The Senate confirmed various Biden administration nominees and passed a bill to ban the importation of products from China’s Xinjiang region. The House was out of session but worked in committee to advance five fiscal year 2022 spending bills for several federal agencies.
The Senate will vote on various Biden administration nominees and continue its work on an infrastructure package. The House will vote on legislation that would require the Environmental Protection Agency to take several significant regulatory actions, a bill that would restore the Federal Trade Commission’s authority to seek restitution for defrauded consumers and a bill that would improve access to immigration visas for certain Afghan allies.
Infrastructure on Two Tracks in July.
The Senate will take the lead in trying to pass both a $1.2 trillion bipartisan infrastructure bill and a budget resolution that would authorize up to $3.5 trillion on a wider range of federal spending for what President Biden calls “human infrastructure.” Each bill faces challenges, and the passage of both will be a test of unity among Democrats. The goal of passing both measures in July is likely too ambitious, and we envision final votes on both in early August prior to the summer recess.
- The $1.2 trillion bipartisan bill. While President Biden and 22 Senators (11 from each party) agreed on an outline last month (it can be found here), critical details regarding the allocation of infrastructure spending and how to pay for it are still being negotiated by the bipartisan group. It has been a difficult process, but we believe the negotiations will soon conclude with a deal. As we have noted before, spending money is easier than raising it. Perhaps the most contentious issue is over how to empower the IRS to find new revenue through more audits in a way that is not overly intrusive or offensive to taxpayers. Senate Majority Leader Chuck Schumer (D-NY) has called for a vote on the bill next week, but we think the negotiators will need at least another week to sort out remaining differences.
- The $3.5 trillion budget resolution. Senate Budget Committee Chairman Bernie Sanders (I-VT) unveiled a budget measure that would pave the way for Democrats to pass later a large spending bill through the budget reconciliation process. That bill would cover a wide range of social spending not included in the bipartisan plan discussed above. The budget resolution will need the support of all 50 Senate Democrats to advance. However, we do not think all of them are on board with the resolution’s proposed level of spending. Democrats therefore may need to reduce the size of the plan. Another big issue will be how to pay for the spending, particularly given that at least one Democratic Senator has insisted on paying for all of the new spending, something that Chairman Sanders’ plan does not propose. The “pay-fors” for this spending generally will come in the form of increases in taxes on businesses and wealthier individuals. While Majority Leader Schumer also would like a vote on the budget resolution next week, he will need more time build support for it among all 50 Democratic Senators. Moreover, the budget resolution is just the first step as Democrats will face the tougher task of actually passing the increased spending and taxes bill in the fall.
- Summer in Washington. While Congress will work on other policy issues (like voting rights and police reforms) over the next few weeks, the two infrastructure measures will dominate other issues in terms of priority and press coverage. President Biden and Congressional Democrats view their passage as a political necessity. Indeed, whether or not Democrats are successful in holding on to their slim majorities in Congress in the 2022 mid-term elections may depend on the passage of these bills. Despite the challenges, we believe this political urgency will unify Democrats and result in the passage of both bills. This is why the next three weeks are critical not only for this year but for next year as well.
We indicated early last year that we did not think Democrats would enact “Medicare for All” even if they won the 2020 election. Instead, we thought they would fall back to a position of expanding Medicare to pay for services for vision, dental, and hearing that aren’t currently covered. Reflecting that dynamic, Democrats included some form of Medicare expansion in the aforementioned $3.5 trillion budget resolution. The expansion of Medicare to cover other services is estimated to cost over $350 billion. The details will need to be fleshed out in subsequent legislation. While actually approving this expansion would be very difficult, it is possible it could be included in the large domestic spending bill that Democrats would like to pass in the fall.
Cannabis Legalization Legislation.
With 38 states having legalized cannabis in some form, a group of Senate Democrats, including Majority Leader Schumer, this week floated draft legislation that would legalize, regulate and tax cannabis at the federal level. While the bill would reverse federal sentences associated with cannabis, it would allow states to retain their own restrictions. Given that the bill faces Republican opposition and doesn’t even have full Democratic support (including from President Biden), it is a non-starter in the Senate where most legislation needs 60 votes to end a filibuster. There is, however, bipartisan support for legislation (called the Secure and Fair Enforcement Banking Act – the “SAFE Banking Act”) that would allow financial institutions to serve covered cannabis businesses. The House passed this bill by a wide margin earlier this year. However, some supporters of decriminalization, including some of the sponsors of the Senate bill, have voiced opposition to advancing a more narrow cannabis banking bill without broader reforms in areas like criminal sentencing. While there was much fanfare this week about the comprehensive Senate bill, there is currently a stalemate on actually passing any cannabis legislation into law.
As cyber-attacks on private businesses escalate, pressure has increased on Washington to act. Lawmakers from both parties have in the past rallied behind a program to encourage private companies to report attacks on their computer networks on a voluntary basis to help federal authorities better understand the threats and identify the culprits. That process has proven insufficient for a variety of reasons. Congress is currently looking at legislative solutions that would make the reporting of cyber-attacks mandatory, strengthen privacy protections for companies (so their information is not publicly disclosed) and provide liability protection to companies from lawsuits stemming from action contained in the reports. Some Republicans and businesses have apprehension about making the reporting mandatory, while Democrats have some concern about the liability protections. However, in the face of a growing threat from cyber-attacks, these issues seem manageable. Given that, we believe such a bill has a good shot at being enacted into law later this year.
In response to the COVID pandemic, the Trump administration last March temporarily rolled back numerous restrictions to allow more health care providers to deliver remote care through telehealth. Congress has introduced various bills in response to the increase in telehealth usage. Many of the proposals would make the regulatory relief permanent. One bill, the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act, has broad bipartisan support (including 59 cosponsors in the Senate). This bill would end all location-based restrictions on telehealth for Medicare recipients, allow patients to originate care from home and allow rural health clinics to permanently use telehealth. Before the pandemic, Medicare only covered telehealth in certain rural areas and required patients to travel to eligible health care facilities to access telehealth services. In addition to these federal efforts, over half of states have permanently loosened restrictions on telehealth this year, with many others considering an expansion to access. Proponents of this bill would like to include it in a must-pass bill, such as the year-end spending bill, or to pass a temporary extension of the waived restrictions. While not much bipartisanship can be found in the overall health care arena, telehealth legislation seems like an exception.
A Final Word
A Final Word
With the year now more than halfway over, speculation has picked up regarding which members of Congress likely will retire. A large number of retirements for a political party is often taken as a sign that members are not confident about their chances for re-election or their party’s political prospects. So far, there have only been five House members who have announced they will not seek reelection (three Democrats and two Republicans). There have been five Senators (all Republicans including three from competitive states) who have announced their retirement after they complete their term. Traditionally, retirement announcements begin to rapidly increase following the August recess when lawmakers have had a chance to spend time at home with their families, assess the political dynamics and think about what they want to do going forward. With redistricting around the corner, and a Senate map that will feature many competitive races, the question is not if there will be more retirements but which party they will favor. We expect plenty of retirement announcements in the fall.