Update 549 — See You in September:
State of Play as Lengthy Recess Begins
The August recess is more of a misnomer this year than usual. Formal action, committee consideration, and votes won’t occur, but negotiations and conversations will continue behind the scenes, with the possibility of material progress.
On Congress’ extensive to-do list after the recess: the bipartisan infrastructure bill (no text yet and the House hasn’t weighed in), the FY22 budget resolution with reconciliation instructions, and lifting the debt ceiling. The House adjourns today for seven weeks and the Senate next week, so below we preview the under-the-radar discussions of these big domestic economic issues that will not take a vacation.
Good weekends all,
Where is Congress Leaving Things?
Earlier today, the Senate voted to advance the bipartisan Infrastructure Investment and Jobs Act, after clearing a cloture vote on Wednesday with the support of every Democrat and 17 Republicans. Majority Leader Schumer has indicated that he would like a vote on the bill’s final text before the Senate adjourns for recess next week. The legislation would increase federal spending on crucial infrastructure projects by $550 billion over the next five years while offsetting the cost through a series of minor revenue tweaks and budget gimmicks.
The package differs slightly from the framework negotiators agreed to at the White House last month. The main points of deviation, all framework provisions omitted in the Senate bill:
- $9 billion less for public transit, though additional funding could easily be re-added in the reconciliation package.
- $20 billion for a national infrastructure bank was zeroed out. It is unclear if Democrats will be able to use reconciliation for this policy given the restrictions of the Byrd Rule. Killing the infrastructure bank was a big win for the municipal bond industry, which lobbied hard against its creation.
- Enhanced IRS enforcement and selling off public assets were both swapped out as pay-fors in favor of regulatory changes to cryptocurrency reporting and Medicare rebates. Democrats have indicated that the IRS enforcement provision will make a reappearance in the reconciliation package.
With the broad strokes for traditional infrastructure finalized, Democrats are moving forward with their more ambitious $3.5 trillion reconciliation resolution. Schumer has promised not to adjourn the Senate until a budget resolution has been sent to the House. While Senate Democrats are not in complete consensus on precise spending or revenue policies, there is agreement within the caucus that the process must move forward.
Though the Senate has taken up most of the spotlight, the House has not been idle. House Democrats this week passed 9 out of 12 annual appropriations bills amounting to $807 billion in discretionary spending. It is unlikely that the Senate will give the House bills serious consideration, and in all likelihood, a continuing resolution (CR) will be needed to keep the government from shutting down at the end of September.
To Be Negotiated over the Recess
While the Senate has moved forward on the bipartisan infrastructure package, House Democrats have voiced concerns about the deal. Speaker Pelosi has repeatedly stated that the House will not take up the bill until the Senate approves a reconciliation package. However, comments made by Sen. Sinema about reducing the topline reconciliation number prompted a swift backlash.
Some progressive Representatives say they would withdraw support from the bipartisan package if the budget resolution does not cover the rest of Biden’s Build Back Better agenda. House Transportation Committee Chair Peter DeFazio has voiced skepticism about the bipartisan package after being locked out of the infrastructure negotiations in the Senate. The recess will provide an opportunity for these differences to be bridged.
As for the reconciliation process, leadership has indicated that the House may return for a few days in August to vote on the Senate’s expected budget resolution. As for the reconciliation mark-up process, the Congressional roles appear to be reversed. Though the Senate will set the topline reconciliation figures, it will be the House committees which get the first stab of turning dollars into policy specifics. Over the recess, we expect the Agriculture, Education and Labor, Energy and Commerce, Transportation and Infrastructure, and Ways and Means Committees to get the lion’s share of the legislative responsibilities. The House does not currently plan to return until September 20, adequate time for progress.
Deadlines when Congress Returns
With government funding, the debt ceiling, necessary reauthorizations, and provisions from the American Rescue Plan all expiring this fall, Congress is bracing for a period of high activity These deadlines loom:
- Government Funding (September 30): Congress must provide appropriations for the government to avoid a government shutdown. While the House has already passed three-quarters of the necessary appropriations bills, the Senate is hitting road bumps. Ultimately, another CR is likely to provide the off-ramp for both chambers to keep funding going at existing levels while negotiations continue. The House has approved significant increases in many programs, none of which will take effect while a temporary stopgap bill is in effect.
- Surface Transportation Reauthorization (September 30): The House passed a reauthorization earlier this month, and the Senate is including their version of the reauthorization in the bipartisan infrastructure deal. Surface transportation reauthorization is incredibly likely before the deadline as infrastructure is sailing through the Senate.
- ARP Provision Expirations (September 6, September 30, December 31): Even before these legislative provisions expire, the Centers for Disease Control’s moratorium on evictions will expire tomorrow. Whether the House will vote to extend the moratorium today remains to be seen and the Senate is unlikely to have the 60 votes to enact it before recess. Tens of millions of Americans are staring down that fiscal cliff and others in September. Enhanced Unemployment Insurance, COBRA subsidies, increases to SNAP, and paid sick leave tax credits all expire in September. The enhanced Child Tax Credit will only apply to children born before the new year. With the Delta variant threatening the economy and the record reduction in poverty as a result of these programs, Congress must act.
- Debt Ceiling (October or November): The debt ceiling will be breached later this fall and the United States will be close to defaulting on its debts. Despite the cataclysmic impacts of defaulting, Senate Republicans are threatening to vote against a debt limit bill unless they get policy concessions. Democrats will most likely have to attach a further suspension of the debt ceiling to the CR that must pass before September 30.
Infrastructure Week Finally Realized
Congress has accomplished much this summer, but even more work is left to be done when it returns in the fall. The bipartisan infrastructure bill and budget resolution could get votes next week in the Senate to lay the groundwork for a brisk fall, cramming in temporary appropriations, debt limit, House-Senate negotiations on infrastructure, and the all-important reconciliation bill. Further substantial investments in infrastructure are certain to be included in the budget resolution. As Biden implements a comprehensive infrastructure agenda, it seems that the true meaning of Infrastructure Week will finally be fully realized by the Democrats.