Patton Boggs Capital Thinking Weekly Update | June 3, 2013

Patton Boggs Capital Thinking Weekly Update | June 3, 2013
1 of 20
June 3, 2013

2 of 20
Capital Thinking: Contents
General Legislative .......................................................................................................3
Agriculture and Food....................................................................................................3
Budget and Appropriations..........................................................................................4
Cybersecurity................................................................................................................4
Defense..........................................................................................................................5
Education ......................................................................................................................7
Energy ...........................................................................................................................7
Environment..................................................................................................................9
Financial Services.......................................................................................................10
Health Care..................................................................................................................11
Homeland Security......................................................................................................13
Immigration .................................................................................................................15
International ................................................................................................................16
Tax ...............................................................................................................................19

3 of 20
General Legislative
The Senate will convene today, Monday, June 3, at 2:00 pm and begin a period of morning
business. Thereafter, the Senate will resume consideration of S. 954, the Farm Bill, provided that
alfalfa amendment S.A. 987, offered by Senator Jerry Moran (R-KS) and food aid amendment S.A.
1079, offered by Senator Chris Coons (D-DE) will be in order, and that the Senate will proceed to
votes on those amendments at 5:30 pm.
Today, Monday, June 3, the House will meet at 2:00 pm for legislative business, and votes will be
postponed until 6:30 pm. Legislation Considered Under Suspension of the Rules will include: (1)
H.R. 1919 – Safeguarding America’s Pharmaceuticals Act of 2013, as amended; (2) S. 622 – Animal
Drug and Animal Generic Drug User Fee Reauthorization Act of 2013; (3) H.R. 126 – Corolla Wild
Horses Protection Act; (4) H.R. 1206 – Permanent Electronic Duck Stamp Act of 2013; and (5) H.R.
885 – San Antonio Missions National Historic Park Boundary Expansion Act of 2013.
On Tuesday, June 4 and Wednesday, June 5, the House will meet at 10:00 am for morning hour
and 12:00 pm for legislative business. On Thursday, June 6, the House will meet at 9:00 am for
legislative business, and last votes are expected no later than 3:00 pm. On Friday, June 7, no
votes are expected. Also on the House calendar for the week are (1) H.R. 671 – Ruth Moore Act of
2013 (Suspension, 40 minutes of debate); (2) H.R. 2216 – Military Construction and Veterans
Affairs, and Related Agencies Appropriations Act, 2014 (Subject to a Rule); and (3) H.R. 2217 –
Department of Homeland Security Appropriations Act, 2014 (Subject to a Rule).
Agriculture and Food
LEGISLATIVE ACTIVITY
 Farm Bill Timeline. The Senate will resume consideration of the Farm Bill (S. 954) today, Monday,
June 3. Two roll call votes are scheduled at 5:30 pm: S.A. 987 (alfalfa crop insurance program) and
S.A. 1079 (food aid). Senate Majority Leader Harry Reid (D-NV), Senate Minority Leader Mitch
McConnell (R-KY), Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), and Senate
Agriculture Committee Ranking Member Thad Cochran (R-MS) are expected to unveil an amendment
package today or tomorrow, Tuesday, June 4. A final vote on the Farm Bill could likely take place
later in the week.
The House is expected to consider the Farm Bill on the floor the week of June 17.
Contact Information
For additional insights about likely policy developments, please feel free to contact the author of this
section: Dana Weekes, at 202-457-6307, or dweekes@pattonboggs.com.

4 of 20
Budget and Appropriations
 House Appropriations Action. On Friday, May 31, House Majority Leader Eric Cantor (R-VA)
released the House legislative agenda for June which includes consideration of four FY 2014
appropriations bills: Military Construction-Veterans Affairs (MilCon-VA); Homeland Security; Defense;
and Agriculture. The MilCon-VA (H.R. 2216) and Homeland Security (H.R. 2217) bills are both on the
House schedule this week, while the Agriculture and Defense Appropriations Subcommittees will
mark up their bills on Wednesday, June 5.
 Anticipated Senate Appropriations Action. Senate Appropriations Chairwoman Barbara Mikulski
(D-MD) intends to release her committee’s 302(b) allocations in the coming weeks and anticipates a
markup of the Military Construction-Veterans Affairs bill in mid-June. In the meantime, the
appropriations subcommittees will continue FY 2014 budget request hearings this week.
 Sequestration Amendments. Following the recent emergency legislation that enabled the Federal
Aviation Administration (FAA) to transfer funding within its programs in order to avert furloughs and
prevent the closure of 149 contract towers, lawmakers have been calling for Congress to provide
other agencies similar flexibility. Particularly in the Senate, a number of measures have been
proposed that would give federal agencies varying degrees of flexibility to allocate funds across
budget accounts. None of these proposals have secured sufficient bipartisan support to move forward
as a stand-alone bill, in part because the White House and Democrats continue to push for a full
sequestration replacement package. However, we anticipate that floor amendments will be offered
during House and Senate consideration of FY 2014 appropriations bills.
Contact Information
section: Pam Welsh, at 202-457-6493 or pwelsh@pattonboggs.com.
Cybersecurity
 House Homeland Security Committee Legislation. The House Homeland Security Committee is
drafting legislation that will codify the cybersecurity roles and responsibilities of the Department of
Homeland Security (DHS) as well as address other key aspects of cyber. This is the last of the cyber
bills the House is expected to move through the chamber to complete its list of cybersecurity
priorities. The committee is currently working with stakeholders to finalize its draft bill and is expected

