This Week in Washington

Latest news from Washington, D.C. produced by Total Spectrum/SGA exclusively for members of the Arizona Chamber of Commerce & Industry

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Thanks for your interest in Washington, D.C., and thanks for reading This Week in Washington. At the risk of sounding like a broken record, Congress’s continuing discussions on infrastructure remains this week’s hot topic. Patrick Robertson’s Washington Whispers details the latest on all the moving parts of an agreement and how the August recess weighs on the process. Congressman Erik Paulsen writes about the risks – immediate and long-term – of relinquishing intellectual property protections on medicines like the COVID-19 vaccines. Al Jackson shares recent progress of the House and Senate versions of the Fiscal Year 2022 National Defense Authorization Act. Ramona Lessen reviews two recent Senate committee hearings covering cryptocurrencies and the implementation and enforcement of the USMCA (U.S.-Mexico-Canada) trade agreement. This Week in Washington typically follows Congress’s schedule, observing a break in August to rest and plan for the fall legislative session. That said, we’ll continue to monitor legislative activity now and over the summer recess and pledge to update our kind readers as needed. Stay well.

Steve Gordon, Managing Partner


Washington Whispers

By Patrick Robertson, Total Spectrum Strategic Partner

You have read too many words in this space over the last year about the prospects for a bipartisan infrastructure deal, and this week was no exception. However, with bipartisan negotiators reaching a deal Wednesday in Washington, time is short for them to reduce the agreement to legislative text and move it through the House and Senate. The House was expected to leave Washington for the rest of the summer on Friday but could extend its time here if needed. The Senate is scheduled to be here next week but then leave and return after Labor Day.

Both chambers have said they may extend their time in session if time is needed, but many Members of Congress have plans for family summer vacations or official travel around the country and across the globe.

The current state of play is nothing short of uncertain, as negotiators have reached a deal but still must hash out the text and work to get as many Senators on board as possible. 

Senator Rob Portman (R-OH) has emerged as the top Republican senator in negotiations, speaking with White House Senior Advisor Steve Ricchetti regularly. Both are seasoned dealmakers and long-time creatures of Washington. At the same time President Biden hosted Senator Kyrsten Sinema (D-AZ) at the White House this week to keep talks on track.

Last week, Senator Majority Leader Chuck Schumer (D-NY) scheduled a cloture vote on a bipartisan infrastructure bill, but negotiators did not have a deal in place before that vote. As a reminder, cloture is the process by which the Senate limits debate on legislation. Senate Democrats voted in unison to move to debate a bill without legislative text to jumpstart the process, while Republicans voted against doing so because they had not yet seen any language. Cloture requires 60 votes, so the 50-50 split left the Senate without a plan to move forward.

The Senate voted on Wednesday night (July 28) to move to invoke cloture and debate the bill. This vote saw 17 Senate Republicans join all 50 Senate Democrats to agree to proceed to an infrastructure bill, easily passing the 60-vote threshold to invoke cloture.  Now we wait to see text of that bill to see the debate move further along.

Liberals suggested the Senate should move immediately to the partisan reconciliation process expanding on the $3.5 trillion package the Senate is expected to move this fall to include the parameters of a potential bipartisan deal.  Moderate Senate Democrats and the President are still very invested in the bipartisan agreement, so they are advocating moving forward. 

At one point last week, Senator Portman suggested there were as many as two dozen unsettled issues, and we have since learned that nothing is final until everything is final. After a Democratic offer earlier this week, Republican negotiators suggested resolved issues were reopened. 

All of this could lead one to think these discussions were over, but it was very clear they were not. Neither side walked away from the virtual negotiating table and both sides seem committed to seeing this through. And both sides have a lot to gain.

The President and moderate Democrats will do what they promised – find common ground on a traditionally bipartisan issue that benefits every corner of the country with road, bridge, port, airport, sewer, transit, and other infrastructure projects. The President will strengthen his case of being a dealmaker who is not a relic of past Senates.

