Window on Washington – December 20, 2021, Vol. 5, Issue 51

Outlook for This Week in the Nation’s Capital

Congress. The House and Senate are both in recess for the rest of the year. The Senate is expected to return on Jan. 3, and the House on Jan. 10. Congress managed to push through numerous major to-dos before the end of the year, including a debt limit increase, the passage of the FY22 National Defense Authorization Act (NDAA), and the confirmation of over 40 nominees. Despite efforts to vote on the Build Back Better (BBB) reconciliation bill and voting rights legislation before the holidays, Senate Democrats ultimately decided to punt their actions on the BBB and voting rights into 2022. Once Congress returns in the new year, they will also focus on wrapping up their work on the FY22 appropriations bills before the continuing resolution expires on February 18.

Reconciliation Bill. Senate Democrats were unable to finish their work on the reconciliation bill before their self-imposed Christmas deadline. Prior to yesterday’s interview by Senator Manchin on Fox News Sunday, where the West Virginia Democrat declared he would vote no on the measure, Senate leaders had hoped to pick up negotiations after the first of the year and complete it early in 2022. The Senator’s comments effectively doom the BBB’s passage in its current form. The White House reacted angrily to Manchin’s comments, reflected in the harsh statement it issued yesterday afternoon, an indication of the Administration’s surprise at the timing and substance of the Senator’s statement. Given all the attention this legislation has been given over the last six months, and its centrality to the Biden Administration’s economic agenda and the political standing of Congressional Democrats, it is very unclear where the measure goes from here. (Playbook) Senate Majority Leader Schumer sent out a Dear Colleague letter to Senate Democrats this morning memorializing their accomplishments this year and indicating that he intends to proceed ahead on the BBB legislation with a vote on the Senate floor once the Senate reconvenes in January. Suffice it to say that there will be an effort to pass some form of this measure in early 2022, but whether or not Democrats can maintain comity to reach a compromise is far from certain.

Biden Administration. President Biden will give a speech tomorrow focused on the Omicron variant and the Administration’s Winter Plan.

Programming Note. The Window on Washington will not publish editions during the weeks of Dec. 27 and Jan. 3. We will be back on Monday, Jan. 10. Happy holidays!

Last Week in the Nation’s Capital

CONGRESS

Education

Democrats Urge Biden to Avert Student Loan Cliff Next Year: Top Democrats are urging the Biden administration to again extend the freeze on federal student loan payments before it expires next month, warning that requiring tens of millions of Americans to resume paying their debt will drag down the economic recovery. Monthly student loan payments and interest are set to resume on Feb. 1 for the first time since the beginning of the pandemic when the federal government took emergency action to freeze the debt as the economy cratered in March 2020. (Politico)

Crypto/Blockchain

Senate Banking Chairman Wants ‘Specific’ Rules for Stablecoin: Senator Sherrod Brown (D-OH), Chairman of the Senate Banking Committee, isn’t convinced stablecoins will offer what they intend, voicing concerns that lax oversight could result in a repeat of a financial crisis. He thinks stablecoins should be brought within the banking system and regulated using current banking rules, and that stablecoin issuers should be transparent about their reserves. Brown argued they should hold a ratio of 1 to 1 in U.S. dollars and short-term Treasuries, and ensure those reserves are audited. (Yahoo Finance) 

Transportation

Democrats Push Forward with EV Tax Credits: It’s make-or-break time for Democrats’ proposed expansion of electric vehicle tax credits as their plan faces both formal scrutiny by the Senate parliamentarian this week and increasing pressure from international trading partners pushing Congress to ditch bonus credits tied to unionized labor. (Roll Call) 

Trade

Congress Passes Bill Targeting China Over Uyghur Forced Labor: Senators gave final congressional approval last Thursday to a bill barring imports from China’s Xinjiang region unless businesses can prove they were produced without forced labor, overcoming initial hesitation from the White House and what supporters said was opposition from corporations. The Senate’s vote now sends the bill to President Joe Biden. (NBC News) 

Space/NASA & NOAA

Defense Policy Bill Gives a Budget Boost to Space Programs:  The 2022 National Defense Authorization Act — which Congress just passed and now awaits the president’s signature — adds more than $645 million to Defense Department space programs above the Biden administration’s request, analysts estimated.  Of the $645.7 million boost, $548.7 million is for U.S. Space Force satellites and launch vehicle programs and includes $205.2 million for classified programs, most of the rest is for programs at the Defense Advanced Research Projects Agency, the Space Development Agency, and the Missile Defense Agency.  (Space News) 

Homeland Security & Immigration

Senate Parliamentarian Rejects Latest Dem Proposal on Immigration: The Senate parliamentarian on Thursday rejected the most recent push from Democrats to include immigration reform in their party-line social spending bill, leaving party leaders scrambling for an alternative. (Politico)