5 of 20
to introduce the bill in the coming weeks. At the same time, the Senate continues to have discussions
with stakeholders and is expected to begin its legislative efforts in earnest in the next few weeks as
well.
 Supply Chain Working Group. The House Energy & Commerce Subcommittee on Communications
and Technology recently launched a bipartisan working group focused on securing the components
that make up the communications supply chain. The group will be co-chaired by House Intelligence
Committee Chairman Mike Rogers (R-MI) and Subcommittee Ranking Member Anna Eshoo (D-CA).
The working group will be holding stakeholder outreach meetings to gain an understanding of what
steps can be taken to protect the U.S. telecommunications infrastructure from cyber threats.
EXECUTIVE BRANCH ACTIVITY
 U.S. and China Discussions on Cybersecurity. President Barack Obama is scheduled to meet with
China’s President Xi Jinping this week in California to discuss cybersecurity, among other issues.
Last week, a Department of Defense (DOD) Science Board report was leaked to the media that
detailed how Chinese hackers had compromised the blueprints for a large number of critical weapons
systems. While the Pentagon has defended the capabilities of its weapons systems and has taken
steps to protect its resources from cyber criminals, cybersecurity is still a major concern of the Obama
Administration and is likely to be discussed as part of the meetings with President Xi.
 NIST Cybersecurity Framework. Last week, the National Institute of Standards and Technology
(NIST) held its second workshop to discuss the “Cybersecurity Framework” that it was tasked with
developing as part of the President’s February Executive Order (EO). NIST will be holding two more
workshops during the weeks of July 15 and September 9 to gather feedback from stakeholders on the
standards for critical infrastructure that will be included in the framework. According to the EO, a draft
version of the framework is due in October and a final version should be released by February 2014.
Contact Information
For additional insights about likely policy developments, please feel free to contact the authors of this
section: Norma Krayem, 202-457-5206 or nkrayem@pattonboggs.com; or Amy Davenport, at 202-457-
6528 or adavenport@pattonboggs.com.
Defense
EXECUTIVE AND LEGISLATIVE BRANCH ACTIVITY
 Pentagon Budget. This Wednesday, June 5, the House Armed Services Committee will mark up its
version of the National Defense Authorization Act (H.R. 1960). That same day, the House Defense
Appropriations Subcommittee will also mark up, in a closed session, a spending bill for the
Department of Defense (DOD). It is expected the House will largely ignore the spending limits
enacted by the Budget Control Act of 2011, which requires across the board spending cuts.

6 of 20
While top military officials have been stressing the escalating damage from sequestration to
readiness, such as fighter jets grounded for lack of training and maintenance and ships at anchor,
lawmakers appear willing to wait and watch on whether to rescind the sequester. Currently,
Republicans take the position they will only trade mandatory cuts to additional discretionary cuts and
continue to stand firm against raising taxes. Democrats maintain any deal with the Republicans has to
be 50 percent cuts and 50 percent revenue.
 Cybersecurity. Last week the media widely reported on a DOD Science Board report that highlighted
China’s purported access to data from Pentagon weapons programs and other defense technologies.
The Chairman of the Joint Chiefs of Staff is poised to approve new rules empowering the U.S. military
to counter direct cyber attacks. The new cyber rules are expected to be in the Standing Rules of
Engagement (SROE) and will allow the U.S. military to respond quickly and defensively to cyber
attacks, without having to get approval from the National Security Council.
 New Proposal on Contractor Executive Compensation Cap. According to a statement last
Thursday, May 30 by Joe Jordan, Administrator of the Office of Federal Procurement Policy (OFPP),
the statutory formula governing the amount of executive compensation government contractors can
claim as reimbursable costs would be repealed under legislation the administration will propose this
week. In lieu of the statutory formula, the proposal would tie the reimbursement cap to the president's
annual salary, currently $400,000. The new cap would apply to all civilian and defense cost-
reimbursement contracts. In accordance with the statutory formula, the compensation cap was
increased to $763,000 for FY 2011 and is set to be increased to more than $950,000 for FY 2012.
 This Week’s Hearings:
o Tuesday, June 4: The Senate Armed Services Committee will hold an oversight hearing titled
“Pending Legislation Regarding Sexual Assaults in the Military.”
o Wednesday, June 5: The House Armed Services Committee will hold the full Committee markup
of its National Defense Authorization Act (H.R. 1960). It is open to the public and streamed live
online.
o Wednesday, June 5: The House Appropriations Subcommittee on Defense will mark up a
spending measure for DOD. This hearing is closed to the public.
Contact Information
section: Stacy Swanson, at 202-457-5627 or sswanson@pattonboggs.com.

