It is important to note that Senator Lisa Murkowski (R-AK) voted affirmatively to pass all National Labor Relations Board nominees out of the Senate Health, Education, Labor and Pensions Committee. Her five yes votes in yesterday's committee mark-up included Richard Griffin and Sharon Block, the two nominees that met Republican resistance. No other Republican Senator on the HELP Committee voted in favor of Griffin or Block.

Sen. Murkowski should be recognized and appreciated for her principled vote. Alaska's senior senator has previously stated that presidential nominees should be brought to the floor of the Senate. Sen. Murkowski may well oppose the nominations of Griffin and Block on the floor of the Senate, but her exemplary courage and high standard in the HELP NLRB nominee mark-up only emphasizes the lack of the same within the Republican Senate Conference.

Tomorrow the Senate Health, Educations, Labor and Pensions Committee will mark-up nominees to the National Labor Relations Board. The nominees are Democrats Mark Gaston Pearce (current NLRB chairman being renominated), Richard Griffin and Sharon Block (both recess appointments) and Republicans Harry Johnson and Philip Miscimarra. All are highly qualified nominees.  The likeliest outcome is that the nominees will be reported out of committee on a party-line vote.

These nominations have been tainted by rulings by both the DC (Noel Canning v. NLRB) and Third (NLRB v. Vista Nursing and Rehabilitation) circuit courts. In both instances the circuit courts ruled that the intrasession recess appointments of Griffin and Block were unconstitutional. Republicans, namely Senator Lamar Alexander (R-TN) have rejected the validity of two of the three current NLRB board members (again, Griffin and Block) due to the circuit court decisions, adding that both should have stepped down from the NLRB after those decisions so as to properly recognize the courts’ rulings.

A realistic assessment of Sen. Alexander’s position is that it is not one based on principle, but instead is one of expediency and obstruction. Senate Republicans largely desire to use procedure to depose the NLRB so that is unable to function in its role to resolve disputes between labor and management.

Prior to the DC and Third circuit court decisions the precedent had been established that recess appointments are constitutional. The precedent rests with three previous circuit courts opinions: US v. Allocco in 1962 where the Second Circuit Court affirmed intersession recess appointments; US v. Woodley in 1980 where the Ninth Circuit Court did the same; and Evans v. Stephens in 2004 where the Eleventh Circuit Court affirmed intrasession recess appointments.

In 2004 President George W. Bush made an intrasession recess appointment of William H. Pryor to a judgeship on the 11^th Circuit Court. In that ensuing decision contemplated the court’s legitimacy given the intrasession appointment of Judge Pryor, the 11^th Circuit Court found that the appointment was legitimate to “assure proper functioning of the government,” and that recess appointments “extend to the intrasession and intersession.”

Notably, Sen. Alexander was in office at the time (2004) and never raised any concern about the constitutionality of the Pryor intrasession recess appointment as is now his position on the NLRB recess appointments.

Further, in NLRB v. Laurel Baye Healthcare of Lake Lanier, Inc. the Fourth Circuit Court found that having only two sitting members of a board of five was not a quorum and therefore NLRB decisions reached with less than a quorum were invalid. Regardless, the NLRB with a board membership of two continued to issue decisions. At no time thereafter did Sen. Alexander raise any concern about the NLRB’s validity until recently introducing a bill to address the issue while the current NLRB nominations are pending.

Tomorrow at the HELP Committee mark-up Sen. Alexander will protest two of the five nominees for the reasons above and vote against those nominations in committee. With Minority Leader Mitch McConnell (R-KY) already demanding that the Griffin and Block nominations be withdrawn by the White House it is clear that Senate Republicans are intent on disabling the NLRB so as to leave American employees and employers without the ability collectively bargain, or the ability to address certain unfair private sector labor and management practices -- for the first time in 78 years!

Rather than attempt to repeal the National Labor Relations Act of 1935 outright (and face the controversy that would follow), the Republican Senate conference is using procedure to disable the only recourse labor and management have to resolve disputes, to the benefit of management. These tactics, while likely effective, do not pass the smell test.

The major reforms to Senate Rule XXII sought by progressives are not to be. Instead the likeliest reforms to occur on this as soon as today will be along the lines of the Levin-McCain proposal. The odds favor this bipartisan reform package and thus should be done with the 67 votes required by Senate Rule V (but not the Constitution). Majority Leader Harry Reid (D-NV) is unlikely to use the Constitutional Option (or Nuclear Option of passing a rule change with less than 67 votes, but with more than a majority).

