Congressional Outlook 2015 | January 19, 2015 Issue - Vol. 93 Issue 3 | Chemical & Engineering News
Volume 93 Issue 3 | pp. 9-13
Issue Date: January 19, 2015

Cover Story

Congressional Outlook 2015

With Republicans at the helm, lawmakers prepare to act on chemical- and chemistry-related issues including federal research funding, labels for genetically modified foods, a tax credit for corporate research, and pesticides linked to decline of bees.
Department: Government & Policy
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Federal Budget: Increases In Funding For Research Not Guaranteed

Budget battles are likely to loom large over Congress in 2015, and their outcome could become a bellwether for federal funding of basic research.

A spending increase could signal a change in funding fortunes in an area where increases have not kept up with inflation. There is reason for optimism, observers say, given historical bipartisan support for research.

But there are some major challenges too. The 2016 fiscal year, which begins in October 2015, will mark the reemergence of the budget cap called sequestration. This limit resulted in across-the-board budget cuts in the second half of fiscal 2013, cuts that significantly impacted the science community.

Sequestration was designed to chop $1 trillion in discretionary spending over 10 years, but most of the pain hasn’t been felt yet. A bipartisan budget deal resulted in a reprieve in fiscal 2014 and 2015.

“We are going to be watching that very closely in hopes that we can help,” says M. Matthew Owens, vice president of the Association of American Universities. “There are members of Congress who would very much like to see sequestration eliminated” once and for all.

Even if sequestration does go into effect, it could be less across-the-board awful for science than it was in 2013, when budget cuts indiscriminately hit almost all federal research programs. The sequester sets large-scale budget caps, and Congress is free to move money around within them.

Advocates are hopeful that will be good news for science funding. “Republicans embraced medical research even with a government shutdown,” points out Ellie Dehoney, vice president at Research!America. “It is really up to advocates to make the case.”

Dehoney says it is unlikely, though, that sequestration would go away altogether. If it does, the pressure behind that move might mount from the big lobbying guns in the defense industry, since half of the cuts would come out of the military’s budget.

President Barack Obama isn’t going to make keeping sequestration easier for Congress. Observers say he will eliminate sequestration in his budget proposal to Congress, which is expected to be released in early February.—Andrea Widener

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Climate Change: What leaders of key congressional committees have to say

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Inhofe
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Inhofe
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Upton
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“God’s still up there. The arrogance of people to think that we, human beings, would be able to change what He is doing in the climate is to me outrageous.”
—Sen. James Inhofe (R-Okla.), Chair Of The Senate Environment & Public Works Committee


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Smith
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Murkowski
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The Obama EPA’s proposal to ratchet down CO2 emissions from power plants “is going to make it harder to use all of our American [energy] resources and could well force states to ration energy—which certainly is going to make it more expensive to power our homes and factories.”
—Rep. Fred Upton (R-Mich.), chair of the House Energy & Commerce Committee


“Studies show that dramatically cutting carbon emissions in the U.S. will have little impact on global temperature in the future.”
—Rep. Lamar S. Smith (R-Texas), chair of the House Science Committee


“Addressing climate change will require continued American innovation, but the President does not have the power to will technologies into existence through sheer force or scope of regulation. That will require a longer term commitment to basic, scientific research that enables genuine breakthroughs.”
—Sen. Lisa Murkowski (R-Alaska), chair of the Senate Energy & Natural Resources Committee

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Clean Water: Congress Looks To Stop Planned EPA Regulation

Halting a controversial rule that would define what areas are governed by the federal Clean Water Act is a priority in this year for Senate Majority Leader Mitch McConnell (R-Ky.). The rule was proposed last year by the Environmental Protection Agency and the U.S. Army Corps of Engineers and is intended to clarify the federal jurisdiction over waterways and wetlands (C&EN, Dec. 1, 2014, page 25).

With Republicans in general and some Democrats from rural districts opposing the proposal, the issue is expected to surface in congressional committees early this year.

Rep. Bob B. Gibbs (R-Ohio), chairman of the House Transportation & Infrastructure Subcommittee on Water Resources, tells C&EN that plans for action regarding the proposed rule are in the works. Under his leadership, the subcommittee will conduct “vigorous oversight” of EPA and the U.S. Army Corps of Engineers, Gibbs adds.

