Congressional Outlook 2006

The second session of the 109th Congress convenes this month with a cluttered and diverse agenda. Even though an omnibus energy bill was passed last year, high prices and low supplies of fuel will spark more legislation on gas and oil drilling. Debates will continue over tort reform, chemical plant security, and clean air legislation. And both houses will give at least lip service to holding down federal spending.

But this is an election year, and this session promises to be another partisan and argumentative one. Growing divisions in Congress over the war in Iraq and a nasty lobbying scandal in Washington, D.C., have members concerned about keeping their seats. The relatively slim majorities held by the Republican Party may not be in jeopardy for next year, but the GOP must prove it is an effective organization if it does not want to lose seats to the Democrats this fall.

Progress on most issues will be slow. Second sessions are frequently a continuation of a Congress' first, and this second session probably will follow suit. Following is C&EN's annual outlook of what to expect from Congress in the months ahead.

Economy And Budget. Congress begins its new session in much better shape than a year ago. It has already passed all the appropriations bills for fiscal 2006, avoiding the embarrassment of having to pass a series of continuing resolutions well into the new year. President George W. Bush will be proposing his budget for fiscal 2007 on Feb. 6, and it should be a repeat of last year's, especially as it relates to research and development.

R&D funding is going to get caught again in the squeeze between trying to hold the lid on discretionary spending and reducing the budget deficit. Fiscal 2006 science budgets were better than expected for most agencies, and the improving economy might convince Congress to be more generous this year, especially with an important election in November.

An expected Republican priority this year is making previous tax cuts on capital gains and dividends permanent while trying to hold the line on entitlement programs. One tax measure that will come up quickly is extension of the R&D tax credit. This credit expired on Dec. 31, when Congress failed to pass a budget reconciliation bill just before adjournment, but it should be brought up again before the end of this month. The tax credit was first passed as a temporary measure in 1981 and has been extended multiple times since then.

The consequences of the rising deficit, which will be more than $400 billion for fiscal 2006, will be made apparent early this session, because Congress is expected to vote to raise the ceiling on federal borrowing to about $9 trillion. This public admission of failure to control government spending has been used in the past as a way to impose budget restraints, but it is unlikely to hold back spending increases this year.

Chemical Plant Security. High on the list of priorities in 2006 for the Senate Homeland Security & Governmental Affairs Committee is getting a chemical plant security bill passed. Last December, Committee Chairman Susan M. Collins (R-Maine) and ranking member Joseph I. Lieberman (D-Conn.) introduced the Chemical Facility Anti-Terrorism Act of 2005 (S. 2145), which would set minimum mandatory requirements and give broad new authorities to the Department of Homeland Security (DHS) to ensure that chemical facilities are hardened against terrorist attacks.

Companies failing to meet the security performance standards issued by DHS could incur fines and penalties. Particularly high risk facilities could be shuttered immediately for failure to comply.

The bipartisan bill would have DHS designate the facilities to be covered and rank them into tiers according to their potential risks. Initially, DHS is directed to consider the more than 15,000 facilities listed on the Environmental Protection Agency's Risk Management Program that store, produce, or use greater than threshold amounts of hazardous chemicals. All covered facilities would be required to complete site-specific vulnerability assessments and develop security and emergency response plans within six months of promulgation of regulations.

In their vulnerability assessments, companies must evaluate the sufficiency of their security measures, including process modification or substitution of hazardous chemicals. The bill, however, does not mandate a switch to inherently safer technologies, which environmental activists had sought and industry had resisted. This issue consistently derailed former Sen. Jon S. Corzine's (D-N.J.) efforts over the past four years to pass a chemical facility bill and is likely to receive attention in upcoming committee markups of the legislation.

The bill would set up an office of chemical security within DHS's Washington headquarters to ensure compliance and proper resource management across the industry. Security offices would also be set up in existing Federal Emergency Management Agency (FEMA) regions to work more closely with individual facilities.

A prime concern to industry is protection of confidential business information. The Collins-Lieberman bill specifically exempts protected information from disclosure under the Freedom of Information Act and from any state law allowing public access to information.

Industry has long lobbied for uniform national security regulations. The bill, however, opens the door for stricter state standards by allowing states and municipalities to adopt more stringent requirements so long as they don't conflict with federal law. This issue is also likely to be revisited in upcoming committee markups.

The House has exhibited little interest in developing chemical plant security legislation and has produced no bill.

