December Washington D.C. Preview

QUICK FIX

— Federal agencies gear up to meet the requirements Biden set out in his AI executive order, and Obama-era net neutrality regulations are given new life by the FCC   — House Republicans push back on the Special Supplemental Nutrition Program for Women, Infants and Children, a program that traditionally received bipartisan support for funding.   — The FDA is set to decide whether to approve a gene-editing therapy, and the first over-the-counter birth control pill in the U.S. could hit the market in the coming weeks.

AGRICULTURE WIC becomes a flashpoint in the next funding fight: Congress’ failure to include extra aid money for low-income moms and babies in its most recent spending bill sets up a potential showdown early next year.   — At stake: whether the government will have to begin turning away large numbers of mothers and their children from the Special Supplemental Nutrition Program for Women, Infants and Children, breaking with decades of precedent.   First established as a pilot program in 1972, WIC has grown to become a key part of the country’s social safety net. The program provides breastfeeding support to new moms and formula and other nutrition assistance to roughly half of all babies born in the U.S. WIC participation has been growing in most states, especially as pandemic-era boosts to its fruit and vegetable cash benefit made it more appealing to eligible low-income moms and their young children. Food costs have also spiked in recent years, reducing how far federal dollars can stretch.   Unlike other federal nutrition programs, WIC funding has traditionally enjoyed bipartisan support, with Republicans and Democrats committed to ensuring every eligible mother and baby who applies for the program can receive benefits. That consensus is fraying, with House Republicans pushing to pare back WIC spending this year, arguing tough cuts are needed across the government amid the nation’s mounting debt.   As a result, advocates and state-based WIC administrators fear they might have to begin putting people on waitlists to receive aid like breastfeeding support, baby formula and other nutrition assistance.   Those warnings have become more urgent after Congress passed a stop-gap spending bill last month that left out the White House’s request for an additional $1 billion in funding to cover rising WIC program costs.   Many Democrats voted for the short-term spending bill to avert a government shutdown, even though it didn’t include the White House request. But they made clear they will continue to fight for the funding again next year. — Marcia Brown, Meredith Lee Hil

TRADE U.S., EU race to avoid new tariffs in 2024: A steel showdown between Brussels and Washington is turning into a race against time.   With only a month to go to resolve a long-standing metals dispute, the United States and the European Union are scrambling to find an agreement to prevent tariffs worth billions kicking in on steel trade on both sides of the Atlantic.   At the core of the spat are diverging views on global trade and how to deal with Beijing. While Washington seeks to erect a steel and aluminum tariff barrier against “non-market economies” like China, Brussels instead favors deploying classic trade defense measures such as dumping and subsidies probes.   The tariffs, imposed by Trump, were put on hold in October 2021 while the EU and the U.S. tried to clinch a broad deal — called the Global Steel and Aluminum Arrangement — to keep out China’s heavily subsidized metal production and incentivize partners to reduce their carbon emissions. They were scheduled to be reimposed Jan. 1 if the two sides fail to reach a deal.   Washington has already made clear it would not reimpose the tariffs even if there’s no deal by year’s end and instead leave in place a tariff-rate quota arrangement agreed on two years ago. However, Biden has yet to issue an executive order to do that — and that’s causing concern in European capitals.   A U.S. official, speaking on condition that he not be identified because of the confidential nature of the negotiations, said the focus right now is determining the path forward for the tariff-rate quotas that expire at the end of this year.   “We believe that by proposing a two-year extension of the TRQs, we can provide greater certainty to businesses and stakeholders and continue negotiating a high-standard global arrangement in a responsible manner,” the U.S. official said. — Camille Gijs, Antonia Zimmerman, Doug Palmer

EDUCATION Civil rights funding at risk: Capitol Hill lawmakers will have to hash out deep cuts in the bill to fund the Education Department as the agency’s civil rights arm faces increased pressure and a possible drop in funds. The department’s Office for Civil Rights is juggling an increase in complaints of alleged antisemitism since the Oct. 7 attack on Israel and finalizing a twice-delayed final Title IX rule, which dictates how schools must respond to sexual misconduct, all while being understaffed. The House GOP’s proposal would cut the OCR’s funding by 25 percent.   — The continuing resolution passed last month to keep the government temporarily funded gives lawmakers until February to push through legislation to fund education programs. Some of the steepest cuts in House Republicans’ proposal would affect schools serving low-income students. Republicans have argued that Covid-19 relief funds that schools received justify the 80 percent slash to Title I spending, but the largest tranche of relief money needs to be spent by the end of September 2024. — Mackenzie Wilkes

