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The Washington Report – May 8, 2015

08 May 2015

The Washington Report – May 8, 2015

Washington Report

PATRIOT Act … FEINGOLD VOTE … DO YOU WANT THE NEXT PRESIDENT TO BE SOMEONE WHO BRAGS ABOUT NOT BEING A POLITICIAN? … DOES THE DEFENSE BUDGET HAVE A FUTURE? … CYBERSECURITY AND SILICON VALLEY … POSTAGE REVENUES … GROUNDHOG’S DAY … WHAT’S THE FEC UP TO … OR NOT? … and other news this week … read on.

Best,

Joyce Rubenstein and the Capstone Team (John Rogers, Steve Moffitt, Alan MacLeod, Diane Rogers, Erik Oksala and Ross Willkom)

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PATRIOT ACTTHE PATRIOT ACT Politico: “In an opinion issued Thursday, a three-judge panel from the New York-based 2nd U.S. Circuit Court of Appeals held that a law Congress passed allowing collection of information relevant to terrorism investigations does not authorize the so-called ‘bulk collection’ of phone records on the scale of the NSA program. THE FALLOUT – LAWMAKERS ON EDGE “[The] court ruling against the NSA’s phone data collection sparked a war of words between the Senate’s leaders over the future of the program – with little hope of a quick breakthrough. With lawmakers facing a May 31 deadline to extend or reform parts of the PATRIOT Act, Senate Majority Leader Mitch McConnell and Minority Leader Harry Reid both refused to cede ground. … According to the CIA, had these authorities been in place more than a decade ago, they would have likely prevented 9/11,’ McConnell said on the floor of the chamber. He called soon-to-expire provisions of the PATRIOT Act ‘ideally suited for the terrorist threat we face in 2015.’ Reid, meantime, called for an immediate vote on the USA Freedom Act, a surveillance reform bill advancing in the House that would end the telephone metadata program saying, “Instead of bringing the bipartisan NSA reform bill up for a vote, Sen. McConnell is trying to force the Senate to extend the bulk data collection practices that were ruled illegal today,” he said. “It would be the height of irresponsibility to extend these illegal spying powers when we could pass bipartisan reform into law instead.”

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SENATE PASSES IRAN REVIEW BILL Politico:  “The Senate passed legislation that would allow Congress to review and potentially reject a nuclear deal with Iran on Thursday afternoon as senators looked to put an end to acrimonious floor debate. The bill passed 98-1 after a messy floor fight largely prevented opponents of President Barack Obama’s nuclear negotiations with Iran from offering amendments. The underlying measure would allow Congress to reject the lifting of legislative sanctions on Iran and force the administration to regularly certify Iran is following the terms of any nuclear deal. The administration is currently negotiating the final details of a non-proliferation agreement with Tehran, after talks produced an interim framework in early April. The White House has set a June 30 deadline for finalizing the deal.’ REMINDS ME OF THE FEINGOLD VOTE** Sen. Tom Cotton (R-Ark.), who had pressed for holding controversial amendment votes with GOP presidential hopeful Sen. Marco Rubio of Florida was the one ‘NO’ vote. WHERE COTTON AND RUBIO LEFT OFF “House conservatives plan to press House GOP leaders to allow a series of hard-to-oppose amendments to the Iran nuclear review bill. The move by the conservative House Freedom Caucus could put Speaker John Boehner in a bind. He’ll have to decide whether to clamp down on attempts to change the bill as Majority Leader Mitch McConnell (R-Ky.) did in the Senate, angering his right flank – or to allow votes on their amendments at the risk of tanking the legislation authored by Sens. Bob Corker (R-Tenn.) and Ben Cardin (D-Md.).”

**I DIGRESS Reminds me of the time that former Senator Russ Feingold (D-WI) was the only senator to vote ‘NO’ (turns out against) the Patriot Act in 2001—calling it an FBI ‘wish list’ that allowed the government to go on fishing expeditions that collect information virtually on anyone.”

