Legislative update

federal legislative update

November 25, 2020

Overview

G2G

We welcomed back John Richter after a two-month leave to lead the Biden-Harris campaign in Pennsylvania as Deputy Political Director. We also welcomed William Reed in September to be our DC intern and work as Government Affairs Assistant while juggling his senior year at Howard University. Katie C., Becky, Greg, Andrea, Katie B. and Ben all stepped up during the fall to make sure all gaps were filled in John’s absence – a true feat! Sadly, we are losing Ben Weber on November 24 because he was selected for the highly competitive Ohio Legislative Service Commission Fellowship Program in December to work in the Ohio Statehouse. Fortunately, we will get to see him around Capitol Square. Ben’s replacement is a dynamic woman named Sonam Rustagi, who interned in the Statehouse while attending OSU and starts in January 2021.

TRANSITION

The Biden-Harris ticket is identifying key issues to address in the new administration with Agency Review Teams and making staffing and appointee decisions (that will total 1,200 positions). With his GSA Administrator’s finally acknowledging Biden as the victor on the evening of November 23, this triggers a formal transition process, giving Biden and his team access to current agency officials, briefing books, some $6 million in funding and other government resources. Thanks to Biden’s 45+ years of experience and hundreds of former staff and advisers coming together, he didn’t miss a beat during the past few weeks, and in fact announced several appointees likely to secure quick Senate approval – more details below. G2G was invited to share expertise and insights in some key health and high-tech innovation areas, thanks to Katie Collins’ connections as a former Biden staffer and with several former agency and hill staff G2G has worked with over the years on the Biden-Harris team. Meanwhile, Trump and his supporters have until December 8 to complete any legal challenges as that is the “safe harbor” day in order for a state’s electors to be automatically accepted by the Congress.

CAPITOL HILL

While the “Blue Wave” never occurred, a Republican women wave certainly did: 144 women (56 women of color) were elected to serve in the next Congress, up from 120 in the current Congress with the House Republicans increasing from 28 to 36 women. Regarding year-end funding, a $1.4 trillion deal was reached November 25. On November 17 Senate Republicans unveiled 12 appropriations bills for the public to see as they work on a year-end omnibus to avoid a shutdown from the expiration of the current continuing resolution on December 11. A COVID-19 legislative package continues to be stalled as vast differences on funding levels remain between Speaker Pelosi (D-CA) (who seeks $2.2 trillion) and Majority Leader McConnell (R-KY) (who seeks $500 billion while Secretary Mnuchin has pushed for $1.8 trillion) and much attention has shifted to Georgia for two run-off elections for the Senate. Those two Senate elections on January 5 will determine who controls the upper chamber in 2021, thus incentivizing some to punt decisions into next year – more details below. Meanwhile, with 57 freshmen members in the House and 7 in the Senate, the congressional orientation and training programs began mid-November. Mid-November the House Republicans elected the same leadership team headed by Minority Leader Kevin McCarthy (R-CA) and the next day, the Democrats elected the same leadership team headed by Speaker Pelosi except for one addition, Rep. Katherine Clark (D-MA) to serve as Assistant Speaker. The Senate leadership remains the same for now. Committee chair campaigns have intensified as elections occur in early December. While some chairmanships and ranking positions will change across committees, all eyes are on three women running for Appropriations Committee Chair Marcy Kaptur (D-OH), Rosa DeLauro (D-CT) and Debbie Wasserman Schultz (D-FL).

SUPREME COURT

The third branch of government has changed noticeably as Amy Coney Barret – the fourth Trump appointee in just 3.5 years – was confirmed to the Supreme Court, permanently shifting it to a 6-3 conservative majority. The Court recently heard arguments on ending the Affordable Care Act (ACA) or Obamacare that provides health insurance to 20 million people, and two conservative justices (Kavanaugh and Roberts) signaled they’re inclined to keep Obamacare alive but the final judgment is not expected until spring 2021. A key question is whether the high court would “sever” that so-called individual mandate so that the rest of the law remains intact. For background, the mandate originally carried a tax penalty for noncompliance, a provision that was central to a 2012 Supreme Court ruling that upheld the law. The Republican-controlled Congress zeroed-out the tax in 2017. Opponents now say the whole ACA must be invalidated. This decision will determine congressional action on altering the ACA or completely recreating this program.