7 of 20
Education
 Student Loan Interest Rates. As the Senate continues consideration of the Farm Bill, there may be
discussion on an amendment (S.A. 976) that would extend the 3.4 percent fixed student loan interest
rate for two years, although consideration of this issue will likely take place separate from the Farm
Bill. This week, the Senate will likely vote on two student loan interest rate proposals. The first bill
(identical to the Farm Bill amendment) would freeze the 3.4 percent student loan interest rate for two
years in order to force Congress to address the issue during the reauthorization of the Higher
Education Act. The second bill is the House-passed student loan interest rate bill that would create a
market-based variable interest rate and peg it to the 10-year Treasury note. To pass, each bill will
likely require a 60-vote threshold. However, given the stark differences in addressing this issue, both
bills will likely fail, which would place pressure on the Senators to work on a bipartisan solution before
the July 1 deadline.
 This Week’s Hearing:
o Tuesday, June 4: The House Science, Space and Technology Committee will hold a hearing
titled "STEM (Science, Technology, Engineering and Math) Education: The Administration's
Proposed Re-Organization." Department officials, including John Holdren, the director of the
Office of Science and Technology Policy, will testify about the Administration’s proposed
reorganization and consolidation of STEM education programs in the FY 2014 Budget.
Contact Information
section: Amy Budner Smith, at 202.457.6154 or abudnersmith@pattonboggs.com; and Dana Weekes, at
202-457-6307 or dweekes@pattonboggs.com.
Energy
o Tuesday, June 4: The Senate Energy and Natural Resources Committee will explore ways to
improve federal wildland fire management.
o Thursday, June 6: The Senate Energy and Natural Resources Committee will review the
programs and activities of the U.S. Department of the Interior (DOI).

8 of 20
o Thursday, June 6: The House Natural Resources Committee will hold a legislative hearing on the
Offshore Energy and Jobs Act (H.R. __), draft legislation released by Chairman Doc Hastings (R-
WA).
 FERC. Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff has submitted his
resignation letter to President Barack Obama. He will remain at FERC until his replacement is
confirmed by the Senate.
 Hydraulic Fracturing (HF). DOI has issued its revised proposed rule to regulate HF activities on
federal and tribal lands. Comments will be accepted through June 24, unless pressure from Congress
and other stakeholders leads to an extension, potentially of an additional 90 days. A final rule is
expected after DOI considers this latest round of public comments; a target date for finalization is not
yet certain.
 Nuclear. The Nuclear Regulatory Commission’s (NRC) Advisory Committee on Reactor Safeguards
will meet on Wednesday, June 5 to Friday, June 7 in Rockville, Maryland. NRC will also be issuing
the final License Renewal Interim Staff Guidance this week for Updated Aging Management Criteria
for Reactor Vessel Internal Components for Pressurized Water Reactors.
 NPR-A. The Bureau of Land Management will issue a call for nominations and comments, due by
mid-July, on tracts for oil and gas leasing for the 2013 National Petroleum Reserve – Alaska lease
sale.
 USEITI. The U.S. Extractive Industries Transparency Initiative (EITI) Multi-Stakeholder Group
Advisory Committee will next meet on June 12-13 to discuss the legal context for revenue
disclosures, consideration of sub-national payments, and discussions on scope and materiality; it will
also meet on July 23-24 to discuss criteria and components for the U.S. draft candidacy application
for EITI.
 Pipelines. The FERC is updating regulations governing the form, composition, and filing of rates and
charges by interstate oil pipelines for transportation in interstate commerce. The Pipeline and
Hazardous Materials Safety Administration (PHMSA) will host a pipeline safety workshop on June 19-
20 in Richardson, Texas to discuss ways to improve public awareness outreach. PHMSA will also
host an August 7 public workshop on a proposed pipeline “Integrity Verification Process,” to present
information on several new mandates and to seek comment from interested stakeholders.
Contact Information
section: Tanya DeRivi, at 202-457-6504 or tderivi@pattonboggs.com.

9 of 20
Environment
o Tuesday, June 4: The Senate Committee on Energy and Natural Resources will hold a full
committee hearing intended to identify ways to improve federal wildland fire management.
o Tuesday, June 4: The House Committee on Natural Resources will hold a full committee hearing
to address species conservation concerning tribal, state and local stewardship in conjunction with
federal “sue-and-settle” practices.
o Wednesday, June 5: The House Committee on Oversight and Government Reform,
Subcommittee on Energy Policy, Health Care and Entitlements, will hold a hearing to examine the
role of the U.S. Environmental Protection Agency (EPA) in the renewable fuel standard. The
specific focus will be on fuel blends.
o Wednesday, June 5: The House Committee on Science, Space and Technology will hold a joint
subcommittee hearing by the Subcommittee on Research and Subcommittee on Technology
concerning federal efforts to reduce the impacts of windstorms. Witnesses will include Dr. Ernst
Kiesling, Research Faculty, National Wind Institute, Texas Tech University; Ms. Debra Ballen,
General Counsel and Senior Vice President, Public Policy, Insurance Institute for Business &
Home Safety; Dr. David Prevatt, Assistant Professor, Department of Civil and Coastal
Engineering, University of Florida.
o Thursday, June 6: The Senate Committee on Energy and Natural Resources will hold a full
committee hearing to review programs and activities of the U.S. Department of the Interior (DOI).
REGULATORY ACTIVITY
 Gulf Coast Restoration. The U.S Department of Commerce, the lead agency for the Gulf Coast
Ecosystem Restoration Council, has issued its “Draft Initial Comprehensive Plan: Restoring the Gulf
Coast’s Ecosystem and Economy” and accompanying “Draft Programmatic Environmental
Assessment” for public comment. The Draft Plan provides a framework to implement a region-wide
restoration effort in order to restore the Gulf Coast region following the Deepwater Horizon oil spill.
The Council is also hosting a series of public engagement sessions in each of the five impacted Gulf
States from Monday, June 3 to June 17 for public input on the Draft Plan. The Draft Initial Plan and
the Draft Programmatic Environmental Assessment documents, as well as details concerning the
June public engagement sessions can be accessed here. Comments are due June 24.
 Public Water Systems. The following information pertains to states, local and tribal governments,
private and municipal owners or operators of public water systems. EPA has released a final rule

