Overnight Regulation: FTC nominees promise focus on data breaches | Idaho insurer to sell plans outside ObamaCare rules | Dems want watchdog probe of EPA chief's first-class travel

Overnight Regulation: FTC nominees promise focus on data breaches | Idaho insurer to sell plans outside ObamaCare rules | Dems want watchdog probe of EPA chief's first-class travel
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Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It's Wednesday night in Washington, where lawmakers are working on competing immigration bills in the Senate.




President TrumpDonald John TrumpNational Archives says it altered Trump signs, other messages in Women's March photo Dems plan marathon prep for Senate trial, wary of Trump trying to 'game' the process Democratic lawmaker dismisses GOP lawsuit threat: 'Take your letter and shove it' MORE's nominees for the Federal Trade Commission (FTC) plan on making data breaches a top priority for the agency if they are confirmed.

"They're becoming much more significant, much more frequent, and I think that's a real serious concern for us and I think we need to pay much more attention to it," said Joseph Simons, a Republican antitrust lawyer nominated to chair the agency, at a confirmation hearing before the Senate Commerce Committee Wednesday.

The FTC, which is tasked with enforcing consumer protection and antitrust laws, has been operating with just two of its five commission seats since Trump took office over a year ago.

Trump has nominated four to the agency, three Republicans and a Democrat.

Why are data breaches such a big deal? The issue has been getting renewed attention following a year in which companies including Equifax and Uber revealed massive data breaches exposing millions of consumers. The Equifax breach gave hackers sensitive personal information for more than 145 million people. And last year, Yahoo revealed that all of its 3 billion accounts were affected in a 2013 hack.

What does the FTC matter? The tech world is watching the agency closely as it will likely soon become the top watchdog for an open internet. The Federal Communications Commission's (FCC) repeal of its net neutrality rules cedes jurisdiction over anticompetitive behavior from internet service providers to the FTC.

Read more from Harper Neidig here.




The House Transportation and Infrastructure Committee holds a hearing on "Oversight of Positive Train Control in the United States."

The House Homeland Security Committee holds a hearing on "Industry Views of the Chemical Facility Anti-Terrorism Standards Program."

The House Financial Services Committee holds a hearing on "Examining De-risking and its Effect on Access to Financial Services."

The Senate Agriculture Committee holds an oversight hearing on the Commodity Futures Trading Commission. "State of the CFTC: Examining Pending Rules, Cryptocurrency Regulation, and Cross-Border Agreements."



Health care: Blue Cross of Idaho on Wednesday announced that it will offer health insurance plans that do not meet ObamaCare requirements after a controversial executive order from the state's Republican governor.

The move by the insurer is a step further for Republican Gov. Butch Otter's plan to bring cheaper options into the market. He says ObamaCare plans are too expensive and more healthy people need to be drawn into the marketplace.

But his proposal is legally questionable and has drawn backlash from Democrats who say he is simply ignoring federal law.

The new Blue Cross plans, which still need to be formally approved by the state, appear to have cheaper premiums than ObamaCare plans, but they also would charge people with pre-existing conditions more and have a limit of $1 million in claims per year, according to the Idaho Statesman.

Both of those features are not allowed under ObamaCare.

Peter Sullivan has more here.


More: The top federal health official on Wednesday said he will uphold ObamaCare as long as it remains the law.

Health and Human Services Secretary Alex Azar told lawmakers he has a responsibility to enforce the law in response to questions about a controversial plan in Idaho to allow insurers to sell plans that don't meet ObamaCare requirements.

"I'm not aware that our opinions or views have been solicited," Azar said. "There are rules, and there's a rule of law that we need to enforce."

But Azar ducked the main intent of the question, which was whether HHS will step in to stop Idaho's legally questionable new rule.

Read more from me here.



Finance: Treasury Secretary Steven MnuchinSteven Terner MnuchinSecurity for Trump's Mar-a-Lago visits cost local taxpayers million On The Money — Presented by Wells Fargo — Senate approves Trump trade deal with Canada, Mexico | Senate Dems launch probe into Trump tax law regulations | Trump announces Fed nominees Senate Democrats launch investigation into Trump tax law regulations MORE said that his department will issue guidance to prevent hedge fund managers from exploiting the tax law's new limits on the carried interest tax break.

