| Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It's Tuesday night in Washington, where Stephen Bannon is stepping down from his role as chair of Breitbart News. THE BIG STORY Drug prices took center stage at the confirmation hearing for President Trump's nominee to lead the Department of Health and Human Services (HHS) as Democrats expressed concerns over the former pharmaceutical executive's background. Democrats said that Alex Azar -- who previously held top positions at HHS -- served at Lilly USA during a time when the prices of several drugs were increased. Republicans countered that Azar's experience at the pharmaceutical company is an asset. "Mr. Azar's work in the pharmaceutical industry will give him important insights regarding the impact of policies designed and implemented by HHS," Senate Finance Committee Chairman Orrin Hatch (R-Utah) said at the panel's nomination hearing Tuesday. Azar's background: He worked at the pharmaceutical company Eli Lilly for nearly a decade, most recently serving as the president of Lilly USA, a position he left in January 2017. He repeatedly said in nomination hearings that "drug prices are too high." He also held top jobs in HHS under President George W. Bush. The panel's top Democrat, Sen. Ron Wyden (Ore.), laid out the Democratic argument against Azar during his opening remarks. Wyden pointed to four different drugs, including ones for heart disease and ADHD, saying they more than doubled during Azar's tenure at the company. I've got you covered with the rundown of the hearing. ON TAP FOR WEDNESDAY The House Natural Resources Committee marks up a number of bills including the Streamlining Environmental Approvals Act of 2017. The House Foreign Affairs Committee looks at the effectiveness of sanctions as a national security tool. The House Financial Services Subcommittee on Monetary Policy and Trade holds a hearing on proposals to reform the Federal Reserve. REGULATORY ROUNDUP Health: The Trump administration is proposing new safety rules for egg products that are used in food items like cake and pudding mixes, pasta, ice cream and mayonnaise. The U.S. Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS) proposed a rule Tuesday that would require producers to develop safety plans and ensure eggs are free of detectable pathogens like salmonella. Egg products refer to eggs that are removed from their shells for processing at facilities called "breaker plants." Egg products include whole eggs, egg whites and egg yolks in frozen, refrigerated, liquid and dried forms that are available in a number of different products, according to the American Egg Board. Lydia Wheeler reports. Technology: A Senate bill that would block the Federal Communications Commission (FCC) from repealing its net neutrality rules now has 40 co-sponsors, Senate Democrats announced Tuesday. The news comes just a day after the bill won its 30th co-sponsor, ensuring that it has enough support to clear a procedural threshold and get fast-tracked to a floor vote. It appears unlikely that the bill will pass, but Democrats see political value in forcing Republicans to take a stance on the issue. Polls have found that a large majority of the public supports keeping the net neutrality rules. Harper Neidig has the story. There's more: The legislation received its first GOP backer -- Sen. Susan Collins (R-Maine). "Senator Collins does not support the FCC's recent decision to repeal net neutrality rules, and she will support Senator Markey's legislation that would overturn the FCC's vote," a spokeswoman, Annie Clark, said in a statement to The Hill. Read more on Collins's decision here from Harper. Energy: President Trump's former campaign manager slammed a five-member federal board -- four of whom Trump nominated -- as part of the "deep state" for rejecting Energy Secretary Rick Perry's plan to boost coal and nuclear power. The Tuesday morning tweet from Corey Lewandowski came the day after the Federal Energy Regulatory Commission (FERC) unanimously killed Perry's plan to require higher electricity payments to coal and nuclear plants. "The deep state is very real," Lewandowski tweeted, with a link to a New York Times story about FERC's decision. "More government officials who don't support the Trump agenda." The "deep state" label has become popular among Trump's supporters, who have accused some career government employees and holdovers from previous administrations of working to undermine the president's agenda. But Lewandowski notably used the label against a body composed almost entirely of Trump nominees. But Lewandowski notably used the label against a body composed almost entirely of Trump nominees. Three of the five FERC commissioners are Republicans, including Chairman Kevin McIntyre. All three Republicans, as well as one of the Democratic commissioners, were nominated by Trump last year and confirmed by the Senate. More from Timothy. More on that decision... The CEO of the nation's largest privately held coal mining company says President Trump should fire four of the five commissioners who rejected Energy Secretary Rick Perry's plan to help coal and nuclear power plants. Bob Murray, head of Murray Energy Corp, said the members of the Federal Energy Regulatory Commission (FERC), an independent agency, "defaulted" on their duties by rebuffing the plan to stop coal and nuclear plants from closing. Supporters said the reliability of the electric grid was at stake. "I believe that the Trump administration, with the exception of Neil Chatterjee, picked three bad appointees for FERC. And they should all be fired," Murray told The Hill Tuesday. Murray is an outspoken advocate for coal. He accused former President Barack Obama of being the "nation's