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Byrne Statement: Markup of H.R. 1313, the Preserving Employee Wellness Programs Act

Education & the Workforce Committee - Wed, 03/08/2017 - 12:15pm

Obamacare has been a disaster for working families. For years, workers have struggled to make ends meet and small businesses have struggled to keep their doors open due to the law’s harmful consequences. From increased costs to limited choices, the flawed 2010 health care law has made it more difficult for employers wanting to provide workers with health care coverage.

While Congress is already taking steps to provide relief from the law, it’s also our responsibility to implement positive reforms in its place that will lower health care costs, expand affordable coverage, and promote a healthy workforce. That’s why we are here today. Encouraging innovation in employer-provided health care coverage is an important part of our health care reform efforts. By finding ways to successfully promote a healthy workforce, we can help lower health care costs for working families. Employee wellness programs do just that.

Wellness programs provide employees and their families with various incentives — such as lower health care premiums — for making healthy lifestyle choices. The programs reward activities like exercising or maintaining appropriate cholesterol levels that can drive down costs and promote a healthier and more productive workforce.

Allison Klausner, an employee benefits expert who recently testified before this committee, described employee wellness programs as a “cornerstone of health care reform.” She said, “Not only are these programs important for achieving better health outcomes for employees and their families, they also have the potential to increase employee productivity, improve workforce morale and engagement, and reduce health care spending.”

These plans are not only effective, but they are also popular and widely supported by employers and employees. A recent survey showed more than 60 percent of all employers offer their employees the option of enrolling in a wellness program. And this free-market health care solution has long received bipartisan support from Congress. In fact, one of the only bipartisan provisions in the 2010 health care law allows employers to discount health insurance premiums up to 50 percent, in some circumstances, for employees who voluntarily participate in a wellness program.

Unfortunately, in recent years, the Equal Employment Opportunity Commission has worked to undermine these popular and effective wellness programs. The commission pursued costly litigation against employers and published restrictive rules that created significant regulatory confusion. This is simply not acceptable. If we want to lower health care costs, our policies should encourage — rather than discourage — the adoption of free-market solutions. That’s why I urge support of the Preserving Employee Wellness Programs Act.

H.R. 1313 reasserts the bipartisan intent of Congress to encourage the development of employee wellness programs. Under H.R. 1313, employers will have the legal certainty they need to reward workers for making health lifestyle decisions. H.R. 1313 also reaffirms existing law that allows employers to provide responsible incentives for participation in employee wellness programs.

By eliminating the red tape surrounding employee wellness plans, Congress can help employers expand access to these popular plans and the benefits they provide for workers. The substitute amendment I am offering makes clear that if a wellness program complies with the non-discrimination standards in the Health Insurance Portability and Accountability Act, then the program will also meet the requirements for wellness programs in the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. The amendment makes a number of technical changes to the introduced bill so it more accurately reflects congressional intent to facilitate these programs.

By empowering employers to adopt employee wellness programs, we can take a positive step toward lowering health care costs and promoting a healthy workforce. I’d like to thank Chairwoman Foxx for her leadership on this important legislation and strongly urge my colleagues to support the Preserving Employee Wellness Programs Act. Through our support of H.R. 1313 and other positive reforms, Congress can provide Americans with a patient-centered health care system that delivers more choices, lower costs, and greater control for working families.

Subcommittee to Hold Hearing on Truck Safety

The hearing will examine truck safety advancements in the bipartisan Fixing America’s Surface Transportation (FAST) Act that passed last Congress and potential reforms moving forward. The hearing will also hear from a range of perspectives on the implementation of safety programs and other opportunities and challenges facing truck safety.

Walberg Statement: Markup of H.R. 1101, the Small Business Health Fairness Act

Education & the Workforce Committee - Wed, 03/08/2017 - 11:20am
When Obamacare was forced on the American people seven years ago, small business owners were concerned about how the law would affect their businesses and their workers. Over the years, many of those employers appeared before the committee, and we listened as their concerns over the law turned to stories about its consequences.

As one small business owner testified back in 2014, “the Affordable Care Act is anything but affordable for our company and employees.”  In 2015, another small business testifying before the committee explained, “In addition to the challenges of record keeping, reporting, and other compliance issues, the looming unknown cost of insuring future employees has made me apprehensive of continuing to expand my business and hire new employees.”

The sad truth is that small businesses have been hit especially hard by the government takeover of health care. In fact, Obamacare has destroyed an estimated 300,000 small business jobs and forced an estimated 10,000 small businesses to close. Additionally, Obamacare’s costs and mandates have resulted in $19 billion in lost wages for small business employees.

These stories and statistics are bad enough on their own, but it’s also important to understand what they mean for workers’ health care. With more and more small businesses unable to offer coverage, more and more employees have fewer health care options. It’s not that these employers don’t want to provide health insurance for their employees. It’s that in the current environment, they simply can’t afford to do so.