"We will have that resolved," he said Wednesday at a Senate Finance Committee hearing.

Carried interest is the profit investment managers get for performing the service of managing funds. Under federal tax law, it can be taxed at lower capital gains rates rather than ordinary income rates.

The new law requires investments to be held for at least three years to get the capital gains rate, however, instead of at least one year under the old law. That longer holding period doesn't apply if carried interest is held by a corporation rather than an individual.

Bloomberg reported on Wednesday that hedge fund managers are looking at exploiting the new provision by trying to put their carried interest into S-corporations so they don't have to hold the investments for three years to get the tax break.

Naomi Jagoda has more here.



Technology: Federal Communications Commission Chairman Ajit Pai is backing a proposal from Elon Musk's SpaceX to provide broadband using satellites.

"To bridge America's digital divide, we'll have to use innovative technologies," Pai said in a statement Wednesday. "Satellite technology can help reach Americans who live in rural or hard-to-serve places where fiber optic cables and cell towers do not reach."

Pai also said the proposal would increase competition among internet service providers, and he encouraged the agency's commissioners to approve an application from SpaceX to begin the project.

Ali Breland has more here.


Environment: Environmental Protection Agency (EPA) Administrator Scott PruittEdward (Scott) Scott PruittEPA employees push 'bill of rights' to protect scientific integrity EPA's independent science board questions underpinnings of numerous agency rollbacks Overnight Energy: Rate of new endangered species listings falls | EPA approves use of 'cyanide bombs' to protect livestock | Watchdog says EPA didn't conduct required analyses MORE says he flies first class on airplanes due to past interactions that have "not been the best."

In an interview with WMUR in New Hampshire Tuesday, Pruitt said he flies first class for security purposes stemming from past negative travel experiences.

"There have been instances, unfortunately, during my time as administrator, as I've flown ... of interaction that's not been the best," Pruitt said.

Pruitt was quick to note that his security team made the decisions on which class he traveled.

"Ingress and egress off the plane, the security aspect, those are decisions all made by our detail team, by the chief of staff, by the administration. I don't make any of those decisions, they place me on the plane where they think is best from a safety perspective."

When asked specifically whether he's encountered "near confrontations" in coach, Pruitt declined to give specifics.

The statement came amid new scrutiny into Pruitt's travel expenses. The Washington Post reported Sunday that he frequently flies first class, costing taxpayers thousands of dollars.

Miranda Green has the story here


More: Leading House Democrats want the Environmental Protection Agency's (EPA) internal watchdog to look into EPA head Scott Pruitt's premium-class flights on the taxpayer's dime.
Rep. Frank Pallone Jr.Frank Joseph PalloneOvernight Health Care — Presented by That's Medicaid — Deal on surprise medical bills faces obstacles | House GOP unveils rival drug pricing measure ahead of Pelosi vote | Justices to hear case over billions in ObamaCare payments Obstacles remain for deal on surprise medical bills This week: House impeachment inquiry hits crucial stretch MORE (N.J.), the Energy and Commerce Committee's top Democrat, wrote to EPA Inspector General Arthur Elkins about the matter Wednesday.

Elkins is already investigating all of Pruitt's official travel through 2017. But Pallone and two other top Democrats on the panel want to ensure that Elkins is probing recent revelations that Pruitt has flown first or business class repeatedly, and he has a "blanket exemption" to rules limiting premium-class flights by federal employees.

"Administrator Pruitt's many first-class flights around the country at taxpayers' expense raise renewed concerns of secrecy and waste at the Trump EPA," Pallone wrote along with Reps. Diana DeGetteDiana Louise DeGetteLawmaker calls for hearing into MLB cheating scandal Overnight Health Care: Big Pharma looks to stem losses after trade deal defeat | House panel to examine federal marijuana policies | House GOP reopens investigation into opioid manufacturers Lawmakers express alarm over rise in cocaine overdose deaths MORE (Colo.) and Paul TonkoPaul David TonkoOvernight Energy: Republicans eye top spot on Natural Resources panel | GOP lawmakers push back on bill to make greener refrigerators, air conditioners | Green groups sue Trump over California fracking plans Republicans push back on bipartisan bill to make greener refrigerators, air conditioners House passes sweeping bill to target spread of toxic 'forever chemicals' MORE (N.Y.).

