California Capitol Hill Bulletin

Volume 25, Bulletin 20 - June 28,2018 [online/pdf]


To expand communications between Washington and California, the California Institute provides periodic bulletins regarding current activity on Capitol Hill that affects our state.  Bulletins are published weekly during sessions of Congress, and occasionally during other periods.  To subscribe to the Bulletin or other California Institute announcements, visit this link.


CONTENTS OF THIS ISSUE:

Immigration: "Compromise" Immigration Bill Fails on House Floor

Natural Resources: House E&C Committee Examines Geopolitics Of Oil

Appropriations: Senate Appropriations Approves $179.3 Billion For Labor, Health & Human Services, & Education

Health: Senate Finance Committee Examines Administration's "Blueprint" to Lower Prescription Drug Prices

Economy: Joint Economic Committee Declares Need For U.S. Leadership on Digital Trade

Environment: House Oversight Subcommittee Reviews Access to U.S. Forest Service Lands & Effects of Motorized Vehicles


Immigration: "Compromise" Immigration Bill Fails on House Floor

        On Wednesday, June 26, 2018, the House of Representatives voted down H.R. 6136, the Border Security and Immigration Reform Act of 2018 by a vote of 121-301, with all Democrats opposing the bill, and 112 Republicans joining in opposition to the bill. H.R. 6136 was authored by the House Judiciary Committee Chairman Bob Goodlatte (VA), with other Republican cosponsors. Although commonly known as the "compromise" bill, H.R. 6136 was solely a compromise among Republicans, as Democrats were not involved in the negotiations. Last week, the House voted down a more restrictive immigration measure – H.R. 4760, Securing America's Future Act, also by Rep. Bob Goodlatte – by a vote of 193 - 231.

        As written, H.R. 6126 would have provided $23.4 billion from 2018 to 2026, including $16.625 billion for the construction of a wall along the southern border. The legislation also would have strengthened tactical border security, increased staffs for the Department of Homeland Security, provided a new legal status for Deferred Action for Childhood Arrivals recipients – including an eventual pathway towards citizenship, – strengthened specific Visa penalties, and curbed legal immigration. The bill did not address the current situation at the border dealing with the separation of children from migrant parents.

        For the full roll call of votes, please visit: http://clerk.house.gov/evs/2018/roll297.xml

        For an in-depth review of the H.R. 6136, please find last week's Capitol Hill Bulletin at: http://www.calinst.org/bul2/b2519.pdf

        For more information regarding H.R. 6136, please visit: https://www.congress.gov/bill/115th-congress/house-bill/6136


Natural Resources: House E&C Committee Examines Geopolitics Of Oil

        On Tuesday, June 26, 2018, the House Energy and Commerce Subcommittee on Energy held a hearing to "examine the current state of U.S. oil and gas development and production and the associated geopolitical, security, and economic impacts." The witnesses were: Daniel Yergin, Vice Chairman, IHS Markit; Harold Hamm, CEO, Continental Resources; Dennis Arriola, Chief Strategy Officer, Sempra Energy; and, Kevin Kennedy, Deputy Director, U.S. Climate Initiative, World Resources Institute.

        Chairman Fred Upton (MI) noted that "in 2005, American domestic oil and gas production was declining and the country reached a point of peak reliance on foreign sources of energy. At that time, we were importing eight times more energy than we were exporting and we were becoming increasingly dependent on Organization of the Petroleum Exporting Countries (OPEC) nations for our energy needs." The Chair noted that technological breakthroughs, such as "horizontal drilling and hydraulic fracturing… led to a surge in domestic oil and gas production, decreasing US reliance on energy imports." The Chair cited the Energy Information Administration in stating that "by 2022 the United States will become a net energy exporter for the first time in over half a century." Further, as noted by Committee documents, "the US consumes more energy from petroleum than from any other source of energy (37 percent of all energy consumed). This is primarily because 92% of the nation's transportation energy needs are met by petroleum products such as gasoline."

