*EPF109 11/15/2004
Security, Trade, Social Issues to Face New U.S. Congress
(Energy policy, judicial appointments also on legislative agenda) (1870)

By Bruce Odessey
Washington File Staff Writer

Washington -- When U.S. lawmakers come back to Washington November 16 for a short post-election session and then return in early January 2005 for the 109th Congress, facing them will be a broad legislative agenda ranging from overhauls of the U.S. intelligence agencies and the Social Security system to development of a national energy plan and simplification of the tax system.

With a number of new representatives and Republican gains in both the Senate and the House of Representatives, the 109th Congress also will likely see the introduction of a number of bills aimed at enhancing an agenda outlined by President Bush during his re-election campaign.

INTELLIGENCE AGENCY REFORM AND THE WAR ON TERRORISM

Near the top of the list of congressional priorities will be reforms in line with the intelligence recommendations of the 9/11 Commission (National Commission on Terrorist Attacks Upon the United States).

In an interview, James Carafano, senior research fellow at the Heritage Foundation in Washington, said Congress would act on reorganizing U.S. intelligence agencies, possibly in the short November post-election session of the 108th Congress, called a "lame-duck session," but more likely in 2005. He predicted that Congress would create a national intelligence director as well as a national counterterrorism center.

So far Senate and House of Representatives conferees have remained far apart on intelligence reform, with the House seeking a relatively weaker national director and stronger provisions on immigration and border security than the Senate seeks.

Carafano said he expects Congress will review those provisions of the anti-terrorist PATRIOT Act that are scheduled to expire at the end of 2005. He said he doubted Congress would attempt any comprehensive revision of the legislation, which passed just weeks after 9/11. The Bush administration wants the expiring provisions extended and possibly expanded, but some are subject to criticism about their threat to civil liberties.

MILITARY SPENDING

The Bush administration will likely have to request additional spending from Congress for operations in Iraq and Afghanistan for the fiscal year ending in September 2005, Carafano said. The amount of money requested will depend on the degree of success in January's planned Iraqi elections as well as the capability of Iraqi security forces, he said.

Requested spending levels will also depend somewhat on how many countries withdraw forces from Iraq after the elections although he expects U.S. troop levels will not change much in any case, at least through summer 2005, he said.

Congress will also have to consider the president's recommendations for repositioning U.S. military personnel and bases around the world as well as for realigning domestic bases and closing some of them, he said. Shifts of personnel and bases require appropriations that must be approved by the Congress.

The Department of Defense is charged under U.S. law with reviewing U.S. defense strategy, including the level of money and infrastructure needed to support it, once every four years. Carafano said that after the department publishes its report, probably in September, Congress would likely consider any necessary implementing legislation.

Congress can set its own agenda apart from any administration's agenda, of course. Some members of Congress from both parties would like to pass legislation reforming administration authority in conducting post-conflict military operations and increasing security-related cooperation among federal government agencies, for a couple of examples.

Carafano expressed doubt, however, whether Congress can manage to consider much beyond intelligence and USA Patriot Act reforms and military spending bills while facing the immense challenges on tax and Social Security reform.

TAX AND BUDGET POLICY

Congress will be under immediate pressure to increase the amount of debt that the federal government can hold beyond the current $7.4 trillion ceiling. Without raising that ceiling in the next few days the United States cannot sell the Treasury bills it needs to finance the interest payments from its rising deficits.

The president also campaigned on a proposal to overhaul the Social Security pension system by permitting younger workers to invest a portion of their payroll taxes in private savings accounts. This has major budgetary implications that Congress will have to consider. According to some estimates, the transition costs could go as high as $3 trillion as Social Security loses revenue to the new system while having to pay out benefits to current retirees.

Congress may also face another Bush proposal to simplify the U.S. tax code. The president has not announced how he would like to proceed, but some Republicans are known to favor such approaches as a flat tax, a national sales tax and a consumption tax. Congress also will likely have to vote on Bush's proposal to make permanent the temporary tax cuts of 2001 and 2003.

TRADE POLICY

Bill Reinsch, president of the National Foreign Trade Council in Washington, said in an interview he expects Congress to consider the Bush administration's Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) in 2005.

DR-CAFTA faces considerable opposition, not only from members of Congress representing textile- and sugar-producing districts but also from those, mostly Democrats, demanding stronger labor and environmental provisions.

A free-trade agreement with Bahrain could be approved by Congress either in the upcoming November lame-duck session or in 2005, Reinsch said.

In October 2004 Congress finally passed legislation aimed at resolving a longstanding complaint brought in the World Trade Organization (WTO) by the European Union (EU) over export tax breaks. Congress has not passed legislative remedies in at least two other cases that the United States lost in the WTO.