DEFENSE NDAA talks down to the wire: The clock is ticking for Congress to pass a final defense policy bill that Biden can sign before the end of the year. Leaders of the House and Senate Armed Services committees aim to file a compromise defense policy bill as early as Monday.   Final negotiations on the National Defense Authorization Act have dragged out in recent days as lawmakers wrangle over a variety of unrelated proposals that could be attached. That debate includes a potential short-term extension of federal surveillance authorities, cryptocurrency trading regulation and screening of outbound investment by U.S. companies in China.   — Speaker Mike Johnson will also have a tough task of selling a compromise to conservatives in the House. The final bill is certain to be more toned down than the hard-right bill the House approved over the summer and will likely have to jettison many GOP measures to limit the Pentagon’s abortion travel policy, medical treatment for transgender troops and diversity and inclusion efforts in the ranks. — Connor O’Brien

TECHNOLOGY Agencies scramble to respond to AI executive order: Throughout December, federal agencies will gear up to meet the requirements Biden set out in his artificial intelligence executive order. That order makes several demands of the Commerce Department in particular, which has until the end of January to propose regulations that would require cloud providers to report to the government when a foreign entity trains a large AI model. On Capitol Hill, most AI legislation remains in flux, with little time to advance bills before lawmakers break for the holidays. Senate Majority Leader Chuck Schumer has repeatedly said that passing laws to limit AI-generated election content is a near-term priority. But the federal measures on AI with the greatest momentum may be one lawmakers try to attach to the National Defense Authorization Act, which must pass by the end of year.   — California eyes AI, too: The California Privacy Protection Agency board meets Dec. 8 to kick off a new rulemaking process that will affect how businesses can use AI in decisions like housing, hiring and loans. In the absence of federal legislation, state rules on AI, especially in California, can have outsized impact. The process most likely won’t be finalized until 2024, following a public comment period and debate from industry groups who oppose the regulations.   — FCC prepares for wave of net neutrality input: December will likely feature a lot of jockeying around the FCC’s resurrection of Obama-era net neutrality regulations, which would prevent internet service providers from blocking and throttling customers’ internet traffic. The first round of comments is due Dec. 14, and we’ll likely see a lot of rancor from telecom companies balking at the proposal from FCC Chair Jessica Rosenworcel. — Mohar Chatterjee, Maggie Miller, Alfred Ng, John Hendel

HEALTH CARE Key issues driving policy in the coming weeks: Several looming decisions could alter the medical device and treatment landscape.   — The FDA is expected to decide soon whether to approve a first-in-class, one-time gene-editing treatment that has the potential to cure a rare genetic blood disorder.   The Friday deadline for the agency to make a call on the first gene therapy that modifies the stem cells of people with severe sickle cell disease comes less than a month after U.K. regulators approved the drug, called Casgevy, made by Vertex and CRISPR Therapeutics.   If the FDA endorses the therapy, still known as exa-cel in the U.S., it would become available to patients 12 years and older. The agency will consider a second indication for exa-cel to treat beta thalassemia, another genetic blood disorder, by March.   —The first over-the-counter birth control pill in the U.S. could also come to market in a matter of weeks. But questions persist about the drug’s cost, both with and without a prescription.   Insurers generally cover those products only when they’re prescribed in advance, which people who advocate for greater contraception access say creates a barrier to the uninsured, teens and people of color. But requiring no cost-sharing can create challenges at the point of sale for pharmacists and insurance plans.   The three federal departments that oversee regulation of insurance coverage — HHS, Treasury and Labor — asked for comment in September on the benefits and challenges of requiring most commercial plans to cover OTC preventive services, like contraception and tobacco-cessation products. The comment period closes Monday.   The manufacturer hasn’t announced the drug’s retail cost. With no competition expected for at least a few years, consumers and insurers are anxious to know the sticker price, which could be affected by whether insurers are required to cover the pill.   —The Biden administration is also considering whether to raise tariffs on a wide range of Chinese-made medical devices and personal protective equipment beginning on Jan. 1, which would increase costs for American health care companies and hospitals — and could ultimately get passed on to consumers.   The issue is part of a broader administration review of the duties that former President Donald Trump imposed on more than $300 billion worth of goods beginning in 2018.   The potential tariff hike, which companies say would ripple through to their customers and increase the cost of health care, comes as President Joe Biden touts his administration’s latest actions to strengthen supply chains and fight inflation.   U.S. Trade Representative Katherine Tai has said she expects an 18-month-old examination of Trump’s China tariffs to be complete by the end of the year, raising the possibility of tariffs being lifted on some products and increased on others.   The medical products — which range from masks, gloves and gowns to X-ray tables, blood pressure monitors and surgical equipment — are in a special category since Trump officials exempted them from the duties beginning in 2020 in response to the Covid-19 pandemic.   Since then, the Biden administration has renewed the Covid tariff exclusions a number of times, while cutting the list of excluded products to 77 items, from 99 at its height.   The remaining 77 exclusions were all set to expire in September, when USTR announced another last-minute reprieve until the end of this year. That action also extended exclusions for 352 other nonmedical tariff lines until Dec. 31. Together, the two lists are a small fraction of the more than 10,000 Chinese goods that Trump hit with tariffs.   It’s possible that USTR could extend the Covid exclusions again in coming weeks, but the uncertainty over that action complicates company planning as the new year approaches. A USTR spokesperson declined to comment on that possibility. — Dan Goldberg

