Congressional
Climate Bill Tracking
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Greetings!
Please enjoy today's issue of the Congressional Climate newsletter, brought to you by Lobbyit.com!
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Today's Hill Action:
THE SENATE:
The Senate will convene at 2:00 p.m.
SENATE COMMITTEES:
Senate Appropriations (2:00 p.m.): Subcommittee on Energy & Water Development - Business meeting to markup proposed budget estimates for fiscal year 2012 for Energy and Water Development. SD-192.
Senate Homeland Security & Governmental Affairs (2:00 p.m.): Hearings to examine United States Postal Service in crisis, focusing on proposals to prevent a postal shutdown, including S.353, to provide for improvements to the United States Postal Service, and S.1010, to amend the provisions of title 5, United States Code, relating to the methodology for calculating the amount of any Postal surplus or supplemental liability under the Civil Service Retirement System. SD-342.
Senate Banking, Housing, & Urban Affairs (2:30 p.m.): Hearings to examine the nominations of Patricia M. Loui, of Hawaii, and Larry W. Walther, both to be a Member of the Board of Directors of the Export-Import Bank of the United State, and Richard Cordray, of Ohio, to be Director, Bureau of Consumer Financial Protection. SD-538.
Senate Appropriations (3:00 p.m.): Subcommittee on Dept. of Homeland Security - Business meeting to markup proposed budget estimates for fiscal year 2012 for the Dept. of Homeland Security. SD-138.
THE HOUSE:
No meeting scheduled for today.
HOUSE COMMITTEES:
No meetings scheduled for today.
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| W.H. raises disaster relief estimate
The price tag for disaster relief continues to grow as the White House revised its 2012 figures upwards again Monday to show a total of at least $6.7 billion in costs for the coming fiscal year, including preliminary estimates of $1.5 billion related to Hurricane Irene.
"As of now, our preliminary assessment is that we will need roughly $1.5 billion in additional disaster relief funding through FY 2012 to help families and communities affected by this Hurricane," Budget Director Jack Lew wrote in a posting on his office's website. "This roughly $1.5 billion estimate would help cover the uninsured losses families and communities have suffered - those damages that are not already covered by private insurance."
Just last Thursday, Lew informed Congress that $5.2 billion would be needed in 2012 to cover prior storms including the devastating tornadoes in Joplin, Mo., earlier this year. The $1.5 billion would come on top of that, and Democrats may press for action as early as Tuesday when the Senate Appropriations Committee considers the 2012 Homeland Security budget, which includes FEMA.
"The vast majority of that $1.5 billion will begin to be paid in the upcoming fiscal year that starts in less than four weeks," Lew wrote Monday. "Congress is back in session tomorrow, and we will work with them to fund both the $5.2 billion needed for non-Hurricane Irene known disaster needs and the roughly $1.5 billion that we now estimate is needed for Irene through FY 2012 (as was the case with prior disasters, there also could be costs for future fiscal years)."
Lew's statement stopped short of announcing an explicit budget amendment, and there is frustration in Congress that the administration has not been more explicit in its requests.
In his initial 2012 budget last winter, President Obama allowed that close to $6 billion could be needed for potential disasters. But the administration asked for only $1.8 billion for FEMA's disaster relief fund, and the situation has persisted despite growing bipartisan demands for the White House to address the shortfall.
The tense debt negotiations over the summer complicated the situation, since the White House had to save its energy to protect its core domestic budget. But even now, the president seems of two minds, and critics argue there is a serious gap between Obama's rhetoric and failure to commit to specific requests.
"Budget by blog does not work," said one frustrated Democratic aide.
Just Sunday, Obama visited New Jersey, for example, to review Irene's damage. "As president of the United States, I want to make it very clear that we are going to meet our federal obligations," he promised. "Because we're one country, and when one part of the country gets affected, whether it's a tornado in Joplin, Missouri, or a hurricane that affects the Eastern Seaboard, then we come together as one country and we make sure that everybody gets the help that they need."