        Substituting for Ranking Member Bobby Rush (IL), Rep. Frank Pallone (NJ) argued that the Administration's plans to expand offshore drilling would destroy the Jersey Shore, and noted that the cost of gas has risen nearly 25% under the current Administration. Rep. Pallone noted his concerns over the Administration's reluctance to expand "clean cars and a diverse 21st century energy policy….[and instead] put in place a 1950s energy policy that only an oil company could love."

        Mr. Arriola, of Sempra Energy based in San Diego, noted that the U.S. is both the largest producer and consumer of natural gas. Mr. Arriola cited the Potential Gas Committee (PGC) and stated "that the U.S. possesses a total technically recoverable resource base of 2,817 trillion cubic feet (TCF) as of year-end 2016, or supplies that will last more than 90 years at current extraction levels. This is the highest resource evaluation in PGC's 52-year history." Because of technological advancements, "natural gas now serves as the leading fuel source for the industrial, commercial, and residential sectors of the U.S. economy." The witness argued that "natural gas is not only helping bring economic and environmental benefits domestically, but it also is ensuring greater energy security and prosperity globally...the growth of US liquid natural gas exports has the potential to strengthen U.S. foreign policy and improve our balance of trade."

        Mr. Arriola urged that "the federal government should continue to promote and leverage U.S. liquid natural gas exports as part of its trade policy with Europe, the Middle East and Asia," and also recommended that the Administration should "further advance this objective by removing unjustified tariffs on steel and aluminum, which drive up costs and reduce the competitiveness of the energy sector in general and the liquid natural gas and pipeline businesses in particular."

        Dr. Kennedy recommended that, "while states, cities and businesses are stepping up on clean energy, Congress and the administration could and should be providing meaningful support for these efforts through increased clean energy research and development, incentives for deployment of clean energy technologies, investment in infrastructure for clean energy deployment and support for a carbon tax. Doing so would help companies and local communities across the country take advantage of the economic development opportunities that a clean energy transformation offers."

        For more information regarding the hearing, please visit: https://energycommerce.house.gov/hearings/the-shifting-geopolitics-of-oil-and-gas/


Appropriations: Senate Appropriations Approves $179.3 Billion For Labor, Health & Human Services, & Education

        On Tuesday, June 26, 2018, the Senate Labor, Health and Human Services, and Education (Labor-HHS) Appropriations Subcommittee approved its $179.3 billion appropriation for FY19. On Thursday, June 28, the Full Committee passed the same measure by a vote of 30-1.

        Overview. The legislation provides $179.3 billion, an increase of $2.2 billion above the FY18 level, in base discretionary funding for the Departments of Labor, Health and Human Services, and Education and Related Agencies. In total, this appropriation is $11.9 billion above the Administration's budget request. In addition, the bill includes $711 million pursuant to the 21st Century Cures Act, raising the total appropriation to roughly $180 billion. Chairman of the Subcommittee Roy Blunt (MO) noted that the bill "provide[s] the fourth consecutive funding increase for the National Institutes of Health, which will pave the way for new medical breakthroughs and lower health care costs over the long term."

        Amendments. No amendments that altered the funding levels of the bills were passed. The Full Committee adopted a "manager's package" for the bill by unanimous consent.

        US Department of Health and Human Services (HHS). In total, the bill provides $90.1 billion in discretionary funding for HHS, a $2.3 billion increase above FY18.

        National Institutes of Health. The appropriation includes $39.1 billion for (NIH), an increase of $2 billion, or 5.4%, above FY18. This funding includes, among other provisions: $2.3 billion for Alzheimer's disease research, a $425 million increase; $560 million for the Clinical and Translational Science Award, a $17.32 million increase; $550 million to Combat Antibiotic Resistant Bacteria, a $37 million increase; $500 million for research on opioid addiction, development of opioids alternatives, pain management, and addiction treatment; $429.4 million for the BRAIN Initiative to map the human brain, a $29 million increase; $361.8 million for the Institutional Development Award, a $11.2 million increase; and, $120 million for research on the universal flu vaccine, a $20 million increase.

