Plurus Strategies Weekly Update: Appropriations, BBB, SCOTUS Nominee, and ECA Reform
FY22 Appropriations/Emergency Supplemental/FY23 Budget
Following House passage of the continuing resolution (CR) last week, the Senate is hopefully on track to pass the CR today. While Democrats had been optimistic about reaching a consent agreement last night, the effort to hotline the bill failed, leaving a narrow window for passage ahead of the expiration of the current CR tomorrow. The CR has already overcome procedural delays after Sen. Marsha Blackburn (R-TN) placed a hold on the bill over concerns about a new Department of Health and Human Services (HHS) substance abuse program. Sens. Ted Cruz (R-TX) and Roger Marshall (R-KS) are demanding votes on amendments to block federal vaccine mandates, Sen. Marco Rubio (R-FL) is pushing for a vote on an amendment to prohibit federal funding from being used to buy crack pipes, and Sen. Mike Braun (R-IN) is insisting on a vote on a balanced budget amendment. It’s high politics, as several Democratic Senators are absent for votes and a Congressional delegation (CODEL) to the Munich Security Conference is scheduled to depart at 4PM today. The CR will fund the government through March 11.
It is now an open question if appropriators can draft and Congress can pass a $1.5 trillion omnibus appropriations package by March 11. Following last week’s breakthrough in negotiations among the “big four” (Sens. Patrick Leahy (D-VT) and Richard Shelby (R-AL) and Reps. Rosa DeLauro (D-CT) and Kay Granger (R-TX)) we have learned that all 12 appropriations subcommittees now have their topline numbers, although the 302(b) allocations are being kept a close hold. As you know, Republicans were seeking parity between the increases in defense and non-defense spending. We are hearing that last week’s agreement will result in more than the five percent increase in defense spending authorized by the Fiscal Year 2022 (FY22) National Defense Authorization Act (NDAA), but that the topline number for the Labor-HHS Appropriations Bill is less than the amount in the House-passed bill. Some appropriations cardinals, like Sen. Jeanne Shaheen (D-NH), who chairs the Commerce-Science-Justice (CJS) Appropriations Subcommittee, expressed disappointment with their toplines.
Based on our conversations, there is a lot of optimism the omnibus will be ready by March 11. However, given the Presidents’ Day recess and the tight legislative schedule, it remains possible that another short-term (perhaps a few days or so,) CR will be needed to wrap up the complicated process of drafting the long-term spending bill. The timeline has been described to us as “doable, but challenging.” The good news is that chatter about the possibility of a CR through the end of the fiscal year has faded. We are even hearing rumors that appropriators are already discussing topline numbers for FY23, even though conventional wisdom is that FY23 appropriations will not get done until January 2023 at the earliest. We also now know that President Biden is planning to request more than $770 billion in defense spending for FY23.
One thing that could potentially complicate the omnibus’ path forward is the scramble to add other items to the bill. For example, we are hearing the Senate Health, Education, Labor, and Pensions (HELP) and Finance Committees are aiming to attach other bipartisan products, primarily in the healthcare space, to the omnibus. Meanwhile, senior Democratic staffers tell us that House committees are sort of scratching their heads about what priorities they might strip out of the BBB bill that passed the chamber to try to include on the omnibus.
Another potential hurdle is the emergency supplemental the White House is hoping to tack on to the package. While it has been rumored for weeks that the administration might use the CR as the vehicle for additional COVID and disaster relief funding, we now know that HHS is seeking $30 billion in new COVID spending, including $18 billion for medical countermeasures, $5 billion for testing, $3 billion to treat the uninsured, $4 billion to prepare for future variants, and $500 million for CDC operations. While the coffers for these purposes are empty because funds have either been spent or allocated, Senate Minority Leader Mitch McConnell (R-KY) and Sen. Shelby have been of the view that any additional COVID relief would have to come from repurposing unspent COVID funds. Sen. Leahy has also expressed a preference for dealing with an emergency supplemental separate from the CR.
Things are now at a point where we wonder if we might be dealing with FY22 and FY23 appropriations simultaneously. President Joe Biden’s FY23 budget request is not expected until after the March 1 State of the Union (SOTU). We have now confirmed that agency pass backs have happened, so at best, an FY23 budget framework could be made available at some point in March. Staffers we connected with this week have heard rumors about a late March budget release, but tell us they believe April is more likely.
