Overnight Regulation: Feds hint at blocking Broadcom deal over national security | USDA withdraws animal welfare rule | Court finds EPA broke law with smog rule delay | Pruitt misses deadline on travel docs
Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Monday evening, and both the House and Senate are in session. Here’s what to expect in Congress this week.
THE BIG STORY:
The Treasury Department has told the Singapore-based Broadcom that national security concerns about its proposed takeover of Qualcomm have been “confirmed,” increasing the likelihood officials will recommend that President Trump block the deal.
Broadcom’s efforts at a hostile takeover of Qualcomm are currently being investigated by the Committee on Foreign Investment in the U.S. (CFIUS), an interagency panel chaired by the Treasury Department tasked with investigating foreign deals for U.S. companies. The committee put a halt to Broadcom’s bid last week in order to investigate the potential deal over national security concerns.
In a letter to lawyers representing both companies dated Sunday, Aimen Mir, a top Treasury and CFIUS official, hinted that the interagency panel is leaning toward recommending against the deal.
“That investigation has so far confirmed the national security concerns that CFIUS identified to you in its letter on March 5, 2018. That investigation is expected to close soon,” Mir wrote, asking Broadcom for additional information.
Qualcomm made the letter public Monday.
US concerns… CFIUS is concerned that the deal would threaten the investments Qualcomm has made in areas like 5G technology, thus opening the door for other countries to surpass the U.S. in the race to establish new wireless networks.
“Given well-known U.S. national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States,” CFIUS wrote in a letter to the companies’ attorneys last week.
Broadcom’s response… Broadcom has since been trying to reassure lawmakers and regulators that it intends to prioritize investments in 5G development and preserve U.S. leadership in the field.
“Any notion that a combined Broadcom-Qualcomm would slash funding or cede leadership in 5G is completely unfounded,” Broadcom CEO Hock Tan told Congress last week. “We have a proven track record of investing in and growing core franchises in the companies we acquire. In the case of Qualcomm, this will be 5G cellular.”
Tan emphasized that Broadcom is moving to the U.S. and he promised not to sell any of Qualcomm’s assets to foreign entities.
The Hill’s Harper Neidig has the full story here.
ON TAP FOR TUESDAY
The Senate Energy Committee holds a hearing on President Trump’s fiscal 2019 budget proposal for the Interior Department. Interior Secretary Ryan Zinke will testify.
Senate Commerce subcommittees hold hearings on state and local infrastructure and investing in next generation broadband.
The Senate Judiciary Committee holds a hearing on the Freedom of Information Act, “examining the administration’s progress on reforms and looking ahead.”
REG ROUNDUP
Guns: The Trump administration on Sunday unveiled a series of proposals on school safety and gun restrictions in the wake of the recent shooting in Florida, including a push for states to provide firearms training for school staff members.
White House officials said the administration will establish a federal commission to assess how to best address gun violence in schools, though it will not propose any legislation of its own. The administration will also not push for universal background checks or an increase in the age requirement to purchase a rifle.
Instead, as part of an effort to “harden” American schools, officials said the administration will provide assistance to states to arm teachers, encourage them to pass laws keeping guns away from dangerous individuals and call on Congress to pass legislation strengthening the national background check system.
Read more from Brett Samuels here.
More on guns: President Trump on Monday suggested he still supports raising the minimum age for purchasing a gun despite the idea being left out of a White House proposal released over the weekend.
In two morning tweets, the president reiterated his support for strengthening background checks, arming school officials and banning bump stocks.
The president also said he supports raising the age for purchasing rifles to 21, but said there is not enough political support to make the idea law.
“Very strong improvement and strengthening of background checks will be fully backed by White House. Legislation moving forward. Bump Stocks will soon be out. Highly trained expert teachers will be allowed to conceal carry, subject to State Law. Armed guards OK, deterrent!” Trump tweeted.
Jonathan Easley breaks it down here.
And the White House defended Trump’s proposals Monday, amid questions on whether he had “chickened out” after pressure from the National Rifle Association.
White House press secretary Sarah Huckabee Sanders said Trump “hasn’t backed away” from his support of expanding background checks or raising the age limit on gun purchases, although neither were addressed in a plan the administration rolled out Sunday night.
The NRA, which contributed heavily to Trump’s election campaign in 2016, opposes both measures.
“He hasn’t backed away from these things at all,” Sanders said at a press briefing where she faced numerous questions on the issue, including from a Washington Post reporter who asked why Trump “backed away from some of the ideas he brought into the discussion” and “chickened out.”
