THIS WEEK IN WASHINGTON
July 30, 2021
Welcome to the Georgia edition of This Week in Washington. Thank you for your interest in politics and policy from the Peach State to the Potomac. 
 
At the risk of sounding like a broken record, Congress’s continuing discussions on infrastructure remains this week’s hot topic. Patrick Robertson’s Washington Whispers details the latest on all the moving parts of an agreement and how the August recess weighs on the process. Congressman Erik Paulsen writes about the risks – immediate and long-term – of relinquishing intellectual property protections on medicines like the COVID-19 vaccines. Al Jackson shares recent progress of the House and Senate versions of the Fiscal Year 2022 National Defense Authorization Act.
 
Jesse Weathington gives us the latest in Georgia with his Gold Dome Report, and Ramona Lessen reviews two recent Senate committee hearings covering cryptocurrencies and the implementation and enforcement of the U.S.-Mexico-Canada (USMCA) trade agreement. Finally, be sure to check out the Infographs for an in-depth look at current hot topics.
 
This Week in Washington typically follows Congress’s schedule, observing a break in August to rest and plan for the fall legislative session. That said, we’ll continue to monitor legislative activity now and over the summer recess and pledge to update our kind readers as needed.
 
As always… stay safe, healthy AND sane.

Todd Smith
Chairman, Georgia Group

Jesse Weathington
Director, Georgia Group
Washington Whispers
By Patrick Robertson, Strategic Partner
 
You have read too many words in this space over the last year about the prospects for a bipartisan infrastructure deal, and this week was no exception. However, with bipartisan negotiators reaching a deal Wednesday in Washington, time is short for them to reduce the agreement to legislative text and move it through the House and Senate. The House was expected to leave Washington for the rest of the summer on Friday but could extend its time here if needed. The Senate is scheduled to be here next week but then leave and return after Labor Day.
 
Both chambers have said they may extend their time in session if time is needed, but many Members of Congress have plans for family summer vacations or official travel around the country and across the globe.
 
The current state of play is nothing short of uncertain, as negotiators have reached a deal but still must hash out the text and work to get as many Senators on board as possible. 
 
Senator Rob Portman (R-OH) has emerged as the top Republican senator in negotiations, speaking with White House Senior Advisor Steve Ricchetti regularly. Both are seasoned dealmakers and long-time creatures of Washington. At the same time President Biden hosted Senator Kyrsten Sinema (D-AZ) at the White House this week to keep talks on track.
 
Last week, Senator Majority Leader Chuck Schumer (D-NY) scheduled a cloture vote on a bipartisan infrastructure bill, but negotiators did not have a deal in place before that vote. As a reminder, cloture is the process by which the Senate limits debate on legislation. Senate Democrats voted in unison to move to debate a bill without legislative text to jumpstart the process, while Republicans voted against doing so because they had not yet seen any language. Cloture requires 60 votes, so the 50-50 split left the Senate without a plan to move forward.
 
The Senate voted on Wednesday night (July 28) to move to invoke cloture and debate the bill. This vote saw 17 Senate Republicans join all 50 Senate Democrats to agree to proceed to an infrastructure bill, easily passing the 60-vote threshold to invoke cloture. Now we wait to see text of that bill to see the debate move further along.
 
...continued after the Gold Dome Report
Partner and
Georgia Group Chairman

Partner and
Georgia Group Director


Partner

Partner
INFOGRAPHS
Click image to download
Breaking down the Senate infrastructure agreement’s $550B in new spending
What you need to know about Lina Khan's FTC
CDC: Delta variant now causing 82% of new Covid-19 cases
What you need to know about Job Training Programs
Vaccine Tracker:
68.4% of the U.S. has received first dose
What you need to know about
How The IRS and Congress are
Addressing Taxation Of Cryptocurrency
Gold Dome Report
by Jesse Weathington, Partner and Georgia Group Director
 
Visitors to Savannah or Atlanta hoping to catch a last-minute summer trip before school begins will need to wear a mask with their flip-flops after the CDC reversed course on previous indoor masking guidance due to a surge in ‘delta’ variant COVID-19 cases around the country. Governor Brian Kemp, having ended the state’s Public Health Emergency on June 30, has made clear that Georgia will not return to lockdowns or statewide masking mandates, but the expiry of his extraordinary powers also allows localities to institute their own. Predictably, partisan fault lines quickly re-emerged as cities and private businesses have adapted to the new normal, with some eateries even adopting “no shirt, no shoes, no shots, no service” policies barring the unvaccinated.
 
This has resulted in political figures on the left and right capitalizing on the controversy for their own ends. While the issue splits somewhat neatly along geographic and partisan lines, it does create tension between the liberty interests of private property versus a person’s right to direct their own medical decisions. Reimposing mask mandates for the vaccinated risks undermining a key incentive for the unvaccinated to get COVID jabs. In any case, a large portion of the state’s (mostly unvaccinated) school age population will return to class beginning next week under district masking mandates.
 
