The Senate confirmed various Biden administration judicial nominees. The House passed a bill to reform a 135-year-old election law that clarifies the presidential transition procedure (see below), a bill to allow borrowers with consolidated student loan debt linked to a spouse or ex-spouse the ability to separate the loans and a package of policing and public safety bills.
The Senate will continue to confirm Biden administration nominees. The House may vote on a bill that prohibits Members of Congress and their partners from trading individual stocks. Both the Senate and House will likely vote on a bill to extend funding for government agencies before the current fiscal year expires on September 30 (see below).
Government Funding Bill.
The one item Congress must advance before adjourning before the mid-term elections is a bill to fund the federal government in fiscal year 2023, which begins on October 1. Instead of a funding bill covering the entire fiscal year, Congress for now will need to settle on a temporary funding bill (a “continuing resolution”). It will try to move forward that continuing resolution next week, but a few contentious issues still need to be resolved. The bill likely will include emergency funding to address flooding in Puerto Rico and fires in the west, but funding to house and feed the large influx of migrants from the southwest border may emerge as a partisan flashpoint. The habitual need to enact a temporary bill instead of finalizing the government’s entire funding for the next year by October 1 has been a blemish on Congress for years. The uncertainty regarding funding levels and timing hurts government contractors, some of whom are doing important things like supplying weapons to Ukraine. The delays also raise the specter of a government shutdown, though we don’t believe that will happen this year.
Manchin in the Spotlight Again.
Perhaps the biggest unresolved issue in the government funding debate is whether the bill should include a proposal by Senator Joe Manchin (D-WV) to streamline the permitting process for energy infrastructure projects (both fossil fuel and renewable). As a condition of getting Senator Manchin’s support for the Inflation Reduction Act (IRA) that passed the Senate in August, Senate Majority Leader Chuck Schumer (D-NY) promised that the Senate would take up permitting reform. A substantive permitting reform proposal will need 60 votes to be included in the bill, and supporters at this point don’t number 60. Senate Republicans prefer an alternative version of permitting reform from Senator Shelley Moore Capito (R-WV) and may be in no mood to support Senator Manchin’s proposal given their frustration with him for supporting the IRA. Additionally, a number of Democrats, especially in the House, also oppose the permitting provision. The bottom line is that Senator Manchin is unlikely to prevail in getting his permitting proposal into law, at least not as part of the government funding bill.
Electoral Count Act.
The House this week passed a bill that would update the Electoral Count Act (ECA), an 1887 law that establishes how Congress and the states certify presidential elections. The bill would address ambiguities in the ECA that concern many lawmakers. The bill would clarify the vice president’s role regarding the counting of electoral votes by specifying that the vice president does not have the authority to overturn the states’ certification of election results, which was a controversial point in the aftermath of the 2020 election. The bill also would require a third of each chamber’s members to raise an objection to a state’s electoral votes, instead of the current requirement for just a single member in each chamber. The Senate is also working on a companion bill that includes the clarification of the vice president’s role, but instead would change the threshold for challenging election results to one-fifth (instead of one-third). The Senate bill has greater bipartisan support than the House bill, which passed along mostly party lines (only nine Republicans voted for the bill). Passage of a final bill is possible in December, but it will have to be more closely aligned with the Senate bill. The involvement of Congresswoman Liz Cheney (R-WY) and others on the House January 6th Select Committee in writing the House bill gives too many Republicans heartburn.
Retirement Savings Policy.
Congress continues to make slow and steady progress toward passing a retirement package into law at the end of the year. This package, which contains several dozen changes in the retirement policy area, has very broad bipartisan support. The bill would increase the required minimum distribution (RMD) age to 75 and increase catch-up contributions for those age 62-64. It also would allow companies to match the student loan payments of their employees with contribution to their retirement accounts. In the Senate, Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) recently released an updated version of the bill after their panel approved the bill in concept over the summer. The House passed its version toward the beginning of the year. Heading into the election, staff for different committees in the House and Senate will negotiate the details of a final bill. We remain cautiously optimistic that a final version of this retirement bill will become law before the end of the year.
Stalled Competition Bills.
There has been plenty of activity this Congress on antitrust and competition policy. The House Judiciary Committee last year and the Senate Judiciary Committee early this year each passed legislation aimed at curbing anti-competitive practices by big tech companies on their platforms. Not surprisingly, the tech industry is strongly opposed to these measures and argues – among other things – that they would harm the global competitiveness of the US and be disruptive to consumers. While these bills passed the committees with some bipartisan support, many members from both sides of the aisle that don’t sit on these committees also share these concerns. Supporters have tried for months to get floor votes on these bills, but the bills have hit a wall in the House, while the Senate bill doesn’t appear to have the needed 60 votes to overcome that body’s procedural hurdles. Furthermore, the challenges with developing consensus on these issues were on full display earlier this month when the Senate Judiciary Committee tried to pass a narrower bipartisan bill to give smaller news outlets the ability to collectively bargain with large tech companies over payment for news content displayed on tech platforms. That bill had to be pulled due to disagreements over issues relating to how these platforms moderate posted content on their platforms. In the meantime, Biden administration anti-trust enforcers at the FTC and Justice Department (who testified this week before a Senate panel) continue to take an aggressive stance against merger activity, though with limited success thus far. While those cases will play out in court, regulators shouldn’t expect new anti-trust powers from Congress anytime soon.
Student Loan Cancellation Legal Challenge.
We’ve been asked by many readers about potential legal challenges to President Biden’s proposal to cancel student loan debt for certain borrowers. While we expect a serious legal challenge, it won’t be filed until the administration takes action to implement the proposal. We expect this to happen in early or mid-October when the Education Department will publish a form that students can use in applying for forgiveness. It is possible at that point that a federal judge could freeze the President’s plans until the suit is considered. The legal question will be whether the administration has the legal authority to provide the forgiveness the President has proposed or whether it needs more clear authority from legislation passed by Congress (which won’t happen anytime soon). While this issue likely won’t be resolved in the legal arena this year, it could become a political issue if tens of millions of affected borrowers become more motivated to vote in the mid-term elections because of delays in and challenges to their expected debt relief.
House Republican Plan.
We mentioned last week that House Republicans planned to unveil a “Commitment to America” plan today. This plan will outline at a high level a policy agenda for Republicans in the House should they win the majority in the upcoming mid-term elections.
The Final Word
The Final Word
Election Day Begins Today.
While election day (November 8th) is still 46 days away, early voting begins today in Minnesota. Minnesota may be the first state to start the process, but 46 other states and the District of Columbia all have some form of early voting between now and election day. Every election year, more voters opt to vote early. The pandemic accelerated these trends, as 43% of voters cast ballots by mail and another 26% voted in person before election day in 2020. Early voting poses both challenges and opportunities for candidates running for office. It is difficult for candidates just coming off a tough primary election to immediately pivot to the general election only a few weeks later. This dynamic generally favors incumbents who frequently do not have a credible primary challenger. Additionally, early votes can help insulate candidates from anything that happens in the last few weeks of a campaign since a vote is final and cannot be changed even if a voter has buyer’s remorse. As more voters continue to avail themselves of early voting, we should consider election day to be the last day to vote as opposed to voting day.