 

The significance of this is that the Senate should be less burdened by minority obstruction of procedure. This is a good sign for future negotiations around debt ceiling, sequester and a budget, as well as Senate legislation generally.

 

Expect reforms to: limit debate on the motion to proceed (the easiest path to obstruction); allow minority amendments (the minority being able to offer amendments, or alternatively the majority being unable to fill the amendment tree in some instances), a reduction in post-cloture debate; and a streamlining of the conference process (collapsing motions to insist, request and appoint into one non-divisible motion).

 

All that said, these reforms are window dressing as they will be enacted as a Standing Order that expires at the end of the 113th Senate. As important to realize, so one does not become giddy at the prospect of legislative momentum in the Senate, is that all of these reforms are at the prerogative of the Senate Majority Leader and does not in reality change the status quo. Pragmatically Sen. Reid will be reluctant to allow Minority Leader Mitch McConnell (R-KY) to offer amendments, which in turn allows the Motion to Proceed to be debatable (and thus filibuster-able).

 

This is a very good sign in respect to the comity of the Senate and could lead to constructive deliberation. Yet there remains immense potential that the Senate falls back into the obstructionist traits that have defined it the last four years.

Without Democratic votes the House Republican Leadership's debt ceiling suspension bill, 'No Budget, No Pay' would not have passed. Of the 233 House GOPers, only 200 voted Yea, requiring 18 Democratic votes to pass this legislation. Speaker Boehner indeed got a majority of the majority, but 33 Republicans reneged, potentially leaving Republican leadership with their six hanging in the wind.

This vote speaks volumes about future budget negotiations, sequester and the next debt ceiling clash in May and how the Republican House Conference may be expected to perform if its leadership does not meet its conservative litmus test (defined by its lack of definition; they'll know it when they see it) on mandatory and discretionary spending.

Correction: 199 GOP yes votes; 86 Dem yes votes.

The House Republican Leadership’s debt ceiling suspension vote today is politically savvy but is a legislative stunt. Speaker John Boehner (R-OH) has only accomplished in furthering his obligation to the most conservative in his conference. At the slightest hint that the deal that results from this suspension does not pass the conservative litmus test there will be revolt.

 

This bill is a legislative stunt in contrast with the House GOP conference’s desire to return to regular order. This bill was not spawned from regular order; there were no committee meetings. This is a bill handed down by House Republican leadership without debate, including the unlikelihood of an open rule when the bill comes to the floor.

 

House conservatives will likely vote for this debt ceiling suspension bill today so Speaker Boehner is likely to get a majority of the majority. Approving this bill places conservatives in a position to walk away from their leadership if the legislative process works its way to a compromise with the US Senate that they find unacceptable. This was on full display yesterday when Rep. David Schweikert (R-AZ) said, “We’ll always play great with the team when we’re doing what’s conservative.” Further, this vote today will embolden House conservatives to shutdown the federal government in February.

 

As to sequester, House conservatives have realigned their line in the sand away from preserving defense spending and placed it squarely on the $974 billion in sequester spending cuts with the intent to have a balanced budget in ten years. So conservatives are ready to re-sequence spending cuts as long as the cuts equal $974 billion; this demonstrates a willingness to make defense cuts but likely would require budget cuts to mandatory spending.

 

There remain House conservatives wary of today’s debt ceiling suspension vote but on the whole conservatives see this as a vote they must take in order to apply pressure on their leadership later.

The announcement by House Minority Leader Eric Cantor (R-VA) that there will be a vote on the debt ceiling next week was not a concession. Saying, "we will authorize a three month debt limit increase to give the Senate and House time to pass a budget," is more political brinksmanship.

 

Effectively, Mr. Cantor's offer is a three month extension. The expected extension was six months (see below, January 17, 2013) to allow time for a budget agreement to develop between the House and Senate.

 

Unexpected was that House Republicans would entirely punt budgeting to Senate Democrats. Accompanying the passing of the hot potato to Democrats was the threat of a suspension of pay if a budget resolution was not attained; so clear a violation of the 27th Amendment that it was rejected out of hand by Rep. Darrell Issa (R-CA).

 

House Republicans have not given up on using the debt ceiling as a bargaining tool. They are simply trying to shift the burden from themselves to their Democratic colleagues on the other side of the Capitol (as anticipated in an earlier post this week). Further, they are doing as expected (see below, January 15, 2013) and making dissentience a way of life on Capitol Hill.

 

Mr. Cantor's statement about authorizing a debt limit increase for three months indicates he has the backing of the majority of the majority. We'll know if that is the case next week. It seems hard to believe but it may well be that the central Virginian air helped House Republican leadership get their conference in line.