The trench warfare over the previous presidential election continued unabated through July, with the Rules Committee of the United States Senate holding its first field hearing in decades in Atlanta on the issue of voting rights and state election bills, particularly Georgia’s SB 202. This week, the State Senate GOP began the process of requesting a performance review of Fulton County elections, which under SB 202 could eventually allow for a state-appointed temporary elections superintendent to assume administrative responsibilities from the county’s superintendent. House GOP delegation members from Fulton signaled they would do the same, which would trigger a review. Fulton Democrats signaled they would fight such a move tooth-and-nail.
 
Crime has continued to occupy the center stage in state politics, with Governor Kemp addressing a House Public Safety committee hearing and indicating that he was likely to add criminal justice and public safety as items under consideration in the looming special redistricting session to address the surge in Atlanta’s violent crime rate. Each of the ‘big three’ GOP leaders has outlined a differing approach to the problem: additional state police presence in the capital, law enforcement tax credits, and addressing mental health as a driver of criminal activity. The issue is inexplicably linked to the Atlanta mayoral race and the viability of the Buckhead cityhood movement, so it is likely to continue to dominate Peach State political rhetoric for the foreseeable future. 
Washington Whsipers, cont'd.

Liberals suggested the Senate should move immediately to the partisan reconciliation process expanding on the $3.5 trillion package the Senate is expected to move this fall to include the parameters of a potential bipartisan deal. Moderate Senate Democrats and the President are still very invested in the bipartisan agreement, so they are advocating moving forward. 
 
At one point last week, Senator Portman suggested there were as many as two dozen unsettled issues, and we have since learned that nothing is final until everything is final. After a Democratic offer earlier this week, Republican negotiators suggested resolved issues were reopened. 
 
All of this could lead one to think these discussions were over, but it was very clear they were not. Neither side walked away from the virtual negotiating table and both sides seem committed to seeing this through. And both sides have a lot to gain.
 
The President and moderate Democrats will do what they promised – find common ground on a traditionally bipartisan issue that benefits every corner of the country with road, bridge, port, airport, sewer, transit, and other infrastructure projects. The President will strengthen his case of being a dealmaker who is not a relic of past Senates.
 
Republicans will have the chance to vote for something after uniformly opposing the American Rescue Plan, announcing they will vote against a clean debt ceiling increase and opposing the next Democratic reconciliation bill likely to come in the fall. They will deliver projects to their states and districts and show they can work with the President when he is reasonable. While there are likely 20-25 Senate Republicans who will not vote for even this bipartisan bill, I expect the final vote count will be in the 70s or maybe 80 at the end of the day if an agreement is reached.
 
The coming hours and days are critical. Codifying the deal to legislative language is likely necessary by this weekend or Monday at the latest to change recess plans and try to move something through both bodies quickly. If that happens, Democrats will try to almost immediately turn to passing a budget resolution that will set up the partisan budget reconciliation process to pass their $3.5 trillion social infrastructure bill. While they will not yet have all of the details ironed out, they will work to pass the budget resolution which will set them up to pass the actual policy and spending priorities when they return from their summer breaks.
 
Democrats in the House have expressed some skepticism about the deal already, especially since a number of the proprieties they worked on in recent months were not included. 
 
As is always the case, moderate Senate Democrats like Senators Sinema and Joe Manchin (D-WV) will have an outsized influence over whether this happens. Senator Sinema also made news this week by saying she would not support the $3.5 trillion reconciliation package Democrats are crafting. However, she said she will vote for the budget and will work to make that proposal better. Democrats cannot pass that proposal without unanimity in their caucus of 50 Senators.
 
Keep an eye on the dominoes this week and beyond to see how they fall.
We can save the world with our vaccines — without surrendering our IP to China
By Congressman Erik Paulsen, Strategic Consultant
 
The Biden administration gave Beijing a gift when it endorsed a petition before the World Trade Organization to force the American developers of COVID-19 vaccines and therapeutics to relinquish their intellectual property rights to these medicines.
 
The Chinese government seeks to take over in biotech, a sector where U.S. innovators lead. Biotech is included in its “Made in China 2025” plan, which lists 10 sectors that China aims to dominate. The government intends to force anyone doing business in China in those spheres to hand over know-how.
 
Surrendering IP protections on biomedical technology has dire consequences. Foremost, it guts the foundation of biomedical innovation, which takes huge investments spanning many years to bear fruit. IP protections assure innovators that they can recover those investments and make a profit. Losing IP protection would have a chilling effect on investments in the sector.
 
Equally injurious to America, the IP waiver would allow China to become a biotech powerhouse by piggybacking on American innovation.
 
