April 14, 2017
Capitol Update

In this issue:


CONGRESS BEGINS RECESS WITH FY 2017 SPENDING A MYSTERY

Congress has left Washington, DC for two weeks with no plan in place as to how to fund the government for the remainder of the fiscal year. They will be returning the week of April 24th with only four legislative days to come up with a solution for FY17 before the Continuing Resolution that is currently funding the government (PL 114-254) expires on April 28.

Neither political party wants a government shutdown, but relations between the two parties are becoming increasing strained. This is due in part to harsh political wrangling over the open Supreme Court seat for more than a year and the recent use of the “nuclear” option, which promoted a 54-to-45 Senate vote in favor of the confirmation of Judge Neil M. Gorsuch as the 113th justice of the U.S. Supreme Court.

“The Appropriations committees have been working together on a bipartisan basis to come up with a package, and of course, the Democratic leader will be in a role similar to the one I was during the Obama years,” said Majority Leader Mitch McConnell (R-KY) at a press conference. “These kinds of bills can't pass without a reasonable number of the party of the minority in the Senate. And we are optimistic we'll be able to work all that out and meet the deadline at the end of the month.”

Democratic support is critical to getting a spending bill passed in the four days upon Congress’ return. Senate Democrats are against President Donald Trump’s key priorities, including funding for a border wall between the U.S. and Mexico, and his request for $30 billion in supplemental Pentagon funds for FY17.

While Congress wants to avoid a government shutdown, as it would have significant impact back in their districts and result in much criticism, preparations are underway for a shutdown in case it occurs. For instance, Senator Ben Cardin (D-MD) has introduced a bill (S. 861) that would provide retroactive pay for employees involuntarily furloughed during a government shutdown, once lawmakers agree to a FY17 spending bill and the government reopens. Senator Dean Heller (R-NV) also introduced a bill (S. 871) that would allow members of the armed forces — including contractors, civilians and reserve forces — to continue to receive pay and allowances for active service if government funding lapses.


HOUSE ADVANCES TWO BILLS TARGETING EPA SCIENCE POLICIES

The U.S House of Representatives recently passed two pieces of legislation targeting science policies at the Environmental Protection Agency (EPA).  H.R. 1431, the EPA Science Advisory Board Reform Act of 2017, was introduced by Science, Space, and Technology Committee Vice-chair Frank Lucas (R-Okla.) and passed by a vote of 229-193.  The legislation rebalances the scope of membership on the EPA’s Science Advisory Board (SAB) and reforms the transparency, public participation, and reporting requirements for membership on the Board. The legislation also directs the SAB to avoid making policy determinations or recommendations, and to clearly communicate scientific uncertainties associated with the Board’s activities. 

The House also approved H.R. 1430, the Honest and Open New EPA Science Treatment Act of 2017 (HONEST Act). The bill was introduced by Science, Space, and Technology Committee Chairman Lamar Smith (R-Texas) and Rep. Henry Cuellar (D-Texas), and passed by a vote of 228-194.  The HONEST Act requires that EPA regulations be based upon science that is publically available, and prohibits the EPA from proposing, finalizing, or disseminating new agency actions unless all scientific and technical information relied on to support the action is “the best available science, specifically identified, and publicly available online in a manner that is sufficient for independent analysis and substantial reproduction of research results.”

The House advanced similar legislation in the last Congress, but faced steep opposition in the Senate and a veto-threat from the Obama Administration, due to concerns that the bills would prevent EPA from using large bodies of peer-reviewed literature and bar certain highly qualified academics from being members of the EPA’s Science Advisory Board. Companion Senate legislation has not yet been introduced, but the Senate Homeland Security and Government Affairs Committee has begun its own hearing process to examine science policy reform in the context of the Committee’s regulatory reform agenda.

