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Roll Call

Domestic Agenda: Five Key Items for the 111th Congress

Agenda Ahead Policy Briefing

How will the 111th Congress tackle health care?

How will the 111th Congress tackle economic recovery?

How will the 111th Congress tackle energy?

How will the 111th Congress tackle global warming?

How will the 111th Congress tackle finance?

Here is a rundown of five of the most urgent issues facing Congress when lawmakers return in January.

Economic Recovery

Hoping to get the economy back on track, President-elect Barack Obama and Congressional leaders will work to craft and pass a potentially massive stimulus package when lawmakers return in January for the start of the 111th Congress.

Although the president-elect has called the plan “costly,” he hasn’t provided a price tag and has given only broad indications of what might be included in the measure. Most unofficial estimates for the package range up to $700 billion, though some have suggested numbers even higher.

The main goal, Obama has said, is to create 2.5 million jobs by 2011.

“We have to make sure that the stimulus is significant enough that it really gives a jolt to the economy,” Obama said.

Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) have said they expect an economic recovery package will be introduced, and possibly passed, during the first week of the Obama administration in late January.

The stimulus plan — which will be shaped by his growing team of economic advisers in cooperation with House Appropriations Chairman David Obey (D-Wis.) and House Ways and Means Chairman Charlie Rangel (D-N.Y.) — would borrow elements from proposals that have already passed the House. Those include investment in infrastructure, food stamps, tax cuts and environmentally sustainable technology.

Rangel’s committee is working on a tax-cut proposal that aims to aid the middle class.

Obama has said he isn’t sure how he is going to handle the tax cuts enacted under President George W. Bush, saying he would consult with his economic team to determine a course of action.

“The basic principle is that we’re going to provide tax cuts to the vast majority of Americans,” he said recently. During the campaign, Obama said he would favor a repeal of the Bush tax cuts, which critics say disproportionately benefit wealthier Americans.

One of the items in the stimulus, Obama said, will be investments in the “clean-energy infrastructure of the 21st century,” including boosting alternative power sources such as wind or solar. As a candidate, Obama promised to invest $150 billion in clean energy over 10 years — an investment that he said would lead to the creation of 5 million jobs.
— Vicki Needham

Financial Services

With the economic crisis showing no signs of ending, Congress will be addressing the problems that got the nation into this crisis in the first place by overhauling the regulatory structure for the financial services industry.

The focus of the two key panels — the House Financial Services Committee and the Senate Banking, Housing and Urban Affairs Committee — will likely be on increasing transparency, eliminating loopholes and consolidating regulatory power to a smaller number of agencies. The chambers could vote to create a special select committee to oversee an overhaul of financial markets.

House Financial Services Chairman Barney Frank (D-Mass.) has signaled that he intends to regulate credit default swaps, which are essentially insurance contracts on lending, and the credit rating industry will likely see some changes.

One proposal to bring transparency could further fuel a jurisdictional battle between the chambers’ financial services committees and their Agriculture panels. Sen. Tom Harkin (D-Iowa), chairman of the Senate Agriculture, Nutrition and Forestry Committee, is planning legislation for the 111th Congress to bring all over-the-counter derivatives, including credit default swaps, onto regulated futures exchanges. Harkin’s proposal, the Derivatives Trading Integrity Act, would require credit default swaps to be traded as futures contracts. Doing so would grant the Commodity Futures Trading Commission sole regulatory jurisdiction over the complex product, giving his committee and the House Agriculture Committee sole jurisdiction over credit default swaps.

Both committees will continue to handle oversight of the $700 billion Troubled Asset Relief Program, the fund the Treasury Department is using to stabilize the financial markets. Senate Banking Chairman Chris Dodd (D-Conn.) has said he will continue to push for financial institutions receiving funds under the TARP to make credit available to small businesses and consumers. Meanwhile, Frank has also argued that some TARP funds should be allocated for mortgage foreclosure mitigation.
— Charlene Carter

Health Care

The top health care issues likely to emerge in the 111th Congress are the reauthorization and expansion of the State Children’s Health Insurance Program, efforts to improve health coverage for all Americans and an overhaul of Medicare.

SCHIP is likely to head the list because a temporary extension of the federal health care program for lower-income children expires in April.

