Window on Washington – August 9, 2021, Vol. 5, Issue 32
Outlook for This Week in the Nation’s Capital
Congress. The House is in recess for the rest of August, though the Senate is still in session this week. Senate committees will hold a few hearings this week on Biden Administration nominees, and on the Senate floor, Senate Majority Chuck Leader (D-NY) plans to wrap up votes on the bipartisan Infrastructure Investment and Jobs Act and to hold votes on the budget resolution with reconciliation instructions. There may also be a vote on a scaled-back voting rights bill that could generate broad support while Democrats continue to work on the John Lewis Voting Rights Advancement Act.
Infrastructure Package. The Senate is wrapping up the amendment process on the bipartisan infrastructure package, and the Chamber appears to be on track to pass the legislation this week, though the exact timing of the final vote is not yet known. Sen. Hagerty (R-TN), a first-term Republican from Tennessee, said Saturday that he will not consent to any agreement to shorten the 30-hour post-cloture time, a move that would push a final vote on the package until later this week.
FY22 Budget and Appropriations. Senate Democrats are finalizing the budget resolution framework and reconciliation instructions in preparation for a vote on the resolution this week. Since Republican Senators will have the opportunity to introduce an unlimited number of amendments during a vote-a-rama this week, the budget resolution will not go through a Senate Budget Committee markup. Democrats are still trying to decide what approach to take for the debt limit, and it is expected that they will exclude any action on it in the budget resolution. The House could return early from its recess to consider the Senate-passed FY22 Budget Resolution, but that remains unclear.
Separately, the Senate marked up the Military Construction and Veterans Affairs (MilCon-VA), Agriculture, Rural Development, and Food and Drug Administration (Ag), and Energy and Water Development (EW) bills last week. It is unknown when exactly after recess the Committee will mark up the remaining 9 appropriations bills and when the full Senate will proceed to vote on them. With the end of the fiscal year around the corner, once both Chambers are back from recess, it is becoming increasingly likely that there will be a continuing resolution to fund the government past the end of September.
Last Week in the Nation’s Capital
Budget & Appropriations
Budget Reconciliation Instructions Likely to Assume Deficits: The budget blueprint Senate Democrats are preparing to unveil will likely assume, at least on paper, that the eventual reconciliation package to implement the more partisan pieces of President Joe Biden’s fiscal agenda will add hundreds of billions of dollars to deficits over the next decade. (Roll Call)
McConnell Lays Out GOP Demands for Government-Funding Deal: Senate Minority Leader Mitch McConnell (R-KY) warned last Wednesday that Republicans won’t let full-year funding bills come up without a larger deal on government spending. McConnell’s warning comes as the Senate Appropriations Committee cleared its first package of fiscal 2022 funding bills, underscoring that they don’t, currently, face a smooth path to the Senate floor. McConnell said that in order to get a larger deal there would have to be equal levels of growth on defense and non-defense spending, as well as an agreement on keeping out provisions that Republicans view as “poison pills,” or issues that one party views as non-starters. (The Hill)
Democrats Prepare to Rope GOP Into Political Cliff Dive Over Debt Limit: Speaker Nancy Pelosi’s (D-CA) plan to link the Senate’s $550 billion bipartisan infrastructure plan to a $3.5 trillion budget reconciliation package is starting to backfire, as moderate Democrats warn they may not vote for a budget resolution needed to begin the reconciliation process unless it’s paired with a vote on the Senate bill. Pelosi can lose no more than three Democrats on party-line votes, and as of now, at least half a dozen Democrats have expressed reservations about voting for the budget resolution if Pelosi declines to bring up the bipartisan infrastructure bill after the Senate sends it to the House, although each with varying degrees of commitments. (Roll Call)
Dems Plot to Squeeze Health Care Promises into Social Spending Bill: Democrats’ $3.5 trillion social spending package marks the party’s last chance before the midterm elections to make good on health care promises they’re counting on to keep control of Congress. The collective cost of these measures is as much as several trillion more dollars, making it a major political and fiscal challenge. To squeeze as many of their priorities as possible into a budget resolution that’s expected right after the bipartisan infrastructure package, lawmakers are discussing making some of the new health spending temporary, similar to the two-year boost to Obamacare subsidies they wrapped into Democrats’ coronavirus relief package in March. (Politico)