Already the House approved a bill (H.R. 185) that would limit the reach of regulatory agencies. The bill would make it more difficult for EPA to issue regulations under the Clean Water Act and other laws it administers, argues the Center for Effective Government, a watchdog organization. The White House has threatened to veto the bill.

The bill is likely to get a ready welcome from the Republican-held Senate, which was already expected to act on the pending rule, says a spokesman for Sen. Mike D. Crapo (R-Idaho), a member of the Senate Environment & Public Works Committee.—Jessica Morrison

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Arch graph of 114th Congress House and one of Senate.
 
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Patent Reform: Congress aims to curb litigious ‘patent trolls’

Lawmakers are vowing to quickly take up legislation to crack down on so-called patent trolls, firms that collect patents and use lawsuits or the threat of litigation to extract licensing fees from businesses.

Sen. Orrin G. Hatch (R-Utah), the chairman of the GOP’s High-Tech Task Force, says legislation is needed to thwart companies that bring frivolous patent infringement lawsuits against the technology industry and retailers.

“Through abusive and meritless litigation, patent trolls—which are often shell companies that do not make or sell anything—seek to extort settlements from innovators,” Hatch says.

Legislation stalled in the Senate last May after former majority leader Sen. Harry Reid (D-Nev.) refused to allow the measure to come to the floor because of objections by drugmakers and other industries. The House of Representatives easily passed a counterpart proposal in December 2013.

Among other things, high-tech companies such as Google, Oracle, and Cisco are pushing for antitroll measures that would reduce the cost of litigation. They are seeking a provision that would require plaintiffs in patent infringement cases to pay the defendants’ legal fees if they are found by a court to have pursued a frivolous claim.

But the fee-shifting provision has critics, among them biotech companies and universities, that say it could discourage small businesses and nonprofits from filing suits to enforce their legitimate intellectual property rights.

In a Dec. 10, 2014, letter to congressional leaders, trade groups representing the pharmaceutical sector joined university associations in declaring that they “will continue to strongly oppose legislation that would weaken the overall patent system and thereby diminish innovation and job creation in the U.S.”

Reform advocates say such fear is unfounded. “This is unfinished business, so we need to keep pressing forward,” says Victoria A. Espinel, chief executive officer of BSA/The Software Alliance, a lobbying group. “Litigation abuses are harming the U.S. patent system and acting as a drag on the economy. We need reforms that make life harder for bad actors and better for innovators.”—Glenn Hess

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Food Labeling: Lawmakers Look To Reverse State Initiatives On Genetically Modified Organisms

State initiatives calling for mandatory labeling of foods that contain genetically modified organisms (GMOs) are raising the hackles of some in Congress. This is particularly true of legislators who favor giving the Food & Drug Administration the final say over food labeling. FDA currently says that labeling GMOs in food should not be mandatory.

Three states—Vermont, Connecticut, and Maine—have enacted laws that will require labeling of GMO foods.

Rep. Mike Pompeo (R-Kan.) is expected to reintroduce his proposed Safe & Accurate Food Labeling Act, a bill he sponsored in the previous Congress. This legislation would nullify state efforts to require GMO food labeling and let FDA decide whether such labeling is needed. Food manufacturers support it.

“Food labeling is a matter of interstate commerce and is therefore clearly a federal issue that rightfully resides with Congress and the FDA,” says Rep. Joseph R. Pitts (R-Pa.), chairman of the House Energy & Commerce Subcommittee on Health. “I’m concerned that a patchwork of 50 separate state labeling schemes would be impractical and unworkable,” he says, adding that “such a system would create confusion among consumers and result in higher prices and fewer options.”

Also likely to be introduced this year is legislation that would mandate GMO labeling at the federal level and would be similar to bills introduced last year by Democrats. The chance of such bills passing, however, is slim in a Republican-controlled Congress.

Large food and chemical corporations are staunchly opposed to state food-labeling laws and have poured millions of dollars into campaigns to stop such initiatives. The Grocery Manufacturers Association, which represents food manufacturers, sued Vermont shortly after the state signed its GMO food-labeling bill into law.

Those in support of mandatory labeling of GMOs include food safety activists, small-scale food producers, and organic farmers.—Britt Erickson

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Pesticides: Congress May Further Probe Role Of Neonicotinoids In Honeybee Declines

Lawmakers are expected to continue putting pressure on the Environmental Protection Agency this year to learn more about the decline in honeybees and other pollinators.

Neonicotinoid pesticides are one of many factors that have been implicated in the loss of bees, but it is still unclear how much of a role these pesticides play.