 

All of this comes at an interesting moment in time in the Senate when its rules governing the use of the filibuster will be the first order of buisness after the current recess. Look for Maj. Leader Reid to shift cloture to the minority by requiring 41 votes to sustain a filibuster, making it more difficult for Minority Leader Mitch McConnell (R-KY) to drop anchor (freeze Senate business) and hold on (until after the 2014 election) when Republicans should historically add seats in both chambers and President Obama's visage will more and more resemble that of a lame duck.

 

Trade:

Pending are two trade agreements: TransPacific Partnership (see below, December 14, 2012) and the US-EU Trade Agreement. TPP involves Pacific Rim nations and is a priority to the Obama Administration as part of its pivot to Asia strategy and as the first agreement fully negotiated by this White House. TPP is controversial and will draw opposition not only from US labor and environmental groups, but from the Republican Tea Party factions. Points of contention will be the use of international tribunals to resolve disputes and China's eligibility given the structure of the agreement's membership ratification process (which could potentially also apply to North Korea).

 

The US-EU Trade Agreement is far less controversial and will not garner significant US labor opposition as European environmental and social welfare standards are more progressive than those in the U.S.

 

Trade tension with China will continue to be a flash-point, further heightened by the debate over the US debt but also including currency manipulation, WTO requirements (i.e. government procurement), tariffs, intellectual property protection, China-owned enterprises and raw material export restrictions among others.

 

This year the US likely expands its Bilateral Investment Treaties as a method to protect US investments abroad in countries where investors are vulnerable, including treaties with India and China.

 

 

 

 

 

 

The House Republican Conference is in retreat to central Virginia through the weekend to gather itself and devise a plan to move forward in the 113th Congress. Notably, Rep. Paul Ryan (R-WI) addressed the conference today stressing the significance of the debt ceiling as a negotiating tool while reminding the more precocious Members of the conference about the consequences of treating it as a casual matter.

 

The upshot from this retreat is that the intent is to devise a robust proposal that reforms entitlements (chained CPI for Social Security and Medicare eligibility age), specifies spending cuts and identifies revenue sources (closing loopholes and limiting deductions for higher income earners).

All of this cannot happen in two months. Therefore along with this proposal would be a short-term increase in the debt ceiling (six months, as three months is inadequate to expect action out of the Senate) to hammer out an agreement with the White House. House Republicans seem finally to be taking President Obama at his word that he will not negotiate under threat of default so this proposal is an attempt to find negotiating leverage using the debt ceiling without bearing responsibility for a default. However, this is the exactly the scenario the President doesn’t want and the White House will bristle at its introduction.

Within the House there is a desire to return to regular order rather than bake-n-vote deals fashioned by a handful of leaders (e.g. the Fiscal Cliff negotiation that resulted in the American Taxpayer Relief Act of 2012). Members want committee hearings and input; which really means many rank and file GOPers do not trust their leadership but also rightly want to do their jobs. Another reason for a six month repreive on the debt ceiling.

 

What the GOP House retreat yields is yet to be seen. As of now it appears Speaker Boehner (R-OH) and Minority Leader Cantor (R-VA) want to bring order to their conference after having to pass the Fiscal Cliff bill and Hurricane Sandy relief with less than a majority of the majority. Passing bills with less than a majority of the majority makes for more minority influence than would make any House Speaker comfortable. The next two months are do or die time for Speaker Boehner if he wants to retain his leadership into the second session of the 113th, which candidly is a shame but is the reality for a conservative considered to be moderate by many of his newest conference colleagues.

 

Defense:

Among the defense issues that will get notice in this new Congress will be (other than the immediate sequestration) Foreign Military Sales. The last four years the average FMS has been two and a half times what it was in the previous decade ($30 billion v. $12 billion). This growth is reflective of the Defense Department’s strategy of pivot (to Asia) and partnership (largely everywhere else). This is obviously very good for the US defense sector as FMS reached over $60 billion in 2012.

Energy:
On the Senate side expect the Committee on Energy and Natural Resources to run smoothly as Sen. Ron Wyden (R-OR) and Senator Lisa Murkowski (D-AK) have constructed a productive working relationship. If sequestration does go into effect the Department of Energy will see an eight percent budget reduction, which will trigger a fight between Republicans and Democrats over clean energy research. Watch for conflict over production and investment tax credits for the renewable energy sector.

This is a small slice of what to look for in both of these sectors; more tomorrow on these and others.