Republicans will have the chance to vote for something after uniformly opposing the American Rescue Plan, announcing they will vote against a clean debt ceiling increase and opposing the next Democratic reconciliation bill likely to come in the fall. They will deliver projects to their states and districts and show they can work with the President when he is reasonable. While there are likely 20-25 Senate Republicans who will not vote for even this bipartisan bill, I expect the final vote count will be in the 70s or maybe 80 at the end of the day if an agreement is reached.

The coming hours and days are critical. Codifying the deal to legislative language is likely necessary by this weekend or Monday at the latest to change recess plans and try to move something through both bodies quickly. If that happens, Democrats will try to almost immediately turn to passing a budget resolution that will set up the partisan budget reconciliation process to pass their $3.5 trillion social infrastructure bill. While they will not yet have all of the details ironed out, they will work to pass the budget resolution which will set them up to pass the actual policy and spending priorities when they return from their summer breaks.

Democrats in the House have expressed some skepticism about the deal already, especially since a number of the proprieties they worked on in recent months were not included. 

As is always the case, moderate Senate Democrats like Senators Sinema and Joe Manchin (D-WV) will have an outsized influence over whether this happens. Senator Sinema also made news this week by saying she would not support the $3.5 trillion reconciliation package Democrats are crafting. However, she said she will vote for the budget and will work to make that proposal better. Democrats cannot pass that proposal without unanimity in their caucus of 50 Senators.

Keep an eye on the dominoes this week and beyond to see how they fall. 


We can save the world with our vaccines — without surrendering our IP to China

By Congressman Erik Paulsen, Total Spectrum Strategic Consultant

The Biden administration gave Beijing a gift when it endorsed a petition before the World Trade Organization to force the American developers of COVID-19 vaccines and therapeutics to relinquish their intellectual property rights to these medicines. 

The Chinese government seeks to take over in biotech, a sector where U.S. innovators lead. Biotech is included in its “Made in China 2025” plan, which lists 10 sectors that China aims to dominate. The government intends to force anyone doing business in China in those spheres to hand over know-how. 

Surrendering IP protections on biomedical technology has dire consequences. Foremost, it guts the foundation of biomedical innovation, which takes huge investments spanning many years to bear fruit. IP protections assure innovators that they can recover those investments and make a profit. Losing IP protection would have a chilling effect on investments in the sector. 

Equally injurious to America, the IP waiver would allow China to become a biotech powerhouse by piggybacking on American innovation. 

A waiver on IP for COVID-19 vaccines would accelerate the timeline for “Made in China 2025.” The mRNA technology which undergirds the Pfizer-BioNTech and Moderna vaccines has uses beyond this pandemic. It has the potential to take on cancers and other diseases. With the waiver, China and others will be emboldened to use the once-proprietary mRNA know-how for broader research and applications. 

Is this in America’s interest? Mark Cohen, an expert on Chinese IP theft, recently told the Washington Post that the waiver would deliver “a competitive advantage to countries that are increasingly viewed as our adversaries, at taxpayer expense.” 

Beyond the damage that an mRNA giveaway will inflict on U.S. R&D investments, the waiver sends a signal that America could agree to force American innovators to part with trade secrets every time there’s a global crisis. 

That attitude will arrest biopharmaceutical innovation. Small biotech firms spearhead 70% of the R&D pipeline, relying heavily on private investors to fund that work. If investors know that innovators may have to give away their discoveries in a global crisis, they’ll deploy their money elsewhere. That’ll make it even harder to draw the R&D investments needed to address infectious diseases, including drug-resistant infections and viruses. America is benefiting greatly from the early access to COVID-19 treatments and vaccines, saving lives and speeding economic recovery. Preserving U.S. leadership in biomedical innovation includes preserving the incentives that helped make it the world’s leader. 

A final downside of the waiver is the ability for American firms to find a cure for the next pandemic. Among the greatest threats is bacteria resistant to our current arsenal of antibiotics that becomes a pandemic-inducing superbug. Already, the market for new antimicrobials is broken. Only a handful of biotechs have them in development, and many have gone bankrupt trying to commercialize one. 