Judiciary/Justice

Sinema Pops Democrats’ Filibuster Trial Balloon on Voting Rights: Sen. Kyrsten Sinema (D-AZ) supports the elections reform bill that Democrats are considering a year-end push to pass. She doesn’t support a shortcut around the filibuster to get it done. The Arizona moderate is making clear that she intends to keep protecting the Senate’s 60-vote requirement on most legislation and she isn’t ready to entertain changing rules to pass sweeping elections or voting legislation with a simple majority. Her Democratic colleagues have been discussing those revisions as they weigh dropping their focus on President Joe Biden’s $1.7 trillion climate and social spending bill and pivoting to voting rights, though it’s not clear that avenue will be any more successful. (Politico)

Elizabeth Warren Calls for Expansion of Supreme Court, Saying Current Court is a Threat to Democracy: Sen. Elizabeth Warren (D-GA) on Wednesday called for the US Supreme Court to be expanded with more justices and said that the current court “threatens the democratic foundations of our nation.” (CNN)

Senators Reach Deal on Framework for Reauthorizing Violence Against Women Act: A bipartisan group of senators announced on Thursday that they had reached a deal on a framework to reauthorize the Violence Against Women Act (VAWA). (The Hill)

EXECUTIVE BRANCH 

Budget & Appropriations

Biden Signs Debt Ceiling Increase, Preventing First-Ever U.S. Default: President Joe Biden signed a debt ceiling increase into law last Thursday, ensuring the U.S. will not default on its debt for the first time ever. The legislation raises the debt ceiling by $2.5 trillion and is expected to allow the government to cover its obligations into 2023. (CNBC)

White House Says Manchin Went Back on His Word: White House press secretary Jen Psaki said Sen. Joe Manchin’s (D-WV) opposition to President Biden’s social spending package was “a breach of his commitments,” calling his reversal on the bill “inexplicable.” Psaki said the White House will continue to press Manchin on the bill and see if he will “reverse his position yet again” and “be true to his word.” (The Hill) 

Health/HHS/NIH

Fauci Worried About Increased Hospitalizations but Hopeful About Schools: Anthony Fauci on Sunday predicted increased hospitalizations during the winter but was also hopeful that children will be able to remain in schools. “We are going to see a significant stress in some regions of the country on the hospital system, particularly in those areas where you have a low level of vaccination,” he told CNN’s Jake Tapper on “State of the Union.“ (Politico)

FDA Loosens Rules for Distributing Abortion Pills, Opening New Battle Fronts: The Food and Drug Administration last Thursday said it’s lifting longstanding restrictions on abortion pills, clearing the way for doctors to prescribe the drugs online and have them mailed to patients or sent to local pharmacies. Enforcement of the agency’s decades-old rules requiring the pills to be physically handed out by a physician was suspended earlier this year following a lawsuit from the ACLU arguing that the risks of traveling to a doctor’s office during the Covid-19 pandemic outweighed any potential harms from having the drugs delivered. Now, the agency says it will move to make the looser distribution rules permanent. (Politico) 

Labor & Workforce

Biden Admin Asks Supreme Court to Allow Nationwide Health Worker Vax Mandate: The Biden administration on Thursday asked that the Supreme Court allow it to impose its vaccine mandate on health care workers nationwide after lower courts froze it in two dozen mostly Republican-led states. The rule formulated by the Centers for Medicare and Medicaid Services has been in legal limbo for weeks after some states successfully sought injunctions, arguing that CMS overstepped its authority. (Politico) 

Department of Education

White House Not Budging on Feb. 1 End to Student Loans Forgiveness: The White House has been pretty clear in recent days: Federal student loan payments will resume Feb. 1 as President Joe Biden lifts the nearly two-year pandemic-era pause despite pressure from many in his own party to extend it. Behind the scenes, that political reality has led the Biden administration to conduct Zoom meetings with allies in the student loan forgiveness space in an effort to make the resumption of loan repayments as smooth as possible. (Politico) 

Banking & Housing/HUD

Biden Taps Thompson for Full Term as Top Housing Regulator: President Joe Biden will nominate Sandra Thompson, currently the acting director of the Federal Housing Finance Agency, to a full term at the regulator, the White House announced last Tuesday. (Politico)

FHFA Takes a Swing at Racial Bias in Appraisals: The Federal Housing Finance Agency (FHFA) is the latest stakeholder to examine how racial bias may creep into property valuations. In a Dec. 14 blog post, Fannie Mae and Freddie Mac’s regulator and conservator said it found examples of “overt references to race, ethnicity, and other prohibited bases under federal fair lending laws,” which FHFA said indicate the “continued presence of valuation bias.” (Housing Wire)

Fed Clears Path for Multiple Rate Hikes during Election Year as Prices Surge: The Federal Reserve on Wednesday said it will speed up the timeline for ending its extraordinary aid to the economy — a likely first step toward raising interest rates during the 2022 election year to help fend off heightened inflation. (Politico)

U.S. SEC to Tighten Insider Trading Rules, Boost Money Market Fund Resilience: The U.S. Securities and Exchange Commission (SEC) on Wednesday proposed tightening a legal safe-harbor that allows corporate insiders to trade in a company’s shares, and other rules to improve the resilience of money market funds. (Reuters)