        Early Care and Education. The bill provides $5.23 billion for the Child Care and Development Block Grant (CCDBG), maintaining the historic $2.37 billion increase provided for the program in fiscal year 2018.

        Fighting Opioid Abuse. The bill provides $3.7 billion, an increase of $145 million above FY18. These initiatives, amongst others, include: $1.9 billion for the Substance Abuse Prevention and Treatment Block Grant; $1.5 billion for Substance Abuse and Mental Health Services Administration (SAMHSA's) State Opioid Response Grant, which continues a 15 percent set-aside for states with the highest mortality rate related to opioid use disorders and a $50 million set-aside for Indian tribes and tribal organization; $500 million for research related to opioid addiction, development of opioid alternatives, pain management, and addiction treatment; maintains $476 million at CDC for opioid overdose prevention and surveillance as well as a public awareness campaign; and $200 million for Community Health Centers to support and enhance behavioral health, mental health, or substance use disorder services.

        Mental Health. The bill provides $1.6 million for mental health programs at SAMHSA, $79 million above FY18.

        Community Health Care Centers (CHCs). The bill includes $1.63 billion for CHCs that serve more than 24 million patients per year through 10,400 health centers nationwide.

        Office of Refugee Resettlement. The bill provides $1.3 billion for the Unaccompanied Children (UAC) program, the same level as fiscal year 2018 and $55 million more than the President's budget request.

        Affordable Care Act (ACA). The bill does not provide new funding for the ACA.

        US Department of Labor. In total, the legislation includes $12.1 billion in discretionary funding for the Department of Labor, $92 million below FY18.

        Workforce Training Programs. The bill includes "$2.8 billion to support funds distributed by formula to states and localities to meet each state's unique job training and reemployment needs," according to Committee documents.

        Job Corps. The measure provides $1.7 billion to "support the nation's largest career technical training and educational program for at-risk youth, with centers in all 50 states, the District of Columbia, and Puerto Rico. Approximately 95% of Job Corps students successfully attain industry-recognized certifications," according to Committee documents. This is more than a $15 million increase above FY18.

        Veterans Employment Training (VETS) Programs. The measure includes $300 million for VETS, an increase of $5 million above FY18.

          Apprenticeship Opportunities. The appropriation includes $160 million for apprentice programs, a $15 million increase above FY18.

        YouthBuild. The legislation provides $89.5 million to "help at-risk high school drop-outs develop skills and knowledge to obtain industry-recognized job credentials, apprenticeships, and employment," as noted in Committee documents.

        Rural Workforce Training Initiative. The bill contains $30 million for the dislocated worker training initiative to "provide reemployment and training assistance to dislocated workers in rural areas of the country hit hardest by the recession and recovering more slowly."

         Department of Education. The bill provides $71.4 billion in discretionary funding for the Department of Education, a $541 million increase above the comparable FY2018 level.

        Pell Grants. The bill increases the maximum Pell grant award to $6,195, an increase of 1.6 percent or $100. The bill also continues support for Year Round Pell.

         Campus-Based Aid Programs. $840 million for Supplemental Educational Opportunity Grants and $1.1 billion for Federal Work Study, both level with FY2018 is provided. These programs provide funding for colleges and universities to design financial aid programs to best meet the needs of their students.

        TRIO. The bill appropriates $1.01 billion, level with FY2018, for TRIO programs that provide services to students from disadvantaged backgrounds and first generation college students to help them enter and complete college and postgraduate education.

        Title I Grants to Local Educational Agencies. $15.9 billion, a $125 million increase, is appropriated to assist school districts and schools with a high percentage of low-income students.

        Title IV Student Support and Academic Enrichment Grants. $1.2 billion, an increase of $125 million, is appropriated to support activities to provide students with a well-rounded education, including STEM education and computer science; ensure safe and supportive learning environments, including to help prevent and respond to school violence; and use technology to improve instruction.