A spokesman for Collins, who asked not to be named, says the Senate committee will take up the security bill once it completes its investigation of the federal government's response to Hurricane Katrina and issues a report. The committee is aiming to produce a report and, possibly, legislation calling for a reorganization of FEMA by March, the spokesman says.

Homeland Security. In its deliberations on the aftermath of Hurricane Katrina, the Senate Homeland Security & Governmental Affairs Committee is likely to touch on the Pentagon's role in the federal response to natural disasters and, by extension, its role in response to a terrorist attack. One issue likely to be debated is when the Pentagon should be engaged in disaster relief or control and, specifically, whether it should have been engaged sooner in the wake of Katrina's devastation.

The Senate committee will continue its oversight of DHS, including its procurement practices, and may consider legislation reorganizing the department. The Collins spokesman says such legislation could include the possible merger of such DHS component agencies as Immigration & Customs Enforcement and Customs & Border Protection.

Collins cosponsored Sen. Patty Murray's (D-Wash.) cargo security bill, as did Sens. Norm Coleman (R-Minn.) and Lieberman. The GreenLane Maritime Cargo Security Act (S. 2008), structured to protect U.S. ports from terrorist attacks, among other things sets minimum security standards for shipping containers. Holding hearings on S. 2008 is one of Collins' priorities this year, and the bill may be taken up after her committee considers chemical plant security.

Last May, the House passed DHS's first reauthorization bill. But in the Senate, Collins' committee was preoccupied with the Hurricane Katrina investigation and delayed consideration of reauthorization. Now more than three years after its formation, DHS-a key part of the government's national security toolbox-has yet to have an annual authorization bill. That situation may change this year, because both Collins and Rep. Peter T. King (R-N.Y.), who chairs the House Homeland Security Committee, are on record as wanting to press for an authorization bill in 2006.

A spokesman for Rep. Bennie G. Thompson (D-Miss.), ranking member on the House Homeland Security Committee, says committee Democrats will call for intensive oversight hearings on DHS's performance to date. The spokesman, who could speak for Thompson only if he was not named, says the hearings would focus on "what's gone wrong and what we will be looking for in the future."

Thompson's spokesman points to a report issued by the committee's Democratic staff late last December as fodder for possible oversight hearings. That report, "Leaving the Nation at Risk," lists 33 promises made by DHS officials since 2002 that the report's authors say have gone unfulfilled. Among the unfulfilled promises is better sharing of information with private owners of critical infrastructure.

In all, the report cites security gaps in 10 areas that leave the U.S. vulnerable, from preparedness for possible chemical and biological attacks to critical infrastructure protection to port security.

Energy. After several years of contentious debate, Congress passed comprehensive legislation in 2005 setting a new long-term energy policy for the U.S. This year, lawmakers are expected to focus their attention on two more immediate challenges on the U.S.'s unfinished energy agenda: soaring natural gas prices and the nation's increasing reliance on imported oil.

To help bring down natural gas prices, which have quadrupled in recent years, the chemical industry and other U.S. manufacturers are urging Congress to increase gas supplies by passing legislation to allow energy development on more of the outer continental shelf (OCS). The Interior Department estimates that almost 406 trillion cu ft of natural gas can be recovered from the OCS.

House Resources Committee Chairman Richard W. Pombo (R-Calif.) may revive legislation that would give states the authority to allow oil and gas or natural-gas-only leasing in areas off their coastlines where drilling is now prohibited. In November, the bill was attached to House budget reconciliation legislation, but it was dropped along with Arctic National Wildlife Refuge (ANWR) drilling provisions by the Republican leadership in an attempt to gain votes for the deficit-reduction package.

New offshore drilling is banned in 85% of U.S. coastal waters under a 1981 federal moratorium. Under Pombo's bill, states could opt out of the drilling ban in return for a share of leasing royalties, a provision that could send billions of additional dollars to cash-strapped states. The Congressional Budget Office estimates that total revenue over five years would be more than $1.5 billion, about half of which would go to states that choose to allow new energy production.

Pombo's measure would also open to gas production a section of the eastern Gulf of Mexico in federal waters off the shore of Louisiana called "Lease Sale 181" that is believed to contain at least 6 trillion cu ft of natural gas. After 2012, when the current moratorium is set to expire, the bill would allow states to petition the federal government to prevent leasing within 125 miles of their shores.