greatest destroyer" and said last year that Obama should be charged criminally for actions toward the coal industry. He's also a close ally of Trump, having met with him on multiple occasions to push for pro-coal policies. Timothy Cama has more here. Environment: The Environmental Protection Agency's (EPA) staffing is now lower than it was in former President Reagan's final year in office. An EPA spokeswoman said Tuesday that, as of Jan. 3, the agency had 14,162 employees, down from about 15,000 at the beginning of last year. That's even lower than the 14,400 employees the agency had in fiscal year 1988, Reagan's final year. The figures come after President Trump and EPA Administrator Scott Pruitt pledgeed to shrink the size of the federal government to demonstrate they are saving money and reducing regulatory burdens. Timothy Cama reports. Environment: The Democratic attorneys general of 12 states say Environmental Protection Agency (EPA) head Scott Pruitt needs to recuse himself from all matters related to the repeal of the Obama administration's climate change rule for power plants. The attorneys general, led by California Attorney General Xavier Becerra, say Pruitt's criticisms of the Clean Power Plan and his attempt in his previous job as Oklahoma's attorney general to fight it make him irreparably biased against it. Becerra led his colleagues and the top law enforcement officials of six cities and one county in submitting a formal request to the EPA outlining their objections. Cama again with the story. Energy: The oil industry wants President Trump and Congress's infrastructure plan to include policies boosting oil and natural gas pipelines and making them easier to build. American Petroleum Institute (API) head Jack Gerard told policymakers and reporters on Tuesday that the group is making a push to jump on the bipartisan excitement for a promised infrastructure bill. The oil lobby group, which represents numerous parts of the industry, has long been looking for regulatory and permitting changes to simplify and speed up pipeline decisions. "We're not looking for a government program, we're not looking for funding in that way," Gerard said after delivering his annual "State of American Energy" speech, which he uses to set the group's annual agenda. "We're merely looking for certainty and predictability in things like permitting processes and the ability to get the requisite permit necessary to build infrastructure." Timothy with the story. Interior: President Trump's Interior Department has implemented a new policy that asks staff awarding federal grants to ensure the awards "promote the priorities" of the administration, according to a Dec. 28 memo obtained by The Washington Post. The decision appears to be an attempt by the Trump administration to exert further control over federal funding of grants to academics and non-profits. The Post reports that Scott Cameron, Interior's principal deputy assistant secretary for policy, management and budget, has instructed other officials at Interior to submit most grants for approval by one of his aides. This includes "any award of at least $50,000 to 'a non-profit organization that can legally engage in advocacy' or 'to an institution of higher education.'" Read more from Avery Anapol. Health care: The director of the Centers for Disease Control and Prevention (CDC) says the agency "has not banned, prohibited, or forbidden" the use of certain words, in a response to concerns from Senate Democrats. Democrats had questions on whether "the Trump Administration is yet again prioritizing ideology over science" after reports that agencies within the Department of Health and Human Services (HHS) had banned employees from using words including "fetus," "vulnerable" and "science-based." CDC Director Brenda Fitzgerald told Sen. Brian Schatz (D-Hawaii) in a letter released Tuesday that "There are absolutely no 'banned' words. These are merely suggestions of what terms to use and what often overused words should be avoided." As examples, she said the HHS style guide recommends avoiding the use of "vulnerable," "diversity," and "entitlement." But Schatz and other Senate Democrats said even the suggestion to avoid certain words sends a politically charged message. Nathaniel Weixel has the story. Energy and Environment: The Trump administration's expansive offshore drilling proposal could boost Florida Sen. Bill Nelson (D) in his upcoming reelection fight. Nelson is running for his fourth term in the swing state. His most likely rival is Gov. Rick Scott (R), though Scott hasn't declared his candidacy. President Trump won the state in 2016 by a little more than 1 percentage point, suggesting Nelson could face a tough reelection. But Trump's proposal to open nearly all of the United States's coasts for potential drilling hands Nelson an opportunity to highlight his decades of efforts to fight drilling in the eastern Gulf of Mexico, adjacent to Florida's coast. Timothy brings you the story again. From The Hill's opinion pages: Jeff Sessions in the wrong and out of step on weed IN OTHER NEWS Four lawmakers join House Climate Solutions Caucus (The Hill) Maryland eyes replacement for repealed ObamaCare mandate (The Hill) Warren: US needs to 'rethink' money laundering laws (Reuters) South Korea steps up cryptocurrency inspections at banks (The Wall Street Journal) Former Trump bank regulator returns to law firm (The Wall Street Journal) US rollback of senior home regulation worries Minnesota officials (KMSP) Watch: The impact of Europe's new financial regulations (Financial Times) Send tips, comments and hopes the weather doesn't hit the single-digits again all winter to rroubein@thehill.com and follow me on Twitter @rachel_roubein. | 