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HARRY REID PROBLEM IN TRADE LAND Polticio: “The Minority Leader [Reid, D-NV] will block the President’s trade bill until the Senate votes on surveillance reforms and highway funding, Huffington Post reported. He said “Democrats will block the measure until the Senate deals first with a stalled infrastructure bill and a package of reforms to the Foreign Intelligence Surveillance Act, known as FISA. Reid said he has spoken with his leadership team and is confident Democratic senators will stick together to demand the two bills be dealt with before moving to approval for trade promotion authority or the Trans-Pacific Partnership.”

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MAKING BANKERS UNEASY Bloomberg “Starting with December’s showdown with Citi, Elizabeth Warren (D-MA), 65, has been on a tear… Only two years into her term as senator, she has the kind of clout and attention it takes most lawmakers decades – or a presidential run – to build. Her stance as watchdog over the financial industry helped her win a Senate seat. Now, she’s harnessing that into something bigger and more powerful. In January, Warren’s protests effectively blocked Obama from appointing Antonio Weiss, a banker at Lazard, to the No. 3 position at the Treasury Department. In February, she took on Federal Reserve Chair Janet Yellen, calling out the central banker for the conduct of Scott Alvarez, the Fed’s top lawyer, who criticized the swaps push-out rule in a speech. For months, she’s been attacking the Trans-Pacific Partnership, a treaty intended to regulate trade between North America and Asian countries outside of China. The White House wants the agreement badly; Warren casts it as a giveaway to multinational corporations.”

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INFRASTRUCTURE FUNDING AND TAX REFORM. NOT SO FAST. Politico: “Senate Environment and Public Works Chairman James Inhofe (R-OK) – the proudly global warming skeptic – is also doubting Paul Ryan’s tentative vision for using a highway stop gap to get to tax reform, reports the National Journal. “That doubt has profound implications for the upcoming fight over highway funding because other prominent Republicans are staking their hopes on tax reform as the savior of the highway and transit system. Inhofe doesn’t share their faith, and he doesn’t want infrastructure funding to be tied to corporate tax reform because he believes the chances of success are too slim to risk a highway-funding shortfall.”

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LITTLE APPETITE FOR IMMIGRATION FIGHT ON HOMELAND BILL Politico: “Hill Republicans have all but surrendered the fight against President Barack Obama’s executive actions on immigration. A handful of GOP firebrands are still agitating to use Congress’ power of the purse to reverse Obama’s move to shield millions of immigrants here illegally from deportations. But top Republicans say they’re not about to go there again… Better to let the issue play out in the courts, the GOP reasoning goes.”

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DO YOU WANT THE NEXT PRESIDENT TO BE SOMEONE WHO BRAGS ABOUT NOT BEING A POLITICIAN? Gail Collins: “Think about that for a minute. “Politician” isn’t a popular term right now. But claiming that you’re not one when you run for president is a little like applying for a job as brain surgeon by announcing, “I am not a physician.”

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JUSTICE IN BALTIMORE WSJ: “The Justice Department announced it will launch a civil rights investigation of the Baltimore Police Department.” Politico: “The woes of the nation’s 18,000 state and local law enforcement agencies have been placed on the shoulders of around 50 lawyers. These Justice Department lawyers, housed within the agency’s Civil Rights Division, for the past twenty years have represented an aggressive option for the federal government to step in and force rogue law enforcement bodies to clean up their acts.” ELIJAH CUMMINGS WashPost: “The unrest [in Baltimore] occurred as Rep. Cummings, 64, has reached a political crossroads, tempted by the prospect of running to succeed retiring Sen. Barbara A. Mikulski (D-Md.). A victory in that race could make him only the 10th African American to serve in the U.S. Senate. Yet the gravity of Baltimore’s searing social troubles may compel him to remain in the House of Representatives, championing his district’s outsize needs, as he did during the riot and after, a blend of compassion and command.”

