Legislative Outlook 2006

provided by Preston Gates, Jan. 18, 2006

House Republican Leadership Vote

An election within the Republican Conference will be held on February 2 for House Majority Leader, a position being vacated by Representative Tom DeLay. Candidates seeking the office include Acting Majority Leader Roy Blunt (R-MO), Education and the Workforce Committee Chairman John Boehner (R-OH), and House Republican Policy Committee Chairman John Shadegg (R-AZ), who is running on a “reform” platform. The election is expected to be close. If Blunt wins and becomes the Majority Leader, his position as Majority Whip will be open, which will trigger another leadership race.

Supreme Court Confirmation

Judge Samuel Alito’s Supreme Court confirmation hearings began on January 9. Alito is widely expected to be confirmed. The full Senate returns on January 24 to consider his nomination along with the nomination of Ben Bernanke to serve as Chairman of the Federal Reserve Board.

Reconciliation

One major piece of legislative business left over from last year is the FY-06 budget reconciliation bill, which the House is expected to pass when it gets back into session early in February. The separate tax reconciliation bill is moving through the process, and is likely to be considered once the Congress has completed action on the spending reconciliation measure. Another reconciliation bill in queue for consideration this year is a debt limit increase, which may attract some riders despite leadership claims that it will be a clean bill.

Asbestos

Senate Majority Leader Bill Frist has announced that legislation sponsored by Senator Specter and Leahy to create a trust fund to compensate victims of asbestos exposure will be the first major legislative bill on the Senate Floor. The bill would create a $140 billion trust fund financed by companies and insurers facing lawsuits. Business interests are split on the legislation and there is a Senate Democratic filibuster threat. While there is a House trust fund bill pending, most of the attention in the House thus far has focused on a medical criteria bill.

Immigration Reform

Immigration reform tops the list of the President’s agenda for 2006 and is second on the legislative timetable for the Senate. President Bush recently outlined a comprehensive immigration reform plan that combines tougher enforcement of the borders and a guestworker program. However, with many Republicans criticizing the President’s planned guestworker program and in the climate of an election year, it is likely that this legislation will be bogged down and a final bill will not reach the President. The House passed a tough immigration bill on December 16, 2005. The Senate plans to consider the legislation in February.

Energy

Senator Joe Lieberman (D-CT) is leading a bipartisan group of senators who want to vote early this year on a bill that would mandate production of alternative fueled vehicles in order to reduce oil demand in the transportation sector. The bill would require a reduction in oil consumption of 10 million barrels per day by 2031; it would set mandates for automakers to increase the number of vehicles powered by alternative technologies; and it includes new and expanded tax credits for fuel efficient vehicles. The Congress may also move legislation passed by the House in 2005 championed by Chairman Joe Barton to promote development of new oil refineries. Republicans in the House and Senate may attempt again to move legislation in 2006 permitting limited drilling in the Alaska National Wildlife Refuge (ANWR).

Farm Bill

The 2002 Farm Bill authorizes many USDA programs, including farm price and income support programs. New legislation will need to be enacted prior to the bill's expiration in 2007. Congress will start work in earnest on the new farm bill early in 2006 with a variety of hearings and meetings, but is not expected to enact a new Farm Bill until 2007.

Tax Reform

Overhauling and simplifying the tax code in one of President Bush’s priorities for his second term. Congress will look at a recent report from a Presidential commission on tax reform and will debate simplification of the tax process. However, many of the Commission’s recommendations are being met with skepticism and resistance on Capitol Hill including recommendation to scale back the home mortgage interest deduction and eliminate the deduction for state and local income and property taxes.

Quadrennial Defense Review

The QDR is a congressionally mandated report the Defense Department undertakes every four years to look at defense strategy, force modernization, infrastructure needs and other aspects of the defense program. The QDR will be submitted to Congress in February, along with the President's defense budget request. The upcoming QDR is not expected to be a course-changing document for the department. Rather, it will examine the relations among all aspects of strategy and resources and determine if they are in sync.

Telecommunication Act

Draft proposals have been already been circulated by the House Energy and Commerce Committee to reform and amend the Telecom Act of 1996. The bills would ease the entry of some telephone providers into the video market so they can compete with the established cable and satellite operators. The legislation would also set federal rules for broadband voice services (VoIP).

Education

Senate Majority Leader Frist announced on December 2 that the Senate would consider an education initiative in 2006 that would increase U.S. “global competitiveness in math and science.” Legislation to reauthorize the Higher Education Act (HEA) will also likely be considered in 2006. The House Education and Workforce approved a draft bill last summer but it has yet to be considered by the full House of Representatives. The House bill changes the aid formula for work study and similar programs as well as revises the definition of a university to include for-profit institutions, making them eligible for increased federal aid. Neither of those provisions are in the Senate-approved measure. Expect the House and Senate to pass another short-term extension of HEA before the Act expires on March 31. Since the difference between the House and Senate on HEA issues are significant, the whole issue may be punted to 2007.