“I’m going to keep hammering away on this issue until we can ensure that the products we are using in our backyards and on our farms are not killing pollinators,” says Rep. Earl Blumenauer (D-Ore.). Blumenauer, along with dozens of other members of Congress, sent letters to EPA Administrator Gina McCarthy last fall requesting a series of policy changes to protect bees and other pollinators from neonicotinoids.

Legislation is likely to be introduced this year that would require EPA to make such changes should the agency fail to act.—Britt Erickson

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Chemical Regulation: Republican-Led Congress Bodes Well For Reform Of Toxic Substances Control Act

Prospects for modernizing the outdated federal law that governs commercial chemicals during this Congress are better than in previous years now that Republicans are in control of both chambers.

Hopes were high last year that Congress would update the Toxic Substances Control Act (TSCA), which dates to 1976. But partisan gridlock and concerns that a new federal law would nullify state chemical control programs got in the way.

The change in leadership of the Senate Environment & Public Works Committee from Sen. Barbara Boxer (D-Calif.) to Sen. James Inhofe (R-Okla.) will boost the possibility of TSCA legislation clearing the Senate. In the past, Boxer has been critical of bipartisan TSCA reform proposals, largely because of the impacts such legislation would have on California’s chemical regulation programs.

Calvin M. Dooley, chief executive officer of the American Chemistry Council, an industry group, is optimistic that that Senate committee will rapidly move TSCA legislation this year under Inhofe’s leadership.

Last October, Boxer circulated a draft TSCA reform bill under development by Sens. David Vitter (R-La.) and Tom Udall (D-N.M.). She objected to provisions in their proposal, saying she wants to maintain states’ authority to manage their own chemical programs.

The issue of states’ authority over chemical programs will likely remain a hurdle for TSCA reform this year. Nonetheless, chemical industry groups are optimistic that such legislation will ultimately pass.

“The Republican leadership in the House and Senate wants to start with legislation that had bipartisan support in the last Congress,” says William E. Allmond IV, vice president of government relations at the Society of Chemical Manufacturers & Affiliates, a trade group for specialty chemical companies. The GOP wants to pass such bills to “demonstrate to the American people that they can govern,” Allmond says, adding that TSCA reform is in that category.

But health and environmental advocates say they will fight to keep the chemical industry from controlling TSCA reform legislation. Industry-supported draft bills circulated last year would wipe out “dozens of state laws that have actually made progress in protecting public health and the environment,” says Andy Igrejas, director of Safer Chemicals, Healthy Families, a coalition of advocacy groups.—Britt Erickson

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Oversight: National Science Foundation Faces Continued Questions From House Science Committee Chief

Almost since he took over as chairman of the House Science, Space & Technology Committee in 2013, Rep. Lamar S. Smith (R-Texas) has peppered the National Science Foundation with questions and accusations.

Smith has attacked the agency for wasteful spending and a lack of accountability in its awarding of almost 10,000 research grants each year. In an unprecedented move, Smith’s staff has gone to NSF headquarters to probe the usually confidential reviews for about 60 individual grants that funded studies in the social sciences and on climate change.

That scrutiny is likely to continue in 2015. “NSF is going to face a rocky road of accountability questions, and that is not going to go away,” says Ellie Dehoney, vice president at the advocacy group Research!America.

Last year, Smith and his colleagues proposed a bill that would require an NSF official to affirm that individual research grants are in the national interest. It would also have given Congress more direct control over how funding is allocated inside the agency. Although it never passed, similar legislation could crop up in 2015.

Many in the science community have stepped up to defend NSF’s peer review system, which many consider the world’s best. For example, the National Science Board issued a rare rebuke of pending legislation, warning that Smith’s bill from last year could make reviewers wary of unusual projects and thus discourage transformative science.—Andrea Widener

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International Trade: Chemical Makers Support White House Bid To Secure Pacific Rim Pact

Chemical manufacturers and other U.S. businesses are gearing up for a major push to win congressional backing for a trade agreement with Pacific Rim nations that would boost exports by cutting tariffs and red tape.

President Barack Obama and GOP leaders have identified trade liberalization as an area of common ground between the Administration and most Republicans. The Administration is close to finishing talks on the Trans-Pacific Partnership, which involves Japan and 10 other mostly Asian countries.