"The last thing that the residents here of Paterson or the residents of Vermont or the residents of upstate New York need is Washington politics getting in the way of us making sure that we are doing what we can to help communities that have been badly affected."
But without action, FEMA's cash reserves have dropped already below $600 million, and there is growing concern that supplemental funds will be needed just to get through the remainder for fiscal 2011 which ends Sept. 30.
"With regard to the next couple of weeks, we are watching the situation closely," Lew said in his posting. "If additional funds are needed to get us through the closing days of this fiscal year, we will make sure that whatever resources are needed are provided. Guiding us is the steadfast commitment to make funds available in the amount and at the time they are needed. If resources are required for the last four weeks of FY 2011, we will explore all options to get it done."
"We are one country. A disaster in one corner is felt by Americans all across our land. That is why when it comes to taking care of our neighbors in need, we will not let politics get in the way and will do what is right to help them recover and rebuild."
Asked by POLITICO if a budget amendment was forthcoming, an administration official answered: "As the blog said, we are exploring all options."
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Richard Shelby, GOP senator, threatens to block consumer chief
The fate of the new Consumer Financial Protection Bureau and its proposed director remained trapped by partisan gridlock at Senate confirmation hearings Tuesday.
Sen. Richard Shelby (R-Ala.) reiterated his plan to block former Ohio Attorney General Richard Cordray from leading the agency, unless it is restructured as a commission and placed under greater congressional control.
"One of our nation's founding principles is that the government should be accountable to the people," Shelby said in his opening statement. "All of the bureau's power is concentrated in the hands of its director. The director determines which rules are enacted and which enforcement actions are brought. The director makes all hiring decisions and decides how the agency spends its resources."
Senate Banking Committee Chairman Tim Johnson (D-S.D.) scolded his Republican colleagues for holding Cordray "hostage," reminding them that "Congress created the CFPB to be a robust and independent agency.
"This political gamesmanship is preventing Americans from receiving the consumer protections they deserve," he said, noting that accountability exists because the president can fire the bureau director and its budget is capped.
The bureau has been mired in tension over its leadership. Many progressive groups favored naming Harvard Law School professor Elizabeth Warren--an outspoken bankruptcy expert who set up the CFPB as a special adviser to Treasury Secretary Tim Geithner - as its director, a call that was largely greeted with silence by the White House.
President Barack Obama chose instead to nominate Cordray, who took over the agency's enforcement division after losing re-election as Ohio attorney general last year. Considered a potential candidate for Ohio governor in 2014, Cordray told the committee Tuesday that he had no plans to seek political office.
In addition to his time in state politics, Cordray has also served as a U.S. Supreme Court clerk, studied at Oxford University as a Marshall scholar and flipped burgers as a teenager at McDonald's.
Shelby declined to ask Cordray any questions, telling the soft-spoken nominee that he appeared to have "good" qualifications for the office.
"You're caught between a big substantive debate," Shelby said. "That's going to have to be resolved."
The debate goes back to May when Shelby voiced his objections along with 43 other Republican senators in a letter to Obama. GOP lawmakers say their goal is not to curtail the power of the bureau, only to ensure it moves with more checks and balances.
While the CFPB officially began operations in July, its authority to issue rules and guidance are restricted without a Senate-approved director in place. That prevents it from regulating non-bank lenders and shielding members of the armed forces from suspect lending.
Cordray emphasized in his hearing that he would avoid increasing the regulatory burden on credit unions and community banks, if approved by the Senate.
The GOP and many within the financial services industry favor structural changes that could slow how quickly the agency can act.
The financial sector has a colossal stake in the hearings, since Cordray could dramatically reshape how mortgages, loans, checking accounts and credit cards are offered to the public.