        IDEA Grants to States. The bill provides $13.3 billion, a $125 million increase, for grants to states under parts B and C of the IDEA, to support special education services for children with disabilities, including grants for infants and families and children in preschool.

        Impact Aid. $1.4 billion, a $25 million increase, is appropriated to provide flexible support to local school districts impacted by the presence of federally-owned land and activities, such as military bases.

        Adult Education State Grants. $642 million, a $25 million increase is appropriated.

        Career and Technical Education State Grants. $1.2 billion, level with FY2018, is appropriated.

        STEM Education. The bill provides $65 million, an increase of $15 million, in dedicated funding for evidence-based STEM education programs, including computer science education, within the Education Innovation and Research program. The bill also includes a $125 million increase for Student Support and Academic Enrichment formula grants, funding that all school districts can use for a wide-range of activities including STEM education.

        21st Century Community Learning Centers. $1.2 billion, level with FY2018, is appropriated for grants to states to support academic enrichment activities for students before school, after school, and during the summer.

        Rural Education. The bill appropriates $180 million, level with FY2018, for additional support to meet the unique needs of small rural schools and school districts.

        School Safety and Safe Learning Environments. The bill provides $95 million, a $5 million increase, for activities that include “evidence-based programs to improve school climates, prevent violence, and provide services for students in response to incidents of violence.” In addition, the bill includes a $125 million increase for Student Support and Academic Enrichment formula grants that can be used by school districts to support a wide range of activities including school counseling and school-based mental health programs. Funding is also maintained at the Department of Health and Human Services for programs that provide mental health support to schools and school-age children. 

        For more information regarding the Full Committee hearing, please visit: https://www.appropriations.senate.gov/hearings/full-committee-markup-of-the-defense-and-labor-h-appropriations-bills-for-fy2019

        For more information regarding the Subcommittee hearing, please visit: https://www.appropriations.senate.gov/hearings/subcommittee-markup-of-the-fy2019-labor-health-and-human-services-education-appropriations-bill

        For a summary of the appropriation authored by the Subcommittee Majority staff, please visit: https://www.appropriations.senate.gov/subcommittees/labor-health-and-human-services-education-and-related-agencies

        For a summary of the appropriations authored by Subommittee Minority staff, please visit: https://www.appropriations.senate.gov/news/minority/summary_fy2019-labor-hhs-and-education-appropriations-bill-gains-subcommittee-approval


Health: Senate Finance Committee Examines Administration's "Blueprint" to Lower Prescription Drug Prices

        On Tuesday, June 25, 2018, the Senate Finance Committee reviewed the Administration's "blueprint" to lower prescription drug prices. The sole witness was: Alex M. Azar II, Secretary, U.S. Department of Health and Human Services.

        Chairman Orrin G. Hatch (UT) stated that "the fact that the United States continues to be a pharmaceutical research and development powerhouse is in large part because we have long preserved the market-based approach." The Chair also said that drug shortages "threaten patient care and demonstrate a weakness in our system." Chairman Hatch discussed other policies that try to lower costs, such as how "some commercial health plans that have responded to market demand by offering prescription drug coverage options that pass along the negotiated discounts and rebates to their enrollees at the point of sale, rather than only through lower premiums."

        Regarding the Administration's blueprint, the Chair noted that the "idea of paying for a drug based on its success in achieving the intended patient benefit holds promise, especially for novel, breakthrough therapies that do not yet have competition."

        Ranking Member Ron Wyden (OR) voiced his concerns over the Administration's blueprint, which he characterized as "essentially a collection of the same questions people have been asking about this issue for a decade or more." The Ranking Member noted that he was releasing "a comprehensive report that looks at exactly what makes this industry so complicated, and why it seems like prices only ever go up." Sen. Wyden also criticized the Administration's proposal to stop "defending protections for Americans with pre-existing conditions." Although not the topic of the hearing, Ranking Member Wyden also voiced his concerns regarding the children of migrants separated from their parents at the southern border.

