By CongressDaily staff
© National Journal Group Inc.
Monday, July 23, 2007

The House and Senate turn their attention to spending for domestic security, law enforcement and public works this week, as the FY08 appropriations process lurches into an uncertain future.

The House will also take up the farm bill, while the Senate considers higher education funding today and is expected to take up a bill later in the week that would reauthorize and expand the State Children's Health Insurance Program.

As part of its reauthorization of higher education programs, the Senate today was poised to approve legislation designed to hold colleges more accountable for tuition hikes. Under the measure, the Education Department would develop a national tuition cost index and publish an annual report providing an analysis of tuition change trends across the country over the previous two years and containing a "Higher Education Price Increase Watch List" of schools whose increases exceed the norm.

The Senate will then take up the first of its 12 spending bills, a $37.6 billion Homeland Security measure that is nearly $2.3 billion above President Bush's request. Bush has already threatened to veto a slightly smaller House version that passed in June, meaning a confrontation looms on the first spending bill likely to reach his desk.

Senate Appropriations Chairman Robert Byrd, D-W. Va., who is also chairman of the Homeland Security Appropriations Subcommittee, made a successful pitch to his leadership last week to get the spending process moving in hopes of avoiding a year-end train wreck. He argued to the Democratic Caucus that the party can win over public opinion by trumpeting the "good works" in the spending bills, "not hiding them away."

Democrats say they have a winning issue in Homeland Security, arguing Bush's budget request shortchanged the department, offering only a 1.7 percent boost over the current year while the Senate bill adds 8 percent.

The measure increases funds above the request for Border Patrol agents and for detention and removal of illegal immigrants. Seeking to address recent plots against the aviation system, the measure would boost funding for explosives detection equipment at airports. Screening of cargo entering the country for signs of radiation is another focus of the bill, while increases are also included for first responders and mass transit, port and rail security.

After a lengthy debate last week over spending on social services, education and job-training programs, the House turns first this week to a $104.4 billion bill funding transportation and housing infrastructure programs. That bill is $4.1 billion above Bush's request, ensuring yet another veto threat.

The Transportation-HUD bill provides funding for two of the most heavily lobbied constituencies. Appropriators argue transportation authorizing laws prevent them from doing more to improve low-income housing and transportation programs like passenger rail service that do not enjoy the same procedural protections that highways, aviation and transit do.

Nonetheless, House appropriators rejected most of the cuts proposed by Bush in housing programs, while fully funding highway, transit and aviation spending guaranteed by law.

They found extra money to protect popular programs like Amtrak and rural air service from cuts, in part by using budgetary offsets some have derided as "gimmicks" -- in this case a $3 billion rescission of guaranteed highway spending that the authorizing committee is sure to attack.

Also on tap in the House this week is a $53.6 billion Commerce-Justice-Science bill, which has the potential to run into all sorts of trouble. A veto threat is guaranteed over that bill's $2.3 billion boost above Bush's request, while the Justice Department's budget could attract a variety of riders targeting Attorney General Gonzales' firing of United States attorneys, domestic wiretapping and other Bush initiatives that have drawn Democratic ire.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., wrote to Bush Friday, requesting a meeting to discuss spending priorities and to try to "avoid a protracted battle over relatively small differences." They wrote: "Given our relatively minor differences over total spending levels, we are hopeful we can quickly reach an agreement that funds American's priorities in a timely manner, so long as both sides negotiate in good faith."

Debate on the farm bill is expected to begin Wednesday or Thursday, according to House Agriculture Chairman Collin Peterson, D-Minn., whose committee approved the measure last week. Pelosi gave her endorsement to the bill, calling it "a critical first step toward reform by eliminating payments to millionaires, closing loopholes that permit evasion of payment limits, and promoting our nation's family farms."

Agriculture ranking member Bob Goodlatte, R-Va., also indicated bipartisan support for the bill. "As we go into the wider House of Representatives we're going to have to work together," Goodlatte said.

The massive five-year bill would extend the government's basic commodity, conservation and nutrition programs.

The commodity title would make some changes to target prices and marketing loans in order to encourage the production of certain crops, add provisions to the cotton program to make up for the loss of the Step 2 marketing program that was repealed to settle a World Trade Organization case the U.S. lost and create a sugar-to-ethanol program under which the government would support sugar prices by buying excess sugar and sell it to ethanol plants.

