January Washington D.C. Preview

From departures in the Biden administration to the shakeup in Congress, there’s a lot of movement to keep track of as the new year kicks off. In this month’s CEO Report, Pro policy teams take a look at the key people to watch this year. — House Republicans will bring a sharp change in direction in energy policies this year, focusing on promoting oil and gas production as well as oversight of Democrats’ spending from the bipartisan infrastructure law.   — A handful of House and Senate lawmakers will be the key power players in the upcoming, high-stakes farm bill negotiations.   — The 2023 budget includes $3 billion in added federal education funding, and a handful of officials are tasked with carrying out and setting priorities that affect millions of schoolchildren. AGRICULTURE Agriculture power players: A handful of House and Senate lawmakers will be the key power players in the upcoming, high-stakes farm bill negotiations that will determine how more than a trillion dollars of federal funding is spent over the coming decade.   — Rep. G.T. Thompson (R-Pa.): Thompson is poised to take over the House Agriculture Committee gavel when Republicans take their majority in January. He will have substantial power over writing the House’s version of the farm bill. But he’ll need to wrangle various competing factions of the Republican caucus with an extremely small majority in order to get the legislation over the finish line in the chamber.   — Sen. Debbie Stabenow (D-Mich.): Stabenow will be the most powerful person on Capitol Hill when it comes to drafting and hammering out final farm bill negotiations, since the Senate traditionally has the final word on the massive bill. Of the four Senate and House Ag Committee leaders, she’s the only one with farm bill leadership experience. As a member of Senate Democratic leadership, she wields additional power when it comes to getting the legislation across the Senate floor.   — Sen. John Boozman’s (R-Ark.): It’s Boozman’s first farm bill as the top Republican on the Senate Agriculture Committee. He’s known for making key deals with Stabenow to clinch assistance for school meals and southern commodity growers in particular. But, he’s also a vocal critic of the Biden administration’s efforts to scale up USDA’s involvement in climate programs, and will be a key force along with Thompson calling for stricter oversight of the current USDA climate programs while tempering Democrats’ push for new funding.   — Rep. David Scott (D-Ga.): Scott will be the top Democrat on the House Agriculture Committee next year, but after recent discussions about his effectiveness on the panel, some of his fellow lawmakers tell POLITICO it’s likely the subcommittee ranking members and some veterans of the panel will wield the most power in the conversations — including Reps. Abigail Spanberger (D-Va.), Jim McGovern (D-Mass.), Jim Costa (D-Calif.) and possibly Jahana Hayes (D-Conn.) if she stays on as the top Democrat on the nutrition subcommittee.   — Rep. Scott Perry (R-Pa.): Perry is the head of the House Freedom Caucus, whose conservative members have already laid out various demands for the farm bill — including slashing spending on food assistance programs. He could prove to be a sizable thorn in the side of Agriculture Committee members during negotiations, especially after the group helped to torpedo a farm bill on the House floor in 2018. — Meredith Lee Hill HEALTH CARE Five key players in health care in 2023: FDA Commissioner Robert Califf has acknowledged there are “issues on the food side of the FDA.” Now comes the gargantuan task of fixing them. The commissioner has said reforming the human foods program is a top priority. One possible solution — outlined in a recent Reagan-Udall Foundation report — is to appoint a deputy commissioner of foods to combat “unacceptably slow” decision-making. The FDA is slated to release a plan that will outline a “new vision” for the food center in January and is set to announce changes to its leadership structure in February.   Califf and the FDA also will decide whether to approve two more controversial treatments for Alzheimer’s disease. While many are anxious to try these experimental antibody treatments on patients hoping to arrest their cognitive decline, safety concerns abound. A recent report in Science linked a third death to one of the drugs, lecanemab. In addition to concerns over safety and efficacy, granting accelerated approval to lecanemab (a decision is set for Jan. 6) would set in motion another debate over how and when the government should pay for a drug expected to cost thousands of dollars a year.   — Rep. James Comer: Comer (R-Ky.) is expected to chair the House Committee on Oversight and Reform and will be anxious to probe Biden administration officials on the origins of Covid-19. Comer, along with Rep. Jim Jordan (R-Ohio), are requesting transcribed interviews with 40 people, including HHS Secretary Xavier Becerra, outgoing Director of the National Institute of Allergy and Infectious Diseases Anthony Fauci, acting White House science adviser Francis Collins and Director of National Intelligence Avril Haines.   Specifically, Republicans are interested in an earlier report that says Covid emerging from a laboratory is an “improbable” theory. But they are certain to also ask about U.S. funding for the Wuhan Institute of Virology.   — National Coordinator for HIT Micky Tripathi: Tripathi heads the Office of the National Coordinator for Health Information Technology, or ONC, at HHS. With the nonprofit Sequoia Project, his office is rolling out a number of initiatives aimed at facilitating health data-sharing, including the Trusted Exchange Framework and Common Agreement, or TEFCA.   That project aims to smooth data-sharing among networks similar to the way that cell carriers facilitate calls between customers with different service providers.   — CMS Administrator Chiquita Brooks-LaSure: Brooks-LaSure will be leading the agency as it begins to negotiate Medicare drug prices with the pharmaceutical industry.   The process of selecting the first drugs for negotiation started earlier this year, after the passage of the Inflation Reduction Act, which gave CMS the authority to negotiate in coming years.   Brooks-LaSure said the work will be largely done within agency structures but more staff would be brought in for the effort. She also said the agency has been talking with drugmakers to discuss the impacts of the policy.   While drug price negotiations remain one of the agency’s highest-profile priorities, Brooks-LaSure will also oversee key policies of interest to providers and insurers as well — from Medicare Advantage rules to the move toward more value-based care.   — U.S. Global AIDS Coordinator John Nkengasong: Nkengasong, the head of the President’s Emergency Plan for AIDS Relief, is set to take on another big role in 2023.   Secretary of State Antony Blinken has chosen him to lead a new global health bureau. Nkengasong will manage that role while he also promotes his vision of fighting HIV and AIDS to Congress this year when he takes up the $7 billion PEPFAR program’s reauthorization.   A virologist with more than three decades of public health experience, Nkengasong won praise for guiding Africa through the coronavirus pandemic as the first director of the Africa Centres for Disease Control and Prevention. In that role, he secured hundreds of millions of Covid-19 vaccine doses for the continent at a time when they were scarce globally.   Nkengasong became the U.S. Global AIDS Coordinator and Special Representative for Health Diplomacy last June. — POLITICO Pro Health Care staff TRADE Key players for trade: U.S. trade officials will continue to develop the Indo-Pacific Economic Framework in the new year, aiming to bring together 14 countries on issues including fair trade, supply chains and decarbonization. Sarah Ellerman, the acting assistant U.S. trade representative for Southeast Asia and the Pacific, and Sharon Yuan, counsel and chief negotiator at the Commerce Department, are tasked with representing the U.S. in those talks and striking a deal on a speedy timeline.   The Biden administration’s efforts to spur U.S. semiconductor production will focus on the implementation of new programs and subsidies approved by Congress. Ronnie Chatterji will oversee those initiatives from his perch as the White House Coordinator for CHIPS Implementation at the National Economic Council. Chatterji was previously the top economic adviser to Commerce Secretary Gina Raimondo before moving to the White House in September.   — Rep. Patrick McHenry (R-N.C.): McHenry will take the gavel on the House Financial Services Committee as Republicans assume control of the House. And while the panel doesn’t have jurisdiction over trade policy, it does wield influence over foreign investment regulations — and McHenry intends to use it. He has called for the Biden administration to work with Congress on bipartisan reforms to outbound investments to “counter the threat posed by China with maximum effectiveness.”   — Rep. Adrian Smith (R-Neb.): Smith is one of three lawmakers vying to lead the House Ways and Means Committee. Though he isn’t considered the frontrunner, Smith is known for being a policy wonk with a keen interest in trade. (He was ranking member on the panel’s trade subcommittee last Congress.) Smith has criticized the Biden administration’s trade agenda for lacking ambition, and he wants House Republicans to press for the renewal of Trade Promotion Authority and a return to brokering free trade agreements. — Steven Overly CYBERSECURITY Five to watch on cyber: National Cyber Director Chris Inglis plans to leave office in January, but he’s focused on getting his office’s National Cyber Strategy published before then. The document, which is the product of months of consultations with other government agencies and the private sector, will endorse a more aggressive approach to regulation in order to protect the United States’ critical infrastructure from hackers. As the first national cyber director, Inglis will leave a lasting mark on his office, and whoever replaces him will in part be steering a ship whose course he charted.   — TSA Administrator David Pekoske: After Russian hackers crippled the Colonial Pipeline Co. in 2021, the TSA sprinted to issue emergency cybersecurity rules for pipelines. It later followed up with rules for the aviation and rail sectors. Now, the agency is working on permanent cyber regulations for these industries. Pekoske will be instrumental in shaping the final form of those rules, which could become a template for the regulations that other agencies, such as HHS and the EPA, implement to protect the industries under their purview.   — CISA Director Jen Easterly: CISA is in the early stages of crafting rules requiring critical infrastructure companies to report cyberattacks to the government, and as that process plays out, Easterly will have a major hand in resolving tensions between what companies say is feasible and what federal officials say is necessary. The success of the eventual cyber incident reporting program will depend heavily on the decisions that Easterly makes.   — NSA Director Gen. Paul Nakasone: As Russia’s war against Ukraine intensifies, Moscow may respond to growing Western pressure with cyberattacks designed to destabilizing the governments and populations of the U.S. and its allies. No one is more responsible for blocking those attacks and keeping the Kremlin’s hacker army off-balance than Nakasone, who as leader of the NSA also heads the U.S. Cyber Command. The cyber warfighting unit has increasingly used its authority to fend off foreign hackers before they can disrupt U.S. elections, but the real test for Nakasone’s troops could lie ahead in the form of an increasingly desperate Russia.   — Rep. Mike Gallagher (R-Wis.): With the retirements in January of three lawmakers who built their reputations in part on crafting bipartisan cybersecurity legislation, the already short list of cyber-focused legislators has shrunk even further. One of the few remaining Republicans with a record of bipartisan cyber policy work is Gallagher, who helped push through a raft of major legislation as the co-chair of the congressionally chartered Cyberspace Solarium Commission. In the closely divided House, Gallagher — who remains a leader of Solarium’s non-government successor group — will be a key figure in congressional debates over how to balance regulation and incentives when protecting critical infrastructure, how to help CISA grow while holding it accountable and how to deter cyberattacks from Russia, China and other adversaries. — Eric Geller ENERGY Energy permitting fight set to escalate: House Republicans will bring a sharp change in direction in energy policies this year, focusing on promoting oil and gas production as well as oversight of Democrats’ spending from the bipartisan infrastructure law passed in 2021 and the Inflation Reduction Act passed last year.   — Rep. Cathy McMorris Rodgers (R-Wash.): McMorris Rodgers will become the first female chair of the House Energy and Commerce Committee, and is planning to push for faster permitting for energy projects — oil and gas as well as renewables. But her efforts may hit a wall in the Democrat-controlled Senate if, as expected, House Republicans take aim at the permitting requirements in the National Environmental Policy Act. GOP lawmakers had balked at Democrats’ permitting plans last year, contending they did not go far enough toward easing NEPA’s reach.   — Rep. Bruce Westerman (R-Ark.): Westerman, the expected chair of House Natural Resources, will lead that permitting push. He’s expected to start with elements included in a National Environmental Policy Act overhaul bill introduced in 2020 by Rep. Garret Graves (R-La.) that would seek to streamline approvals of critical minerals mining and processing projects, and another bill to expand U.S. oil and gas output and exports. And as the only licensed forester in Congress, Westerman is planning to push legislation like the Save Our Sequoias Act that aims to empower the Forest Service and the National Park Service to more easily conduct forest management projects.   — Rep. Frank Lucas (R-Okla.): Lucas is likely to take the helm at the House Science and Technology Committee, with an eye on oversight of the administration's implementation of recently passed legislation, like the CHIPS and Science Act. As ranking member of the committee, he's questioned the Energy Department's plans to hire 1,000 people for its Clean Energy Corps initiative and the sharp increase in Loan Programs Office funding. — POLITICO Pro Energy staff EDUCATION The future of education policy: The midterm elections are over, and Congress has since passed a budget that includes $3 billion in added federal education funding for 2023. The future of education policy now lies in the hands of officials tasked with carrying out and setting priorities that affect millions of schoolchildren. Here are three players to watch:   — Sen. Patty Murray (D-Wash.): The Senate HELP committee chair and former preschool teacher is poised to take control of the upper chamber’s powerful Appropriations Committee in the 118th Congress. The fate of the country’s child care system is her top-of-mind priority. A massive year-end spending package approved by Congress included significant boosts for the Child Care and Development Block Grant and Head Start programs, but that new spending is still insufficient in the eyes of advocates and a significant number of congressional Democrats. Building a new American economy, Murray stated after senators approved the omnibus spending deal, requires repairing a child care system that she says is in crisis.   — Ryan Walters, Oklahoma superintendent of public instruction: The culture warrior will be inaugurated as the top school official in the GOP-controlled state in 2023. An ally of Republican Gov. Kevin Stitt and the state’s one-time education secretary, Walters has accused liberals of “waging a civil war in our classrooms” after defeating a moderate Democrat and former state teacher of the year. Former Trump administration Education Secretary Betsy DeVos, the conservative Americans for Prosperity group and other political organizations supported his campaign.   Now Walters, a Republican, will oversee academic standards, teacher licensing and curriculum while Oklahoma fights an ACLU-sponsored lawsuit to challenge a state law that bars courses or concepts that cause any individual to “feel discomfort, guilt, anguish or any other form of psychological distress” due to their race or gender.   — Mark Schneider, Institute of Education Sciences director: The head of the Education Department’s statistics, research and evaluation branch will sit atop a newly-funded federal directive to help schoolchildren recover from Covid-19’s blow to academics. Schneider and IES will oversee roughly $808 million under the government’s 2023 funding deal, an increase of about $71 million above the fiscal year 2022 enacted level.   Lawmakers are urging IES authorities to spend some of that windfall on advanced research projects for “quick-turnaround, high-reward scalable solutions” to post-Covid learning recovery. It’s a start on a proposed IES initiative lawmakers floated earlier in 2022: A National Center for Advanced Development in Education, which would have taken a cue from the Defense Advanced Research Projects Agency. — Juan Perez Jr. CANNABIS Republicans will determine if any cannabis legislation passes: Republicans have generally been more skeptical about loosening federal marijuana restrictions, and they’ll be crucial to determining whether there are any significant policy changes over the next two years.   — Rep. Dave Joyce (R-Ohio): Joyce has emerged as a vocal leader on cannabis policy. The former prosecutor has sponsored a bill with Rep. Alexandria Ocasio-Cortez (D-N.Y.) that would provide funding for states to implement expungement programs, as well as legislation that would remove cannabis from the Controlled Substances Act.   — Rep. Nancy Mace (R-S.C.) Mace was a vocal proponent of legalization during her first term, touting her personal experience with the drug. Mace could help put pressure on House leadership to take up the issues.   — Sen. Chuck Grassley (R-Iowa) Grassley played a key role in derailing a bipartisan cannabis package that Democrats attempted to push through in last-year’s lame-duck session. The veteran lawmakers will likey continue to be a barrier to any significant loosening of federal restrictions.   — Sen. Steve Daines (R-Mont.) Daines has established himself as a key supporter of legislation that would make it easier for cannabis companies to access banking services. Daines helped negotiate a package of cannabis bills late last year that supporters unsucessfully attempted to attach to must-pass legislation. — Paul Demko TAX Awaiting key appointments: Democrats got a lot of tax legislation passed in 2021 and 2022, considering their slim majorities in Congress. It’s probably fair to wager that less in the way of lawmaking will occur over the next two years, now that divided government has returned to Washington.   But there will still be plenty of tax players to watch in 2023 and 2024, as the Biden administration works to implement its new tax policies and lawmakers prepare for a fiscal cliff in the not-too-distant future.   — Treasury Secretary Janet Yellen and the next IRS commissioner: Democrats passed the Inflation Reduction Act in August, in the process enacting a new minimum tax on large corporations, funneling billions of dollars to the IRS and revamping incentives for clean energy.   Now, they have to implement it. The Treasury Department and the IRS started rolling out initial guidance on new tax measures late in 2022, including for that minimum tax, a new tax on stock buybacks and a credit for electric vehicles.   Those new provisions all went into effect at the start of this year. But companies and their executives are going to need much more information to be able to comply with all the new tax provisions — particularly with the new minimum tax because it’s levied on financial statement income, instead of the traditional taxable income.   Meanwhile, Senate Democrats will be pushing to confirm Danny Werfel, President Joe Biden’s choice for IRS commissioner, in the coming weeks.   Werfel was interim IRS chief for seven months back in 2013, when the controversy over the agency’s treatment of Tea Party groups burned the hottest, something that has stirred up some skepticism of his nomination on the right.   But Werfel is expected to make it through a Democratic-controlled Senate. In the meantime, the agency has until next month to deliver an initial battle plan for implementing the $80 billion in new funding provided by Congress last year.   — The next Ways and Means chair and Senate Finance Chair Ron Wyden (D-Ore.): It’s quite out of the ordinary for Republicans to officially take over the House without choosing key committee chairs. But whether the House’s next top tax writer will be Rep. Vern Buchanan (R-Fla.), Adrian Smith (R-Neb.) or Jason Smith (R-Mo.) remains up in the air as Rep. Kevin McCarthy (R-Calif.) seeks to lock down the votes to become next speaker.   Any of those three Republicans will likely focus quite a bit on oversight over the next two years, with the GOP incensed at how Democrats released former President Donald Trump’s tax returns in the final days of their majority.   Right before the new year, the IRS unilaterally delayed new reporting requirements that likely meant millions of extra taxpayers would be getting forms for transactions made on eBay or Etsy or through platforms like Venmo or PayPal — giving Congress another shot at delaying the requirements themselves or expanding the reporting thresholds.   But lots of the policy debate over the next two years might actually be focused on matters that likely won’t come to a head until the end of 2025 — the expiration of the individual tax cuts from the GOP’s 2017 tax law. — Bernie Becker EMPLOYMENT AND IMMIGRATION Some holes to fill for labor: Democrats failed to pass their most ambitious priorities — $15 minimum wage, union rights expansion — last Congress, and the Venn diagram for legislation under a Republican House is exceedingly small.   That puts the onus on Biden’s Labor Department, as well as independent agencies like the National Labor Relations Board and Equal Employment Opportunity Commission, to advance Democratic priorities.   — Jennifer Abruzzo: The NLRB general counsel has emboldened the agency to take on big-name employers like Starbucks and Amazon, who have been trying to snuff out unionization campaigns. Many of these cases will continue to play out in 2023 and beyond, and the recent omnibus deal injected additional funding to the NLRB for the first time in years — allowing it to emerge from prolonged retrenchment.   — House Education and Labor chair: This committee is headed for a rebrand under Republican rule, but who will be chosen to wield the gavel remains uncertain. Rep. Virginia Foxx (R-N.C.) received a waiver from GOP term limits to seek the post, but she is being challenged by Rep. Tim Walberg (R-Mich.). This contest is one of several that is in limbo until the speakership saga is resolved, but whoever wins will be primed to grill Biden’s labor officials.   — Marty Walsh: Biden’s labor secretary is expected to be a top target for House Republicans given his union ties and his department’s decisions regarding workplace vaccination policies, among other things.   The former Boston mayor has also never set down roots in D.C., preferring to stay in hotels when in town and keep his residence in Massachusetts, providing fodder for idle speculation that Walsh may look for an exit at some point.   — Jessica Looman: DOL’s Wage and Hour Division has been without a Senate-confirmed leader for the duration of Biden’s term. Looman has been helming it on a non-permanent basis, and was nominated by the president after his first choice went down. She will need to be renominated in order to be confirmed, but employers are closely watching WHD as it works to retool when a worker can be considered an independent contractor versus an employee. — Nick Niedzwiadek