A waiver on IP for COVID-19 vaccines would accelerate the timeline for “Made in China 2025.” The mRNA technology which undergirds the Pfizer-BioNTech and Moderna vaccines has uses beyond this pandemic. It has the potential to take on cancers and other diseases. With the waiver, China and others will be emboldened to use the once-proprietary mRNA know-how for broader research and applications.
 
Is this in America’s interest? Mark Cohen, an expert on Chinese IP theft, recently told the Washington Post that the waiver would deliver “a competitive advantage to countries that are increasingly viewed as our adversaries, at taxpayer expense.”
 
Beyond the damage that an mRNA giveaway will inflict on U.S. R&D investments, the waiver sends a signal that America could agree to force American innovators to part with trade secrets every time there’s a global crisis.
 
That attitude will arrest biopharmaceutical innovation. Small biotech firms spearhead 70% of the R&D pipeline, relying heavily on private investors to fund that work. If investors know that innovators may have to give away their discoveries in a global crisis, they’ll deploy their money elsewhere. That’ll make it even harder to draw the R&D investments needed to address infectious diseases, including drug-resistant infections and viruses. America is benefiting greatly from the early access to COVID-19 treatments and vaccines, saving lives and speeding economic recovery. Preserving U.S. leadership in biomedical innovation includes preserving the incentives that helped make it the world’s leader.
 
A final downside of the waiver is the ability for American firms to find a cure for the next pandemic. Among the greatest threats is bacteria resistant to our current arsenal of antibiotics that becomes a pandemic-inducing superbug. Already, the market for new antimicrobials is broken. Only a handful of biotechs have them in development, and many have gone bankrupt trying to commercialize one.
 
“A lot of people have rightly said we need to start thinking about preparing for the next pandemic now,” noted Craig Garthwaite, a health care-business professor at Northwestern University. “Suspending IP for vaccine manufacturers would send exactly the wrong signal for the future.”
 
For the sake of patients everywhere, American IP rights must stay protected. It’s the only way to keep China at bay and American innovators at work.
 
Erik Paulsen represented Minnesota’s 3rd Congressional District in the U.S. House of Representatives from 2009 to 2019 and currently serves as a strategic consultant for Total Spectrum. This piece originally appeared in the International Business Times.
Defense Update
By Al Jackson, Strategic Consultant
 
The Senate Armed Services Committee (SASC) earlier this month put forth its version of the Fiscal Year 2022 National Defense Authorization Act (NDAA). The bill funds the department at $740 billion, which includes billions more in equipment purchases than the administration desired in their budget, which proposed funding the military at $716 billion. Additionally, the legislation addresses the issue of how serious crimes are handled by military officers, and for the first time in our history, requires women to register for the possibility of future military drafts, and increases parental leave to 12 weeks for all service members after the birth, adoption, or foster care placement of a child. 
 
The bill was passed out of committee by a vote of 23-3. Republican lawmakers in both the House and Senate have advocated for increased defense spending, indicating the administration’s number was insufficient to counter threats like a growing Chinese military and terrorist groups worldwide.
 
It will be interesting to see how the Senate version of the NDAA will be reconciled with the House Armed Services Committee’s version, as Chairman Adam Smith (D-WA) has indicated previously that $716 billion is adequate for military needs. Progressives in both Houses believe the administration’s number of $716 billion is too high. 
 
The Senate version of the NDAA highlights additional funding for the F-35 program, including $85 million to buy an additional F-35A for the Air Force and $535 million to purchase an additional five F-35C aircraft. (While both the Navy and Marines buy that version of the jet, the legislation does not specify which branch is making those purchases.) The bill also increases funding for a wide range of aircraft programs: $575 million for five more Boeing F-15EX fighter jets for the Air Force, $191 million for a Northrop Grumman E-2D aircraft for the Navy, $306 million for two Lockheed Martin C-130Js, $192 million for two KC-130J tanker aircraft, and $250 million for two CH-53K helicopters for the Marine Corps.
 
The bill, as predicted, also rejects some of the United States Air Force’s (USAF) plan to retire legacy aircraft such as the A-10 Warthog, which has a presence in Arizona, Georgia, and Utah. The legislation did, however, permit some aircraft divestments. Namely, it would allow for the retirement of 18 KC-135 aircraft and 12 KC-10 aircraft, enabling the continued phasing out of the KC-46 aircraft. 
 
Over the past decade, the service has attempted to divest some or all of its remaining 281 A-10 Warthog attack planes, which have flown close air support missions for ground troops since the late 1970s. In the FY 2022 budget submitted by the administration, the USAF had hoped to “mothball” 42 A-10s, with the goal of reaching an end state of 218 A-10s by the end of 2023. At the same time, it would extend the life of the rest of the aging Warthog inventory with new wings. However, the Senate committee’s proposed legislation would prohibit any reduction of the A-10 fleet. This action by the committee counters the USAF and members of the Florida delegation, who have highlighted that keeping the A-10 viable threatens the availability of skilled maintainers for service of the 91 new jets to be delivered between FY21 and FY22. 
 
