Oversight & Investigations Informer – 2/19/21
NOTABLE DEVELOPMENTS
What We Are Watching:
MINIMUM WAGE HIKE PROPOSALS STALL: Politico reported that President Biden privately told a group of governors and mayors that a minimum wage hike is unlikely to happen in the near-term. In a related development, Senator Manchin (D-WV) told Biden that he would not support passage of the COVID relief package if it included provisions that violate the Byrd Rule that bans extraneous items in budget bills.
OSSOFF TO LEAD INVESTIGATIVE PANEL: Freshman Senator Jon Ossoff (D-GA) will serve as the new chairman of the Senate’s Permanent Subcommittee on Investigation. Ossoff, a former Congressional staffer and investigative journalist, will have power to issue subpoenas as chairman of the powerful subcommittee.
EARMARKS COME BACK: House Majority Leader Steny Hoyer privately told Democrats that earmarks will be revived this Congress and that he expects it to be a bipartisan rule change. Senate Appropriations Chair Patrick Leahy (D-VT) also supports bringing back earmarks.
Look Ahead:
The House Budget Committee will meet Monday to mark-up the $1.9T COVID relief package, with floor passage expected later in the week. Congressional leaders are working to send the legislation to the President’s desk before programs authorized by the last COVID measure expire on March 14.
The Senate Judiciary Committee holds a confirmation hearing to consider nominee Judge Merrick Garland as the next U.S. Attorney General for February 22 and 23, setting Garland up for a Committee vote on March 1.
Other key hearings include:
Senate Judiciary Committee – Full Committee Hearing
Feb. 23, 10 a.m.
Senate Health, Education, Labor and Pensions Committee – Full Committee Hearing
Feb. 23, 10 a.m., 430 Dirksen Bldg.
Senate Finance Committee – Full Committee Hearing
Feb. 24, 2:30 p.m., 106 Dirksen Bldg.
Senate Finance Committee – Full Committee Hearing
Feb. 23, 10 a.m., 215 Dirksen Bldg.
Tanden Nomination/Committee Rules
Senate Homeland Security and Governmental Affairs Committee – Full Committee Markup
Feb. 24, 10 a.m., 342 Dirksen Bldg.
House Oversight and Reform Committee – Full Committee Other Event
Feb. 24, Time TBA, 2154 Rayburn Bldg.
KEY INSIGHTS:
Ossoff is an intriguing choice to chair the leading Senate investigatory panel. Senator Chris Murphy (D-CT) has led a push to put younger members of the Senate atop sub-committees, and at 34 Ossoff is the youngest member of the Senate. Ossoff formerly led an investigatory TV documentary company and may seek to make more of a splash with the committee than previous chairs, such as Senator Rob Portman (R-OH) and former Senator Carl Levin (D-MI.)
ENERGY SECTOR
What We Are Watching:
CONGRESS TO INVESTIGATE TEXAS ENERGY CRISIS: As the enormity of the crisis in Texas unfolded this week, Democrats in both chambers of Congress said they would investigate Texas’s go-it-alone grid, which has left millions without heat, power, and potable water amid a bitter cold spell (Your humble Chicago-based contributor has temporarily stopped complaining about all the snow he’s had to shovel). House Speaker Nancy Pelosi (D-CA) said the Energy and Commerce Committee would investigate the situation, as did Senate Energy and Natural Resources Committee Chair Joe Manchin (D-WV).
TEXAS POLS WEIGH-IN: While up until this week Texas was pretty pleased with its deregulated grid, the current crisis has shaken that commitment. The current arrangement limits connections to interstate transmission infrastructure and gives the statewide latitude over the grid, limiting FERC intervention. Former Energy Secretary and Texas Governor Rick Perry (R) said “Texans would be without electricity for longer than three days to keep the federal government out of their busines,” but Reps. Marc Veasey (D-TX) and Lizzie Fletcher (D-TX) have asked FERC to investigate, stating their interest “in starting a conversation on the benefits and challenges of allowing limited energy transfers into ERCOT territory in certain emergency situations.”
SPEAKING OF FERC: “I believe both Congress and the state government need to rethink Texas’ go-it-alone approach to much of the central electric grid,” FERC Chair Rich Glick said Thursday at the agency’s monthly open meeting. “Does it make sense to isolate yourself and limit your ability to get power from neighboring regions, just to keep FERC at bay? It is the proverbial cutting off your nose to spite your face.”