10 of 20
approving alternative testing methods for use in measuring the levels of contaminants in drinking
water and compliance with national primary drinking water regulations. EPA is making 84 additional
methods available for analyzing drinking water samples. The EPA intends for this to be an expedited
approach in order to provide public water systems, laboratories and primacy agencies with more
timely access to new measurement techniques and greater flexibility in the selection of analytical
methods. The new methods, along with previously expedited methods in 40 CFR Part 141 Appendix
A to Subpart C and on EPA’s drinking water methods, are listed here.
 Motor Vehicles. The EPA is extending the public comment period to July 1, which previously was to
end on June 13, for its proposed rule concerning “Control of Air Pollution From Motor Vehicles: Tier 3
Motor Vehicle Emission and Fuel Standards.”
Contact Information
section: Sarah Vilms, at 202-457-5248 or svilms@pattonboggs.com.
Financial Services
o Tuesday, June 4: The Senate Banking Committee will hold a hearing titled “Iran Sanctions:
Ensuring Robust Enforcement, and Assessing Next Steps.”
o Wednesday, June 5: The Senate Banking Subcommittee on Housing, Transportation, and
Community Development will hold a hearing titled “Long Term Sustainability for Reverse
Mortgages: HECM’s Impact on the Mutual Mortgage Insurance Fund.”
o Wednesday, June 5: The Senate Banking Subcommittee on Economic Development will hold a
hearing titled “State of the American Dream: Economic Policy and the Future of the Middle
Class.”
o Wednesday, June 5: The House Financial Services Subcommittee on Capital Markets and
Government Sponsored Enterprises will hold a hearing titled “Examining the Market Power and
Impact of Proxy Advisory Firms.”
o Thursday, June 6: The House Small Business Subcommittee on Investigations, Oversight, and
Regulations will hold a hearing titled “Financing America's Small Businesses: Innovative Ideas for
Raising Capital.”

11 of 20
 President Announces Two SEC Nominations. President Obama has nominated Kara Stein and
Michael Piwowar to serve as Commissioners of the Securities and Exchange Commission (SEC).
Both of the President’s nominees are veteran Hill staffers that are very well liked and respected. Kara
Stein, currently legal counsel and senior policy adviser to Sen. Jack Reed (D-RI), would fill
Commissioner Elisse Walter’s seat, set to be vacated by the end of this year. Michael Piwowar, chief
economist for the Senate Banking Committee since 2009, would replace Commission Troy Paredes,
whose term ends in June.
 This Week’s Meetings:
o Tuesday, June 4: The Federal Deposit Insurance Corporation (FDIC) will meet in open session to
consider a final rule on the Definition of “Predominantly Engaged in Activities that are Financial in
Nature or Incidental Thereto” § 201(b).
o Wednesday, June 5: The SEC will hold an open meeting to consider a recommendation to
propose amendments to certain rules under the Investment Company Act that govern the
operation of money market funds and related amendments to Form PF under the Investment
Advisers Act.
Contact Information
section: Caroline Cauley, at 202-457-6625 or ccauley@pattonboggs.com; Mara Giorgio, at 202-457-6522
or mgiorgio@pattonboggs.com; and Matt Kulkin, at 202-457-6056 or mkulkin@pattonboggs.com.
Health Care
 E&C SGR Reform Draft and Hearing. House Energy & Commerce Committee staff unveiled a draft
legislative framework for repeal of the Sustainable Growth Rate (SGR) formula. The proposed
framework would repeal and replace the SGR and provide an undefined period of stable payments. It
would also include the development of quality measures for competency assessments – the
Secretary would develop cohorts of providers and develop sets of measures or “competencies” within
each cohort. The measures would be published before being proposed in notice and comment
rulemaking. The framework also includes an opt-out option for providers to be paid under alternative
payment models. Under this option, the Secretary would publish a list of approved models in which
providers could participate and would develop a process by which stakeholders could propose new
payment models for consideration. The framework leaves blank any discussion of funding specifics.
The proposal leaves open many issues; interested parties may submit feedback on the proposed