The Army, contrary to the administration’s request, authorized an increase of procurement funding for a range of combat vehicles, including a combined $746 million for the Abrams tank, Bradley fighting vehicle, Paladin self-propelled howitzer, and Joint Light Tactical Vehicle. The committee also added $377 million for UH-60L Black Hawk and CH-47F Block-II Chinook helicopters.
 
Bolstering research and development of advanced technologies meant to counter the fast-paced China threat was also a goal of the bill. The Committee added $1 billion in additional science and technology funding to pay for research and prototyping activities in areas such as artificial intelligence, microelectronics, advanced materials, 5G, and biotechnology.
 
The SASC included provisions from the controversial “Military Justice Improvement Act,” which will remove legal decisions on sexual assault and other serious crimes from the traditional military chain of command. Instead, decisions on whether to pursue or drop charges will be handled by a yet-to-be-established independent office of military prosecutors.
 
The full Senate is expected to vote on the authorization measure after their August recess. The House Armed Services Committee is expected to finalize its companion legislation at the start of September, with a potential chamber vote later in the month.
 
The House Appropriations Committee earlier this month approved $706 billion over the objections of panel Republicans. The 33-23 party-line vote to approve the bill followed objections from Republicans that the budget’s $10 billion, or 1.4 percent increase was to counter global threats, particularly from China. The committee stuck to the administration’s budget of $8.54 billion in procurement funds for the 85 aircraft requested, 48 of which are Air Force F-35A models. The Air Force is currently planning to buy a total of 1,763 of the Lockheed Martin F-35 aircraft. 
 
The bill adds aircraft to all the services:
  • Six additional MQ-9 Reaper drones, split between the Marines and Air Force, doubling the administration’s request from six to 12.
  • Four additional C-130J turboprops of different variants, including the baseline C-130 transport, Marine Corps KC-130 tanker, and Special Ops MC-130. This move increases the administration’s request from nine to 13.
  • Two additional CH-53K helicopters for the Marines funding an additional two aircraft making the request from nine to 11.
  • $212 million worth of Black Hawk helicopters, a third more than the request, primarily for the Army.
 
Overall, the bill increases procurement $1.7 billion. It also increases readiness funding by $696 million including a full $1 billion for maintenance and training. 
Hearing Report
By Ramona Lessen, Executive Director

Senate Banking, Housing and Urban Affairs Committee hearing on Cryptocurrencies: What are they good for?
Tuesday, July 27, 2021; 10:00 a.m.
 
To view a livestream of the hearing, please click here.
 
Member Statements
Senator Sherrod Brown (D - OH), Chairman
 
Senator Patrick J. Toomey (R - PA), Ranking Member
 
Witnesses
Professor Angela Walch
Professor Of Law
St. Mary’s University School of Law
San Antonio, TX
 
Mr. Jerry Brito
Executive Director
Coin Center
Washington, D.C.
 
Ms. Marta Belcher
Chair
Filecoin Foundation
San Francisco, CA
 
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Senate Finance Committee hearing on Implementation and Enforcement of the United States – Mexico–Canada Agreement: One Year After Entry into Force
Tuesday, July 27, 2021; 09:30 a.m.
 
To view a livestream of the hearing please click here.
 
Member Statements
Senator Ron Wyden (D - OR), Chairman
 
Senator Mike Crapo (R - ID), Ranking Member
 
Witnesses
Benjamin Davis
Director Of International Affairs
United Steelworkers
Pittsburgh, PA
 
Allan Huttema
Chairman
Northwest Dairy Association/Darigold Board of Directors
Parma, ID
 
Michelle McMurry-Heath, MD, PhD
President And CEO
Biotechnology Innovation Organization
Washington, D.C.
 
Beth Lowell
Deputy Vice President, U.S. Campaigns
Oceana
Washington, D.C.
Campos
Women's Business Center Director
Center for Rural Affairs
Lyons, NE
 
Mr. Brett Challenger
Senior Vice President of the Regional Agribusiness Banking Group
CoBank
Greenwood Village, CO
 
Mr. Alan M. Crawford
Owner and President
Rangaire Manufacturing Company
Cleburne, TX
This e-newsletter is produced by Total Spectrum/SGA and Total Spectrum Georgia. The views expressed herein may include subjective commentary and analysis that are the views of the editors and authors alone. Information in this e-newsletter is obtained from sources believed to be reliable, but that cannot be guaranteed as independently investigated or verified. Information in this e-newsletter is not an endorsement, advertisement, recommendation, or any type of advice, political, legal, financial, or otherwise. With questions about the content of this e-newsletter, please contact Total Spectrum Georgia.