Public Affairs & Government Relations

Oversight & Investigations Informer – 3/12/21

Notable Developments

What We Are Watching:

$1.9 TRILLION STIMULUS SIGNED INTO LAW: President Biden is taking a victory lap after signing the American Rescue Plan Act into law on Thursday, after the measure narrowly passed in party-line votes in the House and Senate. Biden and Vice President Harris are embarking on a tour to tout the legislative achievement to the American people.

BIDEN CABINET FINALLY COMING INTO PLACE: The Senate confirmed three of Biden’s cabinet nominees: Rep. Marcia Fudge (D-Ohio) to head the Department of Housing and Urban Development, North Michael Regan to lead the Environmental Protection Agency and Judge Merrick Garland to be attorney general.

BLUNT ANNOUNCES RETIREMENT: Longtime Republican Congressional Leader Roy Blunt of Missouri announced that he will not seek re-election next year. He joins a list of other longtime Senate Republican stalwarts who plan to retire, including Rob Portman of Ohio, Richard Burr of North Carolina, and Richard Shelby of Alabama. Among the Republicans expected to seek the nomination to replace is former Governor Eric Greitens, who resigned in a sex scandal in 2018 but remains popular among many in the Republican base.

Look Ahead:

 The House and Senate are both in session next week.

Hearings include: Judy Su testifying before the Senate HELP Committee on her nomination to be Deputy Secretary of Labor; Alejandro Mayorkas, Secretary of Homeland Security, testifying before the House Homeland Security Committee about management of DHS.

KEY INSIGHTS:

Polling shows broad support for the American Rescue Act, but many Republicans question whether this support will hold if the inflation fears of people like former Clinton Treasury Secretary Larry Summers and J.P. Morgan CEO Jamie Dimon are realized.

ENERGY SECTOR

ENERGY CABINET ASSEMBLED: President Joe Biden’s energy and environmental team is finally coming together, with EPA Administrator Michael Regan confirmed Wednesday and Rep. Deb Haaland (D-NM) set to be confirmed for Secretary of the Interior early next week. Senate Republicans delayed a vote on Haaland by initiating a floor debate, with Sen. Steve Daines (R-MT) citing concerns over her record: “she opposes pipelines & fossil fuels, ignores science when it comes to wildlife management & wants to ban trapping on public lands…We must consider the impact she will have on the West.” Despite the roadblock, Haaland is expected to be confirmed, with Sens. Lisa Murkowski (R-AK) and Susan Collins (R-ME) joining Democrats in supporting her nomination.

GRID HEARING HIGHLIGHTS PARTISAN DIVIDE: The Senate Energy and Natural Resources Committee held a hearing on grid reliability this week, following the Texas energy crisis last month. Democrats pressed a former chairman of FERC and the Texas Public Utility Commission about why Texas was so determined to keep its grid disconnected from other states, while Republicans criticized clean energy standards, suggesting they were responsible for eliminating baseload power sources and contributing to blackouts. The Electric Reliability Council of Texas, which is under investigation from just about everybody and has had several leaders resign since the widespread blackouts, was not represented at the hearing. “We invited everybody from ERCOT and spoke to everybody that is still left, which I’m not sure anybody is still left,” Committee Chairman Joe Manchin (D-WV) said.

Week Ahead:  

The House Committee on Science, Space and Technology will hold a hearing on the “Lessons Learned From the Texas Blackouts” at 10 a.m. on Thursday, March 18.

Key Insights:

PORTER PLANS TO PROBE OIL FROM NEW PERCH: Rep. Katie Porter (D-CA), who quickly established a reputation for tough questioning of CEOs in hearings while she sat on the Committee on Financial Services, is taking her talents to the House Natural Resources Subcommittee on Oversight and Investigations, where, as the new Chair, she has vowed to take on the fossil fuel industry. “Please don’t patronize me by telling me the oil and gas industry doesn’t have any special tax provisions,” Porter told the president of an oil and gas producer during a hearing this week, “because if you would like that to be the rule, I would be happy to have Congress deliver.” On Financial Services, Porter focused her questions on the impacts of drug prices on consumers and pay disparities at big banks. But aside from the crisis in Texas last month, natural gas and oil prices have helped keep energy costs low for consumers, so we’ll be watching closely to see what she focuses her questions (and whiteboard) on.

FINANCIAL SERVICES SECTOR

What We Are Watching:

SEC AND CFPB HEADS: Senate Banking Committee confirmed Gary Gensler to be chairman of the SEC 14-10 and Rohit Chopra to lead the CFPB 12-12 this week. This came after the US Chamber endorsed Gary Gensler.

