capitol building

This Week:

The Senate approved Biden administration judicial nominees and a resolution to block a Federal Highway Administration rule on greenhouse gas emissions standards for state transportation departments. It also passed a resolution to block the National Labor Relations Board’s joint employer rule. The House is voting today on a bill to reauthorize a national security surveillance program (see below). Both chambers held a joint meeting of Congress with Japan Prime Minister Fumio Kishida.

Next Week:

The Senate will approve Biden administration nominees and likely begin the impeachment trial of Homeland Security Secretary Alejandro Mayorkas. The House is expected to deliver the articles of impeachment for Secretary Mayorkas’ impeachment trial to the Senate and will consider several bills on energy efficiency standards.

The Lead

US Military Aid to Ukraine, Israel.

A US military aid bill to key allies has become much more complicated over the last few weeks, particularly due to events in Gaza and the broader Middle East. While the aid to Ukraine has generated some opposition from House Republicans, the aid to Israel is now controversial with most Democratic lawmakers who want to condition the aid on Israel’s war goals and practices. The Senate already has passed a bill allocating $95 billion in aid to Ukraine, Israel and Taiwan without conditions on Israel (though it’s not clear that same bill could pass the Senate today), so the ball remains in the court of House Speaker Mike Johnson (R-LA). How will he proceed on an aid bill? This week, he began to craft a bill that we believe will feature the following components.

  • Aid to Ukraine. The Senate-passed bill provided $61 billion for Ukraine. The emerging House bill may maintain that amount or reduce it slightly. Part of that aid would be available in the form of an interest-free waivable loan instead of a direct expenditure. The waivable loan idea was originally suggested by former President Trump, and the Speaker hopes it will increase support for the bill among House Republicans. No one believes the loan (if approved) would ever be paid back, but it may be necessary to bring on board some lawmakers skeptical with the direct aid approach.
  • Aid to Israel. The Senate-passed bill contains $9.6 billion for Israel but with no conditions on the use of those funds. It’s unlikely the House bill will have conditions either. Most Democratic lawmakers will resist this approach. The question of whether to condition the aid to Israel is now as contentious to Democrats as the funding to Ukraine is with Republicans. In fact, one key House Democratic lawmaker suggested last week that all of the aid to Israel should be reconsidered. It’s almost as if we are back to square one with regard to any aid for Israel, and it may have to be removed from this bill going forward.
  • Use of Russian Sovereign Funds. The Speaker’s bill is likely to include a provision that will authorize the seizure of Russian sovereign assets held in the US – about $5 billion – to aid in the eventual reconstruction of Ukraine. This proposal has widespread support from most lawmakers and the Biden administration. The US is separately trying to convince European allies to release Russian sovereign funds they hold for the use of Ukrainian reconstruction. Tapping these funds, which belong to Russia, is complicated and controversial. It would set a precedent for sovereign funds around the world to be seized by the foreign countries where they are held. It also would be subject to significant and lengthy legal action. This provision likely will be included in the House bill, but it will be rewritten as the Senate weighs in on its impact.
  • Reverse LNG Pause. The House bill likely also will provide a policy sweetener for House Republicans in the form of a reversal of the Biden administration’s current pause of US liquified natural gas (LNG) exports. This provision is purely intended to unify House Republicans in their votes, but it will be loudly dismissed by House Democrats. We doubt it would be maintained if the Senate bill drafts its own new bill.

Other Issues in Play

Baltimore Port Tragedy.

It’s possible that aid to help reopen the Baltimore Harbor and the Frances Scott Key Bridge will be included in the military aid. It also could be considered as a separate measure. The estimate for repairs is not yet complete but is believed by some to be about $2 billion. The federal government has $960 million available in a relevant federal grant program, which is a good start. Payments related to insurance for the carrier that collided with the bridge will also be available, though the process of determining how much payouts will be and to whom they will be paid to will be subject to a lengthy and contentious legal process. It’s possible that these two sources could cover the estimated $2 billion needed, but more federal funding will almost certainly be requested. While some members may seek to add additional spending to this project, deficit hawks will want new federal spending to be matched by the State of Maryland and other local government entities as a resolution.

Government Surveillance Stumble.

Congress for months has struggled with passing legislation to reauthorize a significant national security surveillance program. This program, which was established through a post-9-11 expansion of an intelligence surveillance law, allows the government to warrantlessly monitor communications among suspected terrorists and criminals outside of the US. The program has generated controversy because it sometimes surveils American citizens, either by accident or because they are communicating with the person of interest outside of the US. The program is set to expire on April 19 and is strongly supported by law enforcement and national security officials. The House bill includes various reforms to the surveillance program designed to protect Americans from unneeded surveillance and potential abuse by law enforcement agencies. This bill is being debated in the House today and will likely pass. The Senate will consider the same bill next week in an effort to beat the April 19 deadline, and we expect it to pass that chamber as well.

Privacy Progress.

Congress has tried for years to pass legislation to establish national standards for data privacy, but lawmakers have run into difficulties time and again. There was progress this week when key House and Senate committee chairmen introduced a comprehensive legislative draft to establish national standards for data privacy. The proposal features compromises and tradeoffs on contentious issues like state law preemption and enforcement. In particular, it would preempt most state privacy laws (with some exceptions) and would allow for a private right of action for individuals to sue. The bipartisan and bicameral agreement faces challenges ahead as other lawmakers and stakeholders review and assess its details. Underscoring the jurisdictional complexities, House Financial Services Committee Chairman Patrick McHenry (R-NC) stated his interest in attaching legislation he has on privacy requirements for financial institutions (the banking industry already has been subject to federal privacy standards for over two decades) to this bill. Despite the important breakthrough, it will be difficult for Congress to pass a privacy bill into law in an election year, particularly as perennial disagreements around preemption and enforcement come into focus.

Student Loan Relief.

Famed baseball catcher and manager Yogi Bera once opined that “it’s déjà vu all over again,” and that’s what came to mind this week when President Biden released yet another plan to forgive student loan debt. The new plan from the Biden administration, estimated to cost $84 billion, aims to waive interest payments or cancel debt entirely for about 30 million borrowers who meet certain criteria. Similar plans from the President have been struck down by the courts over the last two years, and it’s not clear whether this new plan will pass judicial muster. The Department of Education won’t release the formal proposal for a few months, and no relief is likely this year. Nonetheless, President Biden sees this as a top priority that also will help him politically by appealing to young students saddled with debt. As long as there is a Biden administration, there will be a pending student loan debt forgiveness plan.

The Final Word

Abortion on the Ballot.

Contrasting abortion policies were prominent in the news this week and continue to be top on the minds of many voters. Former President Trump unveiled a new position on abortion that basically agrees with the Supreme Court’s ruling to gives states authority to decide their own policies and announced that he would not sign a federal abortion ban. A day later, the Arizona Supreme Court upheld the state’s dormant 1864 law that bans all abortions unless a mother’s life is in jeopardy. Pro-choice advocates have been energized by recent developments to protect a legal right to an abortion in several states, including CA, KS, KY, MI, MT, OH and VT. Meanwhile, AZ, FL and MD are expected to have ballot measures this year to ensure abortion as a legal right. Still, other states, including AR, CO, IA, ME, MO, MT, NE, NV and SD are considering the same ballot measure. Abortion ranks in the top five of issues on the minds of voters as reflected in national polls and could rise further up the ladder if these states put the issue on their ballots. How these measures advance in key swing states like AZ and MI is especially important since they are both swing seats in the presidential race and have open Senate seats that Democrats are defending. The issue will be one of two major talking points for President Biden and other Democrats for the rest of the year, along with concerns over a threat to democracy.