Last night 48 House Democrats joined 203 Republicans to pass the long-stalled coporate tax bill, moving the measure to conference with the Senate. The 251-178 vote for HR 4520 came after provisions were added including a federal buyout of tobacco farmers and an additional income tax deduction for state sales taxes. The bill still achieves its original goal of bringing the United States into compliance with World Trade Organization (WTO) rules that resulted in European Union (EU) trade sanctions being applied. The EU sanctions will still be in effect until the legislation is signed, according to the EU.

The eventual conference with the Senate will focus on the tobacco buyout provisions, with some Senate Democrats objecting to the method used by the House.

AARP has agreed to endorse a bipartisan Senate bill that would allow consumers to import prescription drugs from countries where they often sell for less than in the United States. This endorsement will likely result in creating a greater urgency for passage of a legislative measure (S.2328) sponsored by Senators Dorgan (D-North Dakota), Kennedy (D-Massachusetts), McCain (R-Arizona) and Snowe (R-Maine).

Last year AARP endorsement of the Medicare prescription drug bill angered many AARP members who considered the new law’s drug coverage inadequate. The group’s support for drug importation reflects an attempt to mend ties with dissatisfied members and shake any perception of partisan leanings by backing a practice the Bush administration opposes.

S.2328 is one of several that propose lifting restrictions on the importation of drugs from abroad. The administration opposes the measure on safety grounds, saying it could open the U.S. market to a flood of ineffective or counterfeit medicines.

A rival measure (S.2493) sponsored by Sen. Judd Gregg (R-New Hampshire) and having the backing of Republican leaders, takes a more conservative approach and is the most likely candidate to be advanced this year.

S.2493 would give the Food and Drug Administration one year to create a system allowing the reimportation of prescription drugs from Canada, eventually expanding the practice to European Union countries.

The bipartisan bill, by contrast, would direct the FDA to implement a reimportation system within 90 days of enactment. It would also place penalties on manufacturers that interfere with importation for example, by limiting supply or increasing prices.

AARP is working with the bipartisan bill’s sponsors to strengthen some of its safety provisions, adding that some changes have already been made.

On June 16, House Appropriations Committee Chairman C.W. "Bill" Young (R-Florida) announced to committee members that he intends to move forward with a plan to bundle all of the 13 annual spending bills for FY 2005 into one large omnibus measure that would move in September after lawmakers return from their political conventions. Young has been discussing his plan with House Republican leaders throughout the spring, but he made his preference for an earlier omnibus official at a markup yesterday.

Young said his goal is to have all 13 measures passed before the House departs for the August recess, which begins July 23. He expressed confidence about that schedule, given that the panel has already marked up six of the bills in subcommittee and four are being marked up in full committee the week of June 14.

Young proposed the idea of an early omnibus in private meetings with GOP leaders this spring, but the plan has gained momentum in recent days as Senate Republicans have been unable to report any breakthrough on a final FY 2005 budget plan. Senate Appropriators have been waiting for a final budget to set their discretionary limits. . Without one, they are forced to rely on the spending limits put in last year's budget for FY 2005 to help them develop their bills.

Among others, Senate Budget Committee Chairman Don Nickles (R-Oklahoma) and Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) both said June 15 that, minus a budget, an omnibus bill is a distinct possibility. Stevens has specifically expressed support for an omnibus, saying he favors it over any yearlong continuing resolution to cover federal government spending. Senate Appropriations Committee ranking member Robert C. Byrd (D-West Virginia), however, has said he would oppose such an effort and would push Stevens to proceed under regular procedures.

Young made clear that the grave funding levels proposed for many programs would worsen the prospects for many of the individual bills and combined with the short legislative year would make an omnibus a likely vehicle for bringing the appropriations process to a close before the November election.

After a series of markups ended June 16, the House committee was readying for floor action the bills for Homeland Security, Defense, Energy and Water, Legislative Affairs, and Interior. Interior has been on the House floor the last couple days and Homeland Security is expected to come up on the floor later today.

Meanwhile, the bills for Agriculture and Commerce, Justice, and State have been marked up in subcommittee and are expected to be taken up by the full committee soon. A full committee markup for C-J-S has been scheduled for June 23. The bills that have yet to be marked up either at subcommittee or full committee are those for the District of Columbia; Foreign Operations; Labor, Health and Human Services, and Education; Military Construction; Transportation-Treasury; and Veterans Affairs and Housing and Urban Development.