12 of 20
framework by June 10 to SGRComments@mail.house.gov. The committee will hold a hearing on the
proposal on Wednesday, June 5 (see This Week’s Hearings below). Chairman Upton intends to pass
a bill out of Committee, and possibly through the full House, by the end of the summer.
o Tuesday, June 4: The House Committee on Education and the Workforce will hold a hearing titled
"Reviewing the President's FY 2014 Budget Proposal for the U.S. Department of Health and
Human Services." The Honorable Kathleen Sebelius, Secretary of HHS, will testify.
o Wednesday, June 5: The House Energy & Commerce Committee will hold a hearing on Medicare
physician payment overhaul legislation.
REGULATORY ACTIVITY
 Wellness Programs Final Rule. The Internal Revenue Service (IRS), U.S. Department of Labor
(DOL), and U.S. Department of Health and Human Services (HHS) released the Incentives for
Nondiscriminatory Wellness Programs in Group Health Plans Final Rule. This document contains
final regulations, consistent with the Affordable Care Act (ACA), regarding nondiscriminatory wellness
programs in group health coverage. Specifically, these final regulations increase the maximum
permissible reward under a health-contingent wellness program offered in connection with a group
health plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost of
coverage. The final regulations further increase the maximum permissible reward to 50 percent for
wellness programs designed to prevent or reduce tobacco use. These regulations also include other
clarifications regarding the reasonable design of health-contingent wellness programs and the
reasonable alternatives they must offer in order to avoid prohibited discrimination.
OTHER HEALTH NEWS
 Medicare Trustees Report. The Medicare Trustees released a report on Friday, May 31 that
predicted that the Medicare trust fund will be solvent until 2026, which is two years beyond what the
trustees projected last year. The report found lower-than-expected growth of Medicare spending in
2012, lower projected spending in many categories, and reflected an expectation that the federal
health care law will reduce growth in Medicare Advantage spending more than previously anticipated.
 MedPAC Appointments. The Government Accountability Office (GAO) made its appointments to the
Medicare Payment Advisory Commission (MedPAC). Jon Christianson, PhD, was appointed as a new
member, along with reappointments of Scott Armstrong, Katherine Baicker, PhD, Herb Kuhn, Mary
Naylor, PhD, RN, and Cori Uccello, FSA.
 Medicaid State Readiness Report. The Urban Institute and Robert Wood Johnson Foundation
released a report on state readiness for Medicaid expansion. The brief examines how eight states are
altering their Medicaid managed care programs as they move into the home stretch of implementing
the ACA. In particular, the report draws on the experiences of eight states (Maryland, Michigan,
Minnesota, New Mexico, New York, Oregon, Rhode Island, and Virginia) participating in the Robert
Wood Johnson Foundation’s State Health Reform Assistance Network and the related health reform

13 of 20
implementation monitoring and tracking project.
The report describes how these states are revamping their Medicaid managed care programs and
how they are preparing the programs to provide coverage to new enrollees under health reform, and
look into health plan and health care stakeholders’ perceptions of the changes and preparations. The
report concludes that states with Medicaid managed care programs seem well-positioned to handle
the ACA Medicaid expansion.
 OIG Health Reports. The Office of Inspector General (OIG) released two reports last Tuesday, May
28. In the first report, “Improvements are Needed To Ensure Provider Enumeration and Medicare
Enrollment Data Are Accurate, Complete, and Consistent,” OIG states that inaccurate, incomplete,
and inconsistent provider data coupled with insufficient oversight place the integrity of the Medicare
program at risk and present vulnerabilities in all health care programs. OIG recommends that the
Centers for Medicare & Medicaid Services (CMS) should require Medicare Administrative Contractors
to implement program integrity safeguards for Medicare provider enrollment as established in the
Program Integrity Manual. Additionally, CMS should require more verification of National Plan &
Provider Enumeration System (NPPES) enumeration and Provider Enrollment, Chain, and Ownership
System (PECOS) enrollment data. Finally, CMS should detect and correct inaccurate and incomplete
provider enumeration and enrollment data for new and established records.
In the second report, “Medicare Could Save Millions by Implementing a Hospital Transfer Payment
Policy for Early Discharges to Hospice Care,” OIG estimated that Medicare could have saved $602.5
million for calendar years 2009 and 2010 by applying a hospital transfer payment policy for early
discharges to hospice care.
 CSHSC Report on Geographic Variations in Medical Spending. The Center for Studying Health
System Change released a report on geographic variations in medical spending. The report suggests
that at least 75 to 85 percent of the difference between high-cost and low-cost areas can be
explained by taking patient health into consideration.
Contact Information
section: Eugenia Edwards, at 202-457-5622 or eedwards@pattonboggs.com.
Homeland Security
 Budget and Appropriations. On May 22, the House Appropriations Committee approved the FY
2014 Homeland Security appropriations bill, which provides $38.9 billion in discretionary funding to
the U.S. Department of Homeland Security (DHS) overall: $35 million below the president’s request,
$618 million below the fiscal 2013 enacted amount and $981 million above the current post-

