The July 4th Recess traditionally gives Congress and chance to take a short break before the mad dash to August’s longer break and the end of the fiscal year in September. Here is what is on their plate as the November elections near.
The USICA bill – Chips, the Bipartisan Innovation Act, whatever you want to call it – suddenly finds itself in the middle of a complex new calculus. There is big money involved and bipartisan support for action. A bill like this can chew up floor time and ruffle feathers that carry over to other issues below.
Senate Minority Leader Mitch McConnell warned on Thursday that if Democrats are still “pursuing a partisan reconciliation” package, he’ll sink USICA. A number of Senate Republicans want to pass USICA, which is designed to boost U.S. competitiveness with China on high-tech research and manufacturing, but they’ll stick with McConnell here. There will be no GOP votes for a $1 trillion reconciliation package that includes tax increases – and that’s what Senate Majority Leader Chuck Schumer is putting together. Corporate America really wants USICA as well, and major industries have spent tens of millions of dollars lobbying for it. But how will McConnell ensure that Schumer doesn’t pass reconciliation after USICA? Does McConnell hold up USICA until September or until after the election?
The conventional wisdom before McConnell threw this wrench in the process was that the Congress needed to clear USICA in July or the effort was dead. Now, K Street and other Hill leaders are scrambling to understand the ramifications of McConnell’s play.
Reconciliation. Passing reconciliation was going to be tough enough even before McConnell’s latest threat. Schumer and Sen. Joe Manchin (D-W.Va.) are trying to craft a roughly $1 trillion compromise package that can be voted on in July – which means a week of floor time. Reconciliation instructions expire at the end of September, and the House is scheduled to leave town on July 29 (the Senate will stay in session another week). So the schedule is tight. Any prolonged absence by Sen. Patrick Leahy (D-Vt.) following hip replacement surgery would also be a huge problem.
Manchin’s speculated chief goal – rolling back the 2017 GOP tax cut – could pass the House so late in the election cycle however Northeastern Democrats have vowed to vote against any change to the tax code that doesn’t include a repeal of the SALT deduction limit. Raising the SALT cap would drive the cost of this legislation through the roof.
Manchin also has concerns about the cost of any Obamacare premium support extension, yet that’s a huge priority for President Joe Biden and other Democrats. So Schumer, Manchin and Speaker Nancy Pelosi have to figure out all of these tricky issues in the next few weeks.
Covid money. Remember Covid funding? Neither does Congress. White House officials begged lawmakers throughout the spring to approve more Covid prep money so the federal government could build up its stockpiles of tests, vaccines and therapeutics for a possible next variant. Republicans blocked it, and the Biden administration was forced to reallocate $10 billion in existing funding to these efforts. HHS and the Pentagon, for instance, just agreed to buy more than $3 billion worth of vaccine doses from Pfizer for a “fall vaccination campaign.”
And a bipartisan group of senators sought $40 billion to help restaurants and other small businesses hit by Covid. That was blocked as well, and seems to have just disappeared from view.
Jan. 6. The Jan. 6 select committee will have at least two more hearings this month that have sharpened the political knives on both sides. The select committee has subpoenaed former White House counsel Pat Cipollone for a deposition next week, but that issue may end up in court. Panel members have a final report to issue, and they also must decide whether to make any criminal referrals to the Department of Justice. There’s lots of action on this front, and it will steal headlines for most of the month.
Appropriations. We’re nine months into the fiscal year and the two sides aren’t close to any kind of agreement on government funding, which expires at the end of September. That’s funding for agriculture and transportation programs that have been authorized but funds need to be appropriated for the plans to go House Appropriations Committee Democrats, led by Rep. Rosa DeLauro of Connecticut, have begun work on the 12 annual spending bills, even passing a number of them through the full committee in the face of GOP opposition. DeLauro and House Majority Leader Steny Hoyer want to have floor votes on some of these bills in July.
However, the Senate Appropriations Committee hasn’t really done anything on any of its bills. And now, Leahy’s injury complicates things. When Leahy will return and what his absence means for the appropriations process is unclear. The normal recovery for that surgery is several weeks.
But the Republicans won’t do a deal on a spending bill while Democrats continue to push on reconciliation. Sen. Richard Shelby of Alabama, the ranking Republican on Appropriations, is going to want a lot more money for defense than House Democrats or Biden have proposed.
And Russia, inflation, and severe weather are sure to throw some urgency in the congressional schedule as we head to some hot August nights.