Many Democrats and their union allies oppose the deal, fearing it would encourage manufacturers to shift jobs to cheap-labor countries in the Pacific trade bloc. On the other hand, corporate America strongly supports the pact. An analysis by the American Chemistry Council (ACC), an industry group, says the agreement could boost U.S. chemical exports to the region by $1.2 billion annually.

But before it considers the Asia-Pacific deal, Congress must first grant Obama “fast-track” authority, which would allow him to submit the pact to lawmakers for an up-or-down vote without any amendments. The system is crucial; it gives trade partners the incentive to put their best offers on the table because they know Congress cannot change the agreement.

Trade authority will be a tough political fight, predicts Calvin M. Dooley, ACC’s chief executive officer. For fast track to pass Congress, he says, “it’s going to take comprehensive engagement by the Administration to develop a significant degree of Democratic support.”—Glenn Hess

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Energy: Republicans Push Their Agenda Despite Veto Threats

The Republican majority in the new Congress has set an ambitious energy agenda and one that, if successful, is likely to trigger vetoes from President Barack Obama.

In the first weeks of the new Congress, House and Senate GOP leaders promise to move a passel of energy-related initiatives.

They intend to speed permitting and construction of liquefied natural gas export terminals, overhaul the environmental regulatory process, reignite development of the Yucca Mountain nuclear waste repository, and block regulation of carbon dioxide emissions from coal and natural gas power plants.

The provisions could come in specific energy bills. Or they could be attached as amendments to other legislation, particularly to must-pass funding bills since many of the provisions run counter to Obama Administration policies.

The first bill introduced in the new Senate may be a barometer of what is to come. S. 1 would end a federal review process and allow construction of the controversial, long-delayed Canada-U.S. Keystone XL oil pipeline. Senate Majority Leader Mitch McConnell (R-Ky.) says he will bring the bill before the full Senate via a procedure that will allow any lawmaker to tack energy-related amendments to the bill. McConnell notes that the bill may morph from oil pipeline legislation to a full-fledged energy bill, depending on amendments.

The President has said he will veto the Keystone bill, but whether that threat becomes action might turn on what gets added to the bill.

Majority leaders of the new Congress have also shown a particular interest in reining in energy-related EPA regulatory proposals that would reduce greenhouse gas emissions from fossil-fuel operations. GOP lawmakers have announced plans to check Environmental Protection Agency efforts to cut emissions of methane, a powerful greenhouse gas, from oil and gas hydraulic fracturing operations, as well as to curb the agency’s ongoing, multiyear plan to address CO2 emissions from coal and natural gas power plants.

EPA’s regulations on fracking emissions are expected later this month, and regulations to cut CO2 emissions from existing and new coal and natural gas power plants are expected to be finalized by summer. Although the regulations would be phased in over several years, they are hotly contested now by coal and natural gas industries and their supporters in Congress. Consequently, legislation and amendments against them are likely.—Jeff Johnson

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Tax Reform: Chemical Makers Seek Permanent R&D Credit

President Barack Obama says he soon will offer explicit proposals on tax reform, noting that tax policy is one potential area where his Administration can work cooperatively with the Republican-controlled Congress.

“I’m going to make sure that we put forward some pretty specific proposals,” Obama remarked last month during his year-end news conference.

Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) says tax reform should lower both individual and corporate rates. He also stresses that the tax code needs permanence to avoid the large number of temporary provisions that expire every year or two, such as the R&D tax credit.

“Individuals and businesses need to be able to rely on provisions in the tax law for planning purposes,” Hatch notes.

Chemical industry lobbyists say there is bipartisan support in Congress for making the R&D tax credit permanent. “You can lower the corporate tax rate and also provide an R&D tax credit,” says William E. Allmond IV, vice president of government and public affairs at the Society of Chemical Manufacturers & Affiliates. “We feel very confident that Congress can do both.”

Congress has renewed the R&D tax credit 16 times since it was enacted in 1981. Although the tax break is popular with lawmakers, finding a way to pay for it has been difficult (C&EN, July 14, 2014, page 25). Permanently extending the credit without offsets in spending elsewhere would add $156 billion to the deficit over the next 10 years, budget analysts say.—Glenn Hess

 
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Comments
Bego Gerber (January 31, 2015 3:30 PM)
To paraphrase Sen. Inhofe, "God's still up there. The arrogance of Sen. Inhofe to think that he, a human being, would be able to know what He is doing in the climate is to me outrageous.”

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