While small businesses and their workers are not the only ones who have taken a hit, they have had a harder time mitigating the damage. For instance, large businesses and labor organizations are able to negotiate on behalf of their employees for high-quality health care at more affordable costs. Small businesses do not have the same bargaining power in the health insurance marketplace and are unable to band together to improve their negotiating position.

Additionally, by offering a self-insured qualified group health plan under the Employee Retirement Income Security Act — or ERISA — large employers and labor organizations are exempt from a maze of state rules and regulations related to health insurance. Small businesses, on the other hand, don’t have that option, and for an employer whose workers reside in different states, finding the right plan can be incredibly difficult.

That’s why Representative Johnson and I introduced H.R. 1101, the Small Business Health Fairness Act. The bill amends ERISA to allow small businesses to participate in association health plans — also known as AHPs. By banding together through AHPs, smaller employers can increase their bargaining power with insurance providers, putting them on a more level playing field with larger companies and unions. Employers will then be able to purchase high-quality health care coverage at lower costs for their workers. At the same time, the bill includes numerous provisions that will help ensure AHPs are solvent and working families are protected.

Small businesses deserve to be treated the same as large corporations and unions when it comes to providing their employees high-quality health care coverage. This legislation levels the playing field to ensure they are. In the end, it will lower costs for small businesses already facing limited resources, and it will help expand affordable coverage for working families who want to purchase health insurance through their employer. It is exactly the kind of free-market, patient-centered reform we promised the American people and one of many positive, commonsense solutions that will modernize our nation’s health care system.

Coordinating Federal Cybersecurity Resources for Small Businesses

House Small Business Committee News - Wed, 03/08/2017 - 11:00am
Chairman Steve Chabot has scheduled a hearing of the Committee on Small Business titled, "Small Business Cybersecurity: Federal Resources and Coordination." The hearing is scheduled to begin at 11:00 A.M. on Wednesday, March 8, 2017 in Room 2360 of the Rayburn House Office Building. 

Hearing Notice
Witness List

The Honorable Maureen K. Ohlhausen
Acting Chairman Federal Trade Commission
Washington, DC

Chuck Romine, Ph.D.
Director Information Technology Lab
National Institute of Standards and Technology (NIST)
Gaithersburg, MD

Mr. Charles Rowe
President & CEO
America’s Small Business Development Centers (SBDC)
Arlington, VA

Mr. Jim Mooney
President and CEO
Chevron Federal Credit Union Cybersecurity Committee Chair
National Association of Federally-Insured Credit Unions
Arlington, VA
*Testifying on behalf of the National Association of Federally-Insured Credit Unions

Roe Statement: Markup of H.R. 1304, the Self-Insurance Protection Act

Education & the Workforce Committee - Wed, 03/08/2017 - 10:20am

It’s no secret that the cost of health care is a significant challenge for workers and employers. According to Gallup, health care costs topped the list of financial problems facing working families in 2016. Similarly, small businesses cited the same chief concern in a recent National Federation of Independent Business survey.

Perhaps the one bright spot in today’s uncertain health insurance market is that employers are using innovative strategies to provide affordable health care coverage for workers and their families.

One of the ways employers have eased the burden of rising health care costs is through self-insured policies. This is a very popular approach among employers of all sizes. In fact, in 2016, more than 60 percent of employers offering health care coverage were self-insured.

These plans benefit workers and employers in a variety of ways. With a self-insured policy, employers have the flexibility to design a health care plan tailored to the unique needs of workers and their families. For example, a company with a younger workforce may add additional wellness programs related to prenatal care. At the same time, employees are free from restrictive requirements that force them to purchase specific coverage that they may not want or need.

Workers and employers also have greater control over their health care dollars. Instead of purchasing a plan from an insurance company, self-insured employers pay their employee health care costs directly. This allows them to retain savings in years with lower claims and pass those savings on to their workers.

For these reasons, this cost-effective model is popular among both employers and labor unions. It’s also used by some cities, counties, and school districts. In 2014, the Executive Director of Columbia Power and Water Systems, a municipal utility in my home state of Tennessee, testified before the committee on the effectiveness of their self-insured policy.

Because of the flexibility of their self-insured policy, this local utility provider was able to keep their workers’ deductibles at $200 for an individual and $400 for a family in 2014 – far below what families are paying on collapsing Obamacare exchanges. And eligible retirees and their dependents receive the same benefits as current employees.

The witness testified that their self-insured policy allows them to “retain the best possible workforce, increase productivity, and maintain a high-level of satisfaction with the plan.”

There’s no doubt that these are high-quality plans that serve as a viable option for workers and employers alike. However, because employers take on greater financial risk with these plans, most also purchase what’s known as “stop-loss” insurance.

Stop-loss insurance has never been considered health insurance under federal law. The reason is simple. It’s not health insurance. It does not pay medical claims or perform any of the traditional functions of health insurance. What it does is provide a financial backstop to actual health insurance and protect the benefits of workers and their families.

Always looking to expand the regulatory state, the previous administration threatened to regulate stop-loss as traditional insurance. Doing so would put workers and employers at risk of losing their self-insured policies.