To read each bill, visit www.congress.gov. To view on archived webcast of the Senate Homeland Security and Government Affairs hearing on ‘Agency Use of Science in the Rulemaking Process’, visit: https://www.hsgac.senate.gov/hearings/agency-use-of-science-in-the-rulemaking-process-proposals-for-improving-transparency-and-accountability


GOVERNMENT INCENTIVES AROUND THE WORLD FOR R&D, CAPITAL EXPANSION, EMPLOYMENT, TRAINING, ENERGY SUSTAINABILITY AND REGIONAL DEVELOPMENT

Deloitte recently released its report, 2017 Survey of Global Investment and Innovation Incentives. This survey describes popular government incentives available in 36 countries to encourage investment in research and development (R&D), employment, training, energy sustainability, and regional development. This survey is intended to help companies better understand the global dynamics that impact the funding of innovation and investment strategy.
The global survey includes charts that identify the countries that have the following characteristics:

  1. Research and development comparative analysis
  2. Refundable research tax credits
  3. Location of IP may impact research incentives
  4. Qualified research must be performed within the country
  5. Countries that allow some research to be performed outside the country
  6. Countries that permit qualified research activities to be performed outside the country without any restriction
  7. Qualified contract research allowed
  8. Patent box
  9. Countries offering research grants only
  10. Jurisdictions offering super deductions

To review the report, please visit: https://www2.deloitte.com/us/en/pages/tax/articles/global-survey-of-investment-and-innovation-incentives.html?id=us:2em:3na:gi32017:awa:tax:032217


HOUSE ENERGY AND COMMERCE SUBCOMMITTEE TACKLE THE AUTOMATION OF SELF DRIVING CARS

The Digital Commerce and Consumer Protection Subcommittee of the House Energy and Commerce Committee recently held a hearing on the automation of self-driving cars, which continues to be an important policy issue in Congress. In Committee Chairman Greg Walden’s (R-OR) opening statement, he said the hearing would look closely at many of the advanced driver assistance systems and crash avoidance technologies. The hearing addressed how these technologies are improving safety and how the technologies are paving the way for fully self-driving cars.

Subcommittee Chairman Robert Latta (R-OH) said that advanced driver assistance systems are also an essential part in laying the groundwork for the deployment of fully self-driving vehicles and that with the technological advancements by manufacturers and equipment suppliers, basic driver assistance systems are taking on more advanced capabilities that assume greater control of the vehicle’s critical safety functions throughout a driving trip.

Dr. Kay Stepper, Vice President for Automated Driving and Driver Assistance Systems at Robert Bosch LLC, was one of the witnesses, and supported NHTSA’s decision to adopt the SAE International (SAE) J3016 framework for levels of automation as part of the Federal Automated Vehicles Policy. She said this was a step toward harmonizing and establishing a common set of definitions across the various stakeholders involved in these efforts. She added that without a common taxonomy and understanding of the different levels of automation, it will be more difficult to make the necessary strides toward full automation.

Mr. David Zuby, Executive Vice President and Chief Research Officer for Insurance Institute for Highway Safety, also testified, and said he expects driving automation to enter the market gradually and noted the need to help drivers understand the limitations of the systems being deployed.

To read the full testimony and watch the hearing, go to:

https://energycommerce.house.gov/hearings-and-votes/hearings/self-driving-cars-levels-automation


HEARING DISCUSSES HE PROMISES AND PERILS OF EMERGING TECHNOLOGIES FOR CYBERSECURITY

Recently the Senate Commerce, Science and Transportation Committee held a hearing entitled, The Promises and Perils of Emerging Technologies for Cybersecurity, where Chairman John Thune (R-SD), explored the impact of emerging technologies, including artificial intelligence, the Internet of things, blockchain, and quantum computing, on the future of cybersecurity.

According to the Chairman, “The companies represented at today’s hearing are driving innovation.  They have employed machine learning to identify new threats, conducted research that may soon unlock the commercial potential of private blockchains and quantum computing, and launched new tech startups that create jobs and grow the economy.”

