PHOTO BY DAVID J. HANSON

LOIS R. EMBER, DAVID J. HANSON, BETTE HILEMAN, CHERYL HOGUE, JEFF JOHNSON, AND WILLIAM SCHULZ, C&EN WASHINGTON

Senators and representatives returned to Washington, D.C., last week for the second session of the 107th Congress with a load of work left undone from last year. Completing that work is going to be difficult this year because of a combination of factors.

Since neither party has a significant majority in either the House or the Senate, compromise is a necessity. Unfortunately, this Congress has had little success with compromise, and the preliminary outlook for this year is not good. Energy policy legislation, a high-priority issue, remains controversial. The advance of last year's tax cut and passing the much-touted economic stimulus package are other areas where partisanship will make success hard. Thrown on top of this is the distraction caused by numerous hearings on the collapse of energy trader Enron Corp.

Debates on bills to improve national security and protection from terrorism will be prominent as Congress continues to react to the attacks of Sept. 11, 2001. Funds for research into related areas are expected to increase as the need for monitoring, detection, and prevention of biological or chemical weapons receives higher priority.

Two other factors will influence much of Congress' work this year. The first is the national election this fall, critical to both parties as they try to improve their positions. It appears to be one of the more interesting elections in some time. The second is the federal budget, which will have a deficit for the first time in several years. This will cause a lot of finger-pointing and could have impacts on agency research budgets.

So, with that slightly gloomy introduction, the following is C&EN's annual review of issues that will be occupying the government in the months ahead.

ECONOMY & BUDGET. Last year was a contentious one for the economy and the federal budget, and 2002 promises to be at least as difficult. Congress did not even finish this year's appropriations bills until late December, and Bush signed the final three on Jan. 10. With the President submitting his next budget in just a week, the debates over government spending will start all over again.

The fiscal 2003 federal budget is expected to be the first since 1988 with a deficit. Each party will blame the other for this. Republicans will say an explosion of spending at the end of 2001 by Democrats pushed the budget too far, creating the shortfall. Democrats will hit hard at the Bush tax cuts, claiming they were too much, too fast.

Either way, the new budget will have a deficit, with some predicting it will be as much as $100 billion. Senate Majority Leader Tom Daschle (D-S.D.) has said he fears a deficit will limit his party's initiatives this year, which include expanding patients' rights, providing prescription drug coverage under Medicare, and improving subsidies to farmers.

A budget deficit will certainly have a negative impact on agency R&D funding for next year. About the only agency considered safe is the National Institutes of Health. Fiscal 2003 marks the last year of the five-year effort to double the NIH budget, and that is still expected to happen.

However, talk about another NIH-doubling effort or attempts to double other agency R&D budgets might meet resistance at the Office of Management & Budget in coming years. OMB staff have made it clear in public statements that they are not interested in plans to double R&D budgets, but would rather begin setting R&D budgets in accord with performance standards as outlined by the Government Performance & Results Act.

The specter of a deficit is also going to haunt the economic stimulus package that was introduced last year but that failed to move as Congress got hung up on unemployment benefits and health insurance. The main vehicle this year will probably be a proposal by Daschle that includes provisions for a new business tax cut to offset higher payroll taxes, higher depreciation deductions, some tax deduction benefits for companies, and extended unemployment benefits and new health insurance benefits for the working poor.

For transportation, legislation to provide more competition in railroads was also interrupted by the events of Sept. 11. Last year, the Senate held two hearings on rail competition, but a third hearing, scheduled for Sept. 20, was canceled. Currently, one railroad often has power over a "bottleneck section of a route and uses that power to monopoly-price the entire route," says Tom Schick, distribution counsel at the American Chemistry Council (ACC). Another problem is that chemical production facilities located on one railroad are often denied permission to use those rails to move freight to another railroad, Schick says. Bills in the House and Senate would fix this so-called "captive" problem.

Both the House and Senate are expected to consider legislation to toughen site security for chemical companies.

