Update 773 — Supplemental’s Status,
Roundup of Week’s Other Developments
It isn’t the express train but the long-lingering local that the $95 billion international assistance package, originally requested by the administration over six months ago, is riding en route to the finish line in Congress. Once enacted, the White House will sign and herald most of the elusive and overdue bill. The latest on the status of the supplemental and weekend voting ahead are below.
On Wednesday, House Financial Services held a marathon markup to consider seven bills and six rule-blocking resolutions (CRAs), including the Financial Services Innovation Act and other extreme anti-regulatory measures. You can read about how these fared below. We also cover Powell’s comments pointing to longer lingering rates as well as key hearings this week.
Good weekends, all…
Best,
Dana
Headline
Johnson’s Supplemental Package Heads to the Floor
This week, Speaker of the House Mike Johnson (R-LA) unveiled the long-awaited House of Representatives’ version of the Senate-passed National Security Supplemental package. Against the backdrop of Ukraine’s struggles with depleting resources and Iran leading an unprecedented attack on Israel last weekend, Johnson introduced the text for the $95.3 billion package on Wednesday. The four-part package allows lawmakers to vote on each bill instead of the package as a whole.
The legislation, with significant components noted, is detailed below:
The House of Representatives’ National Security Package
| Legislative Purpose | Breakdown |
| Ukraine $60.84 billion | $13.78 billion for military and logistic assistance$13.41 billion to replenish U.S. stockpiles$9.5 billion in economic assistance in the form of forgivable loans |
| Israel $26.38 billion | $13 billion for military assistance (Iron Dome and Beam systems) and replenishing U.S. stockpiles $9.15 billion in humanitarian assistance |
| Indo-Pacific $8.12 billion | $5.6 billion to bolster deterrence in the region and U.S. submarine base$2 billion to partners in the region in Foreign Military Financing Program |
| 21st Century Peace Through Security Act | REPO Act – allows the administration to transfer frozen Russian assets to Ukraine for reconstruction Prohibiting Americans from Foreign Adversary Controlled Application Act (TikTok)Sanctions in response to national emergency regarding fentanyl traffickingSanctions on Hamas, Iran and terrorist organizations |
The House package is largely similar to the Senate bill passed in February, with some key differences, most notably, a loan arrangement for Ukraine economic assistance and bolstered Israel funding. The fourth piece, comprising miscellaneous national security priorities is another novel feature of Johnson’s proposal, an attempt to garner GOP support.
Johnson’s package passed out of the House Rules Committee on Thursday with the help of four Democrats, Representatives Jim McGovern (D-MA), Mary Gay Scanlon (D-PA), Joe Neguse (D-CO) and Tereasa Leger Fernández (D-NM). Similarly, 165 Democrats helped the Speaker, with the GOP conference divided on Ukraine, by agreeing to a resolution earlier today to clear the way for lawmakers to vote on the four pieces on Saturday.
If passed, the bills will move to the Senate as an amendment to their since-passed Supplemental to allow for a quick vote on all four parts as one. Statements from Schumer on Wednesday noting the urgency of finalizing national security funding suggest quick action by the Senate, though it may still have to give up a chunk of next week’s scheduled recess. President Biden has confirmed he will sign this package into law once it reaches his desk.
On Thursday, the House Rules could not pass a floor plan for H.R. 3602, “End the Border Catastrophe Act,” introduced to quell hard-line GOP members demanding border legislation if any Ukraine aid was considered. While not the full-blown extreme H.R. 2, this bill still carries controversial border policies such as the Remain in Mexico policy, limiting asylum systems, and requiring further border wall construction. It faces slim odds, having to pass with a two-thirds majority in the House — and is considered dead in the Senate in any event.
Then, looming over Speaker Johnson is growing Republican discontent and a dormant Motion to Vacate put forth by Representative Marjorie Taylor Green (R-GA) with support from Representatives Thomas Massie (R-KY) and Paul Gosar (R-AZ). They have not yet signaled their intent to trigger the motion. But even so, the Speaker’s fate remains shrouded in uncertainty.