As we know, the last thing workers and employers need right now is to lose access to the health care plan they like because of misguided federal policies. Although we have a new administration that understands we need more affordable health care options, not fewer, Congress must act to prevent a future administration from restricting self-insured plans.

Why? Employers plan years in advance, and they need long-term certainty and stability when it comes to offering affordable health care to their employees. At the same time, working families deserve the peace of mind that they will have continuity of care and won’t be kicked off their plan just like millions of Americans were under Obamacare.

The Self-Insurance Protection Act will provide that peace of mind, certainty, and stability by clarifying once and for all that stop-loss insurance is not health insurance and preventing future bureaucratic overreach. This positive reform will promote more choices and ensure working families can continue to benefit from this popular health care model, not just today, but for years to come.

Foxx Statement: Markup of H.R. 1101, H.R. 1304, and H.R. 1313

Education & the Workforce Committee - Wed, 03/08/2017 - 10:00am

For years, Americans across the country have demanded meaningful health care reform and relief from soaring costs. Instead, what they got was a fundamentally flawed law that is collapsing as we speak.

Minority Leader Nancy Pelosi recently claimed Obamacare has “succeeded in every possible way.” But most families would disagree.

Obamacare premiums are increasing by double — even triple — digits in some states. Millions of families have seen their health care plans canceled. More and more individuals, including many in my home state of North Carolina, are finding they have access to only one insurance provider.

Small businesses and their employees would also beg to differ with claims made by the Democrat Leader. Obamacare has forced an estimated 10,000 small businesses to close their doors, cost $19 billion in lost wages for small business employees, and destroyed 300,000 small business jobs. And since 2008, 36 percent of small businesses with fewer than 10 employees have stopped offering coverage.

These are the predictable consequences of a government takeover of health care that took freedom out of the hands of patients and their doctors; forced individuals to purchase one-size-fits-all health coverage that many do not want or need; and made it harder for small businesses to provide for their employees.  

This law has failed the American people, and House Republicans are demanding better. We will deliver on our promise to repeal Obamacare and replace it with responsible solutions that are patient-centered, not government-driven. While our colleagues on the Energy and Commerce and Ways and Means committees continue their work on this important effort, this committee will as well by advancing free-market reforms, particularly relating to employer-provided coverage.

Today we are taking the next step in that process by considering three bills that would empower employers to help workers access affordable health care coverage. As we all know, the majority of Americans obtain health insurance through their employer. But providing employer-sponsored insurance is increasingly difficult in the face of regulatory obstacles and onerous mandates.

Still, employers of all sizes are developing creative ways to contain health care costs and promote a healthy workforce. We should do everything we can to foster innovation taking place in the private-sector. Unfortunately, misguided federal policies often do more to limit, rather than support this promising progress.

For example, one of the tools employers have adopted in recent years to provide workers with greater control over their health care dollars is employee wellness programs. There has long been bipartisan support for these popular programs. In fact, one of the only bipartisan provisions of Obamacare allowed employers to discount health insurance premiums for employees who participate in a wellness plan.

However, the Obama administration took steps to undermine those plans by issuing restrictive new rules and pursuing litigation against employers. This regulatory confusion and legal uncertainty can have a chilling effect on the ability of employers to reward workers for healthy lifestyle choices. That’s why I introduced the Preserving Employee Wellness Programs Act. As Chairman Byrne will soon explain in more detail, this bill will provide employers with the certainty they need to offer wellness programs to their employees.

Employers are also facing uncertainty when it comes to self-insured health care plans. With this option, employers have more flexibility to control costs and are able to customize benefits to the unique needs of their workforce.

However, in recent years, Democrats in Washington, D.C. signaled these plans are just one regulation away from being at risk. Rep. Roe’s bill, the Self-Insurance Protection Act, would ensure workers and employers can continue to benefit from this cost-effective health plan model.

Finally, we will consider legislation that will make it easier and more cost-effective for small businesses to offer health care benefits. The Small Business Health Fairness Act will remove legal roadblocks preventing small businesses from banding together through association health plans.

As a result, this bill will put small businesses on a more level playing field with labor unions and larger companies. Representative Sam Johnson has championed this important effort for years, which would lead to lower health care costs for small business employees. 

All three of these proposals reflect a few shared principles. Families should have the freedom to choose the health care plan that meets their needs. Americans need more affordable health care options, not fewer. Health care decisions should rest with patients and their doctors — not government bureaucrats. And instead of prescriptive mandates, we should ensure employers have the tools they need to help their employees afford health care.

Ranking Member Bill Nelson Opening Statement

Thank you, Mr. Chairman, for calling this hearing.  I want to welcome all three members of the FCC, including Chairman Pai in his first appearance before Congress in his new role.  The president has renominated him and given him primary responsibility over what I believe is one of the most important consumer protection agencies of the federal government. 

For the past eight years, the FCC has had the American consumer’s back.  Ultimately, for this senator, the success or failure of the commission rests not on the fulfillment of special interest wish lists, but on how those who are least able to protect themselves have been treated and whether first amendment rights, including those of journalists, are vigorously protected. 