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MESSAGE FROM THE WHITE HOUSE  … YOUR VISION FOR THE DEFENSE BUDGET DOES NOT HAVE A FUTURE Politico: “The White House sent Defense Secretary Ash Carter to Capitol Hill on Wednesday with a message for Republicans: their vision for this year’s budget does not have a future. One day after Republicans passed a budget resolution that would increase spending for the Defense Department but decrease it elsewhere across the government, the Pentagon’s chief told the Senate Appropriations Committee’s defense panel that he would not accept that deal even though it would mean more support for his department. SHOULD THE PENTAGON BE EXEMPT FROM SEQUESTRATION? Former Defense Secretaries Leon Panetta and Chuck Hagel helped the GOP gain some leverage on the White House in the big-picture debate over federal spending by blasting sequestration in the strongest terms possible – bolstering the Republican argument that the Pentagon should be exempted from the Budget Control Act of 2011. A WHAT’S ‘GOOD FOR THE GOOSE IS GOOD FOR THE GANDER ARGUMENT Ash Carter, in his testimony on Wednesday, charted a slightly different course than his predecessors – saying he wouldn’t go along with the Republican plan to keep in place strict spending caps on other federal agencies while allowing the Pentagon to evade the caps through increases to the Overseas Contingency Operations war budget.” CAN THE REPUBLICANS DISENTANGLE DEFENSE SPENDING FROM THE REST OF THE DISCRETIONARY BUDGET? Stay tuned.

MIKULSKI PREDICTS ‘TREMENDOUS PROBLEMS’ ON DEFENSE SPENDING Maryland Sen. Barbara Mikulski, top Democrat on the Senate Appropriations Committee, said the House-passed Republican budget plan that cleared the Senate will cause “tremendous problems” as congressional appropriators seek to craft spending bills for next fiscal year for the Pentagon and other federal agencies. “We are not heading for a good situation,” she said during a yesterday’s hearing. “The budget that we passed [Tuesday] is so deeply flawed that it will only provoke tremendous problems in this committee.”

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P.PHILNDAA FLOOR DEBATE COULD BE GROUNDHOG’S DAY Politico: “If at first you don’t succeed in committee, try, try again on the floor. Two of the most heated debates during last week’s committee markup of the NDAA could play out again next week on the House floor. One involves an aging and beloved aircraft the Air Force wants to retire, and the other is over an odd-looking bird that Democrats want on the endangered species list. … The amendments on the A-10 Warthog attack jet and the greater sage-grouse both failed in the HASC last week, following debates that were both lengthy and at times contentious. But the two Massachusetts Democrats who put forward committee amendments dealing with those issues – Reps. Seth Moulton and Niki Tsongas – hope to change their luck when the proposals go before the full House.” A reminder: Not all of the amendments will make it to the floor. The House Rules Committee, and by extension GOP leaders, will vote on what amendments will actually be considered on the floor.”AND THEN THERE’S THIS ‘Senators Rally for A-10″ A group of Republican senators led by Kelly Ayotte of New Hampshire [held] a press conference in support of keeping the A-10 Warthog attack jet that the Air Force wants to retire. TO STATE THE OBVIOUS The HASC included $683 million for the A-10 in its defense authorization bill, and McCain’s presence at today’s press conference is a strong indicator of what he plans to do in his bill out next week.”

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DEFENSE CONTRACTORS GOBBLE UP SMALLER CYBER FIRMS Politico: “Some of the largest defense contractors, anxious to tap into an expanding market, are gobbling up cybersecurity firms in what analysts see as a trend that’s changing the makeup of some of the nation’s most noteworthy arms manufacturers. Raytheon’s recent announcement that it plans to form a new $2.3 billion cybersecurity company with Vista Equity Partners was the latest in a string of defense primes utilizing acquisitions and mergers to take advantage of smaller firms’ cyber expertise and broaden their government and commercial appeal. The deal builds on similar bets the company has made in recent years, including its 2010 purchase of Trusted Computer Solutions, which helped form what is now a division called Raytheon Cyber Products. One of Raytheon’s main competitors, Lockheed Martin, has made its own foray into cybersecurity acquisitions; in March 2014, for example, it bought Industrial Defender.”