NATIONAL SECURITY. The events of Sept. 11 derailed some national-security-related bills but sent others barreling down the tracks to enactment. Within a week of the attacks, for example, Congress passed and President George W. Bush signed a $40 billion emergency appropriations bill. This antiterrorism supplemental spending bill funded military action, reconstruction, and homeland security.

But a rash of hearings on terrorism and homeland security--"just under 70 since Sept. 11," says Amy E. Smithson, a senior analyst at the Henry L. Stimson Center--produced a slew of bills on bioterrorism, seaport protection, and water safety that await congressional action.

Just before Congress recessed in December, the House and Senate passed bills (H.R. 3448 and S. 1765) to combat bioterrorism. Too little time remained in the session, however, for the two chambers to resolve the differences in the bills. These differences are expected to be easily reconciled this session.

Both bills would authorize funds for the accelerated development and production of vaccines, antibiotics, and other drugs to counter the effects of biological agents. And both would fund the Centers for Disease Control & Prevention, public health networks, and food safety programs. But they differ on food safety inspections, health care spending, and aid for drug companies.

Many of the bills' provisions have already been addressed in the 2002 defense appropriations bill. That bill includes $2.5 billion for efforts to counter bioterrorism, including $500 million for accelerated development and production of anthrax vaccines and almost $650 million for antibiotics and other drugs to combat other biological agents of terror.

There was scant congressional reaction to the Bush Administration's rejection of the Biological Weapons Convention (BWC) enforcement protocol or to its intention to withdraw from the Antiballistic Missile (ABM) Treaty, says John D. Isaacs, president of the Council for a Livable World. Congress this year will focus increasingly on "the threat at home posed by chemical and biological weapons," he says, and perhaps "the arms control community can expand that interest into concern over international agreements on these issues."

Jonathan B. Tucker, director of the Monterey Institute of International Studies' Chemical & Biological Weapon Nonproliferation Program, also would like to see "some attention paid to Administration policy on biodefense and biological arms control." He says the Senate Foreign Relations Committee has indicated some interest in these issues. And Sen. Joseph I. Lieberman (D-Conn.), who chairs the Senate Governmental Affairs Committee, is interested in having his committee's International Security, Proliferation, & Federal Services Subcommittee explore the role of multilateral arms control in U.S. security.

Seth Brugger, a research analyst at the Arms Control Association (ACA), warns not to expect congressional action on the Bush Administration's dismissal of the BWC protocol. "There is not a whole lot of support for the protocol on Capitol Hill," he says.

But according to Brugger's ACA colleague Wade Boese, a senior research analyst, there is a huge amount of interest in missile defense policy. "The big issue this year on the national security agenda will largely focus on missile defense and where the Bush Administration is heading," Boese says. He expects heated debate--debate that was quelled temporarily by the Sept. 11 attacks. With the ABM Treaty no longer constraining Administration action, Boese contends that Congress--and especially Democrats--will reassert itself "via funding to decide what types of tests can be conducted."

Isaacs also expects Congress will consider legislation "tightening up the rules and regulations concerning the transfer of biological agents among research institutions, and increasing the penalties for the illegal use of these agents."

Any impacts that security-related legislation have on how researchers perform their work will be reviewed by the House Science Committee, staffers say. For example, legislation to restrict access to research materials might affect the ability of foreign-born scientists to conduct research. The R&D community at large, mainly through professional societies, will no doubt also be watching such legislation closely to ensure fairness as well as to protect areas of research in which there is a high degree of participation by foreign-born scientists.

The impact on academic research of security-related legislation that has already been implemented also will be in the purview of the House Science Committee. For example, the Export Control Act, which affects the physical export of goods from the U.S., could have an impact on the R&D enterprise.

Smithson, who says people should expect hearings and bills on "anything and everything that has to do with homeland security and terrorism," is concerned that Congress may be spinning its wheels and wasting money by not focusing on issues that really make a difference. She contends that "the federal role in disasters needs to be on mid- to long-term recovery, but for immediate assistance, funding needs to go to frontline rescuers and medical personnel."

