Overnight Regulation: Omnibus includes deal on tip-pooling rule | Groups sue over rules for organic livestock | AT&T, DOJ make opening arguments in merger trial

Welcome to Overnight Regulations, your daily rundown of news from the federal agencies, Capitol Hill and the courts. It’s Thursday evening here in Washington where a $1.3 trillion spending bill advanced in the House. Though when the Senate will vote on the bill to avoid a shutdown is up in the air.

 

THE BIG STORY

Lawmakers added language to the $1.3 spending bill to prevent employers from being able to steal workers’ tips under the Labor Department’s controversial tip-pooling rule.

Sen. Patty Murray (D-Wash.) reached the deal with Labor Secretary Alexander Acosta to add a rider in the bill that amends the Fair Labor Standards Act to prevent employers, managers or supervisors from pocketing workers’ tips regardless of whether they earn gratuities on top of a full minimum wage.

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The lack of a safeguard was a sticking point of controversy on the rule that allows employers to pool the tips of workers who make the full minimum wage and split them with non-tipped workers.

But Acosta has also been under fire for his actions in the rule making process. 

Sen. Elizabeth Warren (D-Mass.) sent letters to Acosta and Office of Management and Budget Director Mick Mulvaney on Thursday demanding answers over reports the two hid an unfavorable impact analysis from the proposed rule that showed workers could lose billions in gratuities. 

Bloomberg Law reported Wednesday that Acosta and Mulvaney also overruled Office of Information and Regulatory Affairs Administrator Neomi Ra, who objected to its release without the report.

Warren is now calling on Sen. Lamar Alexander (R-Tenn.), the chairman of the Health, Education, Labor, and Pensions (HELP) Committee, to hold an oversight hearing on the controversy.

Read the full story here.

 

REG ROUNDUP

Agriculture: Consumer groups are suing the Trump administration over its decision to withdraw an Obama-era rule that set new standards for how animals must be treated if their meat is going to be sold as “certified organic.”

The Center for Food Safety (CFS) and three other groups filed the lawsuit in the U.S. District Court of the District of Columbia on Thursday.

They argue that the Department of Agriculture (USDA) wrongly claimed it lacked the authority to regulate practices such as animal space and preventative health care for livestock under the organic label and gave an arbitrary rationale for withdrawing the rule.

The CFS said the USDA claimed the regulation would be costly, despite its own economic analysis finding only minor costs.

Read the full story here. 

 

Tech: The government and AT&T delivered their opening arguments Thursday in the trial over the telecom giant’s proposed $85 billion merger with Time Warner.

Justice Department attorney Craig Conrath focused on the “ability and incentive” AT&T would have to use popular Time Warner programming — which includes HBO shows, March Madness, NBA games and more — to hurt competition. And he warned that consumers could end up paying more for television subscriptions.

“Effectively, consumers will be forced to pay for an extra month of Time Warner content every year even though they’re only getting 12 months,” Conrath argued.

But Daniel Petrocelli, the lead attorney for the merging companies, dismissed that argument as “preposterous,” saying that AT&T’s business relies on finding innovative ways to distribute content to consumers.

The two sides made their opening cases Thursday before a packed courtroom that included AT&T CEO Randall Stephenson and Time Warner CEO Jeffrey Bewkes.

The case is widely seen as the antitrust “trial of the century” and has been mired in controversy.

Harper Neidig has the story here. 

 

Tech: Facebook chief executive Mark Zuckerberg said on Wednesday that he’s open to having his company be regulated.

“Actually, I’m not sure we shouldn’t be regulated,” Zuckerberg said in an interview with CNN that represented some of his first public remarks since the Cambridge Analytica controversy plunged his company into crisis and led to calls for his testimony before Congress.

“I actually think the question is more ‘What is the right regulation?’ rather than ‘Yes or no, should it be regulated?'” Zuckerberg told CNN.

Facebook has faced intense scrutiny from critics, including lawmakers on Capitol Hill, since it revealed that the British research firm Cambridge Analytica improperly took data from 50 million Facebook users without those users’ consent.

Ali Breland has the story here.

And on Thursday, lawmakers on the House Energy and Commerce Committee called on Zuckerberg to testify on the Cambridge Analytica controversy.

More on that here.

