The Senate approved a bill to reauthorize the federal Land and Water Conservation Fund after several weeks of debate. The House did not vote on any legislation but held various committee hearings.
Both the House and Senate will vote on comprehensive police reform legislation (see below).
Stimulus 4: the next Stimulus Bill.
Senate Republicans are still in a wait-and-see mode as a gradual reopening takes root around the country and the economy adjusts. Nonetheless, there is a strong sentiment among those Senators (and Democratic Senators) that another stimulus bill is needed and will be advanced next month. There is work underway behind the scenes to shape the content of that bill, which will likely have a much smaller price tag than the $3 trillion bill passed by the House last month. Once the Senate passes police reform legislation, the chamber's top priority once again will be the next stimulus bill, which it likely will pass by August 1.
President Trump and the Next Stimulus Bill.
President Trump supports the passage of another stimulus bill and has requested that it contain payroll tax forgiveness, tax incentives to encourage companies to move supply chains and manufacturing jobs back to the US from China, and an infrastructure bill. These are three very ambitious and expensive proposals. The Senate doesn't seem particularly interested in these proposals as additions to the stimulus bill, and the last House-passed bill contained none of them. These three issues will be wild card issues in the Senate negotiations next month. Given that the bill will need his signature to become law, the reality is that the President has the leverage to get perhaps one or two of these proposals in the bill. If pressed by the President, we think a reluctant Senate would be more likely to relent on infrastructure or tax incentives for reshoring than it would on payroll tax forgiveness. Whether the President prevails on any of these issues depends on how much he stands his ground as negotiations on a stimulus bill intensify next month.
In the initial wave of the pandemic and shutdowns in March, the federal housing agencies (HUD and the Federal Housing Finance Agency (FHFA)) and Congress took action to provide protections to borrowers and renters by temporarily blocking foreclosures and evictions on properties backed by the federal government. Partly in response to pressure from Congress, HUD and the FHFA extended to August 31 the primary moratorium on evictions and foreclosures on federally-backed mortgages that was set to expire at the end of this month. The agencies could extend the moratorium further as needed. The extension does not apply to renters in federally-backed apartment buildings who are protected by a moratorium on evictions that expires in late July. Moreover, congressional Democrats would like to apply these temporary protections to all homeowners and renters. While close to 70% of mortgages are federally backed, a comparatively smaller percentage of renters (under 30%) are in federally-backed units. The more broad-based protections were included in the $3 trillion stimulus bill that the House passed last month but face longer odds for inclusion in any stimulus bill that can pass the Senate.
Efforts to enact police reform legislation continued to gain momentum as a House committee passed a comprehensive bill authored by House Democratic leaders and the Congressional Black Caucus (a bill summary can be found here). In the Senate, a similar, but not identical, bill was introduced by Senator Tim Scott (R-SC), one of three African-American senators (a bill summary can be found here ). Both bills will be debated and voted on next week. Most of the provisions in both bills have bipartisan support, but the real drama over any vote will be in the Senate, where many Democrats believe the bill authored by Senator Scott does not go far enough in making reforms. If both bills are passed, the most likely outcome in our view, the two bills will need to be reconciled at some point (or the House could accept the Senate bill). This is very fluid, but the likelihood is that a final bill will be agreed to and the President will sign it into law this summer.
If there is one issue relevant to the police reform effort that deeply divides most Democrats and Republicans and puts the passage of a bill in jeopardy, it is qualified immunity. Qualified immunity is largely a creation of the Supreme Court and provides federal officials, including police officers, immunity from lawsuits brought by citizens over actions performed on the job. Supporters of qualified immunity for police officers believe that frivolous lawsuits brought against them would slow recruitment and take officers away from their law enforcement work, while opponents believe the law unfairly shields officers from many legitimate lawsuits. The House bill eliminates qualified immunity for police officers but leaves it intact for other federal officials. The Senate bill does not make any changes to qualified immunity, though there will likely be an amendment offered to the bill to eliminate it (which will likely fail). If there is a stalemate between the House and Senate in reconciling their two bills, it will likely be over this provision.
Statehood for Washington, DC.
The House plans to vote next week on a measure to make Washington, DC the 51st state in the US. The resolution would retain a much smaller federal city encompassing the federal buildings but also create a new state consisting of the other parts of the current District of Columbia. Making DC the 51st state has long been a priority of congressional Democratic leaders and has been accelerated by the recent protests in Washington. Under the measure to be voted on, the new state would be called "Washington, Douglass Commonwealth" after William Frederick Douglass, who lived in the capital city for over 20 years. The new state would elect a representative, but more notably two new senators, which would significantly impact the political makeup of the Senate. The amendment is more of a symbolic messaging effort to show House Democratic support for residents of Washington, DC and will not be considered by the Senate this year.
Immigration and the Dreamers.
As we mentioned last week, the Supreme Court decision on the status of the Deferred Action to Childhood Arrivals (DACA or "the dreamers") could have a big impact on the election. The decision made this week was to reject the Trump administration's plan to end temporary protection from deportation afforded the dreamers in 2012. The decision lessens the impact of this issue on many voters, particularly those who support the court's decision, since the deportation of the dreamers is now not an imminent threat. Additionally, the decision basically eliminates any chance for passage this year of a comprehensive and bipartisan immigration reform bill. Chances for a bill were already low, but the Trump administration hoped to pair the permanent enactment of the DACA program (a key Democratic priority) with some key illegal immigration enforcement measures (a key Republican priority) in a bipartisan package deal. Many legal and illegal immigration reforms are needed, but they will have to wait until next year for a chance to advance.
Mobile Workforce and Taxes.
One thing that has brought added complexity for many Americans who are fortunate enough to work from home during the pandemic is their tax situation. Many employees live and work in different states and must pay different state income taxes every year. Senators John Thune (R-SD) and Sherrod Brown (D-OH) have renewed their bipartisan effort to set a federal minimum threshold of 30 days for working in another state before that state can tax employees. The bill also brings clarity regarding the tax obligations of employees during the current pandemic. For example, an employee may live in New Jersey but typically work full-time and pay taxes in New York. With the pandemic, that worker may now be working from home in New Jersey but still pay taxes in New York. The bill would have that worker continue to pay New York taxes and protect him or her from New Jersey tax authorities. The bill has strong bipartisan support and has a chance of being included in the next stimulus bill. However, we think it will fall short as a few key Senators will likely object to protect their states' revenue stream.
The Final Word
Voting Begins in 91 Days – on September 18.
While Election Day (November 3) is still four and a half months away, the election itself will officially kick off in 91 days when early voting begins in Minnesota on September 18. This may seem like a lifetime to people in battleground states who are barraged with constant political ads, but it's really the home stretch for the campaigns, which have been operating for years now. Despite the ongoing health crisis, both the Trump and Biden campaigns are raising record amounts of money. Once voting begins, the campaigns will shift their main objective from trying to persuade voters to ensuring that their supporters get to the polls to vote. In a year that will break records on early voting, it may be more accurate to mark the election not by the official Election Day but instead by the first day votes begin.