“A lot of people have rightly said we need to start thinking about preparing for the next pandemic now,” noted Craig Garthwaite, a health care-business professor at Northwestern University. “Suspending IP for vaccine manufacturers would send exactly the wrong signal for the future.” 

For the sake of patients everywhere, American IP rights must stay protected. It’s the only way to keep China at bay and American innovators at work. 

Erik Paulsen represented Minnesota’s 3rd Congressional District in the U.S. House of Representatives from 2009 to 2019 and currently serves as a strategic consultant for Total Spectrum. This piece originally appeared in the International Business Times.


Defense Update

By Al Jackson, Total Spectrum Strategic Consultant

The Senate Armed Services Committee (SASC) earlier this month put forth its version of the Fiscal Year 2022 National Defense Authorization Act (NDAA). The bill funds the department at $740 billion, which includes billions more in equipment purchases than the administration desired in their budget, which proposed funding the military at $716 billion. Additionally, the legislation addresses the issue of how serious crimes are handled by military officers, and for the first time in our history, requires women to register for the possibility of future military drafts, and increases parental leave to 12 weeks for all service members after the birth, adoption, or foster care placement of a child. 

The bill was passed out of committee by a vote of 23-3. Republican lawmakers in both the House and Senate have advocated for increased defense spending, indicating the administration’s number was insufficient to counter threats like a growing Chinese military and terrorist groups worldwide. 

It will be interesting to see how the Senate version of the NDAA will be reconciled with the House Armed Services Committee’s version, as Chairman Adam Smith (D-WA) has indicated previously that $716 billion is adequate for military needs. Progressives in both Houses believe the administration’s number of $716 billion is too high.  

The Senate version of the NDAA highlights additional funding for the F-35 program, including $85 million to buy an additional F-35A for the Air Force and $535 million to purchase an additional five F-35C aircraft. (While both the Navy and Marines buy that version of the jet, the legislation does not specify which branch is making those purchases.) The bill also increases funding for a wide range of aircraft programs: $575 million for five more Boeing F-15EX fighter jets for the Air Force, $191 million for a Northrop Grumman E-2D aircraft for the Navy, $306 million for two Lockheed Martin C-130Js, $192 million for two KC-130J tanker aircraft, and $250 million for two CH-53K helicopters for the Marine Corps. 

The bill, as predicted, also rejects some of the United States Air Force’s (USAF) plan to retire legacy aircraft such as the A-10 Warthog, which has a presence in Arizona, Georgia, and Utah. The legislation did, however, permit some aircraft divestments. Namely, it would allow for the retirement of 18 KC-135 aircraft and 12 KC-10 aircraft, enabling the continued phasing out of the KC-46 aircraft.  

Over the past decade, the service has attempted to divest some or all of its remaining 281 A-10 Warthog attack planes, which have flown close air support missions for ground troops since the late 1970s. In the FY 2022 budget submitted by the administration, the USAF had hoped to “mothball” 42 A-10s, with the goal of reaching an end state of 218 A-10s by the end of 2023. At the same time, it would extend the life of the rest of the aging Warthog inventory with new wings. However, the Senate committee’s proposed legislation would prohibit any reduction of the A-10 fleet. This action by the committee counters the USAF and members of the Florida delegation, who have highlighted that keeping the A-10 viable threatens the availability of skilled maintainers for service of the 91 new jets to be delivered between FY21 and FY22.  

The Army, contrary to the administration’s request, authorized an increase of procurement funding for a range of combat vehicles, including a combined $746 million for the Abrams tank, Bradley fighting vehicle, Paladin self-propelled howitzer, and Joint Light Tactical Vehicle. The committee also added $377 million for UH-60L Black Hawk and CH-47F Block-II Chinook helicopters. 

Bolstering research and development of advanced technologies meant to counter the fast-paced China threat was also a goal of the bill. The Committee added $1 billion in additional science and technology funding to pay for research and prototyping activities in areas such as artificial intelligence, microelectronics, advanced materials, 5G, and biotechnology. 