Since assuming the chairmanship in the last few weeks, the FCC, under your leadership Chairman Pai, has:

  •Acted to prevent millions of broadband subscribers from receiving key information about the rates, terms, and conditions of their service;

  •Acted to guarantee that broadband subscribers will have less protections with respect to the security of their online data, while promising to further weaken the duties broadband providers owe to protect the web browsing history and other personal information of their paying subscribers;

   •Threatened the expansion of broadband into the homes of low-income Americans by limiting the effectiveness of new Lifeline program reforms; and

    • Finally, formally rescinded an FCC staff report detailing the implementation of   the agency’s comprehensive E-Rate modernization effort that sent shock waves through schools and the libraries across the nation, which are worried that you will try to upend this highly functioning and bipartisan program.  

These are actions that directly impact the lives of millions of Americans and I sincerely hope they are not a sign of things to come.  Because, at the end of the day, the FCC has a responsibility to put the public interest ahead of powerful special interests.  Just as it has with past chairman, Congress expects the commission to uphold the laws it has passed and enforce the regulations properly adopted by the agency.  That is what the public interest and this senator has and will continue to demand. 

In closing, I want to express my continued frustration that Jessica Rosenworcel is not sitting before us today as a commissioner.  The failure to confirm her last Congress, frankly, is a black mark on the Senate.  And the president’s decision to pull her nomination last week was truly unfortunate.  I can only hope that the White House will see the error of its ways and re-nominate this impressive public servant for another FCC term once again.  And if that happens as it should, it is imperative for the Senate leadership to live up to its promise and confirm her nomination with all dispatch.

<p>Welcome to today&rsquo;s hearing on

Welcome to today’s hearing on oversight of the Federal Communications Commission (FCC).

Much has changed since the last time we were here six months ago.  We have a new FCC chairman, a new majority in charge of the agency, and we have several new members of this committee for whom this is their first FCC oversight hearing.  At our last hearing, I said I hoped to see changes to how the Commission operates.  I urged “all members of the Commission to treat each other fairly, to respect the law, to be willing to ask Congress for guidance, and to seek consensus whenever and wherever possible.”  While it is still early days, I am heartened because the new FCC leadership seems to have heeded this advice.

The FCC’s first actions under Chairman Pai were to make much needed reforms to improve the agency’s processes and transparency.  Counter to the trend of Chairman Pai’s recent predecessors, who often sought to amass as much power in the chairman’s office as they could, these simple steps instead empower the public and the other commissioners.

Chairman Pai has emphasized that bridging the digital divide will be one of the “core principles” guiding the agency under his leadership.  Representing a rural state where many people are still without broadband service, this is a goal he and I both share.  Indeed, the FCC has already taken huge steps to advance broadband deployment by moving forward with the long-delayed second phases of both the Mobility Fund and the Connect America Fund.

That the Commission could move forward so quickly with these Universal Service Fund items, even during a time of agency transition, begs the question as to why they were not completed much, much sooner.  Nevertheless, it is refreshing to see the agency take decisive action to help bring broadband to every corner of the country.

It is also nice to see the FCC finally move forward with two broadcasting items that will help AM radio and broadcast television better serve the American public.

I recognize, however, that not everything the Commission will do will be as nonpartisan or so positively received as Chairman Pai’s first open meeting agenda.  I was a vocal critic of the previous chairman’s hyper-partisan leadership style, and I recognize it will not be an easy task to rectify some of the agency’s biggest missteps from the last few years.  I am referring, of course, primarily to the 2015 Title II order and the subsequent broadband privacy order.  While I am sure there are other actions that may need to be revisited, I do think we need to hit reset on both of these items.  And I’m glad to see the FCC has already started that process by staying certain parts of the rules that were set to go into effect last week.

As I suspect everyone in this room knows, I feel pretty strongly that the best way to provide long-term protections for the internet is for Congress to pass bipartisan legislation.  But since we don’t yet have agreement on that front, despite good will on both sides, there’s no reason for the FCC to hold off doing what is necessary to rebalance the FCC’s regulatory posture under current statutes.  Something tells me much of today’s hearing will be dedicated to this topic.

The open internet debate, however, should not distract the FCC from important work it must do in other areas as well.  For instance, the FCC is in the final stages of the broadcast TV incentive auction, which has been a real success.  Eighty-four megahertz of spectrum have been reallocated for wireless broadband and billions of dollars dedicated for deficit reduction.  While the auction process may be almost done, the FCC’s work is far from complete.  The clock will soon start on the broadcaster repacking process, and this will be no small undertaking for the agency nor for many TV stations.  I urge the Commission to do everything in its power to ensure this transition is successful and occurs as quickly and responsibly as possible.