BIDEN-HARRIS TRANSITION:

President-Elect Joe Biden’s Transition Team has begun to announce several key personnel hires. Ted Kaufman, Biden’s longtime Chief of Staff in the Senate (and former Senator himself) is the Co-Chair of the Transition Team, working with New Mexico Governor Michelle Lujan Grisham (who is John Richter’s former boss when she was a Congresswoman), Jeff Zients, former Director of the U.S. National Economic Council and President Obama’s Economic Advisor, and Anita Dunn, White House Communications Director under President Obama. Ron Klain, former Chief of Staff to Biden and to Vice President Al Gore, will be White House Chief of Staff and immediately started doing the rounds with media interviews to speak on behalf of the incoming administration. Jen O’Malley Dillon, the first female presidential campaign manager for the Democrats to win, will be the Deputy Chief of Staff. Louisa Terrell, long-time Biden staffer and former President of the Biden Foundation (and Katie Collin’s former boss) will be the Director of Legislative Affairs for the White House. Reporting to her are Reema Dodin as the Senate lead and Angela Ramirez as the House lead – both are closely tied with Senator Dick Durbin (D-IL) and Rep. Ben Ray Lujan (D-NM), who was just elected to the Senate. Weeks ago, Biden’s Agency Review Teams started to assess priorities and review Trump’s policies and regulations they want to change and started producing reports on their plans, but now that GSA and federal departments can communicate with the Biden transition team, this work will accelerate. Their top priority is to meet with the agencies to identify key positions that must be rapidly filled and policies that require immediate attention.

As for his Cabinet, Biden has finalized some senior appointments and made announcements on November 23 for key positions. Diversity, experience and ability to be approved by Democrats and Republicans in the Senate are the key criteria. Key names include:

Announced:

  • Special Presidential Envoy on Climate — John Kerry — Former Senator and Secretary of State
  • Secretary of State — Tony Bliken — Former Senate staffer then Deputy National Security Advisor
  • National Security Adviser — Jake Sullivan— Former State Department’s Director of Policy Planning
  • UN Ambassador — Linda Thomas-Greenfield — Former Assistant Secretary of State for African Affairs
  • Department of Homeland Security Secretary — Alejandro Mayorkas — Former Deputy Secretary of DHS and as Director of Citizenship and Immigration Services crafted the DACA program, a Cuban American and first immigrant and Latino in that spot
  • Director of National Intelligence — Avril Haines — White House deputy national security advisor and deputy director of the CIA, would be first woman in that spot
  • Treasury Secretary — Janet Yellen — Former first woman Federal Reserve Chair, would be first woman in that spot (not announced yet, but soon)

Yet to Announce:

Defense Secretary:

  • Former Deputy Assistant Secretary of Defense for Strategy Michele Flournay is the leading contender but not guaranteed

Health and Human Services Secretary:

  • Former Surgeon General Dr. Vivek Murphy
  • New Mexico Governor Michelle Lujan Grisham
  • Secretary of the North Carolina Department of Health and Human Services Dr. Mandy Cohen

Transportation Secretary

  • Oregon Rep. Earl Blumenauer
  • Los Angeles Mayor Eric Garcetti

Commerce Department Secretary

  • Former Quibi and eBay CEO and a Republican Meg Whitman
  • African American business executive Mellody Hobson
  • Former Virginia Governor Terry McAuliffe

Agriculture Department Secretary

  • Former North Dakota Senator Heidi Heitkamp
  • Former Congressional Black Caucus Chair
  • Ohio Rep. Marcia Fudge

Education Secretary

  • President of the nationwide American Federation of Teachers, Randi Weingarten
  • Former president of the National Education Association, Lily Eskelsen García

Labor Secretary:

  • Boston Mayor Marty Walsh who is a former construction union leader
  • Former AFL-CIO organizing official Rep. Andy Levin
  • Rep. Donald Norcross (D-N.J.), who hails from the International Brotherhood of Electrical Workers
  • Obama’s former Deputy Labor Secretary Seth Harris

G2G continues to track and talk to friends engaged in the transition efforts and will provide updates. We are also preparing briefings on some key health and high-tech innovation areas.

