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Legislative Updates: July 2012


Capitol Call

Imagine you have a new Mercedes; one of those sporty coupes, in black. Your teenaged son wants to borrow it to impress his friends and even though he knows the answer will be no, he asks again and again. In fact, he asks 30 times over two years and you begin to wonder how many times he will ask before he accepts the fact that you are not going to change your mind.

The Republicans in the House of Representatives seem to be similarly fixated because in the last two years they have voted 30 times to repeal the Affordable Care Act (ACA) or Obamacare as they call it. In early July, just two weeks after it was ruled mostly constitutional by the Supreme Court, they voted for the 31st time, perhaps to prove to the American people that they are serious about repealing the law.

The Democratic-controlled Senate has met these attempts to repeal the law with a collective yawn. Of course the House and Senate have often been at odds over the years. They do tend to come together, however, to forge a compromise when they are up against a deadline. This was the case last month when Congress passed a major transportation bill and a bill that prevented student loan interest rates from doubling. Both bills had been languishing for several months and finally got done when Congress was under a hard deadline. Those kinds of bills seemed to be the only ones that can be signed into law these days. But that doesn’t stop both chambers from debating and passing bills that serve as a message for what they want, but do not have a chance of being enacted by the other party.

In regulatory news, after two years, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have finally determined what constitutes a “swap” and a “security-based swap.” The definitions, required under the Dodd-Frank Wall Street Reform and Consumer Protection Act, pave the way for the completion of at least 10 to 12 additional rules that could not be finalized until the definitions were completed. Perhaps this rule will mark a breakthrough in the rulemaking process, which until now has been progressing very slowly. Unlike Congress, the agencies have no hard deadlines to meet and no upcoming elections to campaign for, so the rulemaking process may not be finished anytime soon.

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