Robocalls represent another problem that needs to be addressed.  The FCC’s proposed rulemaking on this month’s agenda is a positive step in the right direction.  The government must do everything we can to protect consumers from those who are truly the bad actors, which is one reason why this committee has also worked on anti-spoofing legislation.  But we also need to be sure the government’s rules are not unfairly punishing legitimate callers who are not acting maliciously.  The FCC’s proposed Notice of Inquiry will give a much-needed jumpstart to that conversation.

Lastly, I would note for my colleagues that we will be busy this year with FCC nominations.  Chairman Pai’s term has expired, and he is now in his hold-over year, but just yesterday the President renominated him to another full term.  There are obviously two vacant seats on the Commission right now.  And Commissioner Clyburn’s current term also expires at the end of June.  Once the President makes his nominations for the FCC, it is my hope that the Senate will move swiftly to review and confirm the President’s appointees.  The most important thing, however, is that we not allow the FCC to fall below a functioning quorum.  I know no responsible person would willingly deprive the agency of its ability to protect consumers and the marketplace, and ensuring the agency is sufficiently constituted will be a priority of mine this year.

Thank you.  Ranking Member Nelson.

Small Business Cybersecurity: Coordinating Federal Resources

House Small Business Committee News - Wed, 03/08/2017 - 12:00am

60% of Small Businesses Close Within Six Months of a Cyber Attack

Experts told the House Small Business Committee today that the federal government must do a better job coordinating federal resources to protect America’s 28 million small businesses from growing and varied cybersecurity threats.  

“A cyber attack can have serious consequences, not only for small businesses, but also their customers, employees, and business partners,” said Chairman Chabot.  “Sixty percent of small businesses that fall victim to a cyber attack close up shop within six months.  A 2014 survey from the National Small Business Association estimated the average cost of a cyber attack on a small business to be over $32,000.”

“In our Committee’s efforts to spotlight these serious and growing threats, it has been abundantly clear that the federal government needs to step up its game when it comes to protecting the cybersecurity of small businesses and individuals.  And, to some extent, federal agencies have begun offering resources directly to small businesses in recent years,” added Chabot.

According to a report from Verizon, 71 percent of cyberattacks occurred in businesses with fewer than 100 employees in 2012.


“When implementing new technologies, small businesses need to fully understand all of the potential security risks created by connecting to the Internet,” said Chuck Romine, Ph.D., Director of the Information Technology Lab at the National Institute of Standards and Technology (NIST). “The risks to systems are so complex and pervasive that one cannot reasonably expect small businesses to be experts in all areas of security, including properly implementing security controls for complex system configurations and assessing security features associated with new and emerging technology. Cybersecurity incidents can have a devastating effect on small businesses—60% of small companies will close within six months following a cyberattack.”


“Reports of data breaches affecting millions of American consumers have become commonplace,” testified Maureen K. Ohlhausen, the Acting Chairman of the Federal Trade Commission (FTC). “Data is an increasingly vital asset for every business, including small businesses, and as companies collect more personal information from consumers, the databases they create become more attractive targets for criminals. Hackers and others seek to exploit vulnerabilities, obtain unauthorized access to consumers’ sensitive information, and potentially misuse it in ways that can cause serious harm to consumers and businesses.”


“If a small business has any Fortune 500 companies as customers, they are an even more enticing target,” explained Charles “Tee” Rowe, the President & CEO of America’s Small Business Development Centers (SBDCs). “These secondary attacks are now a regular problem for small business. Small businesses are particularly vulnerable to email attacks mimicking their banks or other trusted institutions and citing an urgent need for account or some other vital information, and often multiple employees have access to that information. Further, business accounts do not enjoy the same protection against loss as consumer accounts—something many small business owners do not discover until it’s too late.”


  • Yesterday, Chairman Chabot made a statement on the announcement that a Chinese cellphone equipment manufacturer had plead guilty and agreed to pay a nearly $1 billion settlement to the U.S. government for violated sanctions on Iran.
  • The House Small Business Committee held several major hearings throughout the 114th Congress on foreign cyber threats to U.S. small businesses where expert witnesses identified foreign telecommunications companies as a major area of concern.
  • Cybersecurity is a key focus of the House GOP’s A Better Way to Keep Us Safe and Free. On page 23, it states: “The United States needs a more comprehensive approach to sharing information on cyber threats. Today, since most networks are interconnected, weaknesses in security can create significant vulnerabilities in both civilian and government infrastructure. Likewise, information that is valuable to one network defender is helpful to all network defenders—and must be shared. Although some private-sector actors may be reluctant to share cyber threat information, government and industry have a common goal: to prevent cyber criminals and cyber terrorists from disrupting commerce, disabling critical infrastructure, and weakening national defense.”
  • Last year, the House passed the Improving Small Business Cyber Security Act which helps small businesses facing cyber threats by providing access to additional tools and resources through existing federal cyber resources.  The bill became law as part of the National Defense Authorization Act of 2017.  The Department of Homeland Security (DHS) and other federal agencies have been permitted to work through Small Business Development Centers (or SBDCs) to streamline cyber support and resources for small businesses.