Other Developments
Powell Hint: Rates May Stay Higher for Still Longer
The Federal Reserve may take longer than previously expected to cut interest rates. This is according to comments made on Tuesday by Federal Reserve Chair Jerome Powell at a panel discussion at the Wilson Center in Washington’s Washington Forum on the Canadian economy. Powell said, “The recent data have clearly not given us greater confidence” that inflation is on track towards hitting the Fed’s target level of two percent, “and instead indicate that it is likely to take longer than expected to achieve that confidence.” He continued, “If higher inflation does persist, we can maintain the current level of restriction for as long as needed.”
The Fed has held the federal funds rate at the 5.25 to 5.5 percent range since last July and officials projected three rate cuts this year at their last meeting in March. Since then, inflation data has come in hotter than expected. In March, the consumer price index (CPI) rose by 3.5 percent on an annualized basis, up from an increase of 3.2 percent in February and 3.1 percent in January. This has fueled concerns by officials that inflation may be stabilizing rather than trending down. Powell’s comments come ahead of the Federal Open Market Committee’s next meeting on April 30 to May 1 when officials will likely hold rates steady once again.
Biden: Sharp Hike to Tariffs on Chinese Steel, Aluminum
On Wednesday, while speaking to the United Steelworkers union in Pittsburgh, Pennsylvania, President Biden called for raising tariffs on Chinese steel and aluminum. Specifically, Biden called for his trade officials to increase the tariff on Chinese steel and aluminum products from 7.5 percent to 25 percent. On the move, Biden proclaimed that “these are strategic and targeted actions that are going to protect American workers and ensure fair competition.” This may not be Biden’s last word on tariffs, as the administration is exploring raising tariffs on a series of other Chinese imports, including EVs and solar panels.
The sharp turn towards protectionism comes as President Biden seeks to pitch his economic platform to blue-collar voters, especially in northern rust belt states such as Pennsylvania and Michigan. President Biden sought to draw a contrast between himself and Trump, stating “My predecessor and the MAGA Republicans want across-the-board tariffs on all imports, from all countries, that could badly hurt American consumers.” The Biden Administration has sought to justify its confrontational stance on trade with China, specifically as a response to China flooding the global market with low-cost exports, undermining American manufacturing in the process.
Hearings and Markups
HFSC GOP Move to Block CFPB Credit Card Late Fee Rule
On Tuesday, the House Committee on Financial Service Subcommittee on Financial Institutions and Monetary Policy convened to attack the Consumer Financial Protection Bureau (CFPB) and considered a resolution to block the Bureau’s rule to rein in excessive credit card late fees. The hearing was a precursor to the full Committee markup on Wednesday, during which the resolution was reported favorably to the House in a 28-22 party-line vote.
During the hearing, the Subcommittee discussed H.J.Res.122, Subcommittee Chair Andy Barr’s (R-KY) Congressional Review Act (CRA) resolution to block the CFPB’s credit card late fee rule, which was finalized in early March. The rule would reduce the typical credit card late fee from $32 to $8, bringing late fees more in line with the actual costs incurred by banks due to late payments. According to the CFPB, the rule will save American families an estimated $10 billion in late fees annually, translating to an average savings of $220 per year for the more than 45 million people charged late fees. Despite the significant benefits the rule could bring to American consumers, Committee Chair Patrick McHenry labeled the CFPB’s recent policy actions as “entirely reckless, arbitrary, and capricious.”
We were proud to join 89 other organizations from across the country in strongly opposing any attempts by lawmakers to overturn the rule in a letter to members of Congress ahead of the hearing. We continue to strongly encourage members of Congress to oppose the resolution as it moves forward.
HFSC Okays Slew of Mostly Dangerous Anti-Reg. Legislation
The House Financial Services Committee favorably reported seven bills and six Congressional Review Act (CRA) resolutions to block rulemaking by federal agencies at a whole-day markup on Wednesday. Most pieces of legislation would harm both the most vulnerable consumers and broader financial stability and were passed along party-line votes. However, two bills led by Democrats would bolster financial stability.
The seven bills were originally slated to be considered at the Committee’s last markup in late February, which was unexpectedly pared down due to a government funding vote needed to avert a government shutdown.
In addition to advancing Representative Barr’s resolution to block the CFPB’s credit card late fees rule (discussed above), the Committee voted to advance H.R. 7428, the Earned Wage Access Consumer Protection Act in a 28-22 party-line vote. The bill, led by Representative Bryan Steil (R-WI), would exempt fintech cash advances from the Truth in Lending Act to endorse a form of loan that makes workers pay to be paid. We were proud to join over 190 organizations in a letter opposing the bill and continue to encourage members to oppose the legislation.