Senate HELP Deadlocks on Lhamon Nomination: The Senate HELP Committee last Tuesday split evenly along party lines on whether to advance Catherine Lhamon, President Joe Biden’s pick for Education’s top civil rights job. Lhamon’s fate may be up to Senate Majority Leader Chuck Schumer (D-NY) — after consulting with committee leaders — who must bring up a motion to discharge her nomination and hold an additional four hours of debate before a confirmation vote on the Senate floor. (Politico)
Banking & Housing
Manchin Takes on the Fed, Rejecting Biden’s Inflation Defense: Sen. Joe Manchin (D-WV) last Thursday urged Federal Reserve Chair Jerome Powell to pare back economic stimulus to avoid stoking inflation, in a rare rebuke of the central bank by a Democratic lawmaker. The West Virginia senator said in a letter to Powell that he is “increasingly alarmed” that the Fed continues to buy $120 billion in U.S. government debt and mortgage-backed securities each month even after Congress injected trillions of dollars of aid into the economy during the pandemic. The purchases help keep borrowing costs low as the Fed tries to coax the economy into full recovery. (Politico)
Waters Urges Federal Agencies and Bank Regulators to Strengthen and Enforce Foreclosure Protections for Homeowners: Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, sent two letters to federal agencies and banking regulators urging them to strengthen foreclosure and mortgage servicing protections for borrowers and provide greater oversight to prevent unnecessary foreclosures during the pandemic. (Clark Hill Insight)
Cryptocurrency Negotiators at ‘Impasse’ Over Tax Reporting Rules: New reporting requirements on cryptocurrency – which could generate as much as $30 billion, remains one of the last hurdles to completion of the bipartisan infrastructure package in the Senate. The stalemate came over which players in the nascent industry should be exempted from broker reporting rules, after industry groups spent days pressing for a narrower definition. Senators are likely to vote on competing proposals this week to resolve the dispute. (Roll Call)
Trump Asks Court to Block Release of Tax Returns to Congress: In a court filing submitted last Wednesday morning, former President Trump’s lawyers argued that the 2019 request from the House Ways and Means Committee to the IRS has no legitimate legislative purpose and that it is designed to “expose the private tax information of one individual — President Trump — for political gain.” (The Hill)
CBO Says Bipartisan Infrastructure Bill Would Add $256B to Deficit Over 10 Years: The Congressional Budget Office (CBO) last Thursday released an analysis saying the $1 trillion bipartisan infrastructure package would add $256 billion to the federal deficit over the next decade, a difficult pill to swallow for GOP senators who have insisted on paying for the entire cost of the legislation. (The Hill)
Senate Infrastructure Bill Slowed in Last Lap by Lone Republican: The Senate advanced the bipartisan infrastructure bill on Saturday afternoon, breaking a filibuster to end debate on the deal crafted by a group of 10 senators alongside President Joe Biden. The vote, which was 67-27, easily cleared the 60 votes needed to move forward. It marked another significant step toward clinching a bipartisan agreement between Biden and Congress. Two Republicans who had previously voted against the bipartisan package — Sens. John Cornyn of Texas and Deb Fischer of Nebraska — voted to advance the legislation. (Politico)
House Democrats Call on Biden to Close Guantánamo ‘Once and For All’: Dozens of House Democrats are pushing President Biden to “immediately” shrink the population being held at the Guantánamo Bay detention facility and “finally” shutter the prison. “We share your belief that after nearly two decades and tremendous expense, it is time to close the prison and seek prompt resolutions for the cases of the remaining detainees,” the 75 lawmakers wrote in a letter to Biden released last Thursday. (The Hill)
Jan. 6 Select Panel Takes Over House Probe of Trump DOJ: A key House committee has postponed multiple scheduled witness interviews about Donald Trump’s final days in office, handing them off to the select panel investigating the Jan. 6 Capitol attack. (Politico)
Lawmakers Roll Out Bipartisan Bill to Help Track Cyber Crimes: A group of bipartisan House and Senate lawmakers last Thursday introduced legislation intended to help the federal government better track and analyze cyber crime following a sharp increase in cyberattacks over the past year. The Better Cybercrime Metrics Act would kick off the process of improving how the government and law enforcement agencies collect data on cyber crime, with many crimes currently going unreported or untracked and making it more difficult for the government to take action. (The Hill)
Senate Panel Advances First Three Spending Bills, Including Ag: The Senate Appropriations Committee last Wednesday advanced its first spending bills for FY22 to the Senate floor, one of which was the agriculture bill. The legislation includes discretionary funding of $25.855 billion for the Department of Agriculture and Food and Drug Administration. (The Hill)
