February 14, 2014
The House and Senate passed a bill that suspends the debt ceiling until March 15, 2015 and a bill to repeal a cut to the cost-of-living adjustment for some military retirees’ pensions that helped pay for last year’s budget deal. These bills now go to the President for his signature.
The House Budget Committee met this week and approved two proposals to overhaul the congressional budget process. The first, HR1872 the Budget and Accounting Transparency Act of 2014, would require the use of fair-value accounting for federal credit programs. The other, HR 1869 the Biennial Budgeting and Enhanced Oversight Act of 2014, would move Congress from an annual to a biennial budget cycle. Congress has considered these budget process changes regularly with no success, mainly due to the opposition of appropriators. However, the Senate voted in favor of a non-binding biennial budget and appropriations cycle last March; and the recent shutdown may make the proposals more appealing to members of Congress.
The last debt limit extension (PL 113-46) expired Feb. 7 and the Treasury Department has been using extraordinary measures to stave off the need for new borrowing authority in the meantime. The threat of a snow storm in DC caused House Republicans to abandon their original plan of considering a debt limit extension bill that included the repeal of the cost-of-living adjustment (COLA) for veterans. Instead, they took up a clean debt limit extension bill that passed the House by a vote of 221 to 201, supported by 193 Democrats and just 28 Republicans. The bill then headed to the Senate where it initially had difficulty getting enough votes to invoke cloture as Sen. Ted Cruz (R-TX) demanded approval by a 60-vote threshold. Majority Leader Reid (D-NV) had to keep the vote open for over an hour. Ultimately, Senate Minority Leader Mitch McConnell (R-KY) and Sen. John Cornyn (R-TX) – both of whom are up for reelection this year and face tea party primary challengers – voted to break the filibuster. McConnell and Cornyn had hoped to avoid a vote like this in this election season, but were backed into a corner by Cruz. The Senate finally passed the bill by a vote of 55 to 43.
The extension suspends the current statutory limit on federal borrowing authority until March 15, 2015. A new debt limit would be automatically re-established on March 16, 2015 adjusted for any new borrowing that occurs between now and March 15. Congress will then have to revisit this issue. If Republicans take control of the Senate next year and keep control of the House, the next discussions on the debt ceiling could be very different than the discussions that occurred this week. Republicans may try to limit the Treasury’s ability to carry out extraordinary measures such as juggling funds among accounts after the government hits the debt ceiling. They are also interested in a prioritization plan that would require Treasury to pay bondholders, Social Security benefits recipients and members of the military ahead of others. Treasury says such prioritization is virtually impossible because of the large volume of payments the department makes.
Military Cost-Of-Living Adjustment
The Budget Control Act passed by Congress last December included a 1% cut to the cost-of-living adjustments (COLA) for military pensions starting in December 2015, affecting the benefits of current and future retired military personnel under the age of 62. The cuts were part of a tradeoff for easing some of the ongoing budget sequesters. The cuts proved politically unpopular with both parties, so the House and Senate voted this week on a bill (S25) to reverse those cuts and restore the benefits. The House passed the bill 326 to 90, and the Senate followed with a vote of 95 to 3. The restored cuts were paid for by an extension of the sequester on some mandatory spending through FY2024. Senate Majority Leader Harry Reid (D-NV) was originally opposed to the offsets included in the House bill, but reversed course during the week and decided to accept the House-passed bill. The pension cut now applies only to members of the armed forces who joined the military after Jan. 1, 2014. The President is expected to sign the bill.
Reid also filed cloture on S1982, the Comprehensive Veterans Health and Benefits and Military Retirement Pay Restoration Act, a bill that would extend and expand health care programs for veterans as well as education and job-assistance benefits. That bill sponsored by Sen. Bernard Sanders (I-VT) also would repeal the cut in the COLA but offsets the cost by cutting overseas contingency operations funds. With Congress in recess next week, action on S1982 won’t occur until the week of Feb. 24 at the earliest.
National Security Council
The President issued an Executive Order this week officially changing the name of the National Security Staff and Homeland Security Council Staff to the National Security Council staff.