The Senate Appropriations Committee held its first subcommittee markup of a FY 2005 bill on June 16. The Homeland Security Subcommittee chaired by Senator Thad Cochran (R-Mississippi) marked up and approved its version of their bill.

House and Senate transportation authorizers are hoping to move a 30-day extension of highway and transit programs, but might face opposition from House and Senate leadership. The Transportation Equity Act for the 21st Century (TEA-21) expired last Sept. 30, and the third extension of the program is set to expire June 30. With lawmakers leaving town June 25 for a 10-day 4th of July recess, an extension must be sent to President Bush before then, or the program will lapse, resulting in the furlough of some 5,000 Federal Highway Administration employees.

Conference and Senate Environment and Public Works Committee Chairman Senator James Inhofe's (R-Oklahoma) draft extension would statutorily run through the end of July, but practically until about July 23, which is the last day of the session before Congress adjourns for a five-week summer break that is longer than in past years to accommodate both the Democrat and Republican conventions. House Transportation and Infrastructure Committee Chairman Don Young (R-Alaska) also is said to prefer a 30-day extension.

Leadership is floating the idea of a three-month extension to take the program through the end of September, which also is the end of fiscal year 2004. However, Inhofe, Young, and the Democrats are expected to oppose that plan because they want to keep the deadlines as tight as possible. There already is acknowledgement that given the slow pace of the ongoing conference committee, there is no way an agreement will be ready by July 23, but they want to keep the extensions short as a way of pushing the work to be done. Democrat leaders have said getting the work done as soon as possible is important, but noted that they cannot finish the conference nor delve too deep into the merits of the legislation until they resolve the overall funding issue.

Committee staffers have said if the leadership wants the extension to go beyond 30 days, they would have to tell the committee "as soon as possible" because it will need time to run the dollar amounts that would fund the various Transportation Department agencies and programs requiring reauthorization.

Conferees are scheduled to meet next Wednesday, June 23.

While the House Appropriations Committee is planning to mark up its $417 billion fiscal 2005 defense spending bill Wednesday, sending it to the floor as early as next week, the Senate has come across obstacles with their companion measure and might not begin until after the upcoming recess. President Bush’s $25 billion war fund will be the most controversial issue on Wednesday’s markup. Rep. David R Obey (D-Wisconsin), is attempting to increase the size of the fund to $65 billion in order to more accurately reflect the cost of the war operations and tighten reporting requirements on the Pentagon’s spending.

The measure constitutes a 7% increase over the Defense Department’s current non-war budget providing the Pentagon with $392 billion in fiscal 2005, not including the $25 billion war fund. Since the war fund will be available once the measure is enacted, there has been pressure on the appropriators to pass a final bill before the August recess. In the Senate Ted Stevens (R-Alaska), chairman of the Appropriations Committee, is not moving forward until the defense authorization bill is finalized because he has expressed concern that the many pending amendments will be offered on the appropriations measure if he begins a markup. According to Congressional Quarterly, Stevens does not want to leave for recess with the defense bill still open for debate, and thus will not begin markup unless he believes he can complete the floor action before Congress departs.

By moving forward to adopt an amendment that would include sexual orientation in the definition of hate crimes, the Senate has sparked a debate on gay rights. Another contentious vote is expected for the Senate in July on the proposed amendment to the Constitution banning same-sex marriages.

The hate crimes amendment, sponsored by Edward M. Kennedy (D-Massachusetts), and Gordon H. Smith (R-Oregon), was easily adopted and added to a defense authorization bill. This amendment would expand the current law, which protects people attacked because of their race, ethnicity, or religion, to include assaults based on sexual orientation, gender or disability. If passed, this would be the first protection for gays and lesbians in federal civil rights law. However, the GOP leadership has successfully blocked all previous attempts to add this amendment, often waiting until conference to eliminate the provisions in question.