During the hearing, the committee members heard from the following:

  • The Honorable Eric Rosenbach, Former Chief of Staff, Office of the Secretary of Defense; Former Assistant Secretary of Defense for Homeland Defense and Global Security
  • Mr. Caleb Barlow, Vice President, Threat Intelligence, IBM Security
  • Mr. Venky Ganesan, Chair, National Venture Capital Association; Partner, Menlo Ventures
  • Mr. Steve Grobman, Chief Technology Officer and Intel Fellow, Intel Security
  • Mr. Malcolm Harkins, Chief Security and Trust Officer, Cylance Corporation.

According to Rosenbach, our nation needs to address the associated increase in the nation’s vulnerability to strategic cyberattacks. New unlock technological innovation requires better protection and an understanding of the strategic perspectives of two competitors and adversaries in the cyber domain: China and Russia.
The Chinese government has invested heavily in the research and development of technology that underpins supercomputing, artificial intelligence, and blockchain. It has the world’s fastest supercomputer and has also strategically established itself as the world leader in the research and deployment of blockchain technologies, specifically in the area of financial technology also known as Fintech. Fintech is more than payment apps and Bitcoin; it has the potential to disrupt America’s dominance in the financial sector to allow for an increase in Chinese’s global economic influence

Meanwhile, the Russians know they can impact the American strategic calculus and control the escalation ladder of conflict by attacking civilian targets in the internet-of-things and the military networks that connect AI-enabled weapons. The Russians’ perception that they can conduct strategic cyberattacks with impunity is likely to encourage further attacks.

Mr. Barlow described that beyond just stealing data thieves are also changing it before releasing it and creating the damaging effect of a loss of trust. Sophisticated thieves operate like any global business by building development tools and collaborating on software, sharing knowledge about targets and vulnerabilities and operating on a regimented schedule from Monday through Friday while taking the weekends off after launching malware on Fridays and returning on Monday to see how well things went. They collaborate and share expertise via the “Dark Web” which is a term used to describe the anonymous Internet where identity-masking tools enable criminals to operate without detection.

Blockchain is an important example of emerging technology designed for a new generation of transactional applications that helps establish security, trust, accountability and transparency. A blockchain is a distributed database that maintains a continuously growing list of ordered records called blocks. A key capability of blockchain is the ability to maintain a recorded history or ledger of all transactions in a way that cannot be manipulated retroactively, is verifiable and permanent. Financial and medical information is information that can benefit from blockchain as well as providing potential security benefits for IoT where supply chain integrity is critical by ensuring transactional integrity and visibility of logistical and quality metrics from manufacturer to point of use.

Not only is it inherently more secure than other protocols, but blockchain has the potential to be used by multiple parties to share cyber-threat intelligence in a way that maintains the reputation of the source of the data without revealing the identity of the source helping governments and private institutions work together to ensure transactional integrity and maintain reputation, but without identifying the contributor. However, blockchain must be further developed using an open source governance model to make it deployable on a grand scale.

More information about the hearing can be found at: http://www.commerce.senate.gov/public/index.cfm/hearings?ID=E0E0BBA1-231C-42A4-AF33-FC4DDFCF43C3

Visit the ASME Public Policy Education Center at http://ppec.asme.org/ for daily news and policy developments, including the following:
* Congressional Visits to Support Research And Development in the Fiscal Year 2018 Federal Budget
http://ppec.asme.org/featured/congressional-visits/
*Scientists Get 3D-Bioprinted Human Cells to Grow Inside Live Mice
http://ppec.asme.org/latest-news/scientists-get-3d-bioprinted-human-cells-to-grow-inside-live-mice/
*Should CRISPR Scientists Play God?
http://ppec.asme.org/latest-news/competitiveness-news/stem-news/should-crispr-scientists-play-god/
*Iowa Has Become a Nationwide Leader in Wind Energy
http://ppec.asme.org/latest-news/energy-news/iowa-has-become-a-nationwide-leader-in-wind-energy/

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