The committee is also considering a bill introduced by Rep. John E. Peterson (R-Pa.) that goes further than Pombo's proposal: It seeks to immediately lift the existing prohibitions on the leasing of federal waters along the OCS for natural-gas-only production. However, the proposal would preclude any new natural gas drilling within 20 miles of a state's coastline. States would receive 40% of the revenue from any new natural gas leasing off their coasts.

Pombo has not decided whether he will proceed with his measure, partly because Peterson's bill has garnered the bipartisan support of 117 cosponsors, says Owen A. Kean, the American Chemistry Council's (ACC) senior director of energy policy. As a result, Kean says, Peterson has indicated that the Resources Committee plans to mark up his bill in February. "When Peterson rounded up all those cosponsors, Pombo said, 'Give it your best shot.' So Peterson's bill seems to be the lead vehicle, at least for now, in the House."

On the Senate side, Energy & Natural Resources Committee Chairman Pete V. Domenici (R-N.M.) has said he plans to take up legislation this year to expand access to oil and gas resources on the OCS and to open the ANWR to energy development. Meanwhile, Sens. Mark L. Pryor (D-Ark.) and John W. Warner (R-Va.) circulated a draft bill among colleagues in December that includes state opt-out and revenue-sharing language similar to that in the Pombo legislation. "We hope it gets introduced shortly after the Senate returns," Kean says. "What we would like to see happen is movement on both sides of the aisle of freestanding, bipartisan legislation that will yield new supplies of natural gas."

Congressional energy and tax panels are also expected to take up legislation introduced in November by bipartisan groups in the House and Senate designed to reduce the U.S.'s growing appetite for foreign oil by gradually moving the transportation sector toward alternative fuels. The Vehicle & Fuel Choices for American Security Act would mandate 10 million barrels in oil savings in 25 years and require the mass production of automobiles that can run on any combination of gasoline and alternative fuels or cars powered by hybrid engines.

The legislation, sponsored by Sens. Lieberman and Sam Brownback (R-Kan.) in the Senate and Reps. Jack Kingston (R-Ga.) and Eliot L. Engel (D-N.Y.) in the House, would mandate a new-vehicle technology standard, require the government to use alternative technologies for its vehicle fleets, promote fuel-efficient vehicles through tax incentives, and boost biofuel programs.

Environment. On the environmental front, Congress is expected to consider legislation affecting U.S. participation in several international treaties controlling hazardous chemicals and will scrutinize the Superfund program for cleaning up hazardous waste sites. Lawmakers could consider air pollution legislation as well.

The Bush Administration, the chemical industry, and environmental activists support U.S. participation in three treaties on chemicals. One is the 2001 Stockholm Convention on Persistent Organic Pollutants (POPs), which initially banned or severely restricted a dozen substances globally. Another is a second POPs pact that covers only North America and Europe. The third is the 1998 Rotterdam convention, which requires exporters to notify a developing country before shipping listed commercial chemicals or pesticides to that nation.

For the U.S. to have an official voice in these pacts, Congress must pass legislation amending two federal laws controlling chemicals: the Toxic Substances Control Act (TSCA) and the Federal Insecticide, Rodenticide & Fungicide Act (FIFRA).

Measures to amend FIFRA are pending in both the Senate and House. Sens. Saxby Chambliss (R-Ga.) and Tom Harkin (D-Iowa), the chairman and ranking minority member, respectively, of the Senate Agriculture, Nutrition & Forestry Committee, are sponsoring S. 2042, a bill they introduced in November 2005. In the House, similar legislation (H.R. 3849) was introduced in September 2005 by Rep. Frank D. Lucas (R-Okla.), chairman of the House Agriculture Subcommittee on Conservation, Credit, Rural Development & Research, and cosponsored by House Agriculture Committee Chairman Robert W. Goodlatte (R-Va.).

Meanwhile, Rep. Paul E. Gillmor (R-Ohio), chairman of the House Energy & Commerce Subcommittee on Environment & Hazardous Materials, introduced legislation (H.R. 4591) in December 2005 to amend TSCA to the terms of the international accords. ACC and EPA support this measure. Many environmental groups, however, strongly oppose Gillmor's bill because it requires no action by EPA if additional chemicals are added to the treaties (C&EN, March 29, 2004, page 22). The Senate Environment & Public Works Committee, which holds jurisdiction over TSCA, has no concrete plans to address such legislation in 2006, though it might if the House passes a bill.

Superfund is also on the congressional agenda for the first time in years. Sen. John R. Thune (R-S.D.), chairman of the Senate Environment & Public Works Subcommittee on Superfund & Waste Management, has announced that he will hold oversight hearings on the Superfund program this spring. Congress has not held such hearings in at least three years.