Some in Congress share Smithson's concerns and plan to hold hearings that will assess the threats, set priorities, and only then allocate funds. Rep. Christopher Shays (R-Conn.), chairman of the House Government Reform Committee's Subcommittee on National Security, Veterans' Affairs, & International Relations, for example, plans hearings in two areas. One set of hearings will assess U.S. progress in countering terrorism, and the other will explore where the U.S. should next take its antiterrorism campaign--to Iraq, Somalia, or Sudan, for instance.

BARRICADES Increased security measures around congressional office buildings and the Capitol have made the area less visitor friendly than before the terrorist assaults.
PHOTOS BY DAVID J. HANSON

ENERGY POLICY. A year ago, California was in the midst of an electricity crisis; natural gas prices were five times higher than today; terrorism was not even on the national agenda; and a new President and vice president with strong ties to the oil, gas, and energy industries were pressing hard for a supply-driven national energy plan.

What a difference a year makes. The biggest change for energy legislation, however, is in the Senate. When Sen. James M. Jeffords (I-Vt.) decided to leave the Republicans and the Democratic Party took over, the Bush Administration's hope for an energy bill took a nosedive.

Although a supply-focused bill (H.R. 4) that the Administration supports cleared the House last summer, Senate Republicans have not been able to muscle it through the Senate. Among the bill's provisions they like: opening the Arctic National Wildlife Refuge (ANWR) to oil drilling, providing $33 billion in tax breaks for energy companies, and slightly increasing vehicle fuel economy standards.

But Senate Democrats have their own broad version of energy legislation, and its future rests with Majority Leader Daschle.

Last year, Daschle took charge of developing a Democratic energy package. He skipped the Senate Energy Committee and selectively took input from Democratic senators. In early December, he announced the bill, S. 1766, and said he would take it directly to the Senate floor.

Two committees were charged with writing sections under their jurisdictions-- vehicle fuel standards and taxing authority--which are expected to be added on the floor. Senate Energy Committee staff say the bill will be introduced before the Presidents Day recess in February.

Republicans are not so sure.

S. 1766 is a broad energy bill with sections that encourage electricity trading, increase availability of oil and gas, and provide for energy R&D, but the bill doesn't include the House bill's energy industry tax breaks or ANWR drilling provisions.

Senate Republicans doubt Daschle will take the Democrats' bill to the floor because Republicans and Democratic allies will try hard to amend it with provisions they support, especially ANWR.

Asked about the likelihood of an energy bill clearing Congress, Jim McVaney, director of federal relations for ACC, is doubtful.

"With natural gas and gasoline prices where they are today and demand driving those prices even lower, if I were a betting man, I'd probably bet against an energy bill getting through by the end of the year," he says. "But at the same time, the forces that drove natural gas prices upwards of $10 per million Btu a year ago and caused California utilities to schedule rolling blackouts a year and a half ago are still here. And if the economy of the manufacturing sector were to turn around very quickly, you could see natural gas prices bubble right back up.

"But probably a more likely scenario for passage would be sometime in spring," McVaney continues. "If we see an electricity crunch similar to what happened in the West a few years ago, that may push Congress to move on energy legislation."

ACC has its concerns, too, about provisions in House and Senate bills that affect combined heat and power facilities at chemical companies.

McVaney says House and Senate bills would remove the current obligation that utilities buy electricity generated by on-site cogeneration facilities, which are increasingly used by chemical companies to generate process steam and electricity.

The obligation to buy has encouraged chemical makers to install cogeneration facilities, enabling them to lower their own power costs, sell the rest, and double energy efficiency. Although such provisions are important to chemical manufacturers, they are likely to get lost in the politics of this year's energy debate.

A host of other energy-related issues appear to be on the horizon in this election year. Among them are the Enron investigation and the Yucca Mountain nuclear waste repository.

So far, 10 Senate and House committees have announced plans to hold oversight hearings on Enron, the bankrupt electricity and natural gas trader. Only two investigations, however, appear to have direct implications for energy policy.