TRUMP CFPB RULE GONE: The Consumer Financial Protection Bureau has rescinded Trump-era policy on what constituents “abusive acts or practices”. The restrictions limited the agency’s capacity to collect penalties from financial firms over abusive acts and practices. The agency’s lawyers will now have greater enforcement latitude to decide if a company is engaging in abusive practices and to assign higher penalties.

SPAC REGULATION: The SEC issued a warning on celebrity-sponsored SPACs but Republican Commissioner Hester Pierce said more regulation on SPACs could reduce the cost-effectiveness of SPACs. The SEC also held an advisory committee hearing on SPACs on Thursday where expert panelists largely focused on investor risks and whether additional protections are needed.

Week Ahead

The Senate Banking Committee is holding a virtual hearing on March 16 called “Home=Life; The State of Housing in America”, and one on the 18th called “21st Century Economy: Protecting the Financial System from Risks Associated with Climate Change”.

The House Financial Services Committee is holding two virtual hearings next week. The first one on the 17 is the second hearing on the GameStop market volatility called, Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide, Part II, Waters indicated in the first hearing that this one would focus on enforcement and regulation. The other hearing this week is on the 18th and called, “By the Numbers: How Diversity Data Can Measure Commitment to Diversity, Equity and Inclusion”.

Key Insights:

The Biden Administration continues to strengthen agencies’ abilities to use enforcement to achieve policy goals with the SEC and CFPB both taking steps to reverse Trump decisions which decreased enforcement and regulations for financial firms.

HEALTHCARE SECTOR

What We Are Watching:

SENATORS PRESS FEDERAL AGENCIES FOR COVID-19 PANDEMIC PREPARATION AND RESPONSE PLAN: On Tuesday, U.S. Senators Gary Peters (D-MI) and Rob Portman (R-OH), Chairman and Ranking Member of the Homeland Security and Governmental Affairs Committee, asked for detailed information from the White House, National Archives and Records Administration, Department of Homeland Security, Department of Health and Human Services, Department of Defense, State Department and the Office of Management and Budget to analyze challenges and flaws in the federal pandemic preparedness and response efforts. This is a bipartisan effort by the Committee leaders to examine the federal government’s planning, coordination and execution of prevention and response efforts to COVID-19. The Committee will identify reforms to strengthen future pandemic preparedness and response. Peters and Portman will also assess needed actions to help strengthen the current pandemic response – including ensuring widely available COVID-19 vaccines for every American.

SENATOR MURRAY EMPHASIZES VACCINE EQUITY: On Tuesday, Chair Senator Patty Murray (D-WA), chair of the Health, Education, Labor, and Pensions (HELP) Committee, held a hearing with clinicians, public health experts, and state health officials to review the challenges facing frontlines workers addressing the COVID-19 response, the importance of an equitable vaccine distribution, and the steps necessary to bring the COVID-19 pandemic to an end. In Chairwoman Murray’s opening remarks, she asserted that funding to build public health infrastructure would save lives by looking at the evidence and science to craft and implement policies that help schools, workplaces, and communities stay safe during public health threats. She also said better public health infrastructure would help keep the public informed about steps they can take to stay healthy, dangers they should avoid, and how vaccines are safe and effective.

Week Ahead:

On Wednesday, March 17, the House Energy and Commerce Subcommittee on Oversight and Investigations will hold a hearing at 10 a.m. (EDT) with Biden Administration officials to discuss the national effort to distribute and administer COVID-19 vaccines to Americans. The hearing is titled, “Leading the Way Forward: Biden Administration Actions to Increase COVID-19 Vaccinations.”

Also on Wednesday, March 17, the Senate Committee on Finance will hold a hearing titled, “A National Tragedy: COVID-19 in the Nation’s Nursing Homes” at 10 a.m. (EDT).

Additionally, on March 17, the Senate HELP Committee will hold a vote on advancing the nominations of Vivek Murthy and Rachel Levine, a pair of high-profile health care officials who will play key roles in President Joe Biden’s pandemic response and the advancing his healthcare agenda.

Key Insights:

Last Friday, Dr. Anthony Fauci, the nation’s leading infectious disease expert warned that the country’s drop in COVID-19 cases has plateaued somewhere between 60,000 and 70,000 new cases per day. Dr. Fauci explained there is a risk in plateauing saying, “When you have that much of viral activity in a plateau, it almost invariably means that you are at risk for another spike.” As states such as Texas and Mississippi relax social distancing guidelines and face masking requirements, he warned that the U.S. could be headed for yet another surge in cases, following a similar pattern to Europe’s. Despite this warning, more states lifted COVID-19 restrictions this week, including Arizona, California, and South Carolina.