CYBERSECURITY The NDAA and nominees: As Congress prepares to leave the nation’s capital for the holiday break, lawmakers are zeroing in on the must-pass annual defense authorization bill, a packed piece of legislation that this year includes a laundry list of bipartisan cyber measures.   — The 2024 National Defense Authorization Act is likely to include language on strengthening U.S. cybersecurity support for Taiwan as tensions rise with China, enhancing the Pentagon’s efforts to educate personnel on the use and implementation of AI technologies and increasing U.S. cyber support to other allied nations. It may also include an extension on the controversial Section 702 clause in the Foreign Intelligence Surveillance Act, which is set to expire at the end of the year and allows the intelligence community to conduct surveillance on foreign persons overseas.   The NDAA, passed separately by the House and Senate earlier this year with differing language, must be passed before the end of the year and is traditionally seen as the way to get bipartisan cyber efforts across the finish line.   — Two key cyber nominations remain pending in the Senate. Biden nominated Harry Coker to serve as the nation’s second national cyber director earlier this year, and the Senate Homeland Security Committee approved the nomination and sent it to the Senate for a full vote last month. Former NCD Chris Inglis stepped down from the position in February, and former Acting NCD Kemba Walden left the White House last month.   But while Coker’s nomination could come for a vote at any time in the coming weeks, Lt. General Timothy Haugh, Biden’s nominee to serve as the new leader of both the National Security Agency and U.S. Cyber Command, faces a much tougher path to confirmation.   Haugh’s nomination was held up for most of the year by Sen. Tommy Tuberville’s (R-Ala.) hold on hundreds of military nominees. Tuberville looked set to lift this hold earlier this month, but Sen. Ron Wyden (D-Ore.) placed a separate hold on Haugh’s nomination, vowing to block a vote on Haugh until the NSA made public information on alleged surveillance of Americans.   With Congress still negotiating the renewal of Section 702, Wyden’s request for potentially controversial surveillance data to be made public is unlikely to move the needle on Haugh’s nomination. — Maggie Miller

TRANSPORTATION — FAA is maybe unstuck, but that doesn’t mean a swift finish: The Senate appears to be moving toward a deal on the contentious issue of commercial pilot training, and leaders in both parties seem optimistic that the Senate Commerce Committee can revive its markup that’s been on ice for months, possibly as soon as this week. But that doesn’t leave much time to get the full bill done before the current authorization expires at the end of December.   —To that end, the House is preparing another stop-gap that will run through March 8. It remains to be seen whether that’s enough time to get a bill passed in the Senate and through a conference committee. — Kathryn A. Wolfe

ENERGY Energy’s Christmas wish list: With lawmakers punting spending bill fights into early next year, much of the focus on energy and environmental issues has fallen to the Treasury Department, which is working to get guidance out the door before the end of the year on key provisions under Democrats’ signature climate legislation. The department recently released rules for electric vehicle tax credits that would disqualify a vehicle from receiving the credit if even one of its suppliers has ties to China. The department has outlined action on other contentious tax credit guidance expected in the weeks ahead, including on clean hydrogen and sustainable aviation fuel — both of which are being closely watched by industry and environmental groups.   — At the same time, at least 100,000 attendees are gathering in Dubai for the COP28 climate summit focused on global actions to limit the worst impacts of climate change. Delegates will need to make decisions about issues such as the fate of coal, oil and natural gas with wide-reaching consequences. Countries already approved the framework for a climate disaster fund at the summit’s opening session, marking a win for its hosts. And the Biden administration issued a final rule to rein in methane during the summit. But a potential global deal on ending the use of fossil fuels is still being hotly debated. — Kelsey Tamborrino