Congress Returns to Long To-Do ListSeptember 14, 2016
Now that Congress is back in Washington, D.C. following a prolonged August recess, it’s back to business for lawmakers—at least as much business as is typical for Congress these days. With the House having less than six full weeks scheduled and the Senate seven weeks to be in session for the rest of 2016, coupled with the wildly partisan elections, very few small-business related priorities are likely to get done.
Lawmakers will be in D.C. the bulk of September then gone most of October through the week following the elections, and back in town for just a few weeks in November and December to finish up any remaining pieces of business. In those waning weeks of 2016, during the lame-duck, lawmakers will face several key pieces of must-do legislation, however any real, long-term legislation is unlikely to move—including spending bills.
Short-Term Funding CR
On Sept. 12, Senate Majority Leader Mitch McConnell (R-Ky.) filed cloture on proceeding to a vote on a House legislative appropriations bill, which is expected to be the vehicle for the short-term funding continuing resolution (CR) to keep the government open and provide funding to fight the Zika virus and aid veterans’ programs.
The move sets up the Senate to take an initial procedural vote this week, once it wraps up work on a water infrastructure bill. The short-term funding bill would keep the government operating until Dec. 9, effectively moving the budget deadline to after Election Day.
Wrapping up the CR ahead of the Oct. 1 deadline could allow Sen. McConnell to get his conference out of Washington and back on the campaign trail. Republicans are defending 24 Senate seats, including a handful in states previously carried by Democrats.
Despite bipartisan efforts, the future is uncertain for the highly successful Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Authorization for the current programs expires Sept. 30, 2017. Reauthorization efforts are underway, but it is not clear at this time when the House and Senate will consider the pending legislation necessary to ensure no lapse in the programs.
The SBIR program provides $2.5 billion a year in seed funding to companies with emerging technologies. Since the program’s inception, more than 150,000 SBIR awards worth over $42 billion have been made.
In June, Senate Small Business and Entrepreneurship Committee Chairman David Vitter (R-La.) and Ranking Member Jeanne Shaheen (D-N.H.) were successful in getting SBIR/STTR reauthorization language in a “manager’s amendment” to the FY 2017 National Defense Authorization Act (NDAA). Unfortunately, for political reasons unrelated to SBIR, the manager’s amendment was dropped from the NDAA, meaning the SBIR legislation with an allocation increase was not included in the bill passed by the Senate at the beginning of June. There is, however, a “placeholder” provision in the NDAA that was added earlier that will simply make SBIR permanent without any other provisions, but it is too soon to tell if that provision will remain after the Senate and House versions are reconciled.
A central issue in reconciling the Senate and House versions of the reauthorization legislation is whether to make the programs permanent. Both chamber committees’ are working to get SBIR/STTR reauthorization passed this year, either as a stand-alone bill or attached to another piece of legislation.
Two versions of the FY 2017 National Defense Authorization Act (NDAA) have passed the House and Senate and are now in the midst of House and Senate Armed Services Committees’ negotiations to come up with a final version of the bill. Included in both versions of the bill is an exemption from an executive order that would require all federal contractors to include in their contract process any past labor violations for nearly all defense contractors.
Also included in the Senate version of the bill is a very problematic provision which would allow small-business subcontracts to be counted toward the overall small-business contracting goal. This represents a major shift in procurement policy and could dramatically reduce both the overall number of small-business contracts, as well as small-business prime contracts awarded. It is unclear where this provision stands in the ongoing negotiations.
While the NDAA is typically one piece of stand-alone legislation that gets passed by the House and Senate—as opposed to various extensions and CRs—however, it is likely that the final NDAA won’t be taken up until after the elections.
Ever since the summer of 2015 when the possibility of a vote on the Innovation Act was deflated in the House, patent reform has remained firmly on the back burner by Congress. There has been some discussion around the prospects of venue reform with one bill—S.2733, the Venue Equity and Non-Uniformity Elimination Act of 2016—introduced in the Senate aimed at stopping forum shopping, but that has not gone anywhere yet either. And with the election just around the corner, most do not expect anything to happen before the next Congress gathers early next year on patent reform.
On Aug. 12, the Office of the U.S. Trade Representative submitted to Congress the president’s draft Statement of Administration Action (SAA). The submission is necessary for U.S. ratification and implementation of the Trans-Pacific Partnership (TPP), the largest regional trade agreement ever, between the U.S. and 11 other Pacific Rim nations. This transmission of the draft SAA begins the 30-day clock, after which the president may submit the TPP implementing bill together with the final SAA to Congress.
The purpose of the SAA is to set forth the executive actions proposed to implement U.S. obligations under the TPP. As with other SAAs, the TPP statement represents the administration’s view on the interpretation and application of the TPP in regard to U.S. international obligations and U.S. law.
As in past ratification of trade agreements, this SAA will launch substantive consultations between the White House and Congressional leadership, including a series of committee hearings on the Hill. Proponents therefore remain hopeful that following this process Congress will hold a TPP ratification vote by the end of 2016, while others including Senate Majority Leader Mitch McConnell (R-Ky.) have said the vote will not happen this year.
Sen. McConnell has said that the presidential campaign has produced a political climate that makes it virtually impossible to pass the TPP in the lame-duck session after the November elections. Further hindering the possibility of action is that fact that both Democratic presidential nominee Hillary Clinton and Republican nominee Donald Trump are opposed to the trade deal involving 12 Pacific-rim nations. Finally, the trade fight has also spilled over into the battle for the Senate as Republicans defend 24 Senate seats, with vulnerable Republicans Sens. Rob Portman (Ohio) and Pat Toomey (Pa.) coming out against the deal.
Ex-Im Bank Board
The Export-Import Bank of the U.S. (Ex-Im) operates under a renewable general statutory charter, and was extended through Sept. 30, 2019 by the Export-Import Bank Reform and Reauthorization Act of 2015. Despite its four-year renewal, Ex-Im is still facing some issues. Ex-Im Bank is led by a Board of Directors, which consists of the President of the Bank (who is also the chairman of the Board), First Vice President (who is also the Vice Chairman), and three additional directors. The Board authorizes the Bank’s transactions either directly or through delegated authority. All Board members are appointed by the president with the advice and consent of the Senate. Under Ex-Im Bank’s charter, not more than three members of the five-person Board can be of any one political party.
Currently, the Bank remains constrained because the Board needs a three-member quorum to approve insurance, loans or guarantees above $10 million; currently the five-member Board only has two serving directors and therefore, activity has been restricted to smaller-scale transaction since its reauthorization.
President Barack Obama nominated John Mark McWatters, a former aide to House Financial Services Chairman Jeb Hensarling (R-Texas), to fill one of the vacant Republican seats on the Ex-Im Bank’s board of directors, but Senate Banking Committee Chairman Richard Shelby (R-Ala.)—an opponent of the Bank—is in no rush to move on it.
NSBA/SBEA recently signed onto a coalition letter supporting identical language adopted in both the House and Senate Foreign Operations Appropriations bills that would temporarily modify the Bank’s quorum requirement so that it may again review transactions over $10 million dollars. The letter strongly urged leadership to include this modification, which was also on the White House’s anomaly list, to the Bank’s Board in the short term funding CR.