PENTAGON TO LAUNCH CYBERSTRATEGY PUSH IN SILICON VALLEY LA Times: “Defense Secretary Ashton Carter unveiled a new military cyberstrategy last month in the heart of Silicon Valley, reaching out to Facebook Inc. and other companies to help boost the nation’s digital defenses.

THIS WEEK on the Capstone Blog, CEO John Rogers discusses Secretary Carter’s proposed outreach to Silicon Valley.  Read it here.

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POSTAL REVENUES The Hill: “The U.S. Postal Service’s package business spiked by more than 10% in the first three months of the year, as the rise in online shopping drives increases in the struggling agency’s revenues. The USPS outlined several successes in its most recent quarterly report, including a $223 million increase in revenue over the first three months of 2014 and a $160 million decline in expenses. But the report also illustrated the obstacles facing the mail agency these days. The USPS racked up a $1.5 billion net loss in the most recent quarter, driven by a congressionally mandated prepayment for future retiree healthcare that the agency hasn’t paid in years. … Postal brass has called on lawmakers to give the agency more power to grow revenue and cut expenses, but there’s little momentum for legislation on Capitol Hill. First-class mail volume declined by just over 2% in the first three months of the year, while the class of mail featuring advertisements and circulars fell around 1%. The 10.4% in the USPS’s packaging revenue came from an almost 15% increase in shipping volume. The USPS has intensified its efforts on packages, delivering seven days a week in some markets. But agency officials have also made it clear that having shipping become a driver of the agency’s business comes with its own challenges. The Postal Service says it must make $3 in packaging revenue to replace just $1 in profit from first-class mail. The Postal Service is also in the opening stages of revamping its vehicle fleet, as the agency seeks vehicles better designed for delivering packages.”

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JEB BIG MONEY JUGGERNAUT: Playbook: “Bush is racing to top off his massive super PAC before his expected official launch in June. [He] is [developing] a super PAC that would be unprecedented in its size and scope … The group, called Right to Rise, is said to be on track for raising an historic $100 million by the end of May, and its budget is expected to dwarf that of Bush’s official campaign many times over. … [The] likely headquarters [is] in Los Angeles [home of Mike Murphy, who’ll be in charge], 2,700 miles from the Miami office where Bush was basing his campaign … Bush is … setting the timing of his official campaign announcement – which is increasingly likely to come in mid-June, following a trip to Europe – around a cross-country fundraising tour.” A NEW MODEL – THIS IS HOW THE SUPER PAC THING WORKS ‘I think the way they’ve designed the campaign is the wave of the future,’ said Charlie Black … ‘It’s a new model. Bush’s decision to put off a formal announcement is rooted in the complex nature of campaign-finance laws. As a non-federal officeholder who hasn’t yet become a candidate, he’s allowed to travel the country and solicit large contributions of unlimited amounts for Right to Rise. Once he becomes a declared candidate … Bush won’t be able to ask for donations of more than a few thousand dollars for the super PAC. At that time, he’ll also be prohibited from discussing strategy with … the group.”

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UNILATERAL DISARMAMENT NYT’s: ”Hillary Rodham Clinton will begin personally courting donors for a “super PAC” supporting her candidacy, the first time a Democratic presidential candidate has fully embraced these independent groups that can accept unlimited checks from big donors and are already playing a major role in the 2016 race. … Mrs. Clinton’s allies hope that with her support, the top Democratic super PAC, Priorities USA Action, will raise $200 million to $300 million. That is on par with what the largest Republican organizations, such as the Karl Rove-backed American Crossroads super PAC and its nonprofit affiliate, spent in 2012.” The Fix: “How can Clinton reconcile her aggressive advocacy for reigning in big money in politics to embrace her Super PAC? The answer she will likely give to that question, when pressed, is some version of the unilateral disarmament case: The only way to bring about real campaign finance reform is for me to get elected president. The only way for me to get elected president is to ensure a close-to-fair financial fight. The only way to ensure a close-to-fair financial fight is to help the super PAC raise money.” But, the honest truth is that Clinton isn’t likely to be heavily pressed on the question by anyone other than the media. Why? According to Gallup’s Polling … NO ONE CARES (my interpretation of polling results).