The SASC included provisions from the controversial “Military Justice Improvement Act,” which will remove legal decisions on sexual assault and other serious crimes from the traditional military chain of command. Instead, decisions on whether to pursue or drop charges will be handled by a yet-to-be-established independent office of military prosecutors. 

The full Senate is expected to vote on the authorization measure after their August recess. The House Armed Services Committee is expected to finalize its companion legislation at the start of September, with a potential chamber vote later in the month. 

The House Appropriations Committee earlier this month approved $706 billion over the objections of panel Republicans. The 33-23 party-line vote to approve the bill followed objections from Republicans that the budget’s $10 billion, or 1.4 percent increase was to counter global threats, particularly from China. The committee stuck to the administration’s budget of $8.54 billion in procurement funds for the 85 aircraft requested, 48 of which are Air Force F-35A models. The Air Force is currently planning to buy a total of 1,763 of the Lockheed Martin F-35 aircraft.  

The bill adds aircraft to all the services:

  • Six additional MQ-9 Reaper drones, split between the Marines and Air Force, doubling the administration’s request from six to 12.
  • Four additional C-130J turboprops of different variants, including the baseline C-130 transport, Marine Corps KC-130 tanker, and Special Ops MC-130. This move increases the administration’s request from nine to 13.
  • Two additional CH-53K helicopters for the Marines funding an additional two aircraft making the request from nine to 11.
  • $212 million worth of Black Hawk helicopters, a third more than the request, primarily for the Army.

Overall, the bill increases procurement $1.7 billion. It also increases readiness funding by $696 million including a full $1 billion for maintenance and training.  


Hearing Report

By Ramona Lessen, Total Spectrum Executive Director

Senate Banking, Housing and Urban Affairs Committee hearing on Cryptocurrencies: What are they good for?

Tuesday, July 27, 2021; 10:00 a.m. 

To view a livestream of the hearing, please click here. 

Member Statements

Senator Sherrod Brown (D-OH), Chairman
Statement 

Senator Patrick J. Toomey (R-PA), Ranking Member
Statement 

Witnesses

Professor Angela Walch
Professor Of Law
St. Mary’s University School of Law
San Antonio, TX
Testimony 

Mr. Jerry Brito
Executive Director
Coin Center
Washington, D.C.
Testimony

Ms. Marta Belcher
Chair
Filecoin Foundation
San Francisco, CA
Testimony

Senate Finance Committee hearing on Implementation and Enforcement of the United States – Mexico–Canada Agreement: One Year After Entry into Force

Tuesday, July 27, 2021; 09:30 a.m. 

To view a livestream of the hearing please click here

Member Statements

Senator Ron Wyden (D-OR), Chairman
Majority Statement 

Senator Mike Crapo (R-ID), Ranking Member
Minority Statement

Witnesses 

Benjamin David
Director Of International Affairs
United Steelworkers
Pittsburg, PA
Testimony 

Allan Huttema
Chairman
Northwest Diary Association/Darigold Board of Directors
Parma, ID
Testimony

Michelle McMurry-Health, MD, PhD
President and CEO Biotechnology Innovation Organization
Washington, D.C.
Testimony 

Beth Lowell
Deputy Vice President, U.S. Campaigns
Oceana
Washington, D.C.
Testimony


Congressional Calendar

All times EDT

Monday, July 26

  • 2 p.m. House Rules Committee business meeting to consider the rule for H.R. 4502 (117), a seven-bill appropriations package.