Democrats Urge Biden to Support Additional Interior Funds in Reconciliation: House Democrats, led by House Natural Resources Chairman Raul Grijalva, sent a letter to President Biden last Wednesday urging him to request Congress include additional funds for the Department of the Interior programs in the Democrat-only reconciliation package. (Clark Hill Insight)
Senate Democrats Announce New Legislation to Make Polluters Pay for Climate Damage: U.S. Senators Chris Van Hollen (D-MD), Bernie Sanders (I-VT), Ed Markey (D-MA), Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), and Jeff Merkley (D-OR) announced new legislation to require the biggest polluters to begin paying their fair share for a just clean energy transition. The legislation, titled the Polluters Pay Climate Fund Act, requires the largest U.S.-based fossil fuel extractors and oil refiners and foreign-owned companies doing business in the U.S. to pay into a Polluters Pay Climate Fund based on a percentage of their global emissions. The Fund would then be used to finance a wide range of efforts to tackle climate change. The House companion legislation will be led by Congressman Jamaal Bowman (D-NY). (Clark Hill Insight)
Obamacare Architect Floated for Top FDA Job: Biden administration officials involved in the lengthy search for a permanent Food and Drug Administration commissioner have discussed University of Pennsylvania bioethicist Ezekiel Emanuel as a candidate to lead the agency, according to four people with knowledge of the deliberations. A prominent figure in Democratic health policy circles, Emanuel helped craft the Affordable Care Act as an adviser to the Obama administration. (Politico)
Federal Officials Eye COVID-19 Booster Shots for Immunocompromised People: The Biden administration is working to make COVID-19 vaccine booster shots available to immunocompromised people as quickly as possible, Anthony Fauci, the nation’s top infectious disease expert, said last Thursday. The announcement comes a day after the World Health Organization said poorer nations should be prioritized for first shots until September. (Roll Call)
Department of Education
Education Secretary Says ‘We’re Clearly at A Fork in The Road’ In Opening Schools Safely: Education Secretary Miguel Cardona said Sunday that the country is at a “fork in the road” when it comes to opening schools amid a resurgent coronavirus wave. (Politico)
Banking & Housing/HUD
Key Fed Official Sees Rates Liftoff in 2023 as Policy Debate Heats Up: The contours of debate within the U.S. central bank over when to dial back support for the economy burst into the open last week as a key architect of the Federal Reserve’s new policy strategy said he feels the conditions for raising interest rates could be met by the end of 2022. (Reuters)
Biden Buys Time with New Eviction Ban: President Biden is attempting to thread the needle by replacing a lapsed federal eviction ban with new protections designed to keep millions of Americans from losing their homes amid surging coronavirus cases. The Centers for Disease Control and Prevention (CDC) last Tuesday imposed a new, narrower moratorium to replace the one that expired last Sunday. But there are already questions about the legality of the order. (The Hill)
Democrats See Chance to Reset Wall St. Oversight When Top Fed Official Steps Down: The looming exit of the Federal Reserve’s top regulatory official will give Democrats an opportunity to reverse the central bank’s Wall Street-friendly course without ditching Chair Jerome Powell when his term expires next year. Randal Quarles, who was appointed to the Fed board by former Republican President Donald Trump, will end his term as vice chair for supervision – a powerful role overseeing the country’s largest lenders – in October. Powell, who was appointed chair by Trump, ends his term in February and the White House has not said if it plans to re-nominate him. (Reuters)
Janet Yellen Has Been Lobbying Against Wyden-Lummis-Toomey Crypto Amendment: Senators Ron Wyden (D-OR), Cynthia Lummis (R-WY.) and Pat Toomey (R-PA) proposed their amendment last Wednesday to ensure that miners, node operators, developers and other non-custodial crypto industry participants are exempt from the crypto tax reporting provision. (Coindesk)
IRS Offers Further Guidance on ERC, Even as Congress May End It Soon: The Internal Revenue Service and the Treasury Department released guidance last Wednesday on the employee retention tax credit, including guidance for employers who pay qualified wages after June 30, 2021, and before Jan. 1, 2022, as Congress weighs a proposal to end the tax break next month to help pay for the bipartisan infrastructure plan. (Accounting Today)
Biden Wants 500,000 EV Charging Stations. Here’s Where They Should Go: The Biden administration wants EVs to comprise 50% of all new car sales by 2030, an ambitious target that will likely require broader consumer incentives. But if electric vehicles are going to achieve mass market adoption, people also need to be able to find charging plugs. (Axios)