The conservation section re-establishes the Wetlands Reserve Program, whose authority has expired. It also extends the Conservation Security Program, but does not allow new enrollments for the life of this farm bill and makes changes in that program's structure in future years.

An amendment added during the committee markup would eliminate or soften many of the regulations and penalties in the implementation of the country-of-origin labeling of meat mandated by the 2002 farm bill.

The language requires that as of Sept. 30, 2008, beef, pork, lamb and goat meat from animals born, raised and slaughtered in the United States will be labeled "Product of the U.S." Goat meat was added to the list during the final day of markup.

Meat from animals born in another country and raised and/or slaughtered in the United States will be labeled as a product of that country and the United States. Ground meat that comes from a variety of countries will be labeled "may contain meat from" and list the countries.

Peterson said battles over the country-of-origin labeling program are not over because the fresh fruit and vegetable industry is split over the provisions that would apply to them.

Another major change made by the committee was adopting stricter limitations on subsidy payments to farmers that CBO estimates will reduce subsidies by $226 million over five years.

But challenges lie ahead, with many critics saying the payment limits do not go far enough and that the bill should have cut or eliminated subsidies in favor of using that money for conservation, nutrition and fruit and vegetable programs.

Rep. Ron Kind, D-Wis., who has introduced an alternative bill to eliminate all subsidy programs within seven years, called the farm bill's reforms "superficial at best."

Kind plans a news conference Tuesday to announce a proposal that would include cutting the direct payments program and using the money for other purposes.

Kind and other members of the House Ways and Means Committee also are still bristling at Pelosi's directive to Ways and Means Chairman Charles Rangel, D-N.Y., to find a $4 billion offset to pay for increases in the food stamp program.

The Senate meets today at 10 a.m. to begin consideration of the higher education reauthorization bill.

The House meets today at 10:30 a.m. for morning hour and at noon for legislative business. On Tuesday, the House will meet at 9 a.m. for morning hour and at 10 a.m. for legislative business. On Wednesday and Thursday, the House will meet at 10 a.m. On Friday, the House will meet at 9 a.m.

BANKING
The House Financial Services Capital Markets Subcommittee will mark up legislation Tuesday that would reauthorize the federal government's terrorism risk insurance program, which expires at year's end. The bill would require carriers to make available coverage for a nuclear, biological, chemical or radiological attack, a provision opposed by some industry groups that argue it would result in massive risk exposure for smaller companies.

Capital Markets Subcommittee Chairman Paul Kanjorski, D-Pa., has noted some problems with the bill, such as a provision that would allow areas that have suffered significant terrorist attacks to qualify for lower deductibles and a trigger level for the program to kick in for any subsequent attack. That language was pushed by the New York delegation.

The full committee will hold a Wednesday hearing on how to improve consumer protection by federal banking regulators and the FTC. The panel will hear from industry representatives and consumer groups. Also on Wednesday, the Financial Services Oversight Subcommittee will hold a hearing on the Home Mortgage Disclosure Act, which requires lenders to annually make available their data on home purchases.

BUDGET
The Senate Homeland Security and Governmental Affairs Committee will hold the first of two confirmation hearings Tuesday for President Bush's choice to head the OMB, former House Budget Chairman Jim Nussle, R-Iowa.

The Senate Budget Committee, which also must clear Nussle's nomination, will hold its hearing Thursday.

Nussle would replace OMB Director Portman, who plans to step down this month.

DEFENSE
The House Appropriations Committee will mark up the FY08 defense spending bill Wednesday, in anticipation of floor debate on the $459 billion appropriations measure later this month.

Approved by the House Defense Appropriations Subcommittee July 13, the bill makes several changes to the Pentagon's budget request, including adding $480 million to pay for a second engine for the international Joint Strike Fighter program. It also cuts $400 million from the Army's $3.7 billion request for Future Combat Systems, the cornerstone of the service's technology transformation efforts.

In addition, the defense subcommittee increased the Navy's shipbuilding accounts by adding an LPD-17 amphibious ship, two T-AKE cargo ships and advanced funding for a second Virginia-class nuclear submarine.

The spending measure does not include $141.8 billion in supplemental funds requested for Iraq and Afghanistan. House Defense Appropriations Subcommittee Chairman John Murtha, D-Pa., has said the panel will consider that portion of the Pentagon request after the August recess.