The Superfund account essentially ran out of money in 2003. Money in that trust fund came from taxes on chemical feedstocks, crude oil, and corporate profits, but those levies expired at the end of 1995.

Bills to reinstate parts or all of the Superfund taxes are pending in the House, though their chances are slim in a Republican-controlled Congress, especially in an election year. But some believe that H.R. 4481, introduced in December 2005 by Rep. Maurice D. Hinchey (D-N.Y.), could gain political traction. That bill would restore all three Superfund taxes and use the proceeds in part to finance cleanup from Hurricanes Katrina and Rita.

Another environmental issue, the President's Clear Skies initiative to cut emissions of sulfur dioxide, nitrogen oxides, and mercury from power plants, remains under discussion in the Senate. Opponents of the legislation, mainly Democrats, say Bush's plan does not cut emissions of these pollutants quickly or steeply enough, and they want such legislation to curb releases of carbon dioxide, a greenhouse gas, as well. In March 2005, the Senate Environment & Public Works Committee deadlocked 9 to 9 on a Republican bill to implement the Clear Skies plan (C&EN, March 14, 2005, page 10).

Some observers believe Clear Skies is dead for a panoply of reasons. Congress has little incentive to take up the issue now that EPA has finalized rules that will implement the emission reductions called for in the President's plan (C&EN, March 21, 2005, page 11). Meanwhile, recent EPA and Congressional Research Service analyses show that there could be significantly greater health benefits from legislative alternatives being offered by Sens. Thomas R. Carper (D-Del.) and James M. Jeffords (I-Vt.) that would cut emissions more steeply than the President's plan would (C&EN, Dec. 12, 2005, page 8).

Sen. James M. Inhofe (R-Okla.), chairman of the Environment & Public Works Committee, is waiting for Jeffords or Carper to propose a new bill before the panel takes up the matter further, a spokesman for Inhofe says.

With respect to climate change, most observers do not expect any bill that would effectively reduce U.S. greenhouse gas emissions to pass both houses of Congress this year, but it is likely that hearings and possibly a vote on climate-change legislation will occur in the Senate.

Two Senate bills are under discussion: S. 342, the Climate Stewardship Act of 2005, introduced by Sens. John McCain (R-Ariz.) and Lieberman, and the Climate & Economy Insurance Act of 2005 (S. Amdt. 868), introduced by Sen. Jeff Bingaman (D-N.M.).

S. 342, known as the McCain-Lieberman bill, would cap the greenhouse gas emissions of the electricity, manufacturing, commercial, and transportation sectors in the U.S. at the 2000 level by 2010. Emitters would be able to trade emission credits and get credit for early reductions.

The Bingaman bill establishes annual targets for greenhouse gas emissions, but regulated entities could exceed their targets by paying a special price for emission allowances. Senate Energy & Natural Resources Committee Chairman Domenici has expressed an interest in the bill, and it may be approved by his committee. But it is unlikely to come up for a floor vote, because Senate Majority Leader William H. Frist (R-Tenn.) strongly opposes it.

On the other hand, there is little chance that Inhofe's committee will approve the McCain bill. McCain, however, might be able to force a Senate floor vote on his legislation.

Although the House Science Committee has vowed to hold hearings on climate change, no major legislative action on the topic is expected in the House.

Legal Reform. Last February, President Bush signed the Class Action Reform Act. The law makes it easier to move class-action lawsuits from state courts into federal courts. It hinders so-called judge shopping, that is, filing class-action lawsuits in districts that are friendly to plaintiffs, and it ensures that cases that have national implications are decided in federal courts.

The Senate is expected to take up another bill that will affect filing of lawsuits. The legislation would mirror a measure passed in the House in 2005, the Lawsuit Abuse Reduction Act, which requires judges to sanction attorneys if they file three frivolous cases and requires plaintiffs to file cases in a venue where they live or work. The Association of Trial Lawyers of America (ATLA) strongly opposes this legislation. It contends that "frivolous" is defined so loosely in the bill that many legitimate lawsuits could be thrown out.

In December, another aspect of tort reform was dealt with by a controversial amendment to the Defense Department appropriations conference report. Late at night, after conferees were told the report was final, Frist introduced a 45-page provision providing liability protections to producers of vaccines, medicines, and medical devices needed during a pandemic, epidemic, or other medical emergency. According to this provision, if the Secretary of the Department of Health & Human Services declares a public health emergency, manufacturers of vaccines, medicines, and medical devices used in the emergency cannot be sued for damages under federal or state laws. They can be sued only if they acted with "willful misconduct."

