plan to pay for any of the projects, and those questions appear to remain unresolved.


Tax Rebuttal

New York Governor Andrew Cuomo said his administration plans to sue the federal government over the new Republican tax law, on the grounds that it’s unconstitutional because it discriminates against New York and other states that voted against President Donald Trump.

Cuomo, who described the Trump presidency as “the most hostile federal administration in history,” said the changes to state and local tax deductions in the bill will raise New Yorkers’ property and income taxes by at least 20 percent. The governor added that New York state already contributes $48 billion more annually to the federal government than it gets back.

Critics of the state and local tax deduction have said the break effectively lets the federal government subsidize high-tax states. The impact of the tax law “is a question of New York’s economic viability long term, a question of New York’s competitiveness long term,” Cuomo said. “The threat from this federal government is not going to derail the great state of New York, I promise you.”

In addition to challenging the law as unconstitutional, Cuomo said he plans to start a campaign to repeal and replace the new tax law. And, he said he’s considering workarounds to respond to the changes, including restructuring New York’s current income and payroll tax system, and creating new opportunities for making charitable contributions to support public programs.

With about two weeks left until the current continuing resolution expires, lawmakers are stepping up negotiations for an omnibus spending bill to fund the government for the rest of this fiscal year. They may have to consider a fourth stopgap spending bill to give them more time to reach a deal on immigration and top-line spending figures.

President Donald Trump Must Make Compromises on Immigration

President Donald Trump, Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI) discussed strategy during a meeting this past weekend at Camp David. Sen. John Cornyn (R-TX), Number 2 Republican in the Senate, said that while there is a bipartisan consensus to address immigration, movement should be made on funding the government if there’s no immigration deal by Friday, January 19.

Senate Republicans said they’re optimistic that a deal can be struck soon, but it will come down to how much President Trump is willing to compromise on his own wish list, which includes building a wall at the U.S.-Mexico border. President Trump has invited lawmakers of both parties to the White House next week to discuss immigration issues.

Sen. Lindsey Graham (R-SC) said at the meeting last week there’s a real chance that GOP and Democratic negotiators can agree on a plan to boost border security while also protecting as many as 800,000 young undocumented immigrants from deportation.

GOP negotiators want to include authorization for some version of a wall in the legislation, although the length and locations have not been worked out. Any funding would be spread over time. He added that Senate negotiators are still talking about how extensive limitations on family preferences, which President Trump calls chain migration, might be. They are looking to prevent DACA recipients from petitioning to allow immediate family members to immigrate to the U.S.,

Trump Administration Takes Step That Could Threaten Marijuana Legalization Movement

The viability of the multibillion-dollar marijuana legalization movement was thrown into new doubt on Thursday when the Trump administration freed prosecutors to more aggressively enforce federal laws against the drug in states that have decriminalized its production and sale, most recently California.

Attorney General Jeff Sessions, long a vocal opponent of the legalization of marijuana, rescinded an Obama-era policy that discouraged federal prosecutors in most cases from bringing charges wherever the drug is legal under state laws.

Democrats and some Republicans condemned the move. Senator Cory Gardner, Republican of Colorado, threatened to retaliate by holding up Justice Department appointments that required Senate approval. Gavin Newsom, the Democratic lieutenant governor of California, vowed to encourage cooperation among states that have legalized marijuana.

California began allowing the sale of recreational marijuana on Monday, January 1, joining Alaska, Colorado, Nevada, Oregon and Washington. Massachusetts and possibly Maine are expected to begin sales this year. In all, 29 states and the District of Columbia have at least partly legalized the substance — including for medicinal use — though it remains illegal under federal law.

The move seemed certain to increase the confusion surrounding whether it is legal to sell, buy or possess marijuana in those parts of the United States where state and federal law conflict. Federal law has long prohibited those activities.

In 2013, after voters in Colorado and Washington State voted to decriminalize marijuana for recreational use, the Justice Department deliberated about how to handle the resulting disconnect between state and federal law. Ultimately, federal prosecutors were instructed to deprioritize most marijuana-related prosecutions in those states.

Justice Department officials would not say whether they intended to carry out a crackdown and begin prosecuting commercial growers, distributors and shopkeepers, or were instead merely trying to sow doubt and slow growth in the semi legal industry.

The dissonance between federal laws that outlaw marijuana and a growing number of state laws that allow and regulate it make uncertainty a fact of life for marijuana businesses and consumers. They say they live constantly with shifting legal terrain, losing their bank accounts and lines of credit and never knowing how vulnerable they may be to losing their business or being federally prosecuted.

The White House press secretary, Sarah Huckabee Sanders, maintained that President Trump was not going back on a campaign promise to refrain from using federal authority to shut down sales of recreational marijuana in states where they were legal.


Trump Seeks to Open Most U.S. Coastal Waters to New Drilling

The Trump administration is proposing to open almost all U.S. coastal waters to oil drilling, including those off California and Florida where activists have fought for decades to spare delicate ecosystems from oil spills.

The proposal released Thursday will go far beyond President Trump’s April order directing the Interior Department to consider auctioning oil and gas leases in the Arctic and Atlantic Oceans as well as the Gulf of Mexico.