WCOE Turning Point for 3/7

Turning Point RSS - Tue, 03/07/2017 - 2:28pm

EPA Uses “Sue and Settle” to Impose Regulations on Unsuspecting Industries

WLF Legal Pulse - Tue, 03/07/2017 - 12:23pm
In recent years, EPA and other federal agencies have sought ways to circumvent the strictures of notice-and-comment rulemaking. One popular method became known as “sue and settle.” Here’s how it works: An advocacy group files suit demanding that a federal agency impose new or stricter regulatory standards on a business or even an entire industry. […]
Categories: Latest News

Senator Seeks Answers From Toy Maker Following 'CloudPets' Teddy Bear Breach

Washington Times

By Andrew Blake

March 7, 2017

The Senate Commerce Committee’s top Democrat demanded answers from a toy manufacturer on Tuesday after a data breach was said to affect nearly a million users of its high-tech brand of teddy bears.

Sen. Bill Nelson, Florida Democrat, asked Spiral Toys’ top executive on Tuesday to provide specific details about the company’s security practices after it was reported that hackers repeatedly gained access to databases containing sensitive customer information including millions of personalized audio recordings meant for children.

Spiral Toys is the maker of CloudPets, a line of Wi-Fi- and Bluetooth-enabled teddy bears intended for customers to “send [and] receive messages you can hug from anywhere in the world,” as advertised on its website. Owners are instructed upon purchase to record greetings with their smartphones that are then sent over the internet, downloaded by a device near the toy and transmitted wirelessly to am embedded speaker the ultimately broadcasts the greeting.

Nearly 2.2 million of those audio messages were recently exposed to the world after they were stored on a poorly protected, public-facing database that was accessed by hackers and held for ransom, security researcher Troy Hunt reported last week, in addition to data pertaining to roughly 820,000 user accounts.

“The breach of Spiral Toys raises serious questions concerning how well your company protects the information it collects, especially information collected from children,” Mr. Nelson wrote in Tuesday’s letter to Spiral Toys CEO Mark Meyers.

Furthermore, he added, the breach raises questions concerning the company’s compliance with the Children’s Online Privacy Protection Act (COPPA), a federal law requiring certain companies to “establish and maintain reasonable procedures to protect the confidentiality, security and integrity of personal information collected from children.”

The senator’s letter requests a response from Spiral Toys no later than March 23 with regards to over a full page of questions concerning the data breach as well as any security practices implemented before or after Mr. Hunt’s report last week.

Spiral Toys downplayed allegations concerning the supposed severity of the data breach last week and claimed no audio recordings were stolen from its exposed databases. Nonetheless, the company filed a notice with the California Attorney General’s Office last Tuesday that said it intended to plan the state with further details of the breach as required by its data breach reporting law.

In a statement, Mr. Nelson’s office said the incident “underscores growing concern from lawmakers and consumer advocates over the security and privacy risks associated with internet-connected toys.”

The Senate Commerce Committee previously issued a report in December 2016 amid concerns involving the privacy risks associated with internet-connected toys, and said then parents should “make efforts to learn about the ways in which a toy maker collects, uses, and secures data — and reject connected toys that do not provide this information.”

Chabot Statement on ZTE’s $1 Billion Settlement

House Small Business Committee News - Tue, 03/07/2017 - 12:00am

Small Business Cybersecurity Hearing Set for TOMORROW


WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-Ohio) made the following statement on the announcement that a Chinese cellphone equipment company will plead guilty to charges that it violated sanctions restricting technology sales to Iran. The announcement from the Departments of Commerce and Justice that the company, ZTE, will pay a $1 billion settlement to the U.S. government comes the day before the Small Business Committee is scheduled to hold a major hearing on improving the coordination of federal resources to protect small businesses from cyber threats.

“For years, our Committee has spotlighted the threat to American economic security and national security posed by the illegal trade practices of foreign companies like ZTE,” said Chairman Chabot. “Small businesses, including small contractors in the defense and telecommunications supply chain, are especially vulnerable to these types of threats. This episode reminds us why we must remain vigilant in guarding against bad foreign actors who sell malicious hardware and software to our small businesses. This settlement is a good first step because one of the worst offenders has finally been held to account, but more work remains to ensure this does not happen again. As tomorrow’s hearing will demonstrate, we must do all we can to protect small business owners, contractors, employees and customers from cyber threats, whether they are foreign or domestic in origin.”

Chairman Chabot, who also serves as a Senior Member of the House Judiciary and Foreign Affairs Committees, led several members of Congress in sending letters to then-Secretary of State John Kerry and then-Secretary of Commerce Penny Pritzker last year when reports first surfaced that ZTE may have been used to subvert U.S. sanctions against rogue regimes like Iran.

In one of those letters, Chabot and the lawmakers wrote:“We would further note that ZTE specifically built its sanctions-evading strategy on a company it called “F7” in an internal memo. It is clear that “F7” is in fact the Chinese government-influenced telecom company Huawei. Huawei may be the next large company to avoid consequences for its actions unless steps are taken now to prevent it from developing a critical mass of links to American companies and markets.”