Elections

Budget & Appropriations

FY2021 Omnibus

On November 17, Republican senators released 12 bills to fund the government through September 2021, the first move toward negotiations with House Democrats, who passed their 12 bills during the summer. While Ranking Appropriations Senator Patrick Leahy (D-VT) highlighted several objections to the Republicans’ proposals, which differ greatly from the House-passed versions, the two parties were able to clinch a deal on November 25 on top line funding levels for a total package of $1.4 trillion. The agreed funding plan establishes overall totals for 12 appropriations bills that will be rolled into one massive omnibus bill that would boost federal budgets for the rest of FY2021, which ends on September 30 next year. Negotiators will keep the specific funding levels for agencies and programs — known as 302(b)s — under wraps until the detailed bipartisan, bicameral omnibus is finalized. Some issues to resolve range from NIH allocations as the House version includes shrewd legislative drafting that establishes an emergency health funding account similar to the military’s Overseas Contingency Operations that has helped the DoD circumvent funding constraints since the aftermath of the September 11th attacks. It enables a total of $235 billion increase for NIH and CDC tied to COVID that avoids the Budget Control Act caps, however the Senate version does not include this account and has lower funding. Another difference is the Senate funds the EPA with less funding than the House version in the Interior bill and includes funding for the border wall in the Homeland Security bill, a lingering sticking point that could shut down the entire process as it has done before. Within Defense, the Senate version totals $698 billion and prioritizes F-35 jets and within the Transportation bill, the emergency infrastructure funding in the House is excluded in the Senate version. However, there is some agreed prioritization as both the House and Senate support $12.5 billion for the VA MISSION Act in their Military Construction-Veterans Affairs bills and a boost for nutrition relief in the Agriculture-FDA appropriations bills. Because the House bills passed that chamber, the House can negotiate with a stronger hand. As details are hammered out, we will keep track and share updates.

COVID Package

Majority Leader McConnell is backing Secretary Mnuchin’s proposal to use $580 billion that was allocated for Federal Reserve loan guarantees, small business aid and other virus relief programs that is unspent for targeted relief measures. One challenge is the reclaimed Federal Reserve funds are loans, not grants, and cannot be tapped for other programs under congressional budget scoring conventions. The Congressional Budget Office assumes that loans will be repaid, so there are no measurable savings from not offering the loans. Ways and Means Chairman Richard Neal (D-MA) and Democratic leadership oppose this proposal.

health

COVID-19 Health Disparities

Black, Asian, Native American and Hispanic patients die far more often than White patients, even as death rates have plummeted for all races and age groups, according to a Washington Post analysis of 5.8 million coronavirus patients’ records from early March through mid-October. Death rates overall have fallen more than 80% from the pandemic’s peak in the spring, according to the CDC, but losses among racial and ethnic minorities remain disproportionately large. Black Americans were 37% more likely to die than Whites, after controlling for age, sex and mortality rates over time. Asians were 53% more likely to die; Native Americans and Alaskan Natives, 26% more likely to die; and Hispanics, 16% more likely to die. The shortage of testing in communities of color still persists to this day. However, concerted efforts have resulted in progress. For example, Michigan’s Lt. Governor Garlin Gilchrist formed one of the nation’s first state racial disparities coronavirus task forces in April, consisting of 23 community organizers, doctors and other experts. Five months later, Black residents who in April accounted for 29.4% of cases and 40.7% of deaths dropped to 8% of cases and 10% of deaths in September.

NIH’s RADx

NIH expanded research to improve COVID-19 testing among underserved and vulnerable populations by awarding nearly $45 million to expand the research network of the Rapid Acceleration of Diagnostics Underserved Populations (RADx-UP) program, adding 20 institutions and seven states and territories. RADx-UP aims to support effective approaches to improve COVID-19 testing of populations disproportionately affected by the disease, including African Americans, American Indians/Alaskan Natives, Latinos/Latinas, Native Hawaiians, older adults, pregnant women and those who are homeless or incarcerated. This second round of awards brings the total investment in the RADx-UP program to more than $283 million at 55 institutions across 33 states and territories and the Cherokee Nation. RADx-UP is part of NIH’s Rapid Acceleration of Diagnostics (RADx) initiative which aims to speed innovation in the development, commercialization and implementation of technologies for COVID-19 testing.