The proposed constitutional amendment (S J Res 30) would define marriage as “the union of a man and woman,” as well as bar judges from interpreting the Constitution in such a way as to allow same-sex couples to wed. Since it is unlikely that the vote will get the necessary two-thirds supermajority in both houses of Congress, the move is calculated to put Democrats on record regarding this controversial issue as the national conventions and elections approach.

Although presumptive Democratic presidential nominee John F. Kerry of Massachusetts is against gay marriage, he and most of his fellow Democrats, as well as some Republicans, oppose amending the constitution in order to ban it.

Republican leaders in the House are waiting to see the outcome in the Senate before moving forward with a similar resolution (H J Res 56).

House Republicans hope to use money from the Nuclear Waste Fund to revitalize the Bush administration’s plan to deposit nuclear waste at Nevada’s Yucca Mountain.

Joe L. Barton (R-Texas), chairman of the House Energy and Commerce Committee, is sponsoring a bill that would authorize the use of $749 million from the fund in fiscal 2005. The Subcommittee on Energy and Air Quality plans to mark up the bill on Wednesday. Due to strong opposition from Senator Harry Reid (D-Nevada), this legislation is not likely to get enacted.

Last week the House Energy and Water Development Appropriations Subcommittee endorsed legislation providing only $131 million of the $880 million request for this project. The full Appropriations Committee will consider the bill Wednesday. Barton’s bill, even if it does not make it to the floor itself, may have laid the foundation for an amendment to the House energy and water bill.

Senate appropriators are moving on with markup of spending bills after talks stalled on the fiscal 2005 budget resolution. A last minute proposal to woo Senate passage of the stalled FY05 budget resolution seems likely to garner as much opposition from GOP conservatives as it does support from moderate Republicans.

It is likely that many of the fiscal 2005 spending bills will not make it to the floor in upcoming months because of the increased partisanship during election years.

Having a budget resolution is important to the GOP leadership because it will allow them to move a tax cut package through the Senate more easily. Without a budget resolution, it will be difficult to fight Democratic amendments seeking to peel off moderate GOP members.

Both the Homeland Security and the Defense Appropriations subcommittees plan on marking up their bills Wednesday and sending them to full committee Thursday.

House and Senate Conferees on June 9 held their first meeting to begin the process of reconciling the House and Senate versions of reauthorization of surface transportation programs. The largely ceremonial meeting produced agreement on a short list of provisions virtually identical in both bills. It also produced agreement that all conferees wished House T&I Chairman Don Young a happy birthday. Beyond that, there was scant evidence of progress.

Most of the meeting was consumed by opening statements from the conferees. These statements restated positions on overall funding and on program structure which are now familiar to all who have paid attention to this issue in recent months.

We are told conferees have agreed to meet every two weeks. It is unclear whether there will be any further progress to discuss by June 23. House and Senate staffers have not scheduled meetings to discuss the differences between the two bills. That does not bode well for speedy action.

We continue to believe the prospects for final action on this legislation before the November election are very slim. We are hoping to be convinced otherwise, but are not finding evidence to help in that regard.

Please watch this space for news on further developments.

The Senate Finance Committee held an oversight hearing this week on the implementation of the new Medicare discount drug card. Democrats and Republicans, both, are looking to place blame over low enrollment rates for the program created by the 2003 Medicare Modernization Act.

Sen. Charles Grassley (R-Iowa), Chairman of the Senate Finance Committee said the program has been the target of a campaign to discredit it and confuse seniors. Others, however, blame the complexity of the program for the low enrollment rates.

Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS) appeared before the Finance Committee to answer questions about the implementation of the card program, which was created to offer discounts to seniors before the new Medicare prescription drug benefit begins in 2006.

About 3 million seniors have signed up for the card. Of those, about 2.4 million were automatically enrolled through their Medicare health maintenance organizations. The administration is particularly concerned that more low-income seniors, who are eligible for a $600 credit when they sign up for a card, have not yet enrolled.

Automatic enrollment is available for those involved in state pharmacy benefit programs.

Republicans had hoped the drug discount card would blunt some of the criticism that Democrats have been aiming at the Medicare law. But the cards have become a polarizing issue, with seniors expressing confusion over the program. Some lawmakers who supported the bill complained that the program, which allows card issuers to change prices and available drugs every week, is unnecessarily complex.