Meanwhile, the House Armed Services Committee will meet Wednesday with the House Intelligence Committee to review the recent National Intelligence Estimate and the growing threat of al-Qaida.

The committee also will hold a hearing Thursday on habeas corpus rights for detainees. Last month, House Armed Services Chairman Skelton introduced a bill restoring habeas corpus rights to suspected terrorists held at the military's detention facility at Guantanamo Bay, Cuba.

Across the Capitol, the Senate Armed Services Committee will hold a confirmation hearing for Chief of Naval Operations Michael Mullen, nominated to serve as chairman of the Joint Chiefs of Staff, and Gen. James Cartwright, commander of U.S. Strategic Command, who has been nominated to be vice chairman of the Joint Chiefs.

EDUCATION
The higher education bill has brought an expression of "grave concerns" from the Bush administration about the tuition index proposal and some other provisions, but the White House stopped short of threatening a veto.

The legislation, which would reauthorize the Higher Education Act, was introduced by Health, Education, Labor and Pensions Committee Chairman Kennedy and has the backing of HELP ranking member Michael Enzi, R-Wyo. It cleared the committee on a voice vote last month.

The legislation also calls for cracking down on "sweetheart deals" between colleges and lenders by barring them from offering schools revenue-sharing arrangements and enticing school officials with gifts, such as meals, trips and tickets to sporting events.

In addition, lenders would be subject to an array of new conflict-of-interest and reporting requirements, such as the disclosure of expenses paid to college employees. Colleges would have to explain why banks were selected for "preferred lists" of lenders issued to students. And the selections would have to be based on competitive interest rates and other advantages to students.

Lenders would also have to supply borrowers with more detailed information on the terms of their loans, including interest rates, repayment schedules and default penalties.

ENVIRONMENT
The Senate Environment and Public Works Private Sector Solutions to Global Warming Subcommittee will hold its third and final hearing Tuesday before introducing a plan before next month's recess mandating limits for greenhouse gas emissions.

Private Sector Solutions to Global Warming Subcommittee Chairman Joseph Lieberman, D-Conn., and ranking member John Warner, R-Va., have pledged to offer legislation implementing an economy-wide cap-and-trade program to reduce domestic emissions while aiming to ensure international participation by developing nations such as China and India.

"Our bill will curb global warming without imposing economic hardship on Americans, and it will ensure that growing economies abroad follow our lead and do their part," Lieberman said.

Former Lieberman aide Tim Profeta, now director of the Nicholas Institute for Environmental Policy Solutions at Duke University, will testify. Other witnesses include representatives from AFL-CIO, JPMorgan Securities and Shell International Trading and Shipping Company.

Lieberman and Warner have held about a dozen meetings with outside groups and other lawmakers, including a staff meeting last week with aides to Energy and Natural Resources Chairman Bingaman and Sen. Arlen Specter, R-Pa. Bingaman and Specter have introduced a mandatory greenhouse gas bill that was referred to the Environment and Public Works Committee. Lieberman and Warner are working on a discussion draft that they plan to release before the August recess, a Warner spokesman said Friday.

HEALTH
The Senate could take up late this week a $35 billion State Children's Health Insurance Program reauthorization bill, and is expected to complete work on it before the August recess. The SCHIP schedule is largely dependent on how the debate on the Homeland Security appropriations bill fares. SCHIP is next in the queue.

The SCHIP measure will easily meet the 60-vote threshold needed to stop a filibuster, but lawmakers will first have to contend with amendments from both sides designed to pull the bill in one direction or another. Sen. John Kerry, D-Mass., will offer an amendment to expand the $35 billion authorization to the $50 billion allotted in the budget resolution. Republicans will try to scale back the proposal.

In the House, both the Ways and Means and Energy and Commerce committees could proceed to markups of a larger health care package that includes a $50 billion SCHIP expansion and a two-year block on a scheduled 10-percent cut in Medicare physicians' fees.

The Senate Finance Committee has scheduled confirmation hearings on Wednesday for Kerry Weems, President Bush's nominee to head the Centers for Medicare and Medicaid Services and Tevi Troy to be HHS Deputy Secretary.

The Senate Health, Education, Labor, and Pensions Committee will hold a hearing Tuesday on Bioshield and other preparedness programs to protect against epidemics.

HOMELAND SECURITY
House and Senate lawmakers and their aides will continue behind-the-scenes negotiations this week on legislation implementing unfulfilled recommendations of the 9/11 Commission, after failing to wrap up work last week during a public conference.