"This is akin to a Supreme Court nominee for us," said Richard Hunt, president of the Consumer Bankers Association. "I believe this director has more power at any agency since J. Edgar Hoover."
The comparison to the FBI reveals just how much impact the new agency could have with its power to curb "abusive" practices, an expansive term that Hunt said could limit the types of financial products available.
"We think the word 'abusive' could lead to certain products being banned," he said. "Our economy is much more dynamic than just a simple 30-year fixed interest mortgage. Our customers are way too sophisticated for that. And it stifles innovation."
In his prepared testimony, Cordray indicated that his experience as Ohio attorney general--where he sued Bank of America and the insurer AIG--left him hesitant to regulate mostly through litigation.
Lawsuits "can be a very slow, wasteful and needlessly acrimonious way to resolve a problem," he said.
Instead, Cordray plans to rely on a broad slew of powers granted to the agency in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
"Our bigger and more flexible toolbox includes research reports, rulemaking, market guidance, consumer education and empowerment, and the ability to supervise and examine both large banks and many nonbank institutions," he said in his remarks.
The statement only exacerbated the worries of some in the banking community, because it suggested a degree of heightened oversight by an agency with independent funding.
A financial services lobbyist said this is why some GOP lawmakers are willing to block Cordray. They want to restructure the bureau to be led by a five-person commission instead of a single director, in addition to granting Congress some authority over the CFPB's finances.
"Those very broad powers cry for the need of some basic [legislative branch] accountability," the lobbyist said.
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Postmaster General Patrick Donahoe warned that the Postal Service is on "the brink of default" as he battles to keep his agency solvent. Without legislation by Sept. 30, the agency "will default on a mandated $5.5 billion payment to the Treasury," Donahoe told the Senate Homeland Security and Governmental Affairs Committee on Tuesday.
And with no congressional action, a year from now, next August or September, the post office could run out of money to pay salaries and contractors, hampering its ability to operate, Donahoe said.
"We do not want taxpayer money," Donahoe said, "We have got to get our finances in order."
Committee Chairman Joe Lieberman, I-Conn., said: "We must act quickly. The U.S. Postal Service is not an 18th century relic, it is a 21st century national asset, but times are changing rapidly now and so, too, must the post office."
Sen. Susan Collins, R-Maine, noted that the post office supports a $1.1 trillion mailing industry employing more than 8 million people in direct mail, periodicals, catalogs, financial services and other businesses.
Sen. Tom Carper, D-Del., noted several proposals have been put forward to improve postal operations and said that Congress needs to work on areas where agreement can be found.
Both Carper and Collins have introduced bills to reform postal operations, and measures have also been introduced in the House.
Donahoe and his predecessor John Potter have warned for months that without changes in the law governing postal operations the Postal Service will be unable to make advance payments to cover future retiree medical benefits.
Staggered by the economic downturn and the massive shift from first-class mail to email, the post office lost more than $8 billion last year and is facing losses at least that large this year, despite having cut 110,000 jobs over the last four years and making other changes, including closing smaller, local post offices.
The Postal Service, which does not receive tax money for its operations, is not seeking federal funds.
Instead, postal officials want changes in the way they operate, including relief from the requirement that it prefund medical costs. No other federal agency has to prefund retiree health benefits, but because of the way the federal budget is organized the money counts as income to the government, so eliminating it would make the federal deficit appear larger.
When Congress restructured postal operations in 2006 it ordered the agency to establish a separate fund to begin covering those benefits, instead of using money for the post office's general fund, starting in 2017, and to make annual advance payments to that account. The payment due Sept. 30 would be $5.5 billion.
Also, the post office wants to reduce mail delivery to five days-a-week; close 3,700 offices, further cut the workforce by up to 220,000; and to withdraw from federal retirement systems and set up its own. It also seeks the return of $6.9 billion it overpaid into retirement funds.
Contracts with its employee unions currently strictly limit layoffs and closing post offices riles local communities who complain to their members of Congress.
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