Tuesday, July 27

  • 10 a.m. House Foreign Affairs Subcommittee on Asia, the Pacific, Central Asia and Nonproliferation hearing – Scenarios in a Cross-Strait Conflict.
  • 10 a.m. House Agriculture Committee Business Meeting – 2020 Whip and Reauthorization Act.
  • 10 a.m. House Science Committee markup of five bills, including H.R. 4588 (117), the Regional Innovation Act of 2021.
  • 9:30 a.m. Senate Finance Committee hearing on the USMCA.
  • 10 a.m. House Veterans Affairs Health Subcommittee virtual hearing on veterans access to home- and community-based health services.
  • 10 a.m. House Financial Services National Security, International Development and Monetary Policy Subcommittee hearing on central bank digital currencies.
  • 10 a.m. House Small Business Innovation and Workforce Development Subcommittee hearing on the clean energy economy.
  • 10 a.m. House Judiciary Crime and Terrorism Subcommittee hearing on the effects of court-imposed fees on vulnerable committees.
  • 10 a.m. Senate Judiciary Committee hearing to discuss ransomware attacks in the U.S. 
  • 10 a.m. Senate Homeland Security Committee hearing to examine needed resources and authorities needed to protect the homeland. Secretary of Homeland Security Alejandro Mayorkas testifies.
  • 10 a.m. Senate Energy and Natural Resources Committee hearing to examine Biden’s fiscal 2022 budget request for the Interior Department. Secretary of the Interior Debra Haaland testifies.
  • 10 a.m. Senate HELP Committee hearing to examine lessons learned from the Covid-19 pandemic.
  • 10 a.m. Senate Banking Committee hearing to discuss cryptocurrencies.
  • 10 a.m. Senate Foreign Relations Committee hearing to examine pending nominations of Rufus Gifford to be chief of protocol of the State Department and Lee Satterfield to be an assistant secretary of State, and Isobel Coleman to be a deputy administrator of the United States Agency for International Development.
  • 10 a.m. Senate Commerce Committee hearing to discuss pipeline security with a focus on protecting critical infrastructure.
  • 10:30 a.m. House Energy and Commerce Energy Subcommittee hearing on FERC oversight.
  • 10:30 a.m. House Select Committee on the Coronavirus Crisis Committee hybrid hearing on pandemic evictions and federal efforts to maintain housing security.
  • 2 p.m. House Oversight National Security Subcommittee hybrid hearing on the U.S. electric grid and cyber threats.
  • 2 p.m. House Financial Services Housing and Insurance Subcommittee hearing on reauthorization of the Native American Housing Assistance and Self Determination Act.
  • 2 p.m. House Rules Committee meeting – Legislative Branch Appropriations Act 2022; Department of State, Foreign Operations and Related Programs Appropriations Act 2022; Commerce, Justice, Science and Related Agencies Appropriations Act 2022.
  • 2 p.m. House Foreign Affairs International Development Subcommittee hybrid hearing on the Global Child thrive Act and investing in early childhood development.
  • 2:30 p.m. House Judiciary Constitution Subcommittee hearing on the Voting Rights Act.
  • 3 p.m. Senate Banking Economic Policy Subcommittee hearing to examine protecting student loan borrowers and upcoming economic transitions.

