The House and Senate returned this week after a two-week spring break. Lawmakers have a lot on their plates between now and the end of the year—a year shortened by the campaign season and the November midterm elections. As of April 30, there are only 60 legislative days remaining on the House calendar for 2022 and 106 legislative days in the Senate (though the majority leaders can always adjust their chamber schedules). Here is a summary of their to-do list:
FY 2023 Appropriations. The next fiscal year (FY 2023) begins October 1. Midterm election years are never prolific periods of legislative activity, but galloping inflation, war in Ukraine, and retirement of the Senate’s two top appropriators have some lawmakers eager to jumpstart the annual funding exercise before campaign fever takes over in August. Since a Congressional budget resolution for FY 2023 has not yet been adopted—and probably won’t be—the top appropriators from the House and Senate met last week to begin negotiations on the topline discretionary spending levels (also known as 302(a) allocations) with the goal of getting at least some appropriations bills enacted before the October 1 deadline. For context, Congress hasn’t sent all the required discretionary spending bills to the president on time since 1996.
Senior appropriators may reach a timely agreement on topline numbers, but what happens next is anyone’s guess. Some political analysts believe inflation, war in Ukraine, and the midterm elections are strong incentives for the two parties to cooperate on a mini omnibus bill (“minibus”) containing 2-3 non-controversial measures that can be enacted before October 1. Others believe Republicans will wait until after the results of the midterm elections are known before sitting down to negotiate on anything. If voters hand Republicans a majority in one or both chambers in November, Republican lawmakers would then negotiate the appropriations bills from a position of strength.
One outcome, however, is guaranteed: the House and Senate will not complete all 12 bills before the start of the new fiscal year and at least one continuing resolution (probably though early December) will be necessary to keep the government open and operating. Whether lawmakers will then pass any remaining bills in a December sprint or punt negotiations to the new Congress in 2023 is hard to predict. Organizing a new Congress is time consuming, especially when a new majority takes over. Looking into the not-too-distant future, leaders of both parties may see value in finishing their appropriations work before the new Congress is seated.
Emergency supplemental Ukraine aid. On April 28, President Biden submitted to Congress a $33 billion request for emergency supplemental aid to Ukraine. The $13.6 billion previously provided in the FY 2022 omnibus appropriations bill enacted in March is nearly depleted and as the battlefield shifts to the Donbas region in eastern Ukraine, new weaponry is needed. The president’s request would allocate $20.4 billion in security and military assistance to Ukraine and our nearby NATO allies (artillery, armored vehicles, advanced air defense systems, etc.);; $8.5 billion in economic support (e.g., food, energy, healthcare services, farm support, and natural gas); $3.0 billion in humanitarian aid (wheat and other commodities to fight food price inflation), and $500 million for U.S. food production assistance.
Democrats will try to attach another round of COVID aid to the Ukraine supplemental to help pull the former across the finish line (see below), but this approach is controversial. Most Senate Republicans do not support additional COVID aid (at least not without specific offsets) and are determined to keep the two measures separate. The first test will probably be a procedural vote in the Senate that would initiate debate on a combined Ukraine/COVID measure. If Senate Republicans withhold their support and the test vote fails, Democrats will be forced to make a choice—try again (and again and again) in hopes of wearing down the opposition or separate the two measures and move them independently.
Additional emergency supplemental COVID funding. On March 2, President Biden submitted an emergency supplemental request to Congress for another $22.5 billion to cover the cost of restocking COVID vaccines, testing equipment, and therapeutics. The request was trimmed to $15.6 billion during negotiations over the FY 2022 omnibus spending bill, but the House had to strip that provision at the last minute over objections from their progressive members (they didn’t support the offsets). A bipartisan group of Senators reached a deal on an even slimmer $10 billion package prior to the recess, but it got bogged down in the debate over the CDC’s announcement it would soon rescind the Trump administration’s pandemic-related policy allowing for immediate expulsion of migrants as a public health risk (Title 42). As a result of Congress’ inaction, many uninsured Americans no longer have access to free COVID vaccines or free testing. President Biden said he would re-submit his original $22.5 billion COVID request when he transmits to Congress his Ukraine emergency supplemental, but its fate remains uncertain.
Inflation. The April inflation report for March surprised many economists. The price of the average consumer’s market basket of goods and services rose 8.5 percent over the previous 12 months—the highest level in 40 years. With House and Senate Democrats in danger of losing their majorities in November, vulnerable lawmakers are eager to ease the pain of higher prices before voters cast ballots. Already the Biden administration has announced plans to reduce retail gasoline prices by releasing 180 million barrels of oil from the U.S. Strategic Petroleum Reserve over the next 6 months and allowing the summertime sale of cheaper higher-ethanol blend fuels. Polls suggest, however, voters are restless for more inflation relief.
A working group of House Democrats is examining options that would lower the cost of gasoline and food, with the goal of passing legislation before the Memorial Day holiday. Top prospects for the final package include giving the Federal Trade Commission more authority to go after fuel price gouging, and legislation to address meat industry chokepoints and the skyrocketing cost of fertilizer (a key component in the cost of growing agriculture products, including food). In the Senate, Joe Manchin (D-WV), chairman of the Senate Committee on Energy, is collaborating with Lisa Murkowski (R-AK) and a small group of their colleagues to craft a bipartisan energy bill.
Proposals to temporarily suspend the 18.4-cent excise tax on gasoline and the 24.3-cent tax on diesel have been dismissed by economists and several prominent Democrats. A gas tax holiday would curtail funding for the road and bridge improvements hard won in the 2021 bipartisan infrastructure bill—and the jobs those projects support. In addition, lowering the retail price of fuel would simply increase demand, adding to inflationary pressures and defeating the original purpose of the tax holiday.