14 of 20
sequestration level. The bill provides $817 million less in infrastructure protection that the president
requested to penalize DHS for failing to implement chemical security programs in the wake of the
Texas fertilizer plant explosion. The Senate Appropriations Committee has not yet moved forward on
the FY 2014 DHS bill.
 Comprehensive Immigration Reform. On May 21, the Senate Judiciary Committee approved by a
vote of 13-5 the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744),
which included a number of amendments to address some of the Republicans’ concerns about
adequate border security. Senate Majority Leader Harry Reid (D-NV) expects to begin floor debate
the week of Monday, June 10 and plans to hold a vote on the bill by the end of June. Efforts continue
to secure the 60 votes needed to move ahead with the bill. The bipartisan Gang of Eight in the House
has reached an agreement in principle on a comprehensive bill, but there are still hurdles to reaching
a final deal. In the meantime, House Judiciary Committee Chairman Robert Goodlatte (R-VA) is
planning to hold hearings on portions of the immigration bill in his committee.
o Tuesday, June 4: The Senate Judiciary Subcommittee on Crime, Terrorism, Homeland Security,
and Investigations will hold an oversight hearing titled “The Department of Justice’s Handling of
Known or Suspected Terrorists Admitted into the Federal Witness Security Program.”
o Tuesday, June 4: The House Homeland Security Subcommittee on Emergency Preparedness,
Response, and Communications will hold a hearing titled “Emergency MGMT 2.0: How
#SocialMedia & New Tech are Transforming Preparedness, Response, & Recovery #Disasters
#Part 1 #PrivateSector.”
o To Be Determined: The House Appropriations Subcommittee on Homeland Security has
announced that it will reschedule the March 6 hearing on the U.S. Customs and Border Protection
Budget and Management, but it has not yet finalized a date. U.S. Customs and Border Protection
Deputy Commissioner David Aguilar will testify.
 TSA Airport Scanners. Transportation Security Administrator John Pistole has informed House
Homeland Security Committee Chairman Michael McCaul (R-TX) and Ranking Member Bennie
Thompson (D-MS) that the agency will meet its extended deadline of June 2013 to phase out
“backscatter imaging” airport body scanners that many lawmakers believe invade travelers’ privacy
and could cause health problems. The agency has already begun installing privacy software that
enables machines to produce only a generic body outline.
Contact Information
section: Alexis Early, at 202-457-5105 or aearly@pattonboggs.com; and Norma Krayem, at 202-457-
5206 or nkrayem@pattonboggs.com.

15 of 20
Immigration
 Senate. The Senate Judiciary Committee voted the Border Security, Economic Opportunity, and
Immigration Modernization Act (S. 744) out of committee on May 22 by a vote of 13-5. Senate
Majority Leader Harry Reid (D-NV) expects to open Senate floor debate the week of Monday, June
10, and plans to hold a vote three weeks later before the July 4 congressional recess. Senators are
expected to offer a number of amendments, and the bipartisan Gang of Eight is working to address
concerns and block amendments that either party would consider a “poison pill.” The upper chamber
continues to disagree over border security measures, the path to legalization, and high-skilled visa
reform versus protections for U.S. workers. Sen. Orrin Hatch (R-UT) – a member of the Senate
Judiciary Committee and Ranking Member of the Senate Finance Committee – continues to express
concerns that certain taxation provisions fall under Finance Committee jurisdiction, and he may not
support final passage until that issue is addressed.
 House of Representatives. The Gang of Eight members of the House of Representatives continue
to report that they have reached a deal “in principle” for a bipartisan bill, but doubts remain because a
bill has not yet been introduced. They have not yet resolved whether undocumented immigrants
seeking legalization will be required to purchase health insurance on the open market while they
await permanent status. Current law does not allow them to purchase it under the benefits or
exchanges of the Affordable Care Act (ACA), but it does not require them to purchase insurance
privately. Republicans are seeking to add that requirement to the immigration bill to ensure that
immigrants prove they will not become a public charge once legalized. Energy & Commerce
Committee Ranking Member Henry Waxman (D-CA) is opposing this effort to require the
undocumented to buy insurance at what Democrats fear will be unaffordable market rates. Democrats
argue this provision would violate deals they made to pass the ACA and would create an impossible
hurdle to legalization for many undocumented immigrants.
However, House Judiciary Committee Chairman Robert Goodlatte (R-VA) has followed through on
his plans to take up piecemeal bills that address discrete aspects of the immigration system. His
committee already held hearings on the Agricultural Guestworker Act (H.R. 1773) to reform the
temporary agricultural worker program and the Legal Workforce Act (H.R. 1772) to implement the E-
Verify system and discourage hiring of undocumented immigrants. The committee will likely hold a
hearing on the Supporting Knowledge-based Immigrants & Lifting Levels of STEM Visas Act (SKILLS
Act, H.R. 2131), co-sponsored by Chairman Goodlatte and committee member Rep. Darrell Issa (R-
CA). Speaker John Boehner (R-OH) has indicated that all immigration bills will proceed through the
Judiciary Committee, and he has also warned that the House will not simply take up a bill passed in
the Senate.