Hospitals Stretched Thin

In one week alone mid-November, 20% of American hospitals anticipated a critical staff shortage within seven days, according to the Health and Human Services Department. This record high ratio reflects the surge in cases as patients flood facilities for the third time since the pandemic began. North Dakota, Missouri and Wisconsin reported the highest share, each with nearly half of its hospitals needing medical staff as of November 18. Resources face additional strain by the resumption of elective procedures and an influx of patients who had delayed care earlier in the year. Finally, the anxiety, isolation and disruption of routines and support has exacerbated mental health conditions, increasing demand on health care professionals as well.

BARDA

BARDA recently announced a new type of public-private partnership, BARDA Ventures that will realize authorities granted in the 21st Century Cures Act to utilize venture capital (VC) methods and practices. This will be the first time HHS has utilized VC practices to make investments. As part of the new program, BARDA is soliciting proposals for an existing nonprofit partner to manage an investment fund that will support breakthrough technologies and create entirely new approaches to enhance U.S. preparedness and response to threats, including COVID-19 and future pandemics. Over the past 14 years, BARDA has created many public-private partnerships with companies of all sizes and now is extending this approach to include partnerships with the private investment community.

Biden Coronavirus Task Force

Biden’s Coronavirus Task Force is led by two veterans of fierce political fights in the past, former FDA Commissioner Dr. David Kessler and former Surgeon General Dr. Vivek Murthy, and a national leader in addressing health disparities who is Associate Dean at Yale, Dr. Marcella Nunez-Smith. Other members include Rick Bright, the former head of BARDA ousted by the Trump administration in April; Atul Gawande, the surgeon, writer, and recently departed CEO of Haven, the joint JP Morgan Chase-Berkshire Hathaway-Amazon health care venture; Zeke Emanuel, former Obama administration health policy adviser and Luciana Borio, a former FDA official and former Director of Medical and Biodefense Preparedness policy for the White House who worked for In-Q-tel. Murthy has said regardless of the lack of cooperation with the Trump administration they are doing everything they can to ensure that there are implementable plans on January 20, the day Biden is sworn in. The task force has also studied the rising incidence rates and found those regions that use mask mandates do better in terms of lower rates of infection spread, suggesting the likelihood of putting federal mandates are in place next year.

Congressional Priorities

Given the Democrats taking the reins of the White House and at least one of the two chambers in Congress (maybe three, depending on the results of the January 5 Georgia run-off elections), some key health issues are likely to dominate the next year. These include:

