Update 604 — Legislative High Season:
100-Day Roadmap for Econ. Policy Bills
Congress settles back after recess this week, facing a packed to-do list and a ticking clock. The appropriations process for FY2023 is under way. Again, Democrats’ immediate priority is reconciliation. Negotiations with Sen. Manchin focus now on climate and health provisions, but we saw this movie in 2021. Supplemental spending possibilities: additional support for Ukraine, insulin price caps, and final COVID relief.
The Democrats’ last chance to score wins before the midterm elections comes in the next 100 days — by August recess. This is the legislative high season and opportunities exist to pass bills large and small or send messages via others. In this update, we outline the most salient bills that members of Congress are eyeing and assess their chances of passage.
Congress is back in session after a two-week break and not a moment too soon. There is no shortage of items that Democrats promised to (and need to) accomplish:
- Aid for Ukraine
- Coronavirus relief funding
- U.S. competitiveness bill
- Key nominations for financial regulatory posts
- Tackling higher costs for families
Congress’s leftover items from before April recess will need to be addressed, namely the stalled bipartisan COVID supplemental bill. Before recess, Senate leaders seemed to have reached an agreement on $10 billion in additional funding for vaccines, therapeutics, testing, and research. Republicans began stipulating they would not support the bill without an amendment preventing the Biden administration from lifting Title 42. The controversial Title 42 rule restricts the entry of migrants, including asylum seekers, at the southern border, nominally to prevent the spread of communicable disease.
A growing number of Democrats have also put pressure on the White House not to lift the rule without another plan in place, including vulnerable Senators Hassan, Warnock, Cortez Masto, and Kelly. In response, Homeland Security Secretary Alejandro Mayorkas unveiled the administration’s new plan for the southwest border. Whether this will help separate the COVID supplemental from the immigration fight remains to be seen.
Democrats in the Senate hope to circumvent Republicans’ demands by attaching COVID funding to a new Ukraine supplemental. The Biden administration’s latest drawdowns have almost depleted the money authorized by Congress last month for humanitarian and military aid, and Biden is expected to send a new supplemental request to Congress this week. Despite broad support on the Hill for additional aid to Ukraine, Republicans don’t plan to let the combined supplemental bill pass without a Title 42 amendment vote.
Democrats’ chief challenge is passing a new reconciliation package. Sen. Joe Manchin threw a new wrench into the works Tuesday when he outlined his vision for reconciliation. Manchin, who had previously stipulated that any reconciliation bill would need to be split 50-50 between energy and deficit reduction, proposed increasing the corporate tax rate to 25 percent, hiking the capital gains tax rate to 28 percent, and closing loopholes to pay for deficit reduction.
Rate increases could be an obvious deal-breaker for Senator Kyrsten Sinema, who rejected similar tax hikes last year. Manchin’s plans are also unlikely to fly with the rest of the caucus given his refusal to include any social spending. These types of provisions, including resuming monthly refundable Child Tax Credit payments, represent the most immediate meaningful response Democrats could deliver to families facing rising costs.
Manchin is also looking outside reconciliation for energy provisions. He met with a group of Senators, including Lisa Murkowski, on Monday to discuss a bipartisan deal on energy and climate change. Manchin could be open to a plan to reduce the price of prescription drugs, a final possible avenue for Democrats to eke out a reconciliation win before the midterms. However, there are no formal negotiations around reconciliation at present, and it’s difficult to see a path forward that would satisfy both Manchin and Sinema.
Hot Budget Summer
Looking beyond reconciliation, a round of appropriations hearings are underway this week in both the House and the Senate, signaling that the FY2023 appropriations process is beginning in earnest. The four corners are expected to meet later this week to discuss a top-line numbers deal, which would help prevent the logjam that characterized the budget process last year. Over the course of the next few months, we are guaranteed to see Democrats call for increased social spending, while Republicans continue to demand additional defense spending.
Chair of the House Appropriations committee Rosa DeLauro will try to move 12 bills through the House this summer, regardless of whether or not we see a top-line deal. Subcommittees tentatively plan to begin markups in mid-June, paving the way for committee markups by the end of June. The Senate, on the other hand, will likely take its time. Still, expect to see at least one continuing resolution to fund the government past October 1. We could yet again see a longer-term continuing resolution, or a series of continuing resolutions, particularly if Republicans flip one chamber. However, if Republicans take back both chambers of Congress and the appropriations process extends into the lame duck period, they may try to get the budget for the coming fiscal year off of their plates early to focus on other priorities.
Beyond the Budget, Across the Finish Line
Insulin pricing, gas pricing, Electoral College reform, and Big Tech antitrust bills could also get brought to the floor in both chambers, although time isn’t exactly on Democrats’ side. The Senate will also need to consider its version of a House-passed restaurant relief bill. The bipartisan Senate package contains $40 billion for restaurant relief, as well as aid for gyms, minor league baseball teams, live venues, and border-region businesses, but only $5 billion in offsets, which may be a hurdle to finding 60 votes.
A retirement reform plan known as “SECURE 2.0” is finally on the move again. The bill, known formally as the Securing a Strong Retirement Act of 2022, was passed by the House of Representatives before the April recess in an overwhelming 414 to 5 vote. Expanding on a landmark 2019 retirement bill, the bill aims to further expand Americans’ ability to save for retirement and increase their options for doing so.
The bill unanimously cleared the House Ways and Means committee about 11 months ago. Despite bipartisan support, it languished as lawmakers wrangled over a separate retirement proposal Democrats had hoped to include in Build Back Better. Now, the resurrected SECURE 2.0 heads to the Senate where advocates hope it could earn a vote in the upper chamber in the coming months.
COMPETES – The Long Haul
This week marks the start of the House and Senate negotiations to finalize a deal on far-reaching competitiveness legislation known by a variety of names, most notably USICA and the “America COMPETES Act.”
The package falls under the jurisdiction of multiple committees with 107 total conferees and tens of billions of dollars at stake. The Senate passed USICA with a bipartisan vote last year, whereas the House passed their version, the America COMPETES Act, in February with Rep. Adam Kinzinger (Ill.) as the sole Republican supporter. A final bill will likely be far closer to the Senate product than the House product and include the $52 billion in funding for the CHIPS Act, the most popular provision in the package.
Talks between aides for Senate Majority Leader Schumer and Minority Leader McConnell will pick up this week to reach an agreement on votes on motions to instruct the conferees. These motions are non-binding and used to make senators, particularly those in tough reelection campaigns, take hard votes. Even as leaders negotiate, both sides seem most focused on presenting a united front as they enter into talks with the House.
From Congress to the Campaign Trail
With inflation on the rise and coronavirus cases once again climbing, lawmakers are returning to Washington ready to confront the financial and physical health of the country. A number of House and Senate seats are up for grabs this fall and Democrats are under increasing pressure to score some legislative victories amid Biden’s low approval ratings.
For Democrats, the mounting workload means they must balance matters of routine governance with their broader political aspirations. Democrats are fighting for an economy that will help families. Now the challenge is to use the time remaining before midterm voters make up their minds to make much more certain that voters see and feel Democrats’ legislative efforts too.