Lobby Reform

In the aftermath of guilty pleas involving lobbyists, Republicans and Democrats in Congress are rushing ahead with proposals to reform lobbying practices. The House and Senate are likely to pass lobby reform legislation early in 2006. The reforms should focus on limiting privately paid congressional travel, further restricting gifts, and providing more transparency in the disclosure of lobbying activities.

Foreign Language Initiative

On January 5, 2006, President Bush launched the National Security Language Initiative (NSLI), a plan designed “to further strengthen national security and prosperity in the 21st century through education, especially in developing foreign language skills.” The NSLI will increase the number of Americans learning critical need foreign languages such as Arabic, Chinese, Russian, Hindi, Farsi, and others through new and expanded programs from kindergarten through university and into the workforce. The President will request $114 million in fiscal year 2007 to fund this effort.

Pension Reform

Pension reform will very likely be considered in 2006. The growing number of companies seeking bankruptcy protection and terminating pension plans has jeopardized the long-term viability of the Pension Benefit Guaranty Corporation (PBGC). To address weakness in our pension system, both the House and Senate have proposed substantially increasing the PBGC’s premiums, additional risk-based premiums for under-funded plans and more stringent accounting rules for determining plan assets and liabilities.

Katrina Legislation

$29 billion in emergency spending for recovery and reconstruction efforts in Gulf Coast communities devastated by hurricanes Katrina and Rita was included in the defense funding bill passed at the end of 2005. Most of that money was not new spending but rather funds reallocated from $62.3 billion appropriated in the first two weeks of September. Additional funding is estimated to be required for reconstruction efforts and is likely to be included in a supplemental appropriations bill to be considered this spring.

Tort Reform

The Lawsuit Abuse Reduction Act (LARA) passed the House on October 27, 2005, by a vote of 228-184. LARA would deter the filing of frivolous lawsuits by placing the cost of defending frivolous claims on the lawyers who bring them. LARA also would put an end to forum shopping by properly limiting the filing of personal injury claims to places where plaintiffs live or were hurt, or in the jurisdiction of the defendant’s principal place of business. The legislation will be considered by the Senate in 2006 and a major effort is underway by the business community to generate enough support to pass the bill.

Medicare

Sen. Bill Nelson believes he has adequate support to pass a bill that would extend the enrollment period for the new Medicare prescription drug benefit until Dec. 31, 2006. Under current law, Medicare beneficiaries have until May 15, 2006, to enroll in the prescription drug benefit without penalty. Other Medicare reforms may be considered by Congress in 2006 beyond the program reductions in the FY06 budget reconciliation, including proposals to change physician reimbursements.

Administration’s Health Care Initiative

Along with medical liability and Medicare reform, President Bush will continue to push Congress to pass association health plans and health savings accounts. The House passed legislation to encourage small businesses to enter into association health plans that will allow risk pooling across jurisdictional boundaries. Similar legislation has bogged down in the Senate, so the ultimate fate of AHPs is uncertain. Legislation in 2005 to expand health savings plans, where tax-free money can be set aside for medical expenses, was deemed too costly but may be re-examined during 2006. Congress may also take up legislation dealing with expanding information technology in health care.

Trade

The Bush administration is expected to continue to pursue bilateral free trade agreements (FTAs) in 2006. The President will likely sign a US-Bahrain FTA before the end of December or in January 2006. The USTR is expected to begin or continue FTA talks with several countries, including Thailand, Malaysia, the United Arab Emirates, and Egypt. Talks are also expected to continue with Taiwan on a more limited trade agreement. Likewise, the Doha Round WTO negotiations concerning global trade policies are expected to continue throughout 2006. In Congress, legislation to extend the President’s Fast-Track Negotiating Authority, which expires in 2007, is likely not to be considered until 2007.

PATRIOT Act

While Congress was scheduled to reauthorize the PATRIOT Act prior to adjournment in December 2005, the Congress instead passed a simple five week extension of the controversial Act before adjourning. The President has urged the Congress to quickly consider a long-term reauthorization early in 2006, however support for several key provisions of the Act is weak on Capitol Hill. Debate over long-term reauthorization could be lengthy and contentious. However, it’s possible that the politics of not wanting to be seen as obstructing efforts to stop terrorism will drive the Congress to wrap up a long-term PATRIOT Act extension early in the spring.

This update is a "snap shot" in time and it is only a summary and does not cover all of the issues.

Source: Preston Gates

Posted: Monday, January 23, 2006 12:00:00 AM. Modified: Wednesday, January 25, 2006 11:20:43 AM.