America COMPETES Act/USICA Conference
We have been continuing our efforts to probe for intel on how the America COMPETES Act/U.S. Innovation and Competition Act (USICA) conference will play out. Despite the desire for more of an informal conference, it is our expectation that Republicans will force Democrats into a formal conference as part of their efforts to shape bill and delay Democrats from achieving a timely victory. With the House out this week, Sen. Ben Ray Lujan’s (D-NM) ongoing absence denying Senate Democrats a majority, and 2-3 days of floor time needed for the appropriate procedural motions, it could be some time before formal conference proceedings begin. However, informal, bipartisan, bicameral talks are already underway.
Staffers who are plugged into the conversations tell us they expect the America COMPETES Act/USICA conference to look a lot like the conference that resulted in the Dodd-Frank Wall Street Reform and Consumer Protection Act. In other words, we will see appointed conferees sitting in a room hashing out the differences between the two bills, but they will be doing so under heavy handed guidance from leadership. Given the scope of the bills and the number of redlines that must be negotiated, staffers continue to tell us that the Memorial Day recess could be a target for finishing work on a compromise package.
SCOTUS Confirmation
Democrats have set their sights on confirming President Biden’s Supreme Court (SCOTUS) nominee before the Easter recess. However, the clock is ticking and there are several factors that could impede the timeline. In fact, Sen. Dick Durbin (D-IL) recently indicated that an announcement on a nominee this week would be “optimal,” but indicated that such news is unlikely.
It is our understanding that the president is still interviewing candidates. Frontrunners seem to be Ketanji Brown Jackson, J. Michelle Childs, and Leondra Kruger. Once President Biden makes a decision, the vetting process and FBI background checks will require some time, especially if President Biden’s pick has not previously appeared before the Senate Judiciary Committee for a confirmation hearing. While the president’s search continues, the committee is staffing up for the confirmation process.
We continue to hear that Democrats would like to fill Justice Breyer’s seat on the bench as quickly as Republicans confirmed Justice Amy Coney Barrett. As a reminder, it was just about a month between Justice Barret’s nomination and her confirmation. However, President Donald Trump announced Justice Barrett as his nominee just five days after Justice Ruth Bader Ginsburg’s death, which means that Democrats are already lagging behind. It is also unclear exactly when Sen. Lujan will return to Washington to provide Democrats with a potentially crucial 50th vote on the Senate floor.
The good news, however, might be that all signs seem to point to Democrats uniting behind whoever the nominee may ultimately be. The White House has also initiated outreach to Republicans who are less likely to view this SCOTUS confirmation process as an ideological issue, including Sens. Susan Collins (R-ME), Lisa Murkowski (R-AK), Mitt Romney (R-UT), John Cornyn (R-TX), Rob Portman (R-OH), and Lindsey Graham (R-SC). Vice President Kamala Harris has also played a leading role in soliciting input from female Senators, including Sens. Tina Smith (D-NM), Kirsten Gillibrand (D-NY), Patty Murray (D-WA), Tammy Duckworth (D-IL), Debbie Stabenow (D-MI), Deb Fischer (R-NE), Shelly Moore Capito (R-WV), and Joni Ernst (R-IA).
BBB
For now, BBB continues to be a backburner issue. Given the very public breakdown in negotiations between the White House and Sen. Manchin at the end of the year, we expect ongoing BBB conversations over the next few months to take place quietly and away from the press. We imagine that BBB will be the elephant in the room when Ron Klain, Louisa Terrell, and Cedric Richmond meet with the Senate Democratic caucus today on the president’s agenda.
The latest figures for inflation do not help move BBB forward, especially as Sen. Joe Manchin (D-WV) has made his concerns very well known about the potential impacts of more federal spending on inflation. While President Biden has attempted to message BBB as a solution for inflation, the reality is that the White House and Sen. Manchin now appear to be discussing deficit reduction as part of a BBB package. This could mean that while there may eventually be only a narrow $1 trillion -$1.5 trillion BBB bill, all of the pay-fors that had been on the table when BBB started as a $3.5 trillion package could still hitch a ride on the reconciliation vehicle. While this might help Democrats combat accusations of being fiscally irresponsible heading into the midterms, it will be a balancing act to bring Sen. Manchin on board without losing Sen. Kyrsten Sinema (D-AZ), who is opposed to corporate tax increases, or House Democrats, whose priority programs are likely to be cut.
Again, the reconciliation vehicle for BBB expires on September 30, and our best guess is that it will be months before there is any final resolution.
ECA Reform/Election Subversion
It now seems the bipartisan gang of Senators working on Electoral Count Act (ECA) reform are not making progress as quicky as some would like. While Sen. Manchin has been pressing the group to release a framework, Republicans appear to be slow walking the effort. This is not all that surprising, given that we have seen the GOP attempting to delay progress on pretty much anything on Democrats’ agenda, including nominations, the CR, and even a bipartisan postal bill.