16 of 20
Contact Information
section: Alexis Early, at 202-457-5105 or aearly@pattonboggs.com; and Kristin Wells, at 202-457-6422 or
kwells@pattonboggs.com.
International
EXECUTIVE AND LEGISLATIVE BRANCH ACTIVITY
 Syria. During last week’s Congressional recess, Senator John McCain (R-AZ) slipped over the
Turkish border into Syria to meet with the leaders of the Free Syrian Army. Syrian opposition leaders
reportedly called on the United States to increase its support by providing heavy weapons, instituting
a no-fly zone and employing airstrikes against the Syrian regime and Hezbollah forces that are
increasingly active in Syria. Free Syrian Army Gen. Salem Idris said in an exclusive interview with
THE DAILY BEAST, “We need American help to have change on the ground; we are now in a very
critical situation.”
Also last week, tension ratcheted up over possible Russian arms sales to the Assad regime and the
European Union’s (EU) recent decision to lift its embargo on arming the rebels in advance of the early
June international peace conference in Geneva. The Syrian opposition still has yet to confirm its
attendance.
 Iran. Last week, the U.S. Government eased its restrictions on the sale of mobile phones and other
communication devices and software to Iranian citizens. The U.S. Department of the Treasury
justified the action, saying “The people of Iran should be able to communicate and access information
without being subject to reprisals by the government.” The Government of Iran and those individuals
listed on the Treasury Department’s “specially designated nationals” remain barred from export
licenses. This move comes just weeks ahead of the June 14 elections in Iran. This Tuesday, June 4,
the Senate Banking, Housing, and Urban Affairs Committee will hold a hearing on this issue (See
This Week’s Hearings below.)
 U.S.-China Heads of State Summit. Later this week, Chinese President Xi Jinping will meet with
President Obama in California. The agenda is expected to include North Korea, Iran, Syria, the South
China Sea, economic relations and cyber security. Last week, the media widely reported on a U.S.
Department of Defense Science Board report that highlighted China’s purported access of data on
Pentagon weapons programs and other defense technologies.
 Counterterrorism. On May 23, just before the Congressional recess, President Barack Obama gave
a national security policy speech at the National Defense University. The President noted that while
the core of al-Qaeda in Afghanistan and Pakistan is “on the path to defeat”, there has been an
emergence of various al Qaeda affiliates. President Obama further defended as effective his
Administration’s use of “lethal, targeted action against al Qaeda and its associated forces, including

17 of 20
with remotely piloted aircraft commonly referred to as drones.” He said, “Where foreign governments
cannot or will not effectively stop terrorism in their territory, the primary alternative to targeted lethal
action would be the use of conventional military options.”
The President affirmed U.S. targeted strikes are legal but cautioned “America’s legitimate claim of
self-defense cannot be the end of the discussion.” President Obama also shared that his
Administration has devised a framework that governs U.S. use of force against terrorists, noting the
framework was formally codified in a Presidential Policy Guidance he signed the day before the
speech.
 Terrorism Reports. Last Thursday, May 30, the State Department released its annual 2012 Country
Reports on Terrorism. The Report notes a resurgence of Iran’s state sponsorship of terrorism and
increased Hezbollah terrorist activity, which includes both reportedly engaged in a “broad range of
support to the Assad [Syria] regime.” While the Report also reflects al-Qaeda leadership losses, it
notes terrorist threats are increasingly decentralized and geographically dispersed.
 Trade. Last week, the Office of the United States Trade Representative (USTR) and the Interagency
Trade Policy Staff Committee chaired a public hearing on U.S. negotiating objectives for the proposed
Transatlantic Trade and Investment Partnership (TTIP) agreement. USTR and other agencies are
engaged in a 90-day consultation process regarding the proposed TTIP agreement. This Thursday,
June 6, the Senate Finance Committee will hold its confirmation hearing for Michael Froman to be the
U.S. Trade Representative.
Also last week, the World Organization for Animal Health upgraded the United States’ risk status for
bovine spongiform encephalopathy (BSE) to “negligible.” Montana Senator and Senate Finance
Committee Chairman Max Baucus (D-MT) lauded the news, saying “having the top safety rating will
help us to tear down the remaining barriers to American beef exports and ensure that our trading
partners abide by science-based standards.”
 Western Hemisphere. Vice President Biden wrapped his trip last week to the Western Hemisphere
with a final stop in Brazil. He reaffirmed U.S. engagement with its neighbors in the Western
hemisphere. The White House also announced President Obama will host Brazilian President Dilma
Rousseff for an official State Visit and State Dinner on October 23.
 Middle East Peace. Despite Secretary Kerry’s recent visit to Israel to discuss the Middle East Peace
process, Israel announced additional settlement construction plans after his departure from the
region. The U.S. Government maintains continued construction by Israel in East Jerusalem is
counterproductive to the peace talks.
 Nominations and Departures. President Obama has announced his intention to nominate the
following individuals: James Entwistle to be U.S. Ambassador to Nigeria; Douglas Lute to be the U.S.
Permanent Representative on the Council of the North Atlantic Treaty Organization; Victoria Nuland
to be Assistant Secretary of State for European and Eurasian Affairs; and Kara Stein to be
Commissioner of the Securities and Exchange Commission. This week, the Senate Foreign Relations
Committee will hold confirmation hearings (See This Week’s Hearings below for specifics.)