The Senate Energy Committee plans to hold hearings into Enron's problems, specifically how they might affect the competitiveness of natural gas and electricity markets. A committee spokesman says a hearing is tentatively set for Jan. 29, and its outcome could have a direct impact on language in the Senate energy bill when it comes to the floor.

Things are more complicated in the House. There, the Enron fiasco has refueled the investigation by Rep. Henry A. Waxman (D-Calif.) into who advised the Administration as it prepared its national energy plan. The Administration has refused to supply this information to Waxman or Rep. John D. Dingell (D-Mich.), who has joined the California representative in his requests.

Waxman and Dingell are top-ranking minority members of the House Energy & Commerce Committee, whose Oversight & Investigations subcommittee is looking into Enron's bankruptcy and, in part, the impact of the huge energy trader's collapse on energy markets.

Rep. Joe Barton (R-Texas), chairman of the committee's Energy & Clean Air Subcommittee and the prime mover in deregulation legislation, has maintained that Enron's problems are not related to energy markets and should not affect the energy debate but now says he will modify his bill to make energy trades more "transparent."

The thorny Yucca Mountain repository will also come before both House and Senate by summer. If this site approval process goes as expected, the Nevada governor will veto President Bush's decision to move ahead on the repository, necessitating a veto override vote in both bodies of Congress.

House Speaker J. Dennis Hastert (R-Ill.) says he is sure the House will back the site. Daschle, however, says he will block the site, and without an affirmative vote to override, Yucca Mountain could go back to the drawing board.

A budget deficit will certainly have a negative impact on agency R&D funding for the next year.

ENVIRONMENT. Although environmental legislation will take a backseat in this session of Congress to bills on national security and the economy, a number of measures are moving along.

The Senate is expected to vote next month on legislation that would allow states to ban use of the gasoline additive methyl-tert-butyl ether. The chemical is often added to gasoline to boost its oxygen content to meet a mandate in the Clean Air Act for oxygenated fuels in polluted urban areas. However, MTBE from leaking gasoline storage tanks has contaminated groundwater in some areas.

The Senate Environment & Public Works Committee last September approved MTBE legislation (S. 950) sponsored by Sen. Robert C. Smith (R-N.H.), the ranking Republican on that panel. Smith's bill would allow state governors to waive the Clean Air Act's oxygenate mandate if fuel blends sold in their states produce less air pollution than conventional gasoline. It also would authorize $400 million in federal spending for the cleanup of MTBE contamination of groundwater and prevention of future MTBE pollution.

According to Smith, Daschle has agreed to bring S. 950 to the full Senate for a vote by the end of February.

The MTBE issue is a contentious one. Refiners say they can make cleaner burning fuel, officially called reformulated gasoline, without adding oxygenates. They want Congress to do away with the Clean Air Act's oxygenate mandate. But corn and ethanol producers want that mandate retained so sales of corn-derived ethanol, which is also an oxygenate, will expand.

Looking at air pollution emissions from energy plants, committees in both the House and Senate have plans to take up elements of the Clean Air Act. In the House, Barton's subcommittee plans to hold hearings on the act in spring, and they could stretch on for the rest of the year, an aide says. In the Senate, both the Judiciary and the Environment & Public Works Committees intend to hold hearings on the Administration's overhaul of the Clean Air Act's "new-source review" provisions.

The Environmental Protection Agency is expected to propose weakening those provisions that require companies to install modern pollution control equipment when making process modifications that increase emissions. Also expected to come before the Senate is a proposal by Jeffords to toughen emissions limits for mercury, carbon dioxide, sulfur dioxide, and nitrogen oxides from coal-fired power plants.

Global climate change is not totally dead despite the Administration's rejection of the Kyoto protocol. There appears to be a fairly high probability that some kind of legislation addressing climate change will pass in the Senate this year.

The Senate Democratic energy bill, S. 1766, would create a new office of climate change at the White House and asks the Administration to come up with an energy policy that will not cause dangerous interference with climate.

