Oversight & Investigations Informer – 3.22.21
What We Are Watching:
SENATE CONFIRMATIONS KEEP ROLLING: Last week the Senate confirmed Xavier Becerra as Secretary of Health and Humans Services, and today the Senate will vote to confirm Boston Mayor Marty Walsh as Labor Secretary, thereby completing all cabinet level confirmations. Other nomination votes this week include Shalanda Young for deputy director of the Office of Management and Budget, David Turk for deputy Energy secretary and Adewale “Wally” O. Adeyemo for deputy Treasury secretary.
PPP EXTENSION: Last week the House extended the Paycheck Protection Program until May 31 by a vote of 415-3. Senate Majority Leader Schumer has filed cloture on the legislation, setting up the measure for Senate passage this week.
EARMARKS ARE BACK: Last week House Republicans voted to join Democrats in ending their self-imposed ban on earmarks. Republicans had previously ended the practice in 2011.
The House is out of session for the next several weeks, returning on April 12. The Senate is in session this week, and then goes on a two-week recess, returning the week of April 5.
House Transportation Committee hearing on revitalizing U.S. infrastructure. Monday, March 22 at 11 a.m.; The Senate Foreign Relations nomination hearing considering Samantha Power as USAID administrator. Tuesday, March 23 at 10 a.m.; Senate Judiciary Committee hearing on reducing gun violence. Tuesday, March 23 at 10 a.m.
The return of earmarks after a decade-long hiatus is controversial, with opponents pointing to wasteful spending, such as Alaska’s ‘bridge to nowhere.’ Supporters of the practice argue that legislators best understand the needs and wants of their districts and earmarks have only constituted a tiny fraction of federal discretionary spending.
What We Are Watching:
BIG FREEZE IN TEXAS HASN’T THAWED IN DC: Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), Energy Subcommittee Chairman Bobby L. Rush (D-IL), and Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO) will oversee a pair of hearings on March 24, 2021, to probe the recent Texas power crisis and the investments needed in the national grid. The fallout from the historic weather event continues with the recently announced chapter 11 filings of wholesale power firm Griddy and the chapter 7 filing for electric retailer Brilliant Energy. More bankruptcies are expected in the weeks to come. The last remaining Public Utility Commission of Texas (PUCT) commissioner resigned amid criticism of reassurance she gave to out-of-state investors that he would work to “throw the weight of the commission” behind efforts to stop the clawback of $3.2 billion in electric overcharges as a result of the power market supply crunch.
DEB HAALAND GOES TO WASHINGTON (AGAIN): President Joe Biden’s pick to lead the Department of the Interior was confirmed by the Senate by a 51-40 vote and has wasted no time getting to work. Haaland’s first stop is Utah to visit the Bears Ear and Grand Staircase National Monuments ahead of a decision by the Biden Administration on the outcome of the Trump administration’ss decision to shrink the monuments by over 85 percent and 50 percent respectively. Haaland has not said how the department, which oversees the government to government relationship with Native American tribes, will address the concerns of the 574 federally recognized tribes but at least one energy-producing tribe is hoping that restrictions to drilling on tribal lands are eased.
TODD KIM TAPPED TO LEAD DOJ’S ENVIRONMENTAL DIVISION: Todd Kim is the Biden Administration’s pick to become assistant attorney general overseeing DOJ’s Environment and Natural Resources Division. Kim is the latest Obama-era nominee who the then-Senate took no action on to join the DOJ following Judge Merrick Garland’s confirmation to become attorney general. Kim is expected to play a key role in advancing the Biden Administration environmental and climate justice agenda and will undoubtedly face pressure from progressives to reclaim ground lost under the Trump Administrations’ light touch environmental enforcement.
The House Committee on Energy and Commerce Oversight and Investigations Subcommittee will hold a hearing on the “Power Struggle: Examining the 2021 Texas Grid Failure,” at 11:30 a.m. on Wednesday, March 24.
ALL EYES ON FERC: Federal Energy Regulatory Commission (FERC) was the subject of a petition by the environmental group Center for Biological Diversity urging the regulatory body to block utilities from passing the cost of trade association membership dues along to customers, citing climate threats and “problematic” political activities. FERC also assessed a natural gas pipeline project’s contribution to climate change for the first time ever, bringing a key priority of Chairman Richard Glick to reality. Industry watchers expect to see more robust enforcement in 2021.
FINANCIAL SERVICES SECTOR
What We Are Watching:
CLIMATE DISCLOSURE FRICTION: The SEC asked for public comment on mandatory ESG climate disclosures Monday the 15th and on Thursday the 18th, Republican Senators on the Banking Committee sent a letter the Fed saying they are concerned about the Federal Reserve’s increased focus on climate change. At the same time, the CFTC formed a new unit to gauge the dangers posed by climate change to futures and options markets.
MORE DISCLOSURE MOVEMENT: SEC Acting Chairwoman Allison Lee stated that she wants the agency to require clear disclosures on how asset managers cast shareholder votes. Lee stated that disclosure rules have failed to help everyday investors understand how managers exercise those crucial votes for them.