Week Ahead:
The Senate Committee on Energy & Natural Resources will hold a hearing to consider the nomination of the Honorable Debra Haaland to be the Secretary of the Interior on Tuesday, February 23 at 9:30 a.m.
Key Insights:
THOSE WHO CANNOT REMEMBER THE PAST…The situation in Texas is a disaster, and there’s plenty of blame to go around. The crisis will result in over a year’s worth of analysis and more on the policy and standards evaluation. But this has happened before, in 2011 and 1989, and recommendations issued in the post-mortem of those crises were either not implemented or lapsed. Maybe the lesson of 2021 will stick?
FINANCIAL SERVICES SECTOR
What We Are Watching:
ROBINHOOD CENTER STAGE: Robinhood CEO faced attacks from Democrats on their role in the Game Stop market volatility and their use of pay for order agreements. The app did receive praise from the right for helping democratizing finance. At the same time, the SEC is currently considering rules which would require more transparency in short selling.
REPEALING TAX BREAK: Reps. Bill Pascrell (D-NJ-9), Andy Levin (D-MI-9) and Katie Porter (D-CA-45) announced they are sponsoring legislation which would repeal the carried-interest tax break that allows many hedge fund and private-equity managers to pay a lower tax rate on capital gains rather than higher ordinary income-tax rates.
CLIMATE UPDATE: The Institute of International Finance had a climate finance conference yesterday where Federal Reserve Board Member Lael Brainard spoke about how financial firms should act to manage risk from climate change and said the Federal Reserve is already working to develop a program to ensure the resilience of banks to climate related financial risks. At the conference, leaders from Bank of America, Blackrock and other financial firms outlined their views and resisted pressure to end support for fossil fuel producers and other carbon-intensive industries. Prior to the conference, 11 financial industry trade associations outlined their recommendations on climate with a broad set of principles.
Week Ahead
The House Financial Services Committee has a busy week ahead and will convene for several virtual hearings this week including: “Dollars Against Democracy: Domestic Terrorist Financing in the Aftermath of Insurrection” on February 23, 2021; “Climate Change and Social Responsibility: Helping Corporate Boards and Investors Make Decisions for a Sustainable World” on February 23, 2021; “Monetary Policy and the State of the Economy” on February 24, 2021; and “How Invidious Discrimination Works and Hurts: An Examination of Lending Discrimination and Its Long-term Economic Impacts on Borrowers of Color” on February 24, 2021.
Key Insights:
Wall Street will continue to face increased scrutiny from Democrats as Chairwoman Maxine Waters emphasized that yesterday’s hearing on Game Stop market volatility was just the first in many hearings that will focus on the industry. Waters stated that the next hearing will include a representative from the SEC and possibly the conclusions they reached in their investigation of the incident.
HEALTHCARE SECTOR
What We Are Watching:
MEDTRONIC ORDERS RECALL OF AORTIC STENTS AFTER PATIENT DEATH: On Wednesday, medical device company, Medtronic announced that it is recalling all shipments of its Valiant Navion thoracic stent graft system. In a press release, a spokesperson for the company said, “Medtronic is currently conducting a comprehensive technical root cause investigation, including further review of follow-up clinical trial imaging and commercial complaints and imaging.”
BRISTOL-MYERS SQUIBB AND SANOFI ORDERED TO PAY $834 MILLION OVER INADEQUATE WARNING LABEL: On Monday, Judge Dean Ochiai of Hawaii’s First Circuit Court, ordered health care companies, Bristol-Myers Squibb Co and Sanofi SA, to pay the state more than $834 million for failing to warn non-white patients of health risks associated with its blood thinner drug, Plavix. The Hawaiian Attorney General, Clare Connors, commented that the ruling “puts the pharmaceutical industry on notice that it will be held accountable for conduct that deceives the public and places profit above safety.”
Week Ahead:
In the coming weeks, the Senate will continue to hold confirmation Committee hearings for President Joe Biden’s cabinet nominees. Most notably, next Tuesday, February 23, 2021, the Senate Health, Education, Labor and Pensions (HELP) Committee will hold a confirmation hearing for Xavier Becerra, Biden’s pick to lead the Department of Health and Human Services (HHS). Becerra will likely face questioning from Democratic members on the government’s response to the ongoing COVID-19 pandemic, while Republicans are likely to focus on his role as the California Attorney’s General (AG).