The bill would also provide incentives amounting to $15 billion over 10 years for renewable energy, including a renewal of the tax incentive for wind power. Another provision would create a nationwide registry of greenhouse gases. Sens. John McCain (R.-Ariz.) and Sam Brownback (R-Kan.) have also introduced a bill that would create a registry for greenhouse gas emissions, and the House Science Committee is working on a similar bill. Because of such broad interest in creating a greenhouse gas registry, this measure may be enacted in 2002.

The House is expected to vote on legislation, which the Science Committee approved in October, that would create an EPA deputy administrator for science, according to a congressional aide. Under this measure, the person holding the new position would coordinate the scientific efforts among EPA's various programs and would report directly to the agency administrator. The bill, H.R. 64, would also set a five-year fixed term for the assistant administrator heading EPA's Office of Research & Development. However, Rep. Sherwood L. Boehlert (R-N.Y.), chairman of the Science Committee, acknowledges that H.R. 64 is not high on the legislative priorities of the House leadership.

Also expected to come before both bodies is legislation to toughen site security for chemical companies and nuclear power plants. This issue is a top priority for ACC and the Synthetic Organic Chemical Manufacturers Association (SOCMA).

So far, most attention has been on a bill by Sen. Jon S. Corzine (D-N.J.), S. 1602, which calls for chemical companies to move away from use of toxic chemicals as an alternative to antiterrorism activities. No markup has been held, nor is any action likely until March, staff say. The trade associations are meeting with Democrats and Republicans to focus on risk-based security rather than toxic use reduction.

INTERNATIONAL TREATIES. A bill linked to two chemical-related environmental treaties is also on the 2002 menu for Capitol Hill. A Bush Administration official tells C&EN the White House is "close to final" on proposed legislation for what is termed "prior informed consent" (PIC) and for implementing a recent pact to control persistent organic pollutants (POPs). The U.S. chemical industry supports both treaties.

The PIC accord requires importing nations to give their consent before accepting shipments of chemicals that are banned or severely restricted in other countries. Known as the Rotterdam Convention, the PIC treaty covers 22 pesticides and five industrial chemicals.

The POPs pact is called the Stockholm Convention. It requires treaty partners to stop or restrict the production of 12 pesticides, industrial chemicals, and unintentionally produced pollutants that are relatively stable in the environment, are transported around the globe, and tend to bioaccumulate.

For the U.S. to become a treaty partner in the POPs treaty, Congress must make some adjustments to two laws governing the production of chemicals: the Toxic Substances Control Act (TSCA) and the Federal Insecticide, Fungicide & Rodenticide Act.

James R. Cooper, manager of government relations for SOCMA, says the association wants only limited amendments to TSCA for implementation of the POPs convention. "Anything beyond that will be unacceptable," he tells C&EN, saying the association fears lawmakers will try to use implementing legislation to make broad changes to the chemical control law. Any attempt to overhaul TSCA will delay implementation of the POPs treaty, Cooper says.

Meanwhile, the Bush Administration is still reviewing possible legislative options for the U.S. to become a partner in the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes & Their Disposal, an international hazardous waste trade treaty. Congress would have to change parts of the Resource Conservation & Recovery Act--the federal hazardous waste law--for this to happen.

	ON THE HILL Congressional hearings in 2002 will try to deal with the economy, energy policy, and national security. PHOTO BY PETER CUTTS

HEALTH AND SAFETY. Congress continues to have interest in the cost of prescription drugs and in reducing their costs for senior citizens. A number of bills were introduced last year to make drugs more affordable for Medicare recipients, but the bills take varied approaches. Some rely on the private sector to provide the drugs, while others mandate that the government buy drugs in bulk and sell them at subsidized prices.

H.R. 1512, introduced by Rep. Bernard Sanders (I-Vt.), would have Medicare be the sole purchaser of drugs for seniors, just as the Veterans Administration is for veterans, and it allows pharmacies to reimport drugs that were exported. A new system would be set up to guarantee the safety of the reimported drugs. Under this plan, the government would pay 80% of drug costs and the individual would pay 20%.