 

Health care: The House passed “right to try” legislation on experimental drugs largely along party lines Wednesday, sending a bill backed by President Trump to the Senate.

Last week, House Republican leaders put the bill on the floor under suspension of the rules. Democrats objected, expressing safety concerns over how the measure would bypass the Food and Drug Administration (FDA), and it fell short of the necessary two-thirds support it needed.

But leaders made clear the House would take up the bill again. On the second try, the House only needed a simple majority to pass the bill, and easily did so in the 267-149 vote.

Thirty-five Democrats voted for the bill, and two Republicans opposed it.

Now, the measure goes to the Senate, where a version of the bill passed in August by unanimous consent.

The bill lets terminally ill patients request access to drugs the FDA hasn’t yet approved without going through the agency. Patients can request the drugs from manufacturers if the medicine has gone through a small-scale clinical trial and is still under FDA consideration.

Rachel Roubein has the story here.

 

Environment: The $1.3 trillion government-wide spending bill released late Wednesday rejects President Trump’s proposal to slash the Environmental Protection Agency (EPA) budget by 31 percent.

Senior lawmakers negotiating the omnibus appropriations bill instead chose to give the agency $8.1 billion for fiscal 2018, keeping it at the same funding level as 2017.

“The American people support investments in clean air and water, public lands, parks, and the arts and humanities, which are vital to the health and well-being of our communities and our economy,” Sen. Tom Udall (N.M.), the top Democrat on the Appropriations Committee subcommittee responsible for the EPA, said in a statement.

The funding level represents a victory for Democrats, who had argued that Trump’s cuts would be disastrous. But much of the GOP also opposed the 31 percent proposed cut.

Timothy Cama has more here.

 

Health care: A group of Republicans wants to bolster mandatory minimum sentencing for trafficking fentanyl, a move that comes as President Trump advocates for harsher punishments for drug traffickers.

Fentanyl is “as much a weapon of mass destruction as it is a drug,” Sen. Tom Cotton (R-Ark.) said at a Thursday press conference, holding up a nearly empty salt shaker and explaining how that amount — less than 40 grams — of fentanyl could kill thousands of people.

Federal mandatory minimums for fentanyl kick in after trafficking 40 grams or more.

“That’s why mandatory minimum sentences are so important and our sentences for fentanyl are so inadequate,” he said later.

The bill, which will be introduced Thursday, would reduce the amount of fentanyl required for mandatory minimum sentences to apply. The effort, senators said, is aimed at taking into account the synthetic drug’s potency — which is up to 50 times more powerful than heroin.

Rachel Roubein has more here.

 

Finance: Citibank announced Thursday that it will start requiring clients to place some restrictions on gun sales, including banning the sale of firearms to anyone under the age of 21.

The bank will also require retail clients to only sell guns to individuals who have passed a background check and to not sell bump stocks or high-capacity magazines.

The company announced the changes in a statement condemning gun violence and slamming lawmakers for failing to pass gun control measures. It said the policy would apply to new clients.

Jacqueline Thomsen has the story here. 

 

Environment: Lawmakers grilled federal officials Thursday over why power is still not restored to all of Puerto Rico six months after Hurricane Maria devastated the island.

“I just want you to imagine your own hometown here in the mainland without electricity for two months — three, four, six months without power, with also failing communications with the only assurance that ‘we are working on it,'” said Del. Jenniffer González-Colón (R-Puerto Rico), at a hearing of the House Oversight and Government Reform Committee Subcommittee on National Security, expressing frustration over the slow recovery.

“The people of Puerto Rico have been admirably patient and justifiably tired. If we were a state, we would have five congressional districts and two senators — no one would leave a state without power for six months.”

About 100,000 people still lack power on the island.

Kayiu Wong has the story here. 

 

IN OTHER NEWS

Mulvaney, Acosta override regulatory office to hide tips rule data – Bloomberg Law 

Undocumented and old enough for DACA, but too late to apply – The Washington Post 

Top regulator worries that crypto markets could be full of manipulation – Bloomberg 

Senator tells Ben Carson to stop blaming wife for expensive furniture – The Huffington Post

What would regulating Facebook look like? — Wired 

EU plans tougher consumer laws for Facebook, Gmail — Reuters