Wednesday, July 28

  • 9 a.m. Senate Foreign Relations Committee business meeting to consider three bills and five pending nominations. The meeting will immediately be followed by a Senate Foreign Relations Committee hearing on pending nominations.
  • 9:30 a.m. Senate Homeland Security Committee business meeting to consider the nominations of Robert Luis Santos to be director of the U.S. Census Bureau and Ed Gonzalez to be an assistant secretary of Homeland Security.
  • 10 a.m. House Subcommittee on Antitrust, Commercial and Administrative Law hearing – Oversight of the Bankruptcy Code, Part 1: Confronting Abuses of the Chapter uSystem.
  • 10 a.m. House Financial Services markup of 11 bills, including H.R. 4590 (117), the Promoting New and Diverse Depository Institutions Act.
  • 10 a.m. House Armed Services Cyber Subcommittee markup of the National Defense Authorization Act for fiscal 2022.
  • 10 a.m. House Foreign Affairs Committee markup of various measures.
  • 10 a.m. House Agriculture Livestock and Foreign Agriculture Subcommittee hybrid hearing on the beef supply chain.
  • 10 a.m. Senate Finance Committee hearing to examine opportunities to build on bipartisan retirement legislation.
  • 10 a.m. Senate Judiciary Committee hearing to examine pending nominations. 226 Dirksen.
  • 10 a.m. Senate Energy and Natural Resources National Parks Subcommittee hearing to examine overcrowding in national parks.
  • 10 a.m. Senate Environment and Public Works Committee hearing to discuss investing in Army Corps of Engineers water infrastructure projects.
  • 10 a.m. Senate Commerce Committee virtual hearing to examine three nominations to the Consumer Product Safety Commission and one nomination to the Commerce Department.
  • 10:15 a.m. House Education and Labor Civil Rights and Human Services Subcommittee virtual hearing on federal nutrition programs for children and infants.
  • 10:30 a.m. House Energy and Commerce Consumer Protection Subcommittee hearing on legislation to modernize consumer protections within the Federal Trade Commission.
  • 11 a.m. House Energy and Commerce Subcommittee on Health hearing: “The Path Forward: Advancing Treatments and Cures for Neurodegenerative Diseases.”
  • 12 noon House Armed Services Subcommittee on Strategic Forces Markup of NDAA for FY22.
  • Noon. House Administration Committee hearing on electoral integrity.
  • 2 p.m. House Homeland Security Oversight Subcommittee hearing on the Department of Homeland Security’s efforts to disrupt criminal organizations in Central America.
  • 2 p.m. House Oversight Government Operations Subcommittee hybrid hearing on the Federal Information Technology Acquisition Reform Act. 
  • 2 p.m. House Armed Services Seapower Subcommittee markup of the NDAA for fiscal 2022.
  • 2:30 p.m. Senate Judiciary Committee hearing to examine America’s food supply chain.
  • 2:30 p.m. Senate Foreign Relations Africa and Global Health Policy Subcommittee hearing to discuss U.S. trade and investment in Africa.
  • 3:30 p.m. House Armed Services Military Personnel Subcommittee markup of the NDAA for fiscal 2022.

Thursday, July 29

  • 9 a.m. House Select Climate Crisis Committee hearing on financing climate solutions and job creation.
  • 9 a.m. Senate Judiciary Committee business meeting to consider four bills, including S. 1388, the Prescription Pricing for the People Act.
  • 10 a.m. House Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection and Innovation hearing – The Cyber Talent Pipeline: Educating a Workforce to Match Today’s Threats.
  • 10 a.m. House Foreign Affairs Subcommittee on Middle East, North Africa and Global Counterterrorism hearing – Lebanon: Assessing Political Paralysis, Economic Crises and Challenges for US Policy.
  • 10 a.m. Senate Banking Committee hearing – Protecting Americans from Debt Traps by Extending the Military’s 36% Interest Rate Cap to Everyone.
  • 10 a.m. House Agriculture Committee hearing on 21st century food systems and domestic food supply chains.
  • 10 a.m. House Oversight Committee hearing on voting rights in Texas.
  • 10 a.m. Senate Agriculture Committee hearing to examine the nominations of Xochitl Torres Small to be undersecretary for rural development and Robert Farrell Bonnie to be undersecretary for farm production and conservation at the Department of Agriculture.
  • 10 a.m. Senate Environment and Public Works Committee hearing to consider three nominations to the U.S. Chemical Safety and Hazard Investigation Board.
  • 10 a.m. House Armed Services Tactical Air and Land Subcommittee markup of the NDAA for fiscal 2022.
  • 10:15 a.m. House Education and Labor Subcommittee on Higher Education and Workforce Investment hearing – Keeping the Pell Grant Promise: Increasing Enrollment, Supporting Success.
  • 11 a.m. House Transportation and Infrastructure Committee hearing on Covid-19 relief efforts.
  • Noon. House Armed Services Readiness Subcommittee markup of the NDAA for fiscal 2022.
  • 1 p.m. House Foreign Affairs Subcommittee on Europe, Energy, the Environment and Cyber hearing – Renewable Energy Transition.
  • 2 p.m. House Armed Services Intelligence Subcommittee markup of the NDAA for fiscal 2022.
  • 3 p.m. House Homeland Security Subcommittee on Border Security, Facilitation and Operations hearing – Assessing the State of American Seaports.

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