  • Coronavirus remains the top issue and Congress will address everything from vaccine distribution to BARDA funding to unemployment relief to online education with one million teachers leaving the field since March.
  • Price transparency and an end to surprise billing is a priority as the October rule announced by CMS requires most private health plans, including group health plans and individual health insurance market plans to disclose pricing and cost-sharing information starting in 2021. The rule makes it easier for certain types of health plans to encourage patients to shop for services from lower-cost, higher-value providers by sharing the savings with patients. The rule allows health plans to take credit for “shared savings” payments in their medical loss ratio calculations, which can create incentives for health plans to encourage people to shop around for the best deal. While some legislation started to move in Congress establishing penalties for lack of transparency, nothing got close to passage.
  • Drug pricing proposals are expected as the Trump Administration issued two final rules on November 20 for the “most-favored-nations rule” first proposed in October 2018 and the “rebate rule” first proposed in January 2019. Following the House-passed HR 3 that pursues a similar path, the Senate balked. There is significant controversy in tying the U.S. to the lowest foreign drug prices. Biden wants to repeal the law prohibiting Medicare from negotiating lower prices with drugmakers and has expressed support for allowing people to import drugs from other countries and establishing an independent review board to limit launch prices for drugs that don’t have competing versions on the market. Biden favors limiting price hikes for all brand, biotech, and some generic drugs as a condition of participation in the Medicare program and the public option.
  • Value-based care redesign is on-going and expected to continue. The Biden administration is likely to keep pushing VBC through voluntary approaches. Meanwhile new care and payment models designed to improve quality and reduce costs are changing the way providers practice medicine and how they are compensated for their services, thanks to state-initiated efforts that are in many cases taking a larger role in transforming the healthcare industry than the feds.
  • National stockpile and global supply chain security are bipartisan concerns. Biden is likely to push harder on this issue and find ways to use the Defense Production Act and direct more funding to BARDA, which was stripped down when funds were redirected to Operation Warp Speed, and to domestic manufacturing for public health emergencies.
  • User fees agreement for medical devices and therapeutics (MDUFA and PDUFA) expire September 2022 and the final draft for the next one beginning in 2023 is due March 21, 2021. The details are usually negotiated behind the scenes among the leading trade associations and the FDA before presented to Congress to tweak and move through committees. The process will consider legislation on laboratory developed tests (LDTs): the VALID (Verifying Accurate and Leading-edge IVCT Development) Act, which has the most support in Congress and was built on consensus over time to provide such diagnostic testing to relatively flexible FDA review and the VITAL (Innovative Testing in American Laboratories) Act, which would advance a new regulatory regime for the FDA to manage all diagnostics and create a public health emergency standard that has gained support due to the coronavirus crisis and FDA’s failure in making diagnostic testing widespread in early 2020. While policy riders are always promoted and debated during the process, the FDA has tried to rein in control of LDTs for decades and with the pandemic, it is likely legislation will be enacted in some form.
  • Telehealth has emerged as a top issue during the coronavirus crisis and some 35 bills are pending in each chamber to advance this health care resource, especially to address the lack of access to care during the pandemic. The Telehealth Caucus expects to push significant legislation and more HHS, CMS and FDA regulations are expected during the next Congress to apply lessons learned the past several months in COVID telehealth practices that can help patients and clinicians longer term. Related, the COVID nursing homes crisis brought to light ways to use telehealth and how to enable better care so more agency oversight and legislative activities are expected here as well.
  • Maternal health and health disparities have been brought to the forefront due to vocal members of Congress authoring legislation addressing the much higher infant mortality and maternal health morbidity rates among Black women as well as the glaring statistics and stories on health disparities making headlines throughout the pandemic. In talking with health policy staff for Chair Eshoo (D-CA) of the Health Energy and Commerce Subcommittee, G2G learned legislation is expected in this area next year.
  • Cancer research funding and attention will make a big return with the inauguration of Biden, who led the Cancer Moonshot Initiative under President Obama and went onto create his own Biden Cancer Initiative to convene, call attention to and address gaps in the fighting cancer ecosystem. He will have strong support in Congress, as both chambers and parties have worked to increase funding for NIH and specifically NCI over the years.

Committee Leadership

Other factors shaping 2021 are changing leadership positions. The new chairs include:

  • Senate Finance Committee that oversees CMS and tax policy is likely Senator Mike Crapo (R-ND)
  • Senate HELP (Health Education Labor Pensions) Committee that oversees health and education policy, including the Early and Secondary Education Act and Higher Education Act is likely Senator Richard Burr (R-NC)
  • House Energy and Commerce Health Subcommittee Ranking that will write ACA reforms, telehealth and other health policies is likely Rep. Brett Guthrie (R-KY)
  • House Appropriations Chair will be Rep. Kaptur (D-OH), DeLauro (D-CT) or Wasserman Shultz (D-FL) – all women
  • House Appropriations Defense Subcommittee Chair is likely be Rep. Betty McCollum (D-MN) or Rep. Tim Ryan (D-OH)
  • House Armed Services Committee Ranking Member will be either Rep. Mike Turner (R-OH) or Mike Rogers (R-AL)

Biden’s Health Priorities

ACA – Regarding policy, Biden wants to strengthen Obamacare by expanding premium subsidies for ACA coverage to include people who earn more than 400% of the federal poverty level. He has also called for lowering how much a family can spend on individual market coverage to no more than 8.5% of its annual income. The current limit is 9.8%. Both of those proposals would require Congress to act and would likely see pushback from Republicans. While this could save people hundreds of dollars a month, it could also hurt the employer-sponsored health insurance market. Biden also wants a public option for those who can’t afford private coverage and lower the age for Medicare eligibility to 60 from 65. With Biden’s determination on this issue, the Supreme Court pending decision on ACA, and the many cracks in our health care system surfacing during the coronavirus pandemic, we can expect significant health legislative activity in the 117th Congress.