Sen. Kent Conrad (D-North Dakota) introduced legislation this week to reduce the number of card options, and guarantee discounts and drugs offered by each card.

By allowing companies to compete and have access to prices offered by other card sponsors, supporters say, market forces will drive down prices.

The House Judiciary Committee is expected this week to choose yet a third course for distributing grants to first responders. After the House Transportation Committee decided last week to adhere to the existing grant program while expanding eligibility to include natural disasters as well as anti-terrorism, the Judiciary Committee is expected to support the existing distribution formula but limit funding to only fight terrorism. Earlier this year the House Selection Committee on Homeland Security proposed a new distribution formula that would focus grants to areas considered most vulnerable to terrorist attacks. A fourth oversight committee, Energy and Commerce, basically endorsed the Homeland Security Committee’s version of the bill.

The House Rules Committee must determine which version and amendments will be considered by the full House, leaving no doubt that the House leadership will have to sort out differences between the committee chairmen before the bill progresses further. H.R. 3266, the Faster and Smarter Funding for First Responders Act, was introduced to authorize additional federal assistance to local police, fire and emergency services, focusing on those areas of the country considered most likely to experience terrorist activities.

The existing State Homeland Security grant program distributes three-quarters of one percent of the amount appropriated to each state. Remaining funds are distributed according to state population. The Urban Area Security Initiative program provides grants to high threat areas of the country, initially seven municipalities, now expanding to 50. H.R. 3266 originally proposed that these two programs would be consolidated and funds would be distributed based on threats, vulnerabilities, and risk assessments. States would be required to disburse 80 percent of the grant money to local governments within 45 days of receiving funds from the federal government or face penalties as well as pay 25 percent of the grant activities. Federal funds could be provided directly to local recipients if states fail to perform.

A similar Senate bill, S. 930, the Emergency Preparedness and Response Act, was reported out of the Senate Environment and Public Works Committee in February. The Senate bill guarantees the same basic level of funding as existing law and sets aside at least 10 percent of the appropriated funds for direct assistance to local governments recommended by the Governor. The 28 existing Urban Search and Rescue teams are guaranteed $1.5 million annually, and no additional teams may be established until all existing teams are trained and equipped for two teams to be deployed simultaneously. The bill is ready for floor consideration in the Senate.

The House Subcommittee on Energy and Water Development is scheduled this week to mark-up the spending bill for the U.S. Army Corps of Engineers and the Bureau of Reclamation. While much emphasis will be placed on resolving energy-related concerns in the bill, the subcommittee must also resolve its differences in priority with the administration’s proposed cuts of $500 million for water projects. The subcommittee is expected to restore funding for many flood control, dredging, and environmental restoration projects, but emphasis will be placed on completing projects rather than starting new ones. The House would like to complete this and other spending bills during the month of June. However, final approval by the President might not occur until after the November election.

We at Peyser Associates join the nation in mourning the passing of former President Ronald Reagan. We recall especially this week his ability to pursue a bold agenda in a forthright way while preserving a sense of goodwill between people of opposing views.

We expect the GOP leadership of the House and Senate to announce that no legislative business will be carried out this week on the floor of either body. The schedule for committee action or conference committee action remains uncertain.

Because of the national day of mourning on Friday the federal government will be closed. Out of respect for President Reagan, Peyser Associates will follow suit.

Yesterday, the House passed legislation authorizing the creation of "personal re-employment accounts" for jobless workers. The bill (HR 444), sponsored by Jon Porter (R-Nevada) was passed, 213-203 on party lines. This was done after rejecting a Democratic attempt to offer supplemental unemployment benefits.

The accounts would give unemployed workers at risk of exhausting their state unemployment benefits up to a $3,000 stipend to spend on such expenses as education, childcare, health care or transportation. If workers were to find jobs within 13 weeks, they could take the balance of the account as a balance. Many Democrats are concerned that workers who accept re-employment accounts would be ineligible for some traditional unemployment benefits such as job training.

The legislation is unlikely to be considered in the Senate, however many Senate Democrats would be interested in reviving a a counterproposal to offer supplemental federal unemployment insurance to individuals who go through their traditional state benefits.

We've just posted the full list of House and Senate conferees for the TEA-21 reauthorization conference. Head over to the analysis side for all the details.