One of those cases would be resolved if during the lame-duck session Congress passes a bill for eliminating hundreds of miscellaneous tariffs that has been stalled for various reasons over three years. The two senators from Wisconsin, for example, oppose the bill's extending normal trade relations with Laos, citing alleged human rights abuses in that country.

The current version of the bill, already passed by the House, has a provision that would repeal a 1916 anti-dumping law successfully challenged in the WTO by the EU and Japan, Reinsch said. The 1916 law was never used until the 1990s; opposition to its repeal seems muted. Other U.S. anti-dumping law would remain in place.

Reinsch said he expected no congressional action soon on the other WTO case, which concerns repeal of what is called the Byrd amendment. EU, Japan and Brazil are viewed as getting ready to impose retaliatory sanctions against U.S. imports should Congress fail to act. Before the amendment, any revenue from anti-dumping duties went to the U.S. Treasury. Since the amendment passed, such revenue goes to the companies that file the petition for the antidumping case, such as steel companies.

Short of congressional opposition, the president is expected to get an automatic two-year extension of trade promotion authority, otherwise known as "fast track", that allows the administration to conclude more bilateral, regional and WTO negotiations.

Congress also may face a vote on continued membership in the WTO. Under U.S. law, once every five years any member of Congress can introduce a resolution to end U.S. membership in the WTO, and such a resolution must then be scheduled for a vote in the House and Senate. The next occasion for a WTO withdrawal resolution comes in 2005.

Reinsch said he imagined Congress might also act if the Bush administration does not deal to Congress' satisfaction with currency manipulation by China and outsourcing of U.S. jobs to low-wage foreign countries. He praised the administration for seeking to work out the exchange-rate issue with the Chinese directly. If the U.S. bilateral trade deficit with China worsens anyway, however, Congress might try to pass "fairly aggressive protectionist measures," he said.

EXPORT CONTROLS

Reinsch cast doubt on whether the Bush administration can persuade Congress to reform the Cold War-era Export Administration Act (EAA). The law, which gives the Commerce Department authority to control exports of what are called dual-use exports -- technology with both military and civilian uses -- actually lapsed years ago. EAA export controls are kept in force under emergency law.

While Democrats in Congress have long supported EAA reform, he said, Republicans are bitterly divided between those who want to expand strict export controls and those who want to enforce strict controls on fewer, more sensitive items.

"What you've got is a death struggle, really, between the national security Republicans and the more business- and internationalist-oriented Republicans," Reinsch said.

ENERGY

During his first term, the president was unable to get enough congressional support for national energy legislation, the sticking points being oil drilling in the Arctic regions and subsidies the administration proposed to industry for developing alternative technologies. With rising fuel costs, 75 percent of U.S. oil demand being met by foreign supplies, and increased Republican clout in Congress, a reintroduction of legislation that will include drilling for oil in Alaska's Arctic National Wildlife Refuge is expected.

Senator Pete Domenici, chairman of the Senate Energy Committee, also is expected to introduce incentives that would expand production of nuclear and hydrogen power. Not yet known is the level of congressional interest in promoting clean energy sources such as wind and geothermal.

MEDICAL MALPRACTICE TORT REFORM

The Bush administration is expected to introduce legislation that will reform how lawsuits can be brought in medical malpractice cases. Bush argues that current law allows frivolous lawsuits and that these are driving up the cost of health care and hurting doctors and patients. His proposals include caps on the awards that can be given and other measures to rein in costs.

FEDERAL JUDICIAL APPOINTMENTS

President Bush will be able to nominate candidates for federal judgeships and to the U.S. Supreme Court should vacancies present themselves. The highest court in the United States, the Supreme Court can overturn decisions by lower federal and state courts as well as laws passed by Congress that are found unconstitutional.

The Senate must confirm judicial nominees. Confirmation of judicial appointments, particularly for the Supreme Court, can be a protracted process -- consuming a great deal of time for hearings for the judicial nominees, then debate in the Senate. Among the issues likely to come up in Senate review of judicial nominees are their positions on so-called "moral issues" -- such as abortion and same-sex marriages.

CONGRESSIONAL LEADERSHIP

No changes are expected in House Democratic and Republican leadership, and only a few changes are expected among House committee chairmen, notably in the Appropriations and Budget committees. The trade subcommittee of the Ways and Means Committee will get a new chairman since the current chairman, Republican Representative Phil Crane, lost his bid for re-election.

On the Senate side, Republican Majority Leader Bill Frist of Tennessee is expected to remain in his post. Democratic senators are expected to select Senator Harry Reid of Nevada as their minority leader to succeed Democratic Senator Tom Daschle, who was defeated for re-election. Only a few Senate committees are expected to get new chairmen, notably Appropriations, Budget and Judiciary.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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