FUNDING – Biden is committed to medical research not only due to his past leadership of the Cancer Moonshot, but due to the devastating impact of the coronavirus and many years in the Senate supporting NIH. The NIH estimates it has lost about $10 billion in research due to COVID-19 — nearly a quarter of its budget — and the CDC said it needs about $6 billion to distribute the vaccine. In response, the House included a new emergency funding line but the Senate has yet to agree to this line. In any case, funding for NIH is likely to keep rising over the next four years.

LAWSUITS – The Biden administration will likely withdraw from several lawsuits the Trump administration is appealing, including state work requirements for Medicaid and regulations that allow health care providers to decline to treat LGBT people. The Health and Human Services Department under Biden also will likely halt the expanding availability of short-term health plans that don’t meet Obamacare requirements for minimum care for patients. In addition, there are 14 states that haven’t expanded eligibility for the low-income health program Medicaid, even though they’re allowed under the ACA to offer coverage to people at or below 138% of the federal poverty level. The Biden team will likely work to expand Medicaid, especially given the coronavirus crisis demonstrating the need to provide care to the most vulnerable.

SCIENCE –Biden has vowed to listen to scientists, embracing public health measures such as a push to encourage wearing masking nationally. Career scientists at the CDC, such as Nancy Messonnier, Director of the National Center for Immunization and Respiratory Diseases, who held weekly press calls and was informing the public on the crisis to come when suddenly forced to adopt a low profile during the Trump administration, would likely re-emerge as the leading voices on responding to COVID-19. NIAID Director Fauci and former BARDA Director Rick Bright will all play key roles. Also, the Operation Warp Speed effort will continue as the Biden administration will work to distribute millions of vaccines. It is unclear if Biden will replace FDA Commissioner Stephen Hahn and Peter Marks, Director of the FDA’s Center for Biologics Evaluation and Research during this critical juncture in the coronavirus response.

Defense

Senate Foreign Relations

Senator Jim Risch (R-ID) is set to return as the Foreign Relations Committee’s top Republican and continue his focus on redefining U.S.-China relations. He also wants to invest in global health security to prevent future pandemics and build on U.S. alliances such as the North Atlantic Treaty Organization (NATO). Joining him at the top of the committee will likely be Senator Bob Menendez (D-NJ), whose leading priorities will include rolling back President Trump’s foreign policy and to increase diversity at all levels of foreign policy leadership. Risch and Menendez are concerned about China’s theft of U.S. intellectual property and the trade war between the two countries damaging the American economy. They could push for action during the lame-duck session on a bipartisan measure (S. 2641) that would impose sanctions against Turkey, a NATO ally, for its purchase of the Russian-made S400 missile system. The committee approved it by an 18-4 vote in December 2019. The lawmakers will also consider how to prevent Iran’s development of nuclear weapons, including the future of the Obama-era “P5+`1" deal that limited the country’s nuclear weapons development in exchange for sanctions relief, which the Trump administration withdrew from in opposition to Risch and Menendez.

House Armed Services Committee (HASC)

While Rep. Adam Smith (D-WA) remains Chairman, the retirement of Rep. Mac Thornberry (R-CA) has made the race to be the next top Republican on HASC into a heated contest among some of the most vocal defense hawks. The most likely to win is either Rep. Mike Turner (R-OH) or Rep. Mike Rogers (R-AL). Both have served nine terms in the House and have chaired the subcommittee overseeing strategic forces. The Republican Steering Committee is expected to meet after Thanksgiving to vote on committee leadership posts. Meanwhile the negotiations on a final NDAA has begun and attempts to scramble Trump's plans to remove troops from Germany and Afghanistan, the renaming of bases with confederate names and top funding levels are the issues of contention. The four leaders of the House and Senate Armed Services Committees are aiming to have a final bill ready for a vote by early December. Next year, we expect both HASC and SASC as well as House and Senate Homeland Security Committees to tackle cybersecurity and counterrorism in the new Congress, as the nation relies on online systems at an unprecedented level during the coronavirus pandemic. For example, the House-passed Information Technology Modernization Centers of Excellence Program Act (H.R. 5901 and S. 4200) would codify an AI Center of Excellence within the General Services Administration.