Read the rest of Timothy Cama's story here.


Technology: The House Energy and Commerce Committee on Wednesday approved a bill reauthorizing funding for the Federal Communications Commission.

The bill would allocate funds to television and radio broadcasters affected by the FCC's incentive auction, which repurposes broadcast airwaves for wireless providers. It would also implement a number of process reforms aimed at making the agency run more efficiently.

"By making sure we properly relocate broadcasters displaced in the incentive auction, we add further legitimacy to future spectrum actions and other improvements in communications policy," Rep. Greg WaldenGregory (Greg) Paul WaldenOvernight Energy: Schumer votes against USMCA, citing climate impact | Republicans offer details on their environmental proposals | Microsoft aims to be carbon negative by 2030 Republicans offer details on environmental proposals after Democrats roll out plan Overnight Energy: Cost analysis backing BLM move comes under scrutiny | Republicans eye legislation to rival Dems' climate plan | Report claims top global risks all climate-related MORE (R-Ore.), who chairs the committee, said in a markup hearing Wednesday.

Harper Neidig has more here.


Health care: More than 170 House Democrats asked Health and Human Services (HHS) Secretary Alex Azar to reject requests from states to require Medicaid beneficiaries to work.

"Such actions to tie health coverage to work are motivated purely on the basis of ideology and mistaken assumptions about what Medicaid is and who it covers," the Democrats wrote to Azar.

The administration recently approved Medicaid work requirements for Indiana and Kentucky.

Azar and other HHS officials describe work requirements as a "pathway out of poverty."

But Democrats argue such requirements are harmful.

Read more from Jessie Hellmann here.


Environment: The Energy Department (DOE) is creating a new office to "bolster" its cybersecurity and energy security efforts.

The new Office of Cybersecurity, Energy Security and Emergency Response, announced Wednesday, would support the department's "expanded" national security responsibilities.

"DOE plays a vital role in protecting our nation's energy infrastructure from cyber threats, physical attack and natural disaster, and as Secretary, I have no higher priority," Energy Secretary Rick PerryRick PerryOvernight Energy: Appeals court tosses kids' climate suit | California sues Trump over fracking | Oversight finds EPA appointees slow-walked ethics obligations Warren calls for Rick Perry's resignation from pipeline company Lev Parnas implicates Rick Perry, says Giuliani had him pressure Ukraine to announce Biden probe MORE said in a statement. "This new office best positions the Department to address the emerging threats of tomorrow while protecting the reliable flow of energy to Americans today."

Miranda Green has the story here


Drugs: Sen. Kirsten GillibrandKirsten GillibrandSanders defends vote against USMCA: 'Not a single damn mention' of climate change The Hill's Morning Report — President Trump on trial Overnight Energy: Schumer votes against USMCA, citing climate impact | Republicans offer details on their environmental proposals | Microsoft aims to be carbon negative by 2030 MORE (D-N.Y.), a potential 2020 White House contender, is joining Sen. Cory BookerCory Anthony BookerDNC announces new criteria for New Hampshire debate The Hill's Campaign Report: Sanders, Warren feud rattles Democrats The Hill's Morning Report — President Trump on trial MORE (D-N.J.), another possible presidential candidate, in the fight to legalize marijuana under federal law.

The New York Democrat announced Wednesday that she's co-sponsoring the Marijuana Justice Act, which Booker introduced in August. The bill would eliminate marijuana's status as a Schedule 1 drug under the Controlled Substance Act and require federal courts to expunge the records of Americans who have prior marijuana convictions related to use or possession.

"Millions of Americans' lives have been devastated because of our broken marijuana policies, especially in communities of color and low-income communities," Gillibrand said in a statement.

Lydia Wheeler has more here.



Regulator looks into alleged manipulation of VIX, Wall Street's 'fear index' -- The Wall Street Journal

Employers challenge IRS bid to start enforcing insurance mandate -- The Wall Street Journal

Treasury Department to block Latvian bank from US markets -- The Wall Street Journal

Media executives talked about Facebook regulation in private meeting -- Buzzfeed

Regulator warns about engine shutdown risk on Airbus jets -- Reuters