“They’re still outlined in the plan,” Sanders said.
Jonathan Easley has more here.
Animal welfare: The Trump administration has decided to withdraw an Obama-era rule that would have set new standards for the way animals should be treated if their meat is going to be sold as “certified organic.”
The Department of Agriculture (USDA) announced Monday that it is officially withdrawing the final rule it delayed for the third time in November. The agency said the rule, which was set to take effect in May, exceeded the department’s statutory authority and could have had a negative effect on voluntary participation in the National Organic Program.
“The existing robust organic livestock and poultry regulations are effective,” Greg Ibach, under secretary of Agriculture for marketing and regulatory programs, said in a statement.
Finalized under the Obama administration in April 2016, the rule largely dictated how producers and handlers participating in the National Organic Program are required to treat livestock and poultry to ensure their wellbeing.
The rule stipulated, for example, that poultry must be housed in spaces that are big enough for the birds to move freely, stretch their wings, stand normally and engage in natural behaviors. Livestock, meanwhile, must be provided access to an outdoor space year round.
Lydia Wheeler has the details here.
Environment: The Trump administration broke the law when it missed a deadline last year in implementing the Environmental Protection Agency’s (EPA) ozone pollution rule, a federal court ruled Monday.
EPA head Scott Pruitt was supposed to announce by Oct. 1 which areas of the country were in compliance with the 2015 Obama administration rule.
Pruitt later announced findings for areas that comply, but not for areas that do not.
Judge Haywood Stirling Gilliam Jr. of the federal District Court for the District of Northern California said Monday that Pruitt broke the law, and ordered him to publish the findings for almost all of the rest of the country by April 30.
Environment: Environmental Protection Agency (EPA) Administrator Scott Pruitt has failed to meet a key deadline in the controversy over his first-class travel.
Pruitt has yet to provide key travel documents to Rep. Trey Gowdy (R-S.C.), the chairman of the House Oversight and Government Reform Committee, who requested documentation and explanation surrounding Pruitt’s first- and business-class work travel. The deadline to answer Gowdy was March 6.
In a letter addressed to Pruitt at the end of February, the Republican congressman pointed out concerns over the EPA chief’s reported use of a “blanket waiver” to fly first class, a method Gowdy called prohibited.
A spokesperson for the EPA said the agency has been in touch with Gowdy’s office in an attempt to get the information to him.
Pruitt has made headlines in the past few months over news that he primarily uses first class and business class when flying, including on short destination flights such as between Washington, D.C., and New York City.
Pruitt promised in February that his next flight would be in coach.
Environment: Attorneys for the Trump administration are asking a court to dismiss a lawsuit challenging Environmental Protection Agency (EPA) Administrator Scott Pruitt’s new policy on science advisers.
Justice Department attorneys argued that Pruitt’s policy preventing EPA grant recipients from serving on external advisory committees is well within government ethics rules and Pruitt’s authority to pick his own advisers.
“Plaintiffs make the extraordinary claim that the EPA’s effort to ensure a diversity of viewpoints on advisory committees that provide advice and recommendations to the administrator somehow violates government-wide ethics rules. But the directive that plaintiffs challenge does no such thing,” the government wrote in a motion filed late Friday.
Pruitt rolled out the policy in October, arguing that EPA grantees — generally academics with expertise in areas such as public health and pollution — have significant conflicts of interests. He said the new policy for advisers would eliminate such conflicts.
Energy: Environmental Protection Agency (EPA) Administrator Scott Pruitt is considering taking action to limit what he sees as speculative trade of ethanol credits in an effort to keep prices down.
Pruitt told reporters that one idea is to limit who can trade the credits that some refiners have to buy to comply with the federal ethanol mandate.
“There’s some things on the trading platform I think should happen no matter what,” Pruitt told reporters at EPA headquarters Monday, according to the Houston Chronicle.
“There seems to be a hoarding of [Renewable Identification Numbers], which inflates the price of RINs. Some have talked about limiting the participants who buy and sell, so you can get away from some of the speculation that’s taking place.”
Energy: Two leading industry leaders in uranium mining are challenging the Interior Department’s authority to place a 20-year mining ban on 1 million acres of public land next to the Grand Canyon.
The American Exploration and Mining Association (AEMA) and the National Mining Association submitted a request to the Supreme Court, asking for a review of the Obama-era ban that prohibits uranium mining on public lands next to the national monument.
In AEMA’s petition to the court, the group brought into question whether Congress, when establishing the Federal Land Policy and Management Act (FLPMA) in 1976, intended to give Interior and its secretary “unfettered power to make large-tract withdrawals.”