Student loan debt. According to recent media reports, after months of pressure from the progressive flank of the Democratic party, President Biden told the Congressional Hispanic Caucus he is considering a proposal to cancel a large amount of student loan debt. Most federal student loan payments have been suspended since March 2020—a policy response to the COVID-induced recession. The moratorium also froze interest on government-held federal student loans and stopped collections against borrowers in default on federal loans. Initially set to expire in September 2020, both Presidents Trump and Biden have extended the program, and President Biden’s most recent executive order, signed on April 6, renewed the suspension once more through August 31.
Some context for this debate: Today, 43 million Americans hold approximately $1.6 trillion in student loan debt, the second largest category of debt behind home mortgages. That debt, however, is concentrated among wealthy households—doctors, lawyers, MBAs—and an across-the-board cancellation of student debt would disproportionately benefit them. On the campaign trail, President Biden said he supported canceling up to $10,000 in student loan debt which the Committee for a Responsible Federal Budget estimates would cost $250 billion (on top of the $150 billion already spent during the pandemic). Whether the Biden Administration wants to cancel student loan debt as a way to reduce income inequality or to appeal to younger voters ahead of the midterm elections, one thing is clear: an across-the-board cut is a costly and inefficient approach. The White House said it would announce its decision by the end of August or extend the pause again.
US-China competitiveness/Bipartisan Innovation Act. House and Senate negotiators are expected to go to conference shortly on competing bills that would enhance U.S. science and technology competitiveness with China. Both bills include funding for advanced research in several high-tech areas through the National Science Foundation and research labs operated by the Energy Department. The bills would also provide subsidies to semiconductor manufacturers to re-start the domestic production of microchips. The House bill, however, also includes provisions relating to climate change, immigration, human rights, and trade policy. Backers of the Senate’s approach say their version is better and should prevail because it has already gained broad bipartisan support in the chamber. Democrats hope to have a compromise bill for President Biden to sign by Memorial Day, but that deadline looks likely to slip.
Reconciliation/Build Back Better v2.0. Democrats are not giving up on their desire to move a party-line reconciliation bill with their climate and social spending priorities before the September 30 deadline, but the odds for success are dwindling. Senator Joe Manchin (D-WV), who almost single-handedly killed the last version of the President Biden’s Build Back Better Act, has signaled a willingness to negotiate a revised package that would roll back a portion of the 2017 tax cuts for corporations and wealthy individuals and use half the proceeds to enact policies that would lower the price of prescription drugs. The remaining savings would be reserved for deficit reduction. Unfortunately, the tax increases he supports (a higher corporate rate and higher marginal income and capital gain tax rates) do not have the support of his fellow independent-minded Democratic colleague, Senator Krysten Sinema (D-AZ). Given the 50-50 split in the Senate, Democrats cannot lose a single vote and it’s hard to see how Democrats untie their Gordian Knot.
Immigration reform. Unlike the other items in this to-do list, there isn’t any action-forcing deadline for fixing the nation’s broken immigration laws, and plenty of previous efforts have failed. Recent activity, however, has renewed interest in a compromise, possibly nudged along by the domestic labor shortage. The bipartisan duo of Senators Dick Durbin (D-IL) and Thom Tillis (R-NC), both members of the Senate Judiciary committee which has jurisdiction over the matter, have invited members with bipartisan immigration bills to meet and discuss whether an amalgamation of the various bills can generate the 60 votes needed to pass the Senate.
Retirement security. At the end of March, the Securing a Strong Retirement Act (or Secure Act 2.0, H.R. 2954)—a bill that would expand access to retirement savings plans—passed the House with a rare and overwhelming bipartisan majority (415-5). It now awaits action in the Senate. The bill would lift the mandatory IRA distribution age from 72 to 75 and expand access to employer-sponsored retirement plans, including the automatic enrollment of employees in certain plans (also known as an “auto-IRA”). Payfors included in the House bill are controversial, however, in that they merely accelerate the realization of tax revenue from the future to the present–there is no source of new revenue available to offset the cost of the policy changes beyond the budget window (i.e., the measure is PAYGO-compliant in name only). Members of the Senate Finance Committee are working on their own draft legislation and if successful, would have to reconcile their version (and their offsets) with the House-passed measure. Finding legitimate offsets that satisfy enough Democrats and Republicans in both chambers will be a challenge.
Expiring authorizations. In addition to the big-ticket items mentioned above, several key program authorizations are expiring this year and will require lawmakers’ attention:
- The National Defense Authorization Act, which authorizes Pentagon spending programs, is an annual must-pass measure that traditionally receives bipartisan support (and often previews the spending levels in the annual defense appropriations bill).
- The Prescription Drug User Fee Act of 1992 (PDUFA) allows the Food and Drug Administration (the federal government’s pharmaceutical drug regulatory agency) to collect fees from the pharmaceutical industry to fund the agency’s drug approval process. In exchange, the FDA is required to meet certain performance benchmarks, primarily related to the speed of certain activities within the review process. PDUFA has been reauthorized multiple times and the current authorization expires on September 30.
- The National Flood Insurance Program (NFIP) is the primary flood insurance provider in communities with significant flood risk. Communities volunteer to participate in the NFIP in order to have access to federal flood insurance, and in return are required to adopt minimum standards to mitigate the effects of flooding through floodplain management. Operations of the NFIP are currently authorized through September 30, 2022. Past reauthorizations have been contentious, however, necessitating short-term patches to keep the program functioning until a compromise could be reached. As climate change affects the severity of weather patterns, timely reauthorization of the NFIP in 2022 could be important.
This list is long, but not exhaustive. A water resources bill, workforce development legislation, election law reforms, expiring tax extenders, and a backlog of Biden nominations will also demand attention from lawmakers before the year’s end. Congress has a lot to do and the clock is ticking.