FINANCIAL TRANSACTION TAX: Senators Schatz (D-HI), Warren (D-MA) and Gillibrand (D-NY) released a financial transaction tax proposal targeting stocks, bonds and derivatives. Calls for an FTT have increased amid the GameStop hearings.
The Senate Banking Committee is holding on March 24th to discuss the Quarterly CARES Act Report to Congress, and one on the 25th called, “American Rescue Plan: Shots in Arms and Money in Pocket”.
The House Financial Services Committee is holding three virtual hearings this week. The first one on the 23rd is called, “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response
Full Committee”, the second one on the 24th is called, “Preserving a Lifeline: Examining Public Housing in a Pandemic”, and the third one on the 25th is called, “Ending Exploitation: How the Financial System Can Work to Dismantle the Business of Human Trafficking”.
While Congress has not made climate and ESG issues a priority, Biden’s agencies continue to make it a priority with the SEC, Treasury, and CFTC working on climate disclosures, enforcements, and creating divisions on the topic.
Although Gary Gensler is likely to be confirmed as head of the SEC soon, Acting Chair Allison Lee continues to take steps to increase enforcement efforts to achieve Biden’s policy goals, especially in regard to climate goals.
What We Are Watching:
STUDY SHOWS TWO-THIRDS OF LARGEST HOSPITALS AREN’T COMPLYING WITH PRICE TRANSPARENCY RULE: Last Tuesday, March 16, Health Affairs published a new study that found large hospitals are not complying with new price transparency rules set forth by the Centers for Medicare and Medicaid Services (CMS). The study specifically addresses hospital compliance with a new CMS guideline that requires hospitals to create “a machine-readable file” of rates they negotiate with payers. According to the study, 65 of 100 of the largest U.S. hospitals failed to meet the criteria for the machine-readable file as of early February. The Biden Administration is expected to continue to focus on price transparency issues this year. At his confirmation hearing last month, U.S. Department of Health and Human Services Secretary Xavier Becerra said he is committed to “robust enforcement” of disclosing pricing data.
CHICAGO HOSPITAL BREACHES VACCINE ELIGIBILITY GUIDELINES BY VACCINATING TRUMP TOWER EMPLOYEES: Last Monday, Loretto Hospital President George Miller acknowledged that hospital staff improperly vaccinated hospitality workers from the Trump Towers. In a memo sent to hospital staff, Miller stated that the hospital mistakenly believed hospitality workers were considered essential workers under Chicago vaccine eligibility requirements. The hospital largely serves Black and Latino residents, and Mr. Miller noted that most of the vaccinated workers were black and brown residents of the community, who were unable to leave their jobs during regular business hours.
FDA ISSUES SAFETY ALERT FOR PLASTIC BREAKS IN STRYKER-MADE STAR ANKLE REPLACEMENTS: Last Monday, the Food and Drug Administration (FDA) alerted health care providers that Stryker’s plastic ankle joint implant is prone to breakage, which could cause pain and possibly require additional surgery for patients. The flexible ankle joint implant, called Scandinavian Total Ankle Replacement (STAR), was initially designed to replace ankle joints in individuals suffering from arthritis. The FDA has previously made safety inquiries about the polyethylene plastic implant’s long-term strength. Now, new post-approval studies and real-world data indicate unexpectedly high rates of plastic fractures, particularly among younger and active patients.
FTC ANNOUNCES AGGRESSIVE APPROACH TO BIOTECH MERGERS AND ACQUISITIONS: The Biden Administration’s Federal Trade Commission (FTC) announced last Tuesday that it will begin a sweeping review of biopharmaceutical mergers and acquisitions (M&A) after a high number of industry mergers occurred in the past year and as drug prices continue to increase. FTC Acting Chair Rebecca Kelly Slaughter told reporters that it is “imperative that we rethink our approach” to pharma M&As. The announcement will likely impact the pending examination of AstraZeneca’s $39 billion acquisition of biopharmaceutical company, Alexion. Last Friday, Alexion filed new documentation withdrawing its merger application, to allow the FTC more time to review.
The Senate Committee on Health, Education, Labor and Pensions (HELP) will hold two hearings on health care oversight next week. On Tuesday, March 23, 2021, the Committee will hold a hearing on drug pricing entitled, “Why Does the US Pay the Highest Prices in the World for Prescription Drugs?” Witnesses will include: Aaron Kesselheim, MD, JD, MPH, Professor of Medicine at Brigham and Women’s Hospital and Harvard Medical School; Nav Persaud, MD, MA, Canada Research Chair In Health Justice, University of Toronto; Elia Spates, Derby, VT; and, Alex Brill, Resident Fellow at American Enterprise Institute (AEI).
On Thursday, March 25, 2021, the HELP Committee will hold a hearing on the COVID-19 pandemic entitled, “Examining Our COVID-19 Response: Improving Health Equity and Outcomes by Addressing Health Disparities.” Witnesses for that hearing will include: Consuelo H. Wilkins, MD, MSCI, Vice President For Health Equity, Vanderbilt University Medical Center; Abigail Echo-Hawk (Pawnee), Executive Vice President, Seattle Indian Health Board; Taryn Mackenzie Williams, Managing Director, Poverty To Prosperity, Center for American Progress; Gene A. Woods, President And Chief Executive Officer, Atrium Health.