Pentagon Upheavals

Secretary Mark Esper was ousted and now the Pentagon is working to bring troop levels in Afghanistan and Iraq down to 2,500 by January 15, which has set off an uproar among the president’s GOP allies in Congress. Almost 800,000 U.S. troops have been deployed to Afghanistan over the last two decades, and over 2,400 died fighting a war widely ignored by the American public. However, sudden removal is opposed by many. Esper was fired in part for pushing back on the president's efforts to accelerate the Afghanistan drawdown against the advice of military commanders. Senate Majority Leader McConnell (R-KY), one of Trump’s biggest allies, warned that the consequences of a premature American exit would likely be even worse than President Obama's withdrawal from Iraq back in 2011. Rep. Michael McCaul (R-TX), the top Republican on the House Foreign Affairs Committee, agrees. Meanwhile for a third year in a row, the department has failed a comprehensive audit, but officials insisted that steady progress is being made to track its notoriously messy books.

COVID-19

stem & innovation

Congressional Changes Impacting Legislation

Rep. José Serrano (D-NY), the House’s lead appropriator for NASA, the National Science Foundation, National Oceanic and Atmospheric Administration, and National Institute of Standards and Technology is retiring. Rep. Matt Cartwright (D-PA) is next in line for his job. Meanwhile in the Senate, the next head of the Energy and Natural Resources Committee is expected to be Senator John Barrasso (R-WY) from a big fossil fuel state who will likely seek to thread the needle on advancing energy innovation while maintaining access to affordable, reliable power. He is viewed as less progressive as his predecessor and current Chair Lisa Murkowski (R-AK). His ranking colleague will continue to be Senator Joe Manchin (D-WV). Together Murkowski and Manchin had sought to advance a sweeping policy update for DOE for years and now with her departure, it is likely this legislation will not become law. Although a deal has reportedly been reached on an amendment to phase out hydrofluorocarbons, which stalled the legislation this spring, there is little time to reconcile the bill with the House’s clean energy bill during the lame-duck session.

Senator Cory Gardner (R-CO), who chairs the Senate subcommittee that oversees NOAA and NSF, lost his seat to former Colorado Governor John Hickenlooper, who began his career as a petroleum geologist. This impacts another piece of legislation as Gardner was a main sponsor of the American Innovation and Competitiveness Act, a major cross-agency science policy update for STEM and other programs that Congress passed in 2016. Usually bipartisan, it needs a champion to move through Congress. Also, on a larger scale if the Democrats win both Georgia seats on January 5, they will flip the chamber and shift energy policy efforts toward bolder moves on environmental stewardship and clean energy. However, fossil fuels are still key in any realistic effort to reduce greenhouse gas emissions in an economy still dependent on these fuels.

Science Funding

Some Republicans have signaled support for expanding federal funding of energy innovation as a way to combat climate change, which has drawn strong support from Democrats and the Biden team. Other potential efforts include a major semiconductor R&D and microelectronics production initiative as part of the defense bill and the Endless Frontier Act, sponsored by Senate Minority Leader Chuck Schumer (D-NY) and Senator Todd Young (R-IN), that aims to spend $100 billion over five years on technologies through an enormous new directorate tied to the National Science Foundation. Yet another pending measure is the House Democrats’ ambitious climate plan that includes major spending increases on R&D and technology commercialization, aspects of which are reflected in a clean energy bill the House passed largely along party lines in September. Also, the House FY2021 Commerce, Justice and Science Appropriations bill includes $23.5 billion for the Department of Energy (DOE) in one-time “emergency” stimulus funding. However, House Science Committee Republicans oppose such plans and instead propose doubling budgets for earlier-stage research across various agencies.

Biden Leadership

President-elect Joe Biden has several plans on science and innovation, including rejoining the Paris climate agreement, which the U.S. formally exited on November 4 and to which includes getting the country to net-zero carbon emissions by 2050. His plan calls for developing clean light rail and bus systems, encourage production of electric car batteries, and boost fuel economy standards, with the hopes of creating millions of union jobs that pay at least $15 per hour. The plan would require $2 trillion in spending over four years and reverse the Trump administration’s ease of environmental rules and set up an environmental and climate justice division within the U.S. Department of Justice. President-elect Biden’s plan would allocate 40% of the funding to support communities disproportionately affected by climate change.

