Legislative Update
 

3rd Quarter 2009 Legislative Update

The 111th Congress returned from the August Recess to take on an aggressive fall agenda. Topping all news stories, speeches and town hall meetings over the break, health care will continue to lead the public debate through the end of 2009.  However, while health will remain as the focus, President Obama and Congress must also tackle a number of must-pass measures, such as the annual appropriations, program extensions and defense authorization.

In September and October, the House and Senate will try to finish the twelve annual appropriations bills.  However, with the likelihood that they will be unable to do so before the next fiscal year begins on October 1, both houses will have to pass a continuing resolution (CR) to keep the government running. The House has thus far been able to pass all their appropriations bills and are currently waiting on the Senate to finish eight more, before they can enter in conference committees to develop final versions.  Final votes of those appropriations measure will take up a lot of floor time in the coming weeks.

With reauthorization of the nation’s highway program expiring on September 30, 2009, Congress will have to pass an extension of the current program.  Rumors have circulated that the extension could be as little as three months or could last for as long eighteen months. Congress may also consider extensions on unemployment benefits and the National Flood Insurance Program (NFIP), which expires on September 30, 2009.  The House and Senate are also still working on a final version of the Defense Authorization bill, which authorizes funding levels for the coming fiscal year. Among the many provisions that need to be resolved between the competing House and Senate versions is a provision in the House passed bill that seeks to standardize all ground combat uniforms across all the military services.

Outside of these must-pass measures, health care reform will ultimately dominate the remainder of floor and committee time. In early September, President Obama addressed Congress highlighting a number of reforms including building on successful aspects of the current health care system, undertaking sweeping insurance reform and creating a government-run option for people without health care.

Senate Finance Committee Chairman Max Baucus (D-MT) recently proposed an $880 billion bill that would mandate individual insurance but that would not include the controversial “government option.” His plan would also call for state based co-ops and exchanges, tax credits for small business and certain individuals, an option for individuals to purchase insurance across state lines and expansion of Medicaid.   Employers with 50 or more employees who do not offer health insurance would be required to pay a fee for any employee who receives a tax credit within the exchange. Additionally, if the employer-provided health insurance is greater than 13 percent of an individual’s income, the employer would also be required to contribute a fee. However, it does not appear that employers would be mandated to provide specific benefits, which is a major difference from House proposals.  However, employers would be required to cover preventative services.  Chairman Baucus hopes to have his legislation ready for floor action before Columbus Day. On the House side, the three committees of jurisdiction have already reported out their versions, which have been unofficially merged into one House version. That measure would include the “public option,” employer and individual mandates for coverage. This House version may also come to the floor before Columbus Day.

While the health care debate is taking center stage, the so-called Employee Free Choice Act – another priority of the Democratic leadership – has slipped to the back burner.  Recent news reports and statements by members and staff close to the issue suggest that the bill, as introduced, will not progress further. At the same time, rumors continue to circulate about the potential for compromise.  Nevertheless, it is highly unlikely given the make-up of the Senate that this bill or any compromise will see any action before the end of 2009.

Likewise, much-heralded climate change legislation also appears to have stalled. While the House passed its version of the bill in June, the increasingly packed Senate calendar, combined with controversies over the legislation itself, has bogged the bill down in the upper chamber. For example, in August, ten democratic senators wrote a letter to President Obama saying that they would not support a climate change bill if it did not contain tariff measures, to which the President has already voiced opposition. The Senate will probably not be able to meet Senate Majority Leader’s deadline of September 28 to mark-up the measure.  As a result, the House-passed bill will likely become the de facto U.S. negotiating position at the upcoming international climate change conference in December in Copenhagen.

The trade agenda continues to sit idle, despite past assertions that movement or even passage of the U.S./Panama Free Trade Agreement could occur this past summer. Obama Administration officials have backtracked on those efforts, leaving pending free trade agreements - Panama, Colombia and Korea - in limbo. Meanwhile, the House Ways & Means Committee and Senate Finance Committees still hope to move forward with a Miscellaneous Tariff Bill (MTB) this year that would contain extensions of many temporary duty suspensions for a number of footwear items and some fibers and fabrics.  Finally, intense discussions continue between key stakeholders and Congress on reforming and expanding U.S. trade preference programs. Progress on this issue is particularly important as both the Andean Trade Promotion & Drug Eradication Act (ATPDEA) and the Generalized System of Preferences (GSP) program expire at the end of this year. As part of this debate, discussions continue on providing trade benefits to certain regions of Pakistan.

On March 26, the Affordable Footwear Act (S. 730) was reintroduced in the Senate by Senators Maria Cantwell (D-WA) and John Ensign (R-NV) and boasts sixteen bipartisan cosponsors including the latest co-sponsor Senate Majority Whip Dick Durbin (D-IL). The companion legislation in the House will be reintroduced again by Congressmen Joe Crowley (D-NY) and Kevin Brady (R-TX) this fall. In this time of economic uncertainty, the proposal may have new life as the bill would provide immediate cost savings for consumers of footwear and would create a number of jobs in the industry.

For the first time in two decades, the Consumer Product Safety Commission (CPSC) finally has five commissioners. In early August, the Senate confirmed former Kentucky Congresswoman Anne Northup and Robert Adler, formerly a Counsel to the House Energy and Commerce Committee and an attorney-advisor to two commissioners at the CPSC in Washington, D.C. The newly stocked CPSC has been working overtime to provide industry CPSIA implementation guidance.  In a significant victory for the apparel and footwear industry, the CPSC exempted all textile materials from the lead substrate standard.  On August 14, 2009, the lead and lead paint standards dropped to 300 ppm and 90 ppm respectively (both apply retroactively to inventory).  The tracking label requirement also went into effect for all children’s products manufactured on or after August 14. Further, that date marks a significant increase in civil penalties for violators. Although prospects may be increasing for an amendment to CPSIA that reintroduces risk assessment into product safety regulations, key members of Congress are still interested to see how the CPSC can implement the CPSIA in a “common sense way” without having to seek a legislative solution.

Finally, the ill-conceived Design Piracy Prohibition Act was reintroduced in the House on April 30, 2009. Last year’s Senate sponsor, Charles Schumer (D-NY) has not yet introduced his bill and has instead proactively engaged industry to address concerns.  Nevertheless, more pressing matters in the House and Senate Judiciary Committees will likely push the issue off until next year, though the possibility of a hearing in the House in the coming months still remains viable.  
 

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