FAA Asks Airports to Monitor Passengers’ Alcohol Intake, Citing Unruly Behavior: The Federal Aviation Administration warned airports across the country to monitor the serving of alcohol, particularly “to go cups,” citing a spike in unruly or dangerous behavior involving passengers who drink excessively. In a letter last week to airport managers, FAA Administrator Steve Dickson expressed his concerns about serving alcohol to passengers in restaurants and bars before flights. (NBC News)
Space/NASA & NOAA
NASA Gets the OK to Continue Contract Related to Sending Humans Back to The Moon: NASA can move forward with a contract award involving its plans for sending people back to the moon. The Government Accountability Office denied protests from Blue Origin and Dynetics on the agency’s source selection of SpaceX to continue the development of its human landing system. This means NASA can now award the contract that involves the first crewed mission back to the moon under its Artemis plan. (Federal News Network)
Defense Secretary Austin Expected to Make Covid-19 Vaccine Mandatory for Active Duty Troops: Defense Secretary Lloyd Austin is expected to seek authorization to make Covid-19 vaccines mandatory for all active-duty troops as soon as this week, following President Joe Biden’s directive that the military examines how and when it could make that happen. (CNN)
DHS & Immigration
Biden Administration Commits Historic $3.46 Billion in Hazard Mitigation Funds to Reduce Effects of Climate Change: Last Thursday, President Biden approved more than $3.46 billion to increase resilience to the impacts of climate change nationwide. This significant investment will be available for natural hazard mitigation measures across the 59 major disaster declarations issued due to the COVID-19 global pandemic. (Clark Hill Insight)
U.S. Starts Flying Migrant Families into Mexico Far from Border: Last Thursday, the United States began flying Central American and Mexican families to southern Mexico in an effort to deter migration by bolstering a COVID-era expulsion policy at the U.S.-Mexico border, a person familiar with the matter said. (Reuters)
Biden Administration Developing Plan to Require Almost All Foreign Visitors to be Vaccinated: The Biden administration is developing a plan to mandate vaccinations for almost all foreign visitors to the US, a White House official confirmed to CNN last Wednesday, though some exceptions are expected.
Officials are still in the early phases of developing the plan and an announcement is not imminent. There is no imminent change to the current travel restrictions in place because of the highly contagious Delta variant currently circulating around the world, an official cautioned. (CNN)
Garland Urges Congress to Protect Voting Rights: Garland’s plea fell on the eve of the 56th anniversary of the Voting Rights Act, which then-President Lyndon B. Johnson, in signing the bill, called “one of the most monumental laws in the entire history of American freedom.” (Politico)
Historic Debt Relief for Minority Farmers Faces Legal Juggernaut: A string of legal defeats for a groundbreaking program to forgive the debts of minority farmers is presenting the Biden administration with a stark choice. So far, three different judges have issued preliminary injunctions blocking the program nationwide as litigation proceeds. The Justice Department could appeal but hasn’t yet. (Politico)
EPA & DOI
U.S. EPA Shoots to Push Vehicle Fuel Efficiency to 52 Mpg By 2026: President Joe Biden’s administration said last Thursday it would propose reversing the Trump-era loosening of vehicle emissions rules with a new plan to boost efficiency 10% in the 2023 model year and aiming for a fleet average of 52 miles per gallon by 2026. The U.S. Environmental Protection Agency proposal also calls for a near 5% stringency increase in each model year from 2024 through 2026. But it would not seek to reverse former President Donald Trump’s rollbacks in fuel efficiency standards for the 2021 or 2022 model years. (Reuters)
Department of Energy
Biden Targets 50 Percent Clean Car Sales by 2030: President Joe Biden signed an executive order last Thursday setting a target that half of all new vehicle sales by 2030 will be zero-emissions vehicles, primarily electric cars and trucks. It’s the latest ambitious climate target from Biden, who has pledged to put the country on a path to reduce its greenhouse gas emissions by at least half the 2005 level by 2030. And it’s backed up by new proposed rules to strengthen upcoming federal tailpipe requirements through 2026, with even stricter regulations expected for the following years. (Politico)
U.S. Will Review Oil and Gas Leasing Program in Alaska Refuge: The U.S. Bureau of Land Management announced last Tuesday it is moving ahead with a new environmental review of oil and gas leasing in Alaska’s Arctic National Wildlife Refuge after the Interior secretary said she found “multiple legal deficiencies” in a prior review that provided a basis for the first lease sale on the refuge’s coastal plain earlier this year. (AP)
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