        Secretary Azar noted that "from day one of his Administration, President Trump has directed the Department of Health and Human Services (HHS) to make drug pricing a top priority." The Secretary summarized that the Administration's "blueprint is a plan of action for how to bring prices down while keeping our country the world's leader in biopharmaceutical innovation, and lays out dozens of possible ways HHS and Congress can address this vital issue."

        The Secretary argued that the following 4 problems have arisen in the pharmaceutical market: "1) high list prices set by pharmaceutical manufacturers; 2) seniors and government programs overpaying for drugs due to lack of the latest negotiation tools; 3) rising out-of-pocket costs; 4) and foreign governments free-riding off of American investment in innovation."

        To address these points, Secretary Azar argued that Congress should: "create the right incentives for list prices….[one action of which is to] require drug companies to include their list price on their television commercials…. Second, we need better negotiation for drugs within Medicare," which includes better negotiating prices with Medicare Part D and Medicare Part B. Further, the Secretary argued that the U.S. needs a more competitive pharmaceutical marketplace, including actions to publicize the names of companies who may be using safety programs to block competition. HHS has issued two new guidances to help lessen the effects these actions may have on generic approval. Finally, Secretary Azar, argued that out-of-pocket costs for American patients must be reduced.

        For more information regarding the hearing, please visit: https://www.finance.senate.gov/hearings/prescription-drug-affordability-and-innovation-addressing-challenges-in-todays-market


Economy: Joint Economic Committee Declares Need For U.S. Leadership on Digital Trade

        On Wednesday, June 27, 2018, Congress' Joint Economic Committee hosted a hearing to examine the United States’ role in international digital trade. The witnesses were: Mr. Sean Heather, Vice President, Center for Global Regulatory Cooperation, US Chamber of Commerce, Washington, DC; Mr. Ryan Radia, Research Fellow and Regulatory Counsel, Competitive Enterprise Institute, Washington, DC; Ms. Rachel Fefer, Analyst, International Trade and Finance Section, Congressional Research Service, Washington, DC; and Ambassador Robert Holleyman, Former Deputy U.S. Trade Representative, Office of the United States Trade Representative (USTR), Washington, DC.

        Chairman Erik Paulsen (House of Reps., MN) stated that "digital trade means supply trade tracking, 3D printing or digital platforms that lead to e-commerce, cloud computing, and social media….what many don't realize is that trade and manufacturing goods is itself part of the digital economy." The Chair argued that "because of the novelty of digitalization, commercial principals and freedoms that were carefully developed for conventional trade and gained international consensus are not at risk of being circumvented." The Chair also argued that "digital trade does raise legitimate privacy and cyber security concerns, but some governments may not be sufficiently concerned with the effects of their policies on trade and some may even be using these concerns as an excuse to be protectionist and for other purposes."

        Ms. Fefer noted that the US International Trade Commission (USITC) broadly defines digital trade as follows: "the delivery of products and services over the Internet by firms in any industry sector, and of associated products such as smartphones and Internet-connected sensors. While it includes provision of e-commerce platforms and related services, it excludes the value of sales of physical goods ordered online, as well as physical goods that have a digital counterpart." Ms. Fefer discussed how "one estimate shows that although cross-border bandwidth [trade] increased 45-fold from 2005 through 2015, it may still grow nine times larger by 2021." As of two years ago, "the digital economy supported 5.9 million US jobs, or 3.9 percent of total US employment, and accounted for 6.5% of current dollar Gross Domestic Product (GDP)... [and that] USITC estimated global e-commerce to be worth $28 trillion in 2016, of which 86 percent was business-to business activity." According to the witness, "Tariffs on ICT or digital goods or services may raise costs for sellers and potentially result in higher prices for buyers." Ms. Fefer also noted that "regulations limiting cross-border data flows and requiring local storage are a type of localization requirement that prohibits companies from exporting data outside a country. Governments may claim legitimate policy objectives such as protecting privacy or cybersecurity as justifications for data localization measures."

