Weekly Plurus Strategies Update on Infrastructure, Appropriations, and Other Activity in Washington
It’s been another busy week in Washington as we work our way to the Memorial Day weekend. Here’s our weekly update on infrastructure, budget and appropriations, other activity as we close out the work period.
Building Pressure on Infrastructure Negotiations
Over the past week, it would be hard to say that we saw much progress on infrastructure. In fact, things may be reaching a point where Democrats are beginning to prepare for a pivot to reconciliation. While some Republicans, like Sen. Lindsey Graham (R-SC), continue to express optimism that an $800-$900 billion, bipartisan infrastructure package that includes traditional road, transit, and rail programs and broadband will move through Congress in the next 60-90 days, progressive Democrats are increasing pressure on the White House and Congressional leadership to abandon bipartisan talks and get moving on a proposal.
On Tuesday, Sens. Shelly Moore Capito (R-WV), Mike Crapo, (R-ID), Roger Wicker (R-MS), Roy Blunt (R-MO), John Barrasso (R-WY), and Pat Toomey (D-PA) met with Transportation Secretary Pete Buttigieg and Commerce Secretary Gina Raimondo to unveil their revised infrastructure counteroffer. Readouts of this meeting were mixed. While there continues to be a perception that both sides are attempting to negotiate in good faith, there have still been no breakthroughs on how broadly bipartisan negotiators will define infrastructure, a topline number, or how a bill will be paid for. While Republicans had committed to delivering a “serious” proposal, their plan still reportedly lacks pay-fors, which continue to be a sticking point in infrastructure discussions. While President Joe Biden’s proposal is funded primarily through corporate tax hikes, Republicans have advocated for clawing back unspent funds from previously enacted COVID relief bills as an offset. During Tuesday’s meeting, negotiators discussed a tax on electric vehicles (EVs), public-private partnerships, and a potential infrastructure bank.
Also on Tuesday, members of the Congressional Progressive Caucus sent a letter to House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) arguing that Democrats should avoid wasting more time negotiating with Republicans and instead move forward with a strategy to pass a single, multi-trillion dollar infrastructure package that covers both hard and soft infrastructure priorities. We expect these voices to grow louder if bipartisan negotiators fail to demonstrate any meaningful progress. Meanwhile, the New Dems have written to Speaker Pelosi arguing for more regular order on infrastructure, which could mean that bipartisan negotiations continue just a bit longer.
It is our impression that Leader Schumer is laying the foundation for a pivot to reconciliation by forcing all four of the committees with jurisdiction over infrastructure programs (Environment and Public Works (EPW), Commerce, Banking, and Finance) to markup their sections of an infrastructure package. The thinking is that these markups might be necessary in order to demonstrate to Sens. Kirsten Sinema (D-AZ) and Joe Manchin (D-WV), who have said they would oppose an infrastructure package under reconciliation, that Republicans are not serious about a bipartisan bill. This is likely why we are hearing the Senate Finance Committee could markup the Clean Energy for America Act next week. We are also continuing to hear May 26 is the target date for an EPW Committee markup of the surface transportation bill. While Sen. Capito’s comments about the difficulties associated with achieving a bipartisan agreement cast doubt on the markup, there are some Democrats who seem to be convinced a compressed timeline is what is needed to get moderates on board with reconciliation. Only time will tell if this strategy can succeed.
In the meantime, the House timeline for taking up an infrastructure package seems to be slipping, with the House Transportation and Infrastructure Committee now postponing its surface transportation bill markup from next week until at least June 9-10. According to committee staff, the delay is needed to continue to process earmark requests and coordinate with the White House. It remains possible this timeline could slip further. Rep. Peter DeFazio (D-OR) is eager to pass a surface transportation bill under regular order and has expressed concern about the policy provisions that would be scrapped if the bill ultimately has to move under reconciliation. Speaker Pelosi has publicly set July 4 as the deadline for the House to pass an infrastructure package. At best, this leaves the House Transportation and Infrastructure Committee only three weeks to get a bill through committee and on to the floor, which in our view, is ambitious. It is more likely the Speaker is adjusting her target to passage of an infrastructure bill in the House before the August recess.
As House Democrats continue to work towards releasing their infrastructure proposal, which will presumably be based off of last year’s $500 billion surface transportation bill, House Transportation and Infrastructure Committee Republicans including Reps. Sam Graves (R-MO), Rodney Davis (R-IL), Rick Crawford (R-AR), and Garrett Graves (R-LA) introduced their own infrastructure proposal. With a topline of $400 billion, the STARTER Act 2.0, includes funding for traditional road safety and public transit programs and resilience, and emphasizes other GOP priorities, such as rural investment and streamlining project permitting. Notably, House Republicans’ proposal excludes broadband and other Democratic priorities, such as provisions to address climate change and EVs. It is also missing a rail title and lacks pay-fors.