Tomorrow’s hearing will be livestreamed on the Committee’s website homepage and full written testimony can be read on the hearing page.


  • The House Small Business Committee held several major hearings throughout the 114th Congress on foreign cyber threats to U.S. small businesses where expert witnesses identified foreign telecommunications companies as a major area of concern.


  • The Government Accountability Office (GAO) noted in a 2012reportthat the FBI has determined that foreign state actors pose a serious cyber threat to the telecommunications supply chain.


  • The Office of the National Counter Intelligence Executive released areportin 2011 stating that tens of billions of dollars in trade secrets, intellectual property, and technology are being stolen each year from computer systems in the federal government, corporations, and academic institutions. They identified China and Russia as the two largest participants in cyber espionage.


  • According to areportfrom Verizon, 71 percent of cyberattacks occurred in businesses with fewer than 100 employees in 2012.


  • Cybersecurity is a key focus of the House GOP’s A Better Way to Keep Us Safe and Free. On page 23, it states: “The United States needs a more comprehensive approach to sharing information on cyber threats. Today, since most networks are interconnected, weaknesses in security can create significant vulnerabilities in both civilian and government infrastructure. Likewise, information that is valuable to one network defender is helpful to all network defenders—and must be shared. Although some private-sector actors may be reluctant to share cyber threat information, government and industry have a common goal: to prevent cyber criminals and cyber terrorists from disrupting commerce, disabling critical infrastructure, and weakening national defense.”


Foxx Statement: Republican Efforts to Provide a Better Way on Health Care

Education & the Workforce Committee - Tue, 03/07/2017 - 12:00am

For years, Americans across the country have struggled under a government takeover of health care. Because of Obamacare, insurance markets are collapsing, health care costs are soaring, and patients’ choices are dwindling. Simply put, the flawed health care law is failing. It is hurting hardworking men and women across the country, and the American people deserve better.

That’s why Republicans promised to deliver the health care solutions Americans desperately need. This week, we are making good on that promise and moving forward with an effort that will provide a better way on health care.

After a thoughtful and collaborative process, members of the Energy and Commerce Committee and the Ways and Means Committee recently unveiled a legislative plan that will repeal and replace Obamacare. The plan, the American Health Care Act, includes a number of positive, commonsense reforms that will help create more choices, lower costs, and give control back to individuals and families.

These reforms will create a new and innovative fund giving states the flexibility they need to design programs that fit the needs of their communities. They will responsibly unwind Obamacare’s Medicaid expansion in a way that protects patients and strengthens the program for future generations.

The plan will also dismantle Obamacare taxes and mandates — including the individual and employer mandate penalties and taxes on prescription drugs, over-the-counter medications, health insurance premiums, and medical devices. It will expand Health Savings Accounts to empower individuals and families to spend their health care dollars the way they want and need. And it will provide tax credits to those who don’t receive insurance through work or a government program, helping all Americans access high-quality, affordable health care.

At the same time, we on the Education and the Workforce Committee are working to advance additional reforms that will help expand coverage, make health care more affordable, and promote a healthy workforce. One legislative proposal will empower small businesses to band together to negotiate lower health care costs on behalf of their employees. Another will protect the ability of employers to self-insure, providing greater access to affordable, flexible health care plans for their workers. The third will give employers the legal certainty they need to offer employee wellness plans, helping to promote a healthy workforce and — again — lower health care costs.

These three legislative proposals reflect a few shared principles. Families should have the freedom to choose the health care plan that meets their needs. Americans need more affordable health care options, not fewer. Health care decisions should rest with patients and their doctors — not government bureaucrats. And instead of prescriptive mandates, we should ensure employers have the tools they need to help their employees afford health care.

These proposals — along with those in the American Health Care Act — are exactly the kind of free-market, patient-centered reforms Republicans promised, and they reflect the priorities of President Trump and his administration. They are the products of a careful process that took into account the ideas and concerns of men and women from all walks of life, and they will now be considered through an open, transparent process that provides policymakers on both sides of the aisle an opportunity to share their views and offer their ideas.

I encourage everyone — my colleagues in Congress, as well as all Americans — to join in this process. Visit ReadTheBill.GOP. See for yourself the plan we have laid out, and help us move forward with these positive solutions. Together, we can help ensure all Americans have access to the high-quality, affordable health care coverage they deserve.

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The Health Bill You’ve Waited For

Education & the Workforce Committee - Tue, 03/07/2017 - 12:00am

The Health Bill You’ve Waited For
Our plan removes taxes and mandates, while offering tax credits to help Americans afford coverage.

By Chairmen Kevin Brady (R-TX) and Greg Walden (R-OR)

‘ObamaCare is collapsing,” President Trump said during his address to Congress last week, “and we must act decisively to protect all Americans.” House Republicans have heard the president’s message loud and clear. On Monday night the congressional committees we lead released the American Health Care Act, which will rescue those hurt by ObamaCare’s failures and lay the groundwork for a patient-centered health-care system.