Instead, the Interior Department is proposing 47 possible auctions of drilling rights in more than 90 percent of the U.S. outer continental shelf, including Pacific waters near California and Atlantic waters near Maine. The draft plan opens the door to selling leases in 25 of the nation’s 26 offshore planning areas, including 19 auctions of the Alaska region, seven in the Pacific region and nine in the Atlantic, including the straits of Florida.

The plan is unprecedented in its scope; no prior administration has ever proposed so many lease sales in a single five-year offshore drilling program. And the Obama-era plan Trump is aiming to replace forces drillers to focus on the central and western Gulf of Mexico with 10 sales there and one auctioning acreage in Alaska’s Cook Inlet.

The only region the Trump administration is ruling out now is the North Aleutian Planning Area in Alaska, which had been excluded from leasing by former President George W. Bush.

Environmentalists and coastal residents have fought offshore drilling that they say poses too great a risk of oil spills befouling beaches, harming marine life and jeopardizing tourism.

That kind of opposition helped persuade the Obama administration to jettison its initial Arctic and Atlantic leasing plans. Still, the Trump administration’s broad approach may make it harder for activists to fight now, by forcing them to divide resources and combat proposed drilling off all U.S. coasts — not just in the eastern Gulf, Arctic waters and the Atlantic Ocean where oil companies are believed to be most interested.

Politicians from Florida united in opposition Thursday, with Senators Bill Nelson (D-FL) and Marco Rubio(R-FL) arguing the government should extend an existing ban on oil development in the eastern Gulf of Mexico set to end in 2022 — not allow new leasing there. Governor Rick Scott asked for an immediate meeting with Interior Secretary Zinke to argue against selling leases near the state.

It is not clear how much oil and gas exists under Atlantic waters off the East Coast, because existing data stems largely from decades-old geological surveys and more than four-dozen wells drilled in the 1970s and 1980s. Some petroleum geologists examining the location of continents before they drifted apart point to discoveries and development in other parts of the Atlantic Ocean as illustrating potential oil deposits along the U.S. East Coast.


Justice Department Appeals Travel Ban Ruling

Justice Department filed notice on Thursday, January 4, that it will pursue appeal in Ninth Circuit of Dec. 23 preliminary injunction issued by Seattle judge.

President Donald Trump’s 11-nation refugee ban was partially blocked by a judge who found that it violated federal rule-making requirements.

U.S. District Judge James Robart in Seattle, who issued one of the earliest orders halting the president’s January travel ban, said in a ruling Saturday that the Trump administration can continue to deny entry to refugees who don’t have ties to relatives or institutions in the U.S.

A worldwide suspension of refugee admissions was included in earlier versions of the president’s executive orders that were blocked by judges until the Supreme Court ruled in June that the restrictions could be enforced for immigrants lacking “bona fide relationships” to the U.S.

The refugee ban — which covers Egypt, Iran, Iraq, Libya, Mali, Somalia, Sudan, Syria, Yemen, South Sudan and North Korea — is now a separate directive from the restrictions on travelers. Robart’s ruling comes a day after a San Francisco-based appeals court concluded that the restrictions on travelers from six mostly Muslim nations amounts is illegal discrimination.

The Justice Department has argued the refugee ban is only temporary and applies to nations that fail to adequately screen people to ensure they pose no security risk to the U.S.


Tech Groups Line Up Against FCC’s Net Neutrality Rollback

Leading technology industry groups said Jan. 5 they will join the legal fight against the Federal Communications Commission’s rollback of net neutrality rules.

The tech groups are weighing in alongside public policy groups and several state attorneys general who oppose the agency’s move, ahead of a federal court battle over whether the FCC should have scrapped rules barring broadband providers such as AT&T Inc. and Comcast Corp. from blocking or slowing data traffic on their networks.

The Internet Association, which represents Alphabet Inc.’s Google, Amazon.com Inc., Facebook Inc., Microsoft Corp. and Netflix Inc., plans to file as an intervenor—a non-party joining litigation to be heard—to support likely lawsuits by consumer advocates and online content makers.

INCOMPAS, which represents Netflix, Facebook, Sprint Corp. and T-Mobile US Inc., also plans to back a court challenge to the FCC’s move, a spokesperson told Bloomberg Law. A spokesperson for the Computer & Communications Industry Association, whose members include Facebook, Amazon.com and Google, told Bloomberg Law via email that it would be a litigant.

Lawsuits seeking reversal of the FCC action would likely be consolidated into a single challenge in the U.S. Court of Appeals for the District of Columbia Circuit. The court upheld the net neutrality rules the Democratic-controlled FCC had issued in 2015.

Net neutrality supporters can sue only after the FCC publishes the order in the Federal Register. The publication will follow a review of the order from the White House’s Office of Management and Budget.

Federal Register publication also will start the 60-legislative-day clock on Congress’s ability to invoke the Congressional Review Act (CRA) to void the order. The CRA empowers Congress to overrule a regulation with a majority vote, and Democrats have pledged to try to kill the order that way. The Republican-controlled Congress is unlikely to reverse the FCC’s action.

Sen. Edward J. Markey (D-MA.), a member of the Senate Commerce, Science, and Transportation Committee, said on Twitter Tuesday, January 2 that 29 senators support a CRA vote, one vote shy of the 30 needed to force a Senate floor vote.