        Mr. Heather noted that the "Chamber [of Commerce] favors strengthened international competitiveness and opposes artificial U.S. and foreign barriers to international business," and argued that the US "should continue to write global digital trade rules in our bilateral and multilateral agreements." Mr. Heather noted that the Chamber supports efforts to "modernize the North American Free Trade Agreement (NAFTA) to include important digital trade provisions." The witness also recommended that the US should "identify G7 and G20 partners across a range of digital policy matters and then work with these select partners well in advance of future meetings to develop strong common positions on these issues. Without more forward planning, we fear that the digital policy discussions in the G7 and the G20 may reach a stand still."

        For more information, please visit: https://www.jec.senate.gov/public/index.cfm/2018/6/the-need-for-u-s-leadership-on-digital-trade


Environment: House Oversight Subcommittee Reviews Access to U.S. Forest Service Lands & Effects of Motorized Vehicles

        On Wednesday, June 26, 2018, the House Oversight and Government Reform Subcommittee on the Interior, Energy, and Environment held a hearing to examine how Forest Service policies affect access to public lands and the impacts of road closures on nearby communities. The witnesses were: The Honorable Kerry White, Representative, Montana House of Representatives; Mr. Bill Harvey, Commission Chair, Baker County, Oregon; Ms. Amy Granat, Managing Director, California Off-Road Vehicle Association; and Mr. Jim Furnish, Consulting Forester.

        Chairman Greg Gianforte (MT) noted that the U.S. Forest Service manages roughly "200 million acres of land, more than 370,000 miles of roads, and more than 158,000 miles of recreational trails across the US – land that should be open and accessible for use and enjoyment by all Americans." The Chair argued the USFS "has locked up our public lands instead.” “According to a report by the Montana State Legislature's Environmental Quality Council, the Forest Service has closed more than 21,000 miles of roads in Montana since the mid-1990s. That's nearly one-third of all the Forest Service roads in the state”, Chairman Gianforte said. The Chair also noted that such reductions in accessibility to public lands has also occurred in California and Oregon. He said that "we need to preserve access for hiking, camping, hunting, fishing and other outdoor recreation, the benefits of which speak for themselves….outdoor recreation is also big business. Each year, people spend $887 billion on outdoor recreation."

        Ranking Member Stacey E. Plaskett (Virgin Islands) noted that due to increased off-road vehicle usage, "we are seeing more erosion, water degradation, and habitat depletion." She reviewed how the Bush Administration issued the "Travel Management Rule" to address environmental degradation from off-road vehicle usage. Rep. Plaskett argued that "to enable our National Forest to accommodate a variety of uses, we cannot forget that there are costs to certain types of uses, not just benefits."

        Ms. Granat, of the California Off-Road Vehicle Association, argued that "federal land can and should be managed for continued access by all members of the public," and that the Forest Service has violated this principle and the "Multiple Use Sustained Yield Act of 1960 by engaging in planned and systematic closures of public land to motorized access." Further "forests throughout the country [have] classif[ied] motorized recreation… as an inappropriate and undesirable component in our national forests," she said. The Forest Service, according to Ms. Granat, "closed all routes to travel unless they were designated open on a map called a Motor Vehicle Use Map...with no identifying characteristics, GPS coordinates, landmarks or latitude/longitude," causing fear and confusion in the public. She recommended that: dispersed camping travel maximums should be uniform and codified; access for disabled, handicapped, and elderly people through motorized mobility should be allowed; and systems for "one trip in, one trip out" for specific activities, such as big game and wood retrieval should also be allowed.

        Mr. Furnish argued that " unregulated off-highway vehicle (OHV) use poses significant risks to the natural and human environment." Further Mr. Furnished noted that "a GAO study noted the agency has only one quarter the needed annual funds, and a $314 million backlog," resulting in a " chronic funding shortage for road and trail maintenance."

        For more information regarding the hearing, please visit: https://oversight.house.gov/hearing/access-to-public-lands-the-effects-of-forest-service-road-closures/