Biden also supports increased R&D initiatives, but the details on his funding lines won’t surface until he submits his first budget proposal in early February. Within days of his inauguration, Biden is likely to immediately rescind an October memo from the Environmental Protection Agency (EPA), arguing that the Clean Air Act gives states flexibility to administer air pollution requirements and saying some exemptions are appropriate. Another likely quick action is expected to quell an April 2018 memo on metrics known as significant impact levels, which set thresholds for how much air pollution facilities can produce when expanding or upgrading without degrading air quality. He is also expected to pick someone to head the EPA who is the diametric opposite of the current administrator, Andrew Wheeler, who previously lobbied against Obama regulations.

TRANSPORTATION

Infrastructure Bill

The Surface Transportation bill expires September 2021 and both the House Transportation and Infrastructure Committee (T&I) and Senate Environment and Public Works Committee (EPW) passed bipartisan bills. However, neither will move during the lame-duck session. They should be top of the agenda next year with more of a shift back toward balancing rural and urban funding formulas, but three other committees have yet to draft their titles of the bill, which will slow down the process. Senator Shelly Moore Capito (R-WV) will take over as Chair of EPW and Senator Tom Carper (D-DE) as Ranking. The Highway Trust Fund will be insolvent soon and the Invest Act provided $145 billion for the Highway Trust Fund in House bill but there is no way to finance that authorization, a major hurdle toward enactment. We are currently in an extension for a year and could have many more on the horizon as Congress extended the historic SAFETEA-LU bill 10 times and the MAC21 5 times over the years.

Infrastructure Goals

Biden wants a huge infrastructure package that includes broadband, light rail, infrastructure for schools, bridges and water, green energy and innovation. The last time the gas tax was raised — which funds the Highway Trust Fund — was 1993. Biden voted for this back then, but on the campaign, he said that he did not think the will is there to raise that again. The key Democratic players in moving an infrastructure package who will need to work closely with the Biden administration to gain an upper hand in negotiating with the Senate include: T&I Chair DeFazio (D-OR) and Ways and Means Committee Chair Neal (D-MA) along with Subcommittee Chair Eleanor Holmes Norton (D-DC).

economic development

Relief Funding Needed

With more than one million new cases reported this month alone, states and cities are restricting business activity and enforcing lockdown measures in response. Even though news of vaccine breakthroughs caused a rise in the stock market and now three are moving forward, the continuing stalemate over an economic stimulus package that is failing to meet the immediate need for economic relief is problematic. Federal Reserve Chairman Powell has repeatedly recommended fiscal relief to small businesses, the unemployed, states and cities to bolster the economy and said after a vaccine is distributed, industries like retail and other services will have a hard time recovering. Biden has detailed his plans to assist the economy, by first containing the virus and then investing in manufacturing jobs, and meeting with labor unions and business leaders. He has criticized both parties in Congress for the lack of a spending package.

Connecting coronavirus response to economic impact, the Brookings Institution found President-elect Biden’s victory in just 477 counties encompasses 70% of America’s economic output, whereas Trump’s base of 2,497 counties represents less than 33% of the economy. In 2016, Democratic candidate Hillary Clinton won counties representing 64% of U.S. output, whereas Trump’s accounted for just over a third. With President-elect Biden’s economic plan including raising corporate taxes from 21% to 28%, create 5 million jobs through large investments, including $400 billion into procurement measures to boost domestic manufacturing and an additional $300 billion into research and development, the impact in these counties will be watched.

Small Business and Innovation

The SBA is partnering with the MSI STEM R&D Consortium (MSRDC), which consists of minority-serving research institutions, industry, and government partners, to strengthen and expand small business innovation, research, and commercialization from underrepresented pools of science and engineering talent. Meanwhile the White House Office of Science and Technology Policy (OSTP) led the “Lab-to-Market: Connecting Communities to the U.S. Federal Innovation Ecosystem” as part of Global Entrepreneurship Week, an international movement to empower entrepreneurs and help make it possible for anyone, anywhere to start and scale. Also, the Federal and State Technology (FAST) Partnership funded 24 organizations this year, building the SBIR/STTR ecosystem through outreach, technical assistance, and financial support. Finally, several open solicitations ranging from NSF to DHS to DoD are available with early December and early January deadlines. All ARPA-E programs at the Department of Energy close early January. All of these efforts to drive small business growth, SBIR funding and the bringing of innovation to market will continue in the new administration and the OSTP is expected to regain stature and influence in the Biden administration.