In 2012, then-Interior Secretary Ken Salazar instituted the ban in part because the neighboring Havasupai tribe relies on groundwater from the area.
The 9th Circuit Court of Appeals ruled against the mining groups in December, upholding the ban on mining.
Read more from Miranda Green here.
Pollution: Two former Environmental Protection Agency (EPA) chiefs are urging current administrator Scott Pruitt to withdraw a proposal to lower pollution standards for heavy-duty trucks after reports the agency may have relied on a compromised study to reach its decision.
The joint letter from former administrators Carol Browner and Christine Whitman, who served under Presidents Bill Clinton and George W. Bush, respectively, asked Pruitt to utilize “sound science” and consider the best available research when making policy decisions regarding pollution standards for glider trucks.
“Throughout our tenures as Administrators, our policy decisions were centered on the best available research and scientific protocols. We are deeply troubled that the Agency’s steadfast commitment to public health and environmental protection based on the best available science is being undermined – putting at risk air and water quality and endangering children and families,” the letter reads.
At issue are glider trucks, which have newly-built truck bodies but older engines that are not subject to the same emissions regulations.
The letter follows questions about a key study relied on by the EPA for deciding to ease the pollution standards.
Tech: A federal judge ruled that individuals affected by the Yahoo data breaches can sue the company.
Judge Lucy Koh of the U.S. District Court for the Northern District of California on Friday ruled against a motion from Verizon, which bought some of Yahoo’s businesses, seeking to dismiss breach claims from users.
Among the suits are claims alleging negligence and breach of contract.
The Yahoo breaches, which the company believes affected all 3 billion accounts, occurred in 2013 and 2014 but were not revealed until 2016. Users argued the breach cost them money by requiring the purchase of identity-theft prevention services and that Yahoo should have disclosed the breach sooner.
“Plaintiffs’ allegations are sufficient to show that they would have behaved differently had defendants disclosed the security weaknesses of the Yahoo Mail System,” Koh, who was nominated by President Obama to the bench, wrote in her decision.
Tech: AT&T and Time Warner argued in court documents filed Friday that steep competition with new media companies would prevent prices from rising if the two media giants are allowed to merge.
“There is no fact-based evidence that this merger will harm competition,” the companies said in a trial brief. “Nothing will be withheld from competitors; consumer prices will not go up.”
The companies specifically said competition with Facebook, Google parent company Alphabet, Amazon and Netflix would prevent them from creating a monopoly, according to Reuters.
AT&T and Time Warner are fighting the Department of Justice (DOJ), which is suing to block the merger. The DOJ argues that it would significantly harm competition in the industry and drive up prices for consumers.
Max Greenwood has the story here.
Health care: The top Democrat on the House Energy and Commerce Committee announced his strong opposition Monday to a revised version of the “right to try” bill on experimental drugs that the panel’s top Republicans introduced over the weekend.
The bill “puts vulnerable patients at risk by completely removing the Food and Drug Administration [FDA] from the review or oversight of access to investigational therapies,” Rep. Frank Pallone Jr. (D-N.J.), the Energy and Commerce Committee’s ranking member, said in a statement.
“Rather than rush to pass a bill that was hastily unveiled over the weekend without careful consideration or bipartisan consensus, we should work together to find a sensible path forward that protects patients and upholds FDA’s approval process while ensuring patients, with no other recourse, have access to investigational therapies,” he said.
On Sunday, House Majority Leader Kevin McCarthy (R-Calif.) announced the House would vote Tuesday on the measure, which would allow terminally ill patients to request access to drugs the FDA hasn’t yet approved. They could make that request without going through the FDA. The bill has some powerful backers.
Click here for Rachel Roubein’s report.
FROM THE HILL’S OPINION PAGES
Obama-era ’employer’ definition back from the dead to destroy franchises
Congress, bring the FCC’s authority up to speed
IN OTHER NEWS
US trading partners seek guidance on tariffs — The Wall Street Journal
SEC drops case against New York financier’s sister — The Wall Street Journal
Senate is poised to roll back rules meant to root out discrimination by mortgage lenders — The Washington Post
Towing industry preparing for Coast Guard’s new regulations — The Paducah Sun
EON-Innogy energy deal could spark regulatory power struggle — Bloomberg
Inventor of the world wide web Tim Berners-Lee: We must regulate tech firms to prevent ‘weaponized’ web — The Guardian
Rookie crypto investors look past risks, flock to London show — Reuters
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