The House Ways and Means Subcommittee on Oversight will hold a hearing on Thursday, March 25, 2021, titled, “Examining Private Equity’s Expanded Role in the U.S. Health Care System.” The hearing will likely focus on health care prices and surprise billing practices. Witnesses for the hearing have not yet been publicly announced.
On Thursday, the Senate voted to confirm Xavier Becerra, President Biden’s nominee to lead the U.S. Department of Health and Human Services (HHS). Senator Susan Collins (R-ME) was the only Republican lawmaker that supported Becerra’s nomination. Becerra was one of President Biden’s most controversial Cabinet nominees, with most Republicans opposing his nomination due to a variety of reasons including his support of abortion rights and lack of health care experience. Becerra has been a vocal supporter of the Affordable Care Act (ACA) and will likely look to bolster the law during his time as HHS Secretary. His confirmation now leaves the California Attorney General’s seat vacant, with Governor Gavin Newsom responsible for a new nomination.
This month, Pfizer CFO Frank D’Amelio affirmed that the company is planning on raising prices of their COVID-19 vaccine once the pandemic begins to ease. D’Amelio explained that the current market is “clearly not being driven by normal market conditions,” and expects “normal market forces … will start to kick in.” In light of this announcement, greater congressional scrutiny and oversight over vaccine manufacturers and the price of the vaccine is expected to increase. The Pfizer CFO also noted that the company anticipates a need for annual vaccinations and an increasing likelihood for additional booster shots, due to variant forms, cementing COVID-19 vaccines as a long-term source of revenue.
What We Are Watching:
SCIENCE COMMUNITY CALLS FOR PFAS CRACKDOWN: A group of 67 scientists and public health academics sent a letter to newly confirmed Environmental Protection Agency (EPA) Administrator Michael Regan to crack down on per- and polyfluoroalkyl substances (PFAS). The science community sent a letter on Monday, March 15, urged Administrator Regan to “apply a class-based approach to regulation, and to eliminate nonessential uses of these chemicals.” The authors referred to PFAs chemicals as one of the most pressing public health challenges the Biden Administration is facing.
SENATE ADVANCES PFAS LEGISLATION: Last week the Senate Homeland Security and Government Affairs Committee advanced the Protecting Firefighters from Adverse Substances Act. The bill guides federal agencies to establish practices, programs and training to limit exposure to PFAS. In addition, the bill requires the federal government to issue guidance on the use of PFAS in firefighting foam and personal protective equipment (PPE).
GENERAL MOTORS UNDERGOES SCRUTINY: The National Highway Traffic Safety Administration (NHTSA) reviewed an allegedly defective steering sensor that was used in approximately 778,000 General Motors vehicles. NHTSA ultimately decided against opening a formal investigation into the matter. The issue arose after the widower of a car crash victim involving a 2007 Chevrolet Trailblazer alleged the crash was caused by a defective steering sensor that was unreported by the automaker.
HOUSE INFRASTRUCTURE HEARING: On Thursday, March 25, the House Transportation & Infrastructure Committee will hold a hearing entitled “the Administration’s Priorities for Transportation Infrastructure.” The witness panel has yet to be officially announced but the hearing is expected to cover the priorities of the Biden Administration for any potential future infrastructure package.
TECH, MEDIA & TELECOM SECTOR
What We Are Watching:
ANOTHER MODERATOR FOR CONTENT MODERATION: FTC Commissioner Christine Wilson said that Section 230 is an intrusion into the market with a significant impact on competition. She said that while the FTC shouldn’t police speech, it can enforce whether platforms are honoring terms of service.
ANTITRUST FOR TECH ONLY?: During a House subcommittee hearing on antitrust reform, Rep. Ken Buck (R-CO) sought to clarify he only supports antitrust measures that tackle only the technology sector. Rep. Cicilline (D-RI), on the other hand, said Democrats support new regulation across economic sectors.
ACCOUNTABILITY FOR AI: The Government Accountability Office (GAO) is growing its staff to keep up with the oversight of AI. “We have to make sure there’s no bias in artificial intelligence, and that the data that goes into it is high-quality and actually the algorithm produces a good result,” said GAO Comptroller Gene Dodaro.
House E&C Hearing On “Disinformation Nation: Social Media’s Role in Promoting Extremism and Misinformation”
Two subcommittees within the House Energy & Commerce Committee will hold a hearing on social media misinformation featuring Facebook CEO Mark Zuckerberg, Twitter CEO Jack Dorsey, and Google CEO Sundar Pichai.
PRIVACY VS. COMPETITION?: While Google’s announcement to remove third-party cookies from the Chrome browser was met with applause from some, skeptics are far from convinced the move will protect users from invasive advertising tactics. By limiting third-parties, some claim the company will instead rely on – and “hoard”- its own data for similar precision targeting at an unfair advantage.
MORE ON PRIVACY VS. COMPETITION: Read the new thought leadership article, “Can Data Privacy Be Used as a Competitive Advantage?” in FTI Journal.