Washington Weekly: Russia and Ukraine

U.S. Office of Public Policy, 18 February 2022

7 min read

This Week:

The Senate passed legislation extending government funding through March 11 and approved the nomination of Robert Califf to serve as commissioner of the Food and Drug Administration. The House did not schedule any votes.

Next Week:

Both the Senate and House will be out of session in celebration of President’s Day. Both chambers will return to Washington the following week.

The Leads

Russia and Ukraine.

The talk of the town this week was whether Russia will move forward with additional military action in Ukraine. Based on our conversations with lawmakers, it is clear many believe that further Russian military aggression is indeed imminent. The Biden administration already has the legal authority to implement the array of sanctions that it has threatened to impose on various Russian entities. However, Congress would like to fine-tune and strengthen that authority and demonstrate the strong bipartisan support that exists for US action against Russia. Congressional leaders from both parties continue to work on a comprehensive sanctions bill, but lawmakers remain divided on such issues as the application of sanctions to entities associated with the Nord Stream 2 pipeline and the timing of when sanctions should be applied (i.e. before or after military activity). Given these ongoing disagreements, we believe Congress will need to settle on the passage of a simple resolution expressing support for US action rather than a comprehensive sanctions package.

Fed Nominations Standoff.

The Senate Banking Committee this week was set to clear the nominations of five Federal Reserve nominees (including Fed Chairman Jay Powell), which would have paved the way for final votes in the full Senate. However, Republicans boycotted the committee votes due to ongoing concerns about the possible role of one of the nominees (former Fed Governor and Treasury Deputy Secretary Sarah Bloom Raskin) in helping a financial technology company get approval for a master account with the Fed. This deprived Democrats of a quorum to advance the nominations. Democrats, angered by the move, will continue to try to move all of the nominees together in committee. Even without this obstacle, Democrats likely would have needed to wait for the return of the recuperating Senator Ben Ray Luján (D-NM) in order to approve two of the more contentious nominees (Raskin and economist Lisa Cook) on the Senate floor. Chairman Powell, who is currently leading the Fed on an acting basis, is expected to testify on Capitol Hill in early March as part of semi-annual testimony on the state of the economy. The testimony (and the drama regarding nominations) comes as the Fed is expected to begin tightening monetary policy (in response to rising inflation) at the next open market meeting in mid-March. Expect lawmakers to trade barbs at the hearing, with each side accusing the other of politicizing the Fed at this pivotal time. The Fed nominations likely will continue to be in limbo for weeks if not months until one side relents or Democrats change Senate rules to allow for more expedited floor consideration.

Supreme Court Nomination.

President Biden reportedly interviewed a few candidates this week to replace Justice Stephen Breyer on the Supreme Court. Senate Democrats are eager to receive the nomination as soon as possible so they can begin the formal process of due diligence, hearings and a final vote. Losing the vote of Senator Luján for a few weeks has reminded Democrats of the fragility of their majority in an evenly divided Senate, where every vote counts. We believe the President could announce his choice as early as late next week. This nomination will set off a torrent of publicity and questions about the nominee. We expect public hearings and a vote in the Senate in either April or May.

Other Issues

Gas Tax Relief?

Some Senate Democrats have floated the idea of temporarily waiving the federal gas tax in an effort to provide consumers relief from inflation. That gas tax has been fixed at 18.4 cents a gallon since 1993. The gas tax is the primary source of federal funding for highway and road construction across the country. The proposed waiver would last for the remainder of the year. While probably appealing to drivers, the idea presents serious political and substantive problems. Given their interest in eventually weaning the US off fossil fuels towards more renewable fuel sources, many Democrats are unlikely to favor a waiver that could increase consumer demand for gas (and thereby bolster the profits of the fossil fuel industry). A waiver also would deprive the federal highway trust fund of about $20 billion for the year. This clashes with the Biden administration’s and many lawmakers’ embrace of a bipartisanship infrastructure bill passed last year (just last week, President Biden was in Ohio touting the bill’s new infrastructure spending). Finally, the need for such a bill could be perceived as a tacit admission by Democrats that inflation is not a “transitory” phenomenon. We expect Democrats to unveil a broader set of proposals to counter inflation next month though it’s doubtful any of these measures will pass in an election year.

Senate Bipartisanship (continued).

As Senator Luján recovers, Democrats will remain one vote short in an evenly divided Senate and will be unable to do anything on a purely partisan basis. With that dynamic in mind, we highlighted last week a few bipartisan bills that could get traction over the next month or so. This week, we mention a couple of others likely to get attention.

  • Countering Violence Against Women. A bipartisan group in the Senate recently introduced a bill to reauthorize the Violence Against Women Act (VAWA). The VAWA was first passed in 1994 to establish stronger legal protections for victims of domestic abuse and sexual violence. The latest bill would increase funding of federal programs to assist victims. In particular, it would strengthen assistance to rural victims, women in law enforcement custody and Native Americans. The House last year passed a VAWA reauthorization bill, but that measure contained a controversial gun ban expansion that will not pass the Senate. The latest Senate bill removes that provision. This should give it broad enough support to hurdle a 60-vote procedural threshold in the Senate. We think the bill could pass the Senate in March after which it would go back to the House for a final vote, where it would easily pass.
  • App Store Trouble. The Senate Judiciary Committee this month approved a bill that would impose restrictions on primary “app” platform providers (those with over 50 million US users). The bill would require these platform providers (mainly Apple and Google) to allow third-party app developers to communicate with customers outside of their platforms and would allow customers to install applications from sources on the web or alternative app stores (a process known as sideloading). Critics of the bill argue that it could negatively affect cybersecurity and privacy. On the other side, proponents claim it is crucial to prevent dominant app providers from imposing their own in-app payment systems on developers and unreasonably preferencing their own apps through biased algorithms. This is the second bill the committee has advanced this year that takes aim at major tech companies. The first bill would bar the largest tech platforms from giving preferential treatment to their own products. While these bills still have many hurdles to overcome, Congress’ continual focus on these major tech companies has shown no signs of waning.

The Last Word

The Mid-Term Elections Have Begun.

Early voting began this week in Texas as part of its March 1 primary election process. The Lone Star State has the distinction of holding the earliest primary election date in this year’s mid-term elections. While the general election day of November 8 still seems like a long way off, many primary elections are just around the corner this spring and summer. Those primary elections actually will be more impactful than the general elections held in November. Of the 435 seats in the House, we expect only 40 to 50 to be competitive in the general election. Since all of the other seats are “safe” seats for one party or the other, the de facto winner will be determined by that party’s primary election. The same dynamic exists in most Senate races this year. As we have stated in the past, the first Tuesday in November should be thought of as the end of election season since the elections actually begin much sooner.