The Administration released their Cybersecurity Framework (https://www.vantagepointstrat.com/wp-content/uploads/2014/02/cybersecurity-framework-021214-final.pdf) this week, which is a voluntary how-to cybersecurity guide for critical infrastructure (CI) organizations. The framework was part of the Executive Order the President released last February and was developed by the US National Institute of Standards and Technology (NIST) with input from businesses. The Framework is comprised of three components:
- The Framework Core is a set of cybersecurity activities and informative references that are common across CI sectors. The cybersecurity activities are grouped by five functions that provide a high-level view of an organization’s management of cyber risks:
- The Profiles can help organizations align their cybersecurity activities with business requirements, risk tolerances, and resources. Companies can use the Profiles to understand their current cybersecurity state, support prioritization, and to measure progress towards a target state.
- The Tiers provide a mechanism for organizations to view their approach and processes for managing cyber risk. The Tiers range from Partial (Tier 1) to Adaptive (Tier 4) and describe an increasing degree of rigor in risk management practices, the extent to which cybersecurity risk management is informed by business needs, and its integration into an organization’s overall risk management practices.
Though the adoption of the Framework is voluntary, DHS is partnering with the CI community to encourage use of the Framework. They have established the Critical Infrastructure Cyber Community (C3 pronounced “C Cubed”) Voluntary Program (https://www.vantagepointstrat.com/wp-content/uploads/2014/02/DHS-Critical-Infrastructure-Cyber-Community-C3-2-12-14.doc) as a public-private partnership to increase awareness and use of the Framework. The C3 Voluntary Program will connect companies, as well as federal, state, local, tribal, and territorial partners, to DHS and other federal government programs and resources that will assist their efforts in managing their cyber risks. Participants will be able to share lessons learned, get assistance, and learn about free tools and resources that can help them.
NIST also released a roadmap (https://www.vantagepointstrat.com/wp-content/uploads/2014/02/roadmap-021214.pdf) detailing next steps for the framework. They plan on holding at least one workshop within the next six months to provide a forum for stakeholders to share experiences in using the Framework. NIST will also hold a privacy workshop in the second quarter of 2014 with the intention of advancing “the identification of technical standards and best practices” for mitigating cybersecurity impacts on privacy and civil liberties.
The White House does not plan on tracking which businesses actually implement the Framework recommendations; however they do plan to have some regulatory agencies propose ways to overhaul their existing regulations to make them consistent with these new cybersecurity guidelines. These plans will be revealed in May. And as it stands now, it appears cybersecurity legislation is a long shot this year as the Snowden NSA revelations have slowed momentum for information-sharing legislation.
The President nominated Brad Carson to be an Under Secretary of the Army, William LaPlante, Jr. to be an Assistant Secretary of the Air Force, and Francis Xavier Taylor to be Under Secretary for Intelligence and Analysis at the Department of Homeland Security.
Sen. John Walsh (D-MT) was sworn in on Tuesday filling the seat of former Sen. Max Baucus (D-MT) who was recently confirmed as the United States Ambassador to China.
Rep. Gary Miller (R-CA) announced this week that he will not seek reelection. Miller is the Vice Chairman of the House Committee on Financial Services, and a senior member of the House Committee on Transportation and Infrastructure. His seat is considered to be one of the most competitive in California as President Obama won the district in 2012. Miller was one of the 28 Republicans who voted to increase the debt ceiling.
Rep. Doc Hastings (R-WA), Chair of the House Natural Resources Committee also announced his retirement this week. While Rep. Don Young (R-AK) is the next most senior Republican member of the panel, he is ineligible due to the fact that he has already served three terms as committee chair. After Young, the next most senior Republican committee member is Rep. Louie Gohmert (R-TX). Hastings district is considered safe for Republicans as Mitt Romney carried the seat by a 22-point margin in 2012.
Miller and Hastings retirements bring to 21 the number of Republican House members not seeking reelection, while 13 Democrats are retiring or seeking other office.
The House and Senate are in recess next week.