Crypto/Blockchain

US Eyes Crypto Among Potential Risks to Financial Stability:  The Financial Stability Oversight Council – a regulatory group created after the financial crisis to monitor risks financial firms pose to the overall economy and financial system — noted that rapid growth of digital currencies – including stablecoins, and crypto lending and borrowing – is an “important potential emerging vulnerability.” Regulators highlight that markets are frothy in general and crypto prices are highly volatile – and that speculation is driving the majority of market moves. They warn that it’s unclear how much is tied directly to the economy, but added that even as the sector grows in popularity among small buyers, it “may not be appropriate for many investors.” (Yahoo Finance)

Transportation/DOT

Biden Order Seeks to Speed up Airport Security Lines, Make Services More Accessible: President Joe Biden signed an executive order Monday that aims to make a slew of government services easier to access and more efficient, from airport security screening and passport renewals to Social Security benefits processing. (Roll Call)

The White House Aims to Boost the Ranks of the Pandemic-Strained Trucking Industry: In a bid to improve the nation’s ongoing supply chain problems, the White House on Thursday announced a plan to recruit and train a new generation of truck drivers to bolster an industry that’s been stretched thin during the pandemic. (NPR) 

Trade

The White House Aims to Boost the Ranks of the Pandemic-Strained Trucking Industry: In a bid to improve the nation’s ongoing supply chain problems, the White House last Thursday announced a plan to recruit and train a new generation of truck drivers to bolster an industry that’s been stretched thin during the pandemic. (NPR)

Space/NASA & NOAA

NASA Selects First Chief Scientist for the Planetary Data Ecosystem:  As part of its effort to preserve planetary science data for generations to come, NASA has selected Moses Milazzo to be the first chief scientist for the Planetary Data Ecosystem (PDE). This newly created role provides an independent link between the larger PDE community, the Planetary Data System (PDS), and NASA Headquarters, and also refines and represents the PDE to NASA.  (NASA)

Defense/DOD

NDAA Victory Aside, the Real Pentagon Money Fight Awaits:  While the process of getting the annual defense policy measure to the President’s desk has concluded, as Senate Appropriations Committee Chairman Leahy (D-VT) reminded everyone last week, the bill doesn’t actually include “one penny” for the Pentagon.  None of the dozen fiscal 2022 appropriations bills have become law due to disputes over the split between defense and nondefense programs, as well as what policy riders ultimately get attached to the bills.  (Roll Call)

State Guards’ Vaccine Refusal Sets Up Fight with Feds:  Six states are now rejecting the Defense Department’s order requiring all members of the National Guard to be vaccinated against COVID-19, arguing that Defense Secretary Lloyd Austin’s mandate exceeds his constitutional authority. Legal experts who are closely watching the challenge said it’s likely headed to the courts.  (Defense One)

DHS & Immigration

Biden Administration Loses Appeal in ‘Remain in Mexico’ Case: The Biden administration must send migrants who cross the southwest border back to Mexico while their U.S. immigration cases progress, a federal appeals court has held. In a ruling last Monday, a three-judge panel for the U.S. Court of Appeals for the 5th Circuit upheld a Texas federal judge’s order requiring the administration to reinstate the so-called Remain in Mexico program, formally known as the Migrant Protection Protocols, or MPP. (Roll Call)

Biden to Stop Holding Undocumented Families in Detention Centers: The Biden administration is ending the practice of holding undocumented migrant families in detention centers, turning to remote tracking technology such as ankle bracelets as alternatives. (Axios)

U.S. Promises to Define ‘Statelessness,’ a First for the Federal Government: The United States is committing for the first time to defining “statelessness” and increasing protections for stateless people in the US, the Department of Homeland Security announced Wednesday. (CNN)

Agriculture/USDA

USDA, DOI, and FEMA Jointly Establish New Wildland Fire Mitigation and Management Commission: Establishing this Commission fulfills a key provision of the Bipartisan Infrastructure Law. The Commission is tasked with recommending federal policies and strategies to more effectively prevent, mitigate, suppress and manage wildland fires, including the rehabilitation of land affected from wildland fires. It will include representation from federal, state, Tribal, county and municipal governments as well as non-governmental stakeholders from private industry. Through a coordinated effort, the Commission will deliver a report to Congress with practical policy recommendations one year from the first meeting. In addition, the Commission will outline a strategy to cost-effectively meet aerial firefighting equipment needs through 2030. (USDA)

EPA & DOI

EPA Directing $1 Billion In Infrastructure Money to Superfund Sites: The Environmental Protection Agency (EPA) announced Friday that it will put the first $1 billion in funds from the recently-signed bipartisan infrastructure bill to address the backlog of Superfund cleanup sites. Forty-nine Superfund sites are currently unfunded, with low-income and non-white communities disproportionately affected by proximity to them. The bill, which President Biden signed in November, includes a total of $3.5 billion for cleanup at such hazardous contamination sites. (The Hill)

Department of Energy

Harris Touts Administration’s Electric Vehicle Plans: The Biden administration provided details of its strategy to expand the country’s fleet of electric vehicles last Monday, pledging to create an EV-specific office and to issue standards and guidance to states and cities. (Roll Call)