18 of 20
Last week, Chairman of the President’s Council of Economic Advisers Alan Krueger announced he
will return to the private sector. The President has yet to announce his replacement.
o Monday, June 3: The House Foreign Affairs Subcommittee on Global Human Rights will hold a
hearing on the anniversary of the 1989 Tiananmen Square tragedy. The Administration is not
scheduled to testify.
o Tuesday, June 4: The Senate Banking, Housing, and Urban Affairs Committee will hold a hearing
titled “Iran Sanctions – Ensuring Enforcement and Assessing Next Steps.” Scheduled to testify
from the Administration are: Under Secretary of the Treasury for Terrorism and Financial
Intelligence David Cohen, Under Secretary of State for Political Affairs Wendy Sherman, and
Under Secretary of Commerce for Industry and Security Eric Hirschhorn.
o Tuesday, June 4: The House Foreign Affairs Subcommittee on Global Human Rights will hold a
hearing titled “Continuing Repression by the Vietnamese Government.” The Administration is not
scheduled to testify.
o Wednesday, June 5: The Senate Foreign Relations Committee will hold a confirmation hearing
for Dr. Tulinabo Salama Mushingi to be U.S. Ambassador to Burkina Faso and Catherine Russell
to be Ambassador-at-Large for Global Women’s Issues.
o Wednesday, June 5: The House Foreign Affairs Subcommittee on the Middle East and North
Africa will hold a hearing titled “A Crisis Mismanaged: Obama’s Failed Syria Policy.” The
Administration is not scheduled to testify.
o Wednesday, June 5: The House Foreign Affairs Subcommittee on Asia and the Pacific will hold a
hearing titled “U.S. Relations with Vietnam.” Acting Assistant Secretary of State for East Asian
and Pacific Affairs Joseph Yun and Deputy Assistant Secretary of State for Democracy, Human
Rights and Labor Daniel Baer are scheduled to testify.
o Thursday, June 6: The Senate Foreign Relations Committee will hold a hearing titled “Labor
Issues in Bangladesh”. Assistant Secretary of State for South and Central Asian Affairs Robert
Blake is scheduled to testify.
o Thursday, June 6: The Senate Foreign Relations Committee will hold a confirmation hearing for
Geoffrey Pyatte to be U.S. Ambassador to Ukraine.
o Thursday, June 6: The Senate Finance Committee will hold a confirmation hearing for Michael
Froman to be the U.S. Trade Representative.

19 of 20
Contact Information
section: Stacy Swanson at 202-457-5627, or sswanson@pattonboggs.com.
Tax
 Tax Writing Committee Meetings Continue. The Senate Finance Committee has continued its
series of closed-door committee meetings on tax reform, recently issuing their latest Option Paper on
May 23 – this one on Economic Security. The closed-door meetings are intended to facilitate
discussion among senators in an attempt to find where agreement on policy exists. The sessions are
expected to include discussion on most major policy elements of tax reform.
In this latest paper, when reviewing the tax rules that affect the economic security of Americans, the
committee stated that the aim is to: simplify the taxation of retirement savings and health insurance,
minimize the disruption to business practices and employee expectations inherent in any fundamental
tax reform, increase the number of people with enough resources for an adequate standard of living
in retirement, and expand access to health insurance. For a full recap of the issues presented, the
committee released an option paper available here.
The Economic Security Option Paper was the seventh topic covered by the committee. The
committee is expected to release ten Option Papers. The final three are likely to come in the next few
weeks. A list of all the Option Papers currently published is available here.
 CBO Report Says Tax Expenditures Benefiting Wealthiest Americans. Last week the
Congressional Budget Office (CBO) released a report that the wealthiest Americans benefit most
from ten of the largest tax expenditures. The CBO estimated that more than 50 percent of the largest
tax expenditures benefit the top fifth of U.S. households based on income. House Budget Committee
ranking member Chris Van Hollen (D-MD) and House Ways and Means ranking member Sandy Levin
(D-MI) argued the report confirms that additional revenue to pay down the federal debt and offset
sequestration spending cuts can be obtained by eliminating or limiting tax preferences that benefit the
wealthy.
o Tuesday, June 4: The House Ways and Means Committee will hold a hearing with organizations
targeted by the Internal Revenue Service for their personal beliefs.
o Wednesday, June 5: The House Ways and Means Committee will hold a hearing on how Social
Security protects the benefits of those who cannot protect themselves.

20 of 20
o Thursday, June 6: The Senate Finance Committee will hold a Hearing to consider the Nomination
of Michael Froman to be the U.S. Trade Representative.
Contact Information
section: Joseph Urso, at 202-457-5349 or jurso@pattonboggs.com.

Patton Boggs Capital Thinking Weekly Update | June 3, 2013

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (12)

Destacado

Destacado (17)

Similar a Patton Boggs Capital Thinking Weekly Update | June 3, 2013

Similar a Patton Boggs Capital Thinking Weekly Update | June 3, 2013 (20)

Más de Patton Boggs LLP

Más de Patton Boggs LLP (20)

Patton Boggs Capital Thinking Weekly Update | June 3, 2013