It remains to be seen what the bipartisan group can ultimately accomplish in a 50/50 Senate, especially as Republicans seem to favor a narrower effort focused primarily on the ECA, while Democrats hope the bipartisan group can look more holistically at solutions to address election subversion. Given the dynamics at play, we are hearing the bipartisan group may not be able to produce anything substantive until late spring or early summer.
In the meantime, we anticipate ongoing discussions around elections integrity and security. In case you missed it, this week Sen. Amy Klobuchar (D-MN) led a letter signed by 32 other Senators urging President Biden to include funding for election security grants in his FY23 budget request. More specifically, the letter requests $5 billion to help state and local election officials modernize voting equipment, improve the administration or elections, and strengthen cybersecurity.
Political Tidbits
Rep. Kathleen Rice of New York’s 4th Congressional District is the latest House Democrat to announce her retirement, bringing the total to 30. She is the third Long Island lawmaker to retire, with Reps. Tom Suozzi (D-NY) and Lee Zeldin (R-NY) running for Governor. Rep. Rice’s future plans have not been made clear. As of today, here is the breakdown of retirement announcements:
1 Senate Democrat: 1 full committee chair
5 Senate Republicans 5 full committee ranking members
30 House Democrats: 3 full committee chairs
13 House Republicans: 2 full committee ranking members
Even though it’s still February, retirements have meant the musical chairs of committee leadership have begun. In the House, Members have started to express interest in top committee and subcommittee spots. Rep. Doris Matsui (D-CA) has indicated her intention to succeed House Energy and Commerce Communications and Technology Subcommittee Chairman Mike Doyle (D-PA) upon his retirement. Rep. Kathy Castor (D-FL) is likely to fill the slot that will be vacated by retiring House Energy and Commerce Energy Subcommittee Chairman Bobby Rush (D-IL). She currently chairs the Select Committee on the Climate Crisis, although this is likely to be eliminated if the GOP wins back the House. Reps. Vern Buchanan (R-FL) and Adrian Smith (R-NE) have joined the competition with Reps. Jason Smith (R-MO) for the most senior Republican seat on House Ways and Means, which is currently held by Rep. Kevin Brady (R-TX).
As of Wednesday, 35 states have finished redistricting, the most recent being Minnesota. According to reports on their new maps, the political dynamics will feel familiar. However, Rep. Angie Craig (D-MN) has lost two counties to Rep. Hagedorn (R-MN), which only adds to the intense attention Rep. Craig’s race will get as she seeks a third term.
Due to aggressive map-drawing in New York and court decisions overturning gerrymanders in Ohio and North Carolina, redistricting has created 11 more Democratic-leaning seats (three of which had been Republican-leaning and eight of which were highly competitive seats). Questions remain over Ohio and North Carolina’s maps. In Ohio, Republicans hold a 4-3 majority on the state Supreme Court, though the Republican chief justice is retiring this year. In the North Carolina, Democrats hold a 4-3 majority on the highest court, but two Democratic justices face elections this year. Republicans will continue to target these races, as well as those in Illinois and North Carolina.
Pennsylvania’s map has yet to be finalized. The Supreme Court of Pennsylvania is considering as many as 13 maps and has scheduled a Friday hearing on legal arguments objecting to the lower court judge’s report. Rep. Matt Cartwright (D-PA), who is one of the Democratic Congressional Campaign Committee’s (DCCC) frontline candidates, currently represents an R+3 district that could go up to R+7 or R+8, which could be worrisome for his re-election. Nevertheless, the delay in map finalization could prove to be saving grace. We’ve heard that the longer it takes for the districts to get finalized, the shorter the window for challengers to determine their opportunity to throw their hats in the ring, making it harder to launch a campaign.
Elsewhere in the Keystone State, Rep. Conor Lamb (D-PA), who announced his bid for retiring Sen. Pat Toomey’s (R-PA_ seat in August, is reportedly distancing himself from Sen. Manchin. While Sen. Manchin endorsed Lamb in his 2020 Congressional bid and helped him raise money, Rep. Lamb is looking for a sweet spot focusing on labor and working-class issues as he trails the state’s progressive Lt. Gov. John Fetterman in the polls. The primary is May 17.
Nationally, we’ve seen that Republicans are leading in the generic polls. Democrats have to be concerned that the GOP’s talking points around “‘culture wars” are becoming increasingly potent in public opinion. Recent fundraising reports show the GOP committees in the lead or trailing right behind their Democratic counterparts that typically trounce them in dollars raised. This enthusiasm is further underlined by the running total of 1,220 Republicans who have filed to run.