The Senate HELP Subcommittee on Primary Health and Retirement Security has scheduled a drug pricing hearing for Tuesday, March 23. According to sources close to the issue, the hearing will focus on Americans paying more for brand-name drugs compared citizens of other countries. Subcommittee Chairman Bernie Sanders (I-VT) will likely use the hearing as a platform to remind Americans of the of burdens of drug pricing practices and may look to incorporate drug pricing legislation into a second budget reconciliation.

INDUSTRIALS SECTOR

What We Are Watching:

 PENTAGON 2022 BUDGET EXPECTED TO REMAIN FLAT: Bloomberg News reports that the Biden administration’s first proposed Department of Defense budget for 2022 is expected to remain flat at roughly $708 billion, a figure close to 2021 funding levels. This doesn’t include military spending that goes to other agencies, such as the spending that goes to the Department of Energy for maintaining the country’s nuclear weapons.

PFAS IN PESTICIDES: A new study from an environmental watchdog group has found PFAS present in multiple commonly used pesticides, reports E&E News. This raises concerns for food safety and may pressure the EPA to investigate the issue, as well as expand the field of potential targets for litigation.

BIPARTISAN CONCERN ABOUT ‘UNJUST’ SHIPPING PRACTICES: A bipartisan group of lawmakers from the House Committee on Transportation and Infrastructure sent a letter to the Federal Maritime Commission expressing concern about ocean carriers prioritizing higher value goods over American agricultural products.

Week Ahead:

On Tuesday, March 16, the Senate Energy and Natural Resources Committee holds a full committee hearing on transportation technologies. Witnesses include Tony Satterwaite, Vice Chairman of Cummins, and Robert Wimmer, director of the Energy and Environmental Research Group at Toyota Motor North America.

On Thursday, March 18, CSIS and the U.S. Naval Institute host a Maritime Security Dialogue event featuring Representative Mike Gallagher (R-WI), Co-Chair, House National Security Caucus and Member, House Armed Services Seapower and Projection Forces Subcommittee and Representative Elaine Luria (D-VA), Vice-Chair, House Armed Services Committee & Member, Seapower and Projection Forces Subcommittee, as they provide their perspectives on the future of the U.S. Navy.

Key Insights:

The Biden administration’s expected proposal to keep Pentagon spending flat in fiscal year 2022 will force military brass to make tough decisions on competing needs, especially since experts predict a rise in the price of fuel and commodities. Among these considerations is a potential reduction in aircraft carrier force structure.

TECH, MEDIA & TELECOM SECTOR

What We Are Watching: 

CAUGHT IN YOUR CAR: The use of license plate scanners and data by law enforcement, from local police to the Justice Department, continues to rise. Private companies feed snapshots of plate numbers—including time, date and location— to law enforcement, where use is then highly unregulated. Vigilant Solutions, a division of Motorola Solutions Inc. and one of the largest private vendors of data and scanners, boasted a decade ago that it had 450 million plate scans in its commercial database, with 35 million new plates added each month. 

VERKADA CAUGHT IN PRIVACY BIND: Earlier this week, hackers leaked live feeds of security camera startup Verkada Inc.’s customers including prisons, schools and corporations including Tesla and Cloudflare. According to three former employees, over 100 employees at the company could peer through the cameras of its thousands of customers.    

Week Ahead:  

Brookings Institution: Declining competition: A transatlantic challenge 

The Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution in Washington, D.C., and Bruegel in Brussels will host a conversation on policy responses to rising market power, “Declining competition: A transatlantic challenge.” 

9:00 – 10:45 AM EDT 03/15/2021

CSIS: Accelerating 5G in the United States

In this event, Representative Doris Matsui and Acting FCC Chairwoman Jessica Rosenworcel will offer their thoughts about the actions the United States should take to accelerate 5G in the country.

10:00-10:45 AM 03/18/2021

House Armed Services Disinformation Hearing  

The House Armed Services Intelligence and Special Operations Subcommittee holds a hearing on “Disinformation in the Gray Zone: Opportunities, Limitations, and Challenges.” 

11:00 AM EDT on 03/16/2021, Rayburn House Office Building 

House Judiciary SHOP SAFE ACT Hearing  

The House Judiciary Courts, Intellectual Property, and the Internet Subcommittee holds a hearing on “The SHOP SAFE (Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce) Act: Stemming the Rising Tide of Unsafe Counterfeit Products Online.” 

10:00 AM EDT on 03/17/2021, Rayburn House Office Building 

Key Insights: 

EXCHANGE SERVER VULNERABILITY: Microsoft could answer for the massive exploitation by Chinese hackers. Reports say it took nearly two months to issue a patch after hearing of the server’s flaws, even as a mass-hack unfolded… and some of the flaws were 10+ years old. Trouble for the company continues even after issuing a patch – and questions about how such an expansive hack was possible may not be far behind.  

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