The battle will focus on the scope of the program, with Democrats trying again to expand it by raising the income threshold for eligibility. Democrats failed to win enough support to overcome President George W. Bush’s presidential veto of legislation that would have increased the eligibility cap for SCHIP to 300 percent of poverty, as opposed to the current 200 percent level. But with Barack Obama in office, such expansion is more likely.

Beyond expanding coverage through SCHIP, lawmakers are also expected to consider other options to ensure universal coverage for all Americans. Various Senators, including Finance Chairman Max Baucus (D-Mont.) and Health, Education, Labor and Pensions Chairman Edward Kennedy (D-Mass.), are working to develop a plan to ensure that the 46 million Americans without health insurance are covered.

Their efforts have seemingly been bolstered by the Obama administration’s decision to offer former Senate Minority Leader Tom Daschle (D-S.D.) the job of Health and Human Services secretary. Daschle, who served in the Senate until he lost his re- election bid in 2004, also is set to take on the position of “health care czar.” Daschle’s connections on the Hill and knowledge of the health care issues are expected to ease the path toward reform.

Congress is also expected to consider how to reform Medicare reimbursement rates for physicians. While doctors avoided a 10 percent cut with the passage of a temporary reprieve earlier this year, they stand to face a 21 percent reduction when this interim patch runs out in 2010. A new patch would cost $20 billion.
— Stephen Langel

Climate Change

With expanded majorities and a friendly administration on deck, Democrats will have a much easier time seeing comprehensive climate change legislation signed into law.

But striking the right balance between environmental protection and economic growth will remain a key hurdle, and the strategy for getting a cap-and-trade bill through Congress and to the desk of President-elect Barack Obama remains a work in progress.

Speaker Nancy Pelosi (D-Calif.) last month said Congress will work “closely” with the Obama administration on the substance and timing of the bill, which would attempt to control global warming through the establishment of a federal cap-and-trade program. Under such a plan, the government would cap emissions and distribute annual emission permits that can be traded or sold, creating a financial incentive for reducing pollution.

But previous legislative attempts have collapsed under the sheer complexity of the task, which amounts to a new economywide regulatory system for carbon dioxide and other greenhouse gases. Key Senators last month, including Environment and Public Works Chairman Barbara Boxer (D-Calif.) and Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.), suggested that lawmakers may press a more “streamlined” bill than past efforts.

Boxer plans to introduce a bill in January that would direct the Environmental Protection Agency to draw up a cap-and-trade system, essentially leaving much of the details of the effort to the executive branch.

Bingaman last month said Congress should get started on some of the “necessary preliminaries” for a successful cap-and-trade program, including the advancement of new low-carbon technologies.

In the House, last month’s successful coup by Rep. Henry Waxman (D-Calif.), in which he snatched the gavel of the Energy and Commerce Committee from longtime Chairman John Dingell (D-Mich.), is expected to shift that chamber’s climate debate to the left. Waxman in October led efforts to put 150 House Members on the record as supporting a series of aggressive principles for writing a cap-and-trade bill.

He is also expected to closely coordinate legislative efforts with the incoming administration, which has hired Phil Schiliro, a former top Waxman aide, as assistant for legislative affairs.
— Geof Koss

Energy

Key House and Senate lawmakers are preparing to hit the ground running on a host of familiar energy issues early in the next Congress.

House Natural Resources Chairman Nick Rahall (D-W.Va.) announced last month that offshore oil and gas drilling will be “front and center” before his committee, which has jurisdiction over wide swaths of public land. Lawmakers are not expected to resurrect the blanket moratorium on offshore drilling that expired in September, but new limits could prevent production immediately off coastal areas, which were left unprotected when the ban expired amid aggressive support by Republicans and many Americans burdened by high gasoline prices.

In the Senate, Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) is preparing a comprehensive energy bill that he hopes to advance early in the next Congress. The bill would promote clean energy technologies and energy efficiency.

The bill, which Bingaman expects to pass in 2009, is also expected to include first-time renewable energy standards that mandate that a percentage of U.S. electricity be generated from clean energy sources such as wind or solar by a certain date. Such standards are a longtime goal of Bingaman’s and are also supported by the president-elect.

Renewable energy advocates are also pressing for a long-term extension of tax credits for clean energy production, as well as upgrades to transmission lines to prepare for the expected increase in power from alternative sources.

In addition, lawmakers are expected to heavily promote funding for “clean coal” technology and incentives for next- generation biofuels such as cellulosic ethanol.
— G.K.

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