Some other bills would offer prescription drug benefits under private insurance. Sen. Robert Graham (D-Fla.) has introduced a bill (S. 1135) that gives a drug benefit to all Medicare beneficiaries no matter where in the country they live. Under Graham's proposal, the most a beneficiary would have to pay is 50% of the drug's cost. The insurance companies administering the drug benefit would independently negotiate drug prices.

The Pharmaceutical Research & Manufacturers of America (PhRMA) is adamantly opposed to any plan that allows the government to buy drugs in bulk or permits the reimportation of drugs. "We feel that offering drugs through the private sector is the best way, so seniors can decide on the best plan to fit their needs," PhRMA spokeswoman Meredith Art says. Reimportation would increase the opportunity for counterfeit and substandard drugs to enter the U.S., she warns.

In the arena of pesticide safety, for several years some members of Congress have had concerns that EPA is not using "sound science" in implementing the 1996 Food Quality Protection Act. In 1999, Rep. Richard W. Pombo (R-Calif.) introduced a bill to counteract what he called unscientific risk assessments of organophosphate insecticides. But instead of pursuing legislation this year, the House Energy & Commerce Committee is likely to hold hearings on the issue, says Nancy Foster, vice president for federal legislative affairs at CropLife America (formerly the American Crop Protection Association). Hearings are important to lay the groundwork for any legislation that may be needed, she says.

Once again, Congress is likely to take up the issue of tort reform. Rep. James P. Moran (D-Va.) introduced a bill last year that would make it easier to move class-action lawsuits into federal court. A similar bill has been introduced in the Senate. Current rules require each claimant in federal class-action cases to be suing for at least $75,000. "What often happens now is the plaintiffs in class-action lawsuits do judge shopping and file nationwide class-action lawsuits in the most friendly jurisdiction," says Don Evans, senior counsel at ACC. "We would like to have cases moved into federal court so we can get fair rulings in the matter," he says.

However, the Association of Trial Lawyers of America (ATLA) opposes any effort at tort reform. "The reason corporate wrongdoers want to take state courts out of it is they want to make it as hard as possible" for victims to redress injuries, an ATLA spokesman says. Federal courts take roughly twice as long to hear cases as state courts, he says. If put to a vote, tort reform legislation would probably pass in the House, but it has little chance in the Senate.

SCIENCE POLICY. In the Senate, policies on both stem cell research and human cloning are expected to be battlegrounds. Sen. Brownback, for example, wants more restrictions on both stem cell research and human cloning than have already been outlined by the President. Sen. Arlen Specter (R-Pa.), on the other hand, wants stem cell policy redefined to allow government funding for the procurement of stem cells.

The ban on human cloning will stick, but the subject of therapeutic cloning will be another hot-button issue. The technique, known as somatic cell nuclear transfer, does involve growing human cells to the blastocyst stage, and policy in this area will continue to be debated.

Congress is also expected to fund more bioterrorism research at NIH, but it will not be new money added to the budget. Up to $1 billion in funding--a 10- to 15-fold increase from last year--will be targeted for bioterrorism research, and it will be included in various pieces of legislation dealing with homeland security.

This will surely lead to debates about funding levels at NIH for cancer and AIDS research. Advocacy groups for both diseases will jockey for advantage, and they will join the fray of advocates for other diseases and medical conditions, who will argue that research in their pet areas is being squeezed in favor of cancer and/or AIDS research.

The issue of overall balance in the R&D budget will be taken up by the House Science Committee. Although the budget for the National Science Foundation and other R&D agencies has grown, they are nonetheless dwarfed by the enormous increases for NIH and biomedical research in general. Other budget discussions by the committee will include such topics as the space station and the future of the National Aeronautics & Space Administration.

As has been true for some time, the committee is concerned with science education, a subject of growing concern for every level of education. Rep. Boehlert is expected to introduce, among other actions, a "tech talent" bill on the House floor this year aimed at boosting the number of U.S. students who will be trained for careers in science and technology.

Congressional Outlook 2002

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