A gap also remains between House Democrats and House Republicans over water infrastructure. While the Senate passed legislation last month to authorize $35 billion for drinking water and wastewater projects, House Energy and Commerce Democrats have proposed more than $50 billion for water infrastructure, while House Energy and Commerce Republicans recently introduced legislation to provide just $11.6 billion for drinking water programs and $9.5 billion for the state drinking water revolving loan fund for rural and Tribal areas.
While all of these developments seem to point to a looming breakdown in bipartisanship, the White House has indicated it will give bipartisan negotiations until Memorial Day to yield progress. However, little is known about how progress might be defined. We are hearing from sources inside the White House that President Biden will allow only two or three more weeks for bipartisan negotiations to play out and preparations may already be underway to turn to reconciliation. At this point, we are becoming increasingly convinced there will be a large infrastructure reconciliation package.
Endless Frontier Act/USICA
On Monday night, the Senate voted 86-11 to begin consideration of the Endless Frontier Act. As a reminder, the base bill seeks to maintain and build on U.S. science and technology leadership through investments in research and development and strengthening regional economic development, manufacturing and supply chains. The legislation would authorize $120 billion over five years for research programs at the National Science Foundation (NSF), Department of Commerce, Department of Energy (DOE), and the National Aeronautics and Space Administration (NASA).
On Tuesday, Leader Schumer introduced the U.S. Innovation and Competition Act (USICA) as a substitute amendment. USICA includes not only the Endless Frontier Act, but also CHIPS and O-RAN 5G emergency appropriations, the Strategic Competition Act, the Meeting the China Challenge Act, and other provisions provided by the Senate Homeland Security and Governmental Affairs Committee and the Senate Judiciary Committee.
The Senate is considering USICA under regular order with an open amendment process. Leader Schumer and Sen. Todd Young (R-IN), the original sponsors of the Endless Frontier Act, are doing their best to manage their respective caucuses so that the Senate can finish work on the bill before the Memorial Day recess. Regardless, amendments are being filed with the hope that Senate will consider multiple amendments as part of a manager’s package. The Senate has started voting on individual amendments. However, it is possible the Senate could turn to other floor agenda items, such as nominations, in order to allow staff to continue to work through amendments. The one thing that is certain is that the Senate is likely to be on USICA through the end of this work period.
Once the Senate passes USICA, the House is likely to respond by advancing its own legislation aimed at bolstering U.S. research and innovation and maintaining U.S. competitiveness, even though many House Republicans are concerned the effort could result in duplicative federal research efforts. There has also been an emphasis in the House on considering a China package under regular order. Yesterday, GOP committee leadership sent a letter to Speaker Pelosi urging a bipartisan, open, and transparent process. It is ultimately unclear what vehicle the House will use to move its package. Potential candidates include the companion version of the Endless Frontier Act and the NSF for the Future Act. Ultimately, the House and Senate bills would need to be conferenced before legislation is sent to President Biden for signature.
Budget/Appropriations
As you are likely aware, the release of the president’s full Fiscal Year 2022 (FY22) budget request has now been postponed from May 27 to May 28. We can’t imagine that Congress, already frustrated by budget delays, is pleased the long-awaited budget will drop the Friday of the holiday weekend.
Despite the late budget, the House Appropriations Committee seems poised to proceed on its timeline of marking up FY22 bills in June and passing appropriations measures on the House floor in July. While appropriations requests were due at the end of April, the committee is planning to reopen the database for submissions once the budget has been released. It will close again fairly quickly. Financial Services and General Government (FSGG), Legislative Branch, Labor-Health and Human Services (HHS), and State and Foreign Operations (SFOPs) appropriations requests are due June 2; Agriculture, Commerce, Justice, and Science (CJS), Defense, and Homeland Security Appropriations requests are due June 3; and Energy and Water, Military Construction and Veterans Affairs (MilCon-VA), Interior, and Transportation, Housing, and Urban Development (THUD) appropriations requests are due June 4.
The Senate Appropriations Committee remains far behind the House, although we are expecting the committee to hold several budget hearings next week.
Loosening of COVID Restrictions at the Capitol
As more Americans receive vaccinations, and the Centers for Disease Control and Prevention (CDC) and state governments issue new guidance, offices around the country are contemplating returning to work. On Capitol Hill, we’re hearing rumors that GOP offices expect to be back in person full-time after the Memorial Day recess, but Democrats believe it is unlikely they will be back in the office full-time before the end of the year. Individual offices are implementing their own policies. Many staffers seem to have anxiety about working in close quarters or having multiple staffers in the same room on Zoom calls at the same time.
In the meantime, House Republicans continue to push for an end to the mask mandate in the chamber, even though less than half of the GOP caucus has indicated they are vaccinated. House Republicans’ resolution directing the Capitol's attending physician to update the House chamber mask requirement that is currently punishable by fine was rejected by a vote of 218-210 along party lines. All in all, we are unsure of what this means for virtual hearings and proxy voting in the House as we move forward, but at least for the time being, it seems that Zoom meetings aren’t going away.