The Committee also advanced H.J. Res. 120, a CRA resolution that would block the Financial Stability Oversight Council’s (FSOC) final guidance revising the process and analytical framework it uses to determine whether to designate a nonbank financial company as a systemically important financial institution (SIFI) — a nonbank financial company whose material financial distress could pose a threat to U.S. financial stability. The framework, finalized in November, is important to protect the stability of the financial system. We encourage members to oppose the resolution.
Finally, the Committee voted to advance two bills that would strengthen financial stability:
- H.R. 4206, the Bank Safety Act of 2023, Representative Brad Sherman (D-FL) – would require covered institutions to include elements of accumulated other comprehensive income when calculating capital for purposes of meeting capital requirements.
- H.R. 4116, the Systemic Risk Authority Transparency Act, Representative Al Green (D-TX) – requires reports on the use of the systemic risk authority in the Federal Deposit Insurance Act
We support the two common sense bills that would implement the lessons learned by the bank failures of Spring 2023.
Additionally, the Committee voted to advance:
- H.R. 5535, the Insurance Data Protection Act
- H.R. 802, the Respect State Housing Laws Act
- H.R. 7437, the Fostering the Use of Technology to Uphold Regulatory Effectiveness (FUTURE) in Supervision Act
- H.R. 7440, the Financial Services Innovation Act of 2024
Four CRA resolutions – H.J. Res. 124, H.J. Res. 125, H.J. Res. 126, and H.J. Res. 127 – to block federal rulemaking addressing climate-related risk disclosure and management were also favorably reported out of Committee.
Senate Finance Hearing on IRS Funding and Direct File
On Wednesday, the Senate Finance Committee was joined by IRS Commissioner Danny Werfel to discuss the 2024 filing season and the future of funding for the IRS.
A bulk of the hearing was devoted to discussing the Direct File pilot, a free tax filing service the IRS rolled out to a limited set of taxpayers in 12 states this year. Commissioner Werfel and Democratic Senators praised the success of the pilot program, noting that they have received overwhelmingly positive feedback from users. Not only does the program have the potential to save taxpayers around $150 and nine hours each tax season, it can increase efficiency for the IRS and simplify the filing process for millions of taxpayers. Though Werfel was hesitant to lay out concrete plans to expand Direct File next filing season, we can expect an announcement with more information in the coming weeks.
Senators from both sides of the aisle also praised the work that Commissioner Werfel has done to improve customer service and modernize the IRS, which he noted was only possible with the $80 billion in additional funding that was given to the agency through the Inflation Reduction Act (IRA). The following graphic from the Treasury Department outlines some of the major improvements this year representative of an extremely successful filing season:
Source: U.S. Department of the Treasury
Commissioner Werfel stressed the importance of sustaining this increased funding and defended the over $100 billion in funding for the IRS included in President Biden’s FY25 budget proposal. This call to action comes amidst sustained Republican efforts to claw back funding for the IRS despite a positive rate of return in federal revenue for investments in the agency.
Senate Banking: Preserving US’ Aging Housing Stock
On Tuesday, the Senate Banking Subcommittee on Housing, Transportation, and Community Development discussed the policy challenges in addressing America’s aging housing stock. Across America, nearly half of all homes are 40 years or older, and it is often prohibitively expensive to ensure that these homes remain inhabitable. At a time when America is not building enough affordable housing units to meet demand, maintaining existing housing is crucial to addressing the affordable housing crisis. The witnesses spoke to the prevalence of this problem across America, in both rural and urban areas, and spoke about the issues with obtaining the resources necessary to rehabilitate homes from existing federal programs.
Democrats and Republicans were largely in agreement on the nature of the problem, as well as how it could be addressed. Subcommittee members Senator Lummis (R-WY) and Senator Fetterman (D-PA) took the opportunity to advocate for the Whole-Home Repair Act (S. 3871), a bill that would create a pilot program to support homeowners in need of resources for critical home repairs.
Look Ahead
Thursday, April 25
- GDP Q1 2024 Advanced Estimate
Friday, April 26
- March PCE report