Lawmakers still need to resolve a handful of outstanding issues, such as which federal agency will manage grants for transportation security, how to help local governments buy interoperable communications equipment, and whether a provision will be included that gives people immunity if they are sued for reporting on suspicious activity around transportation networks.

Senate Homeland Security and Governmental Affairs Chairman Lieberman said the measure has gained "even greater urgency in recent weeks, given terrorist activity in the United Kingdom, the national intelligence estimate on [al-Qaida's] continuing intentions to strike the U.S., and warnings from Homeland Security Secretary Michael Chertoff that the U.S. remains vulnerable, especially during these summer months."

But another wrinkle to completing the legislation emerged late last week because conferees approved an amendment to the bill that would require the Homeland Security Department to ensure, within five years, that most cargo is scanned before it is shipped to the United States. The amendment only makes an exception for shipments of cargo and equipment for the U.S. military.

Homeland Security and Governmental Affairs ranking member Susan Collins, R-Maine, said she would not sign a final conference report if the provision remains, indicating that she will try this week to alter or delete the cargo-scanning language from the bill.

If other senators join Collins in protest, it could imperil final legislation from being sent to President Bush, aides said.

Meanwhile, Collins and House Homeland Security ranking member Peter King, R-N.Y., are leading an effort to add another provision to the bill that would give people immunity for reporting suspicious activity around transportation networks.

King said he received assurances that Lieberman would help to add the provision. House Homeland Security Chairman Thompson, however, said he wants to see language in the provision changed to ensure that it does not lead to racial profiling or the targeting of innocent people.

JUDICIARY
The House Judiciary Commercial and Administrative Law Subcommittee will hold a Thursday hearing on a 1998 law that bars federal, state and local governments from taxing Internet access and taxes that treat Internet purchases differently from other forms of sale.

LABOR
The House Education and Labor Health, Employment, Labor and Pensions Subcommittee will hold a hearing Tuesday on misclassifying workers as independent contractors.

On Thursday, the Education and Labor Workforce Protections Subcommittee will hold a hearing on mine-safety legislation, and the panel's Higher Education, Lifelong Learning, and Competitiveness Subcommittee will hold a hearing on the Workforce Investment Act.

POLITICS
Georgia's Secretary of State could certify the results of the July 17 special runoff election as early as this week, setting up a potential recount for the state's open 10th District seat. After last week's election, physician Paul Broun led former state Sen. Jim Whitehead by fewer than 400 votes. Whitehead had been considered the favorite for the seat of the late GOP Rep. Charlie Norwood.

The district's counties had until Friday to provide their tallies to state election officials. Once the state certifies those results, Whitehead would have 48 hours to decide whether to request a recount. Both Broun and Whitehead are Republicans, guaranteeing that the GOP will hold the seat.

Rep. Charles Gonzalez, D-Texas, who chairs a task force reviewing the contested 2006 election in Florida's 13th District, has scheduled a closed-door meeting with GAO officials on Friday to review the status of their inquiry.

The GAO is examining the quality of post-election testing of electronic voting machines in the disputed election of GOP Rep. Vern Buchanan. Among the options the GAO could recommend is additional testing. Gonzalez said last week he would like the task force to be in a position to authorize further action and allow the GAO to continue its work during the August recess.

TAXES
Senate Finance Chairman Baucus holds a hearing Tuesday to examine U.S. tax policy in rural America.

A Treasury Department conference on "Business Taxation and Global Competitiveness" on Thursday will bring together speakers from government, academia and the business sector. It will include the participation of Treasury Secretary Paulson as well as Chairman Edward Lazear of the White House Council of Economic Advisers.

TRADE
U.S. complaints about currency practices of China and other countries will take center stage, with both the Senate Finance and Banking committees aiming to hold markups this week or next.

Senate Finance Chairman Baucus has called a meeting of Finance panel members for today to seek backers for the currency legislation he has co-sponsored with Finance ranking member Charles Grassley, R-Iowa, and Sens. Charles Schumer, D-N.Y., and Lindsey Graham, R-S.C. A markup is possible Wednesday or Thursday.

Meanwhile, Deputy U.S. Trade Representative Karan Bhatia discusses trade issues with Asia Tuesday in an address to the Washington International Trade Association.

• CongressDaily and CongressDailyAM are available online to subscribers only.
• For nonsubscribers, additional information is available.