On Thursday the Senate HELP Committee will hold two confirmation hearings for Surgeon General nominee Vivek Murthy and Assistant Secretary of Health nominee Rachel Levine. Murthy is set to return to his post as surgeon general, a position he held during the Obama Administration. Murthy has already played a large role in facilitating the nation’s COVID-19 response as a member of the President’s COVID-19 task force. Levine, a pediatrician currently serving as Pennsylvania’s Secretary of Health, would become the highest-serving openly transgender official in the federal government and the first to be confirmed by the Senate.
Key Insights:
This week, the Biden Administration continued to make progress on actions to support the nation’s COVID-19 response, announcing it will spend $1.6 billion to expand COVID-19 testing and sequencing. As President Biden ramps up his COVID-19 response, Congress is expecting greater transparency surrounding the rollout. For example, last week, Chairman of the House Energy and Commerce Committee Frank Pallone (D-NJ-6) wrote to the White House requesting a briefing and written response on its efforts to quickly increase the number of Americans vaccinated across the country.
INDUSTRIALS SECTOR
What We Are Watching:
EPA REVAMPING CHEMICAL REVIEW PROCESS: The Environmental Protection Agency (EPA) announced it is revamping its chemical review process under the Toxic Substances Control Act (TSCA) after the National Academies of Sciences (NAS) published a scathing report of the agency’s procedures under the Trump Administration. In a press release, the EPA said it would overhaul the process and address the failures cited in the report.
RAYTHEON RAISING CONCERNS OVER LOCKHEED ACQUISITION: Raytheon Technologies is sounding the alarm with policymakers over concerns related to Lockheed Martin’s acquisition of rocket and propulsion systems manufacturer Aerojet Rocketdyne. Raytheon is arguing the acquisition would create a level of consolidation in the market that would undermine competition in the aerospace industry.
Week Ahead:
INFRASTRUCTURE HEARING: On February 24, the Senate Environment and Public Works (EPW) Committee will hold its first hearing on infrastructure in the 117th Congress. The hearing will launch the Committee’s consideration of the “Build Back Better” infrastructure agenda of President Joe Biden
Key Insights:
FTI THOUGHT LEADERSHIP: Biden Takes Office, Congress Swears In, What’s Next for the Aviation Industry?
SENATE COMMERCE COMMITTEE ANNOUNCES SUBCOMMITTEES: This week the Senate Commerce Committee finalized the Chair, Ranking Member, and roster for each subcommittee. Senate Committee Chairwoman Maria Cantwell (D-WA) announced the formation of a new Subcommittee on Space and Science that Chairman John Hickenlooper (D-CO) and Ranking Member Todd Young (R-IN) will lead.
SENATE ARMED SERVICES COMMITTEE ANNOUNCES SUBCOMMITTEES: The Senate Armed Services Committee announced the Chairs and Ranking Members of the Subcommittees for the 117th Congress. The leaders of the seven panels are each responsible for crafting a portion of the annual National Defense Authorization Act (NDAA). The 26-member panel will have an equal number of Republicans and Democrats to reflect the 50-50 breakdown of the chamber.
TECH, MEDIA & TELECOM SECTOR
What We Are Watching:
FACIAL RECOGNITION EXECUTIVE ORDER?: This week, the ACLU urged President Biden to take executive action to impose a federal moratorium on face-scanning technology. Late last week Minneapolis voted unanimously to prohibit the procurement of facial recognition technology and the use of any related data by city departments, joining dozens of other U.S. cities that have taken similar action.
Week Ahead:
The Senate Judiciary Committee will hold two days of hearings on the nomination of Merrick Garland to serve as U.S. Attorney General on February 22 and February 23. Expect Senators to bring questions about antitrust enforcement and Communications Decency Act Section 230 reform proposals.
Key Insights:
EU Jealous?: The House Energy & Commerce Committee this week announced it will hold a hearing next month with virtual appearances by Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai and Twitter CEO Jack Dorsey on the danger of disinformation on their platforms. Meanwhile, across the Atlantic, the EU Parliament may be green with envy as it has been pushing, so far without success, for a hearing with big tech CEOs. Regardless of what U.S. lawmakers end up focusing on next month, the exercise may heighten tensions between companies and the EU legislative body that lacks the compulsory authority to compel testimony of U.S. tech leaders.