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WHAT’S THE FEC UP TO … OR NOT? NYT’s: “The leader of the Federal Election Commission, the agency charged with regulating the way political money is raised and spent, says she has largely given up hope of reining in abuses in the 2016 presidential campaign, which could generate a record $10 billion in spending. “The likelihood of the laws being enforced is slim,” Ann M. Ravel, the chairwoman, said in an interview. “I never want to give up, but I’m not under any illusions. People think the F.E.C. is dysfunctional. It’s worse than dysfunctional.” WHY DYSFUNCTIONAL? Her unusually frank assessment reflects a worsening stalemate among the agency’s six commissioners. They are perpetually locked in 3-to-3 ties along party lines on key votes because of a fundamental disagreement over the mandate of the commission, which was created 40 years ago in response to the political corruption of Watergate. The F.E.C.’s paralysis comes at a particularly critical time because of the sea change brought about by the Supreme Court’s decision in 2010 in the Citizens United case, which freed corporations and unions to spend unlimited funds in support of political candidates. Billionaire donors and “super PACs” are already gaining an outsize role in the 2016 campaign, and the lines have become increasingly stretched and blurred over what presidential candidates and political groups are allowed to do. THANK YOU, THE FEC IS WORKING JUST FINE Republican members of the commission see no such crisis. They say they are comfortable with how things are working under the structure that gives each party three votes. No action at all, they say, is better than overly aggressive steps that could chill political speech. With the rise of the super PACs and the loosening of legal restrictions on corporate spending, campaigns and groups are turning to creative new methods of raising money. Writing in March in The Washington Post, Ms. Ravel charged that some candidates — she did not name names — appeared to have been amassing large war chests at fund-raisers this year without acknowledging that they were at least considering a presidential run, which would trigger campaign finance limits and disclosure. IT’S THE WILD WEST OUT THERE Candidates and political groups are increasingly willing to push the limits, and the F.E.C.’s inaction means that “there’s very little threat of getting caught.”

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EXERCISE INJURIES USA Today: “Serious injuries involving exercise equipment – treadmills in particular – are among the most common that emergency rooms see, according to data from the U.S. Consumer Product Safety Commission. Almost 460,000 people were sent to the hospital in 2012 for injuries related to exercise equipment, according the agency’s data. NYPost: “SurveyMonkey CEO Dave Goldberg (husband of Facebok COO Sheryl Sandberg), died suddenly last Friday. The tech giant who was a great friend, kind, generous, funny, and always wise, had an arrhythmia before he fell off a treadmill and died of head trauma.” He died too young. RIP

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70 YEARS AGO TODAY Headline in NYTs on Tuesday May 8, 1945, “THE WAR IN EUROPE IS ENDED! SURRENDER IS UNCONDITIONAL; V-E WILL BE PROCLAIMED TODAY; OUR TROOPS ON OKINAMA GAIN: by AP’s Edward Kennedy: “REIMS, France, May 7-Germany surrendered unconditionally to the Western Allies and the Soviet Union at 2:41 A.M. French time today. [This was 8:41 P.M. Eastern Wartime Sunday.] The surrender took place at a little red schoolhouse which was the headquarters of Gen. Dwight D. Eisenhower. The surrender … brought the war in Europe to a formal end after five years, eight months and six days of bloodshed and destruction. … [The official Allied announcement will be made at 9 o’clock Tuesday morning when President Truman will broadcast a statement and Prime Minister Churchill will issue a V-E Day proclamation. Gen. Charles de Gaulle also will address the French at the same time.]”

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McDONALD’S EMBRACING NEW INGREDIENT:  KALE Yahoo: “The world’s biggest burger chain says it’s testing two breakfast bowls in Southern California, one of which includes the leafy green as an ingredient. The test comes as McDonald’s Corp. works to shake its junk-food image.” WITH UNDERSTATEMENT “The embrace of kale may seem odd to some …”

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IN CASE YOU MISSED IT… Capstone launched its new website and logo last week. Check it out here @capstonenationalpartners

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