Eight conferees signed the bill but, in a highly unusual action, noted objections to the so-called avian flu provisions. They believe the liability waivers are far too broad and should not have been included without hearings or debate.

Sens. Edward M. Kennedy (D-Mass.) and Christopher J. Dodd (D-Conn.), Rep. Rosa L. DeLauro (D-Conn.), and other Democrats are working on alternative legislation that would give legal protections to companies making pandemic flu vaccines and medicines. Their legislation includes a vaccine-injury compensation program modeled after the existing vaccine-injury compensation program established for routine childhood vaccines. In addition, the bill would increase federal funding for avian flu preparedness from $3.8 billion to about $5.8 billion.

A strong move is under way among many lawmakers to pass legislation that would nullify state food-labeling laws when they are tougher than FDA labeling regulations. For example, California requires under Proposition 65 that warnings be placed above fish counters saying that nearly all fish and seafood contain mercury and related compounds that cause cancer and birth defects. In December, the House Energy & Commerce Committee approved a bill that would override many state labeling laws. No similar bill has yet been introduced in the Senate. The food industry strongly favors the legislation, but state food safety officials oppose it.

The business community will again be pushing for legislation to create an asbestos liability trust fund. The Senate Judiciary Committee, chaired by Arlen Specter (R-Pa.), has already approved the Fairness in Asbestos Injury Resolution Act (S. 2290), and the Senate leadership plans to bring it to the Senate floor in early February. The bill removes many asbestos lawsuits from the court system and creates a trust fund to pay claimants exposed to the fiber.

Nearly all interested parties agree that some size of trust fund should be created for asbestos victims, but there is strong disagreement about how large it should be and about what criteria should be used to qualify victims. Industry believes a trust fund of $140 billion would be adequate to compensate the real victims of asbestos injury. But the Government Accountability Office has concluded that that amount might be insufficient to pay all claims. Labor groups and ATLA are advocating for a much larger fund.

Science Policy. Both the Senate Commerce, Science & Transportation Committee and the House Science Committee will be keeping an eye on the National Aeronautics & Space Administration this year. Congressional focus will center on oversight issues and ensuring that the recently passed NASA authorization legislation, which charts the future direction of the agency, is properly implemented.

Members in both the House and Senate committees will also keep a close check on NASA's budget. As the agency continues to move forward with the presidential vision for space exploration, NASA may have to do so with less money than it requests. This shortfall will command congressional attention; both houses are expected to hold hearings and request assessments to guarantee that NASA's scientific-program budgets are not cut to fund exploration programs.

Budget issues at the National Science Foundation will also continue to be addressed; congressional members will fight for more funds. Senate legislation introduced late last year by Sen. John Ensign (R-Nev.) and cosponsored by 23 senators to bolster U.S. competitiveness and innovation (S. 2109) would bring a new stream of funding to NSF, which would play a central role in the multi-billion-dollar plan.

NSF also stands to benefit from several pieces of legislation introduced in the House and Senate resulting from the National Academies report on competitiveness released last fall (C&EN Online, Oct. 13, 2005). For example, on the House side, Rep. Bart Gordon (D-Tenn.) introduced in late December the Sowing the Seeds Through Science & Engineering Research Act (H.R. 4596). The bill would authorize a 10% increase in funding for basic physical science research.

In addition to new legislation, the House Science Committee is expected to hold hearings on both U.S. competitiveness and improving math and science education.

The National Institutes of Health will likely face reauthorization hearings this year. The agency has been operating without an updated congressional mandate for more than 10 years. Passing legislation in this area will be a priority for the House Energy & Commerce Committee, which has been trying to move in this direction for the past year. In addition, the committee will continue its oversight hearings of the agency.

Congressional activity surrounding stem cell research should create some fireworks this year. The Stem Cell Research Enhancement Act of 2005 (H.R. 810), which would expand the number of human embryonic stem cell lines that are eligible for federal funding, passed the House last spring (C&EN, May 30, 2005, page 12) and is expected to come to the Senate floor for a vote this spring. If the bill clears the Senate, it is likely to face a presidential veto.

Other stem cell bills dealing with the less controversial adult stem cells, however, are having an easier time making their way through the Senate. For example, the Stem Cell Therapeutic & Research Act of 2005, which passed in the House last May, was approved by the Senate in December.