Our fiscally responsible plan will lower costs for patients and begin returning control from Washington back to the states, so that they can tailor their health-care systems to their unique communities. The bill will improve access to care and restore the free market, increasing innovation, competition and choice.

The legislation provides immediate relief from ObamaCare by eliminating the penalties attached to the individual and employer mandates. Washington will no longer force Americans to purchase expensive, inadequate plans they don’t need and cannot afford.

Our bill also dismantles the ObamaCare taxes that have hurt patients, job creators and health-care providers. It repeals taxes on prescription drugs, over-the-counter medications, health-insurance premiums and medical devices.

The legislation works to ensure a stable transition away from ObamaCare. It preserves and protects insurance for the more than 150 million Americans who receive employer-sponsored health coverage. It provides ObamaCare enrollees with access to the existing financial support for their plans through the end of 2019. People will also be able to use their ObamaCare subsidy to purchase expanded insurance options—including catastrophic coverage—without being tied to the failing exchanges.

Our plan preserves vital patient protections. Young Americans can continue coverage on their parents’ plans until age 26. People with pre-existing conditions cannot be denied policies. Nobody can be charged more for getting sick—period.

To prevent people from unfairly gaming the system, driving up costs for everyone else, we propose a new protection for patients who maintain continuous coverage in the individual and small-group markets. A similar “continuous coverage” provision already exists for those who get insurance through an employer. Extending this safeguard is a simple but important reform that will give patients an incentive to enroll and stay enrolled. This protection is based solely on enrollment status, ensuring that patients will be treated equally no matter how healthy or sick they are.

Additionally, our legislation establishes a Patient and State Stability Fund to help low-income Americans afford health care and to repair the damage done to state markets by ObamaCare. States that take advantage of this new fund will have broad flexibility to develop innovative programs like Maine’s invisible high-risk pool or Alaska’s state-based reinsurance program. If they choose, states may also use these resources to increase access to preventive services, like getting an annual checkup. This program gives states new tools and flexibility to care for their unique patient populations.

Our legislation strengthens Medicaid, which is a critical lifeline for millions of Americans. But Medicaid’s flaws—it offers patients fewer choices and less access to quality care than private insurance—were worsened by ObamaCare’s expansion of the program. To unwind it responsibly, our legislation would freeze new enrollment in ObamaCare’s Medicaid expansion, while grandfathering in existing enrollees. People currently covered under the expansion would stay in the program if they remain eligible. Over time, as their incomes or eligibilities change, they will naturally cycle off Medicaid and receive other help accessing private insurance.

We also refocus Medicaid’s limited resources to the patients most in need. Our legislation proposes a bipartisan idea known as a “per capita allotment” to determine a fair amount of funding for each state based on the number of enrollees in its Medicaid population.

Following President Trump’s direction, our legislation provides tax credits to help Americans pay for the health-care options they want—not the ones forced on them by Washington. The bill repeals ObamaCare’s flawed subsidies, effective in 2020. After that, individuals and families who don’t receive insurance through work or a government program become eligible for between $2,000 and $14,000 in tax credits a year. These credits, based on age and family size, will give millions of people new flexibility and freedom to buy insurance tailored to their needs. The full credit would be available to Americans with low or middle incomes and would slowly phase out as they climb the pay scale.

Our plan will strengthen and expand health-savings accounts so Americans can save and spend their health-care dollars the way they want and need. We nearly double the amount of money people can contribute into their HSAs—$6,550 for individuals and $13,100 for families. And the bill will broaden HSAs to cover even more expenses, including over-the-counter medications.

The bill is now online for our constituents and colleagues to review, and the committees we lead will consider it later this week. Our open process will give lawmakers on both sides of the aisle the opportunity to weigh these policies, offer amendments and vote on the final product.

After seven years of ObamaCare’s failures, Republicans are committed to lowering costs, expanding choices and putting the American people back in charge of their own health care.

Mr. Brady, a Texas Republican, is chairman of the House Ways and Means Committee. Mr. Walden, an Oregon Republican, is chairman of the House Energy and Commerce Committee.

To read online, click here.


WLF Legal Pulse - Mon, 03/06/2017 - 3:00pm
*Note: This is the third in a series of posts compiling Washington Legal Foundation papers, briefs, regulatory comments, and blog commentaries relevant to critical legal and constitutional issues facing new senior leaders at specific federal regulatory agencies. To read posts addressing other federal agencies, click here. As the federal government’s primary prosecutor, the Department of Justice (DOJ) […]
Categories: Latest News

SEC Reconsiders Conflict Minerals Rule Implementation

Office of Advocacy - Mon, 03/06/2017 - 2:11pm

On January 31, 2016, the Securities and Exchange Commission (SEC) announced that the agency would reconsider how to enforce a regulation that requires SEC filers to provide certain disclosures about the use of specified conflict minerals originating in the Democratic Republic of Congo (DRC).

Link to announcement: https://www.sec.gov/news/statement/reconsideration-of-conflict-minerals-rule-implementation.html

Categories: Latest News, SBA Advocate


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