Congress' Laundry List
With less than 200 days until the midterm election, Congress has a narrow window to advance legislative priorities. Federal holidays and Congressional recesses already take 60 days off the calendar between now and November 8. Once we reach the August recess, the chances of getting policy done essentially shut down, truncating the calendar further. Realistically, we are looking at a total of 32 legislative days remaining in the House and 54 in the Senate.
The city may not be facing a once-in-two-decades cicada infestation, but with conference negotiations underway on the U.S. Innovation and Competition Act (USICA) and America COMPETES Act, and ongoing debate on additional COVID relief, Ukraine aid, and possible reconciliation or climate change packages, all while appropriators begin to lay the groundwork on appropriations for the next fiscal year, Washington is sure to be buzzing. Here is Congress' laundry list and our analysis of which legislative vehicles are most likely to see action in the coming months.
Must-Pass Legislation
Ukraine Supplemental: Last Thursday, President Joe Biden announced the White House would be seeking an additional $33 billion in aid for Ukraine, a significant increase from the previous $13.6 billion Ukraine supplemental enacted in March. This new request will support efforts through September 30 and includes $20.4 billion in military and security assistance, $8.5 million in economic aid to support the Ukrainian government in Kyiv, and $3 billion for humanitarian and food security. The $3.5 billion in drawdown authority for Ukraine in a bipartisan spending package passed by Congress in March has nearly been exhausted, underscoring the need for lawmakers to approve more funding swiftly. Recent polls show that 73 percent of Americans support U.S. efforts to supply Ukraine with weapons, aligning with the apparent appetite in Congress to move another assistance package as quickly as possible. However, many Republicans oppose efforts by Democrats to link this new package with a separate compromise on COVID relief funding, meaning it could hit snags. Several other pro-Ukraine bills have moved under expedited floor procedures in the last few weeks. With the House returning from recess on May 10, the supplemental will likely pass before Memorial Day recess.
Fiscal Year 2023 (FY23) Appropriations: Over the last two weeks, both chambers have hosted cabinet secretaries for hearings on the FY23 budget request released in March. While some believe this is just the start in what could be an extended budget cycle, one very senior Democratic Senate Appropriations Committee staffer who we connected with is fairly confident all 12 spending measures will be enacted this year. The staffer outlined that the goal is to reach an agreement on topline numbers within the next three weeks, which will allow the committees and subcommittees to get to work. With Republicans predicting victory this November, it could benefit the GOP if the last budget passed under Democratic control has a high topline. The House Appropriations Committee plans to hold its FY23 subcommittee markups June 13-22 and full committee markups June 22-30. This means the House could potentially begin considering appropriations measures on the floor as soon as they return from the July 4 recess. The Senate Appropriations Committee would also aim to markup all its bills in June and July, although they will likely come to the floor in an omnibus after the election. This means there will likely be a short-term continuing resolution (CR) into the lame-duck, around the October 1 mark.
U.S. Food and Drug Administration (FDA) User Fee Reauthorization: Congress has been stepping up efforts to reauthorize the FDA user fee programs, which are set to expire at the end of September. During a second hearing in the Senate Health, Education, Labor, and Pensions (HELP) Committee last Tuesday, Ranking Member Richard Burr (R-NC) berated the FDA for not publishing meeting minutes with industry on time and for failing to provide a Medical Device User Fee Amendments (MDUFA V) deal. Back in January, the FDA transmitted its user fee packages for the next iterations of the Prescription Drug User Fee Act (PDUFA VII), Generic Drug User Fee Amendments (GDUFA III), and the Biosimilar User Fee Amendments (BsUFA III) to Congress ahead of a statutory deadline. Jeff Buren, Director of the Center for Devices and Radiological Health, assured the committee he plans to have the final MDUFA V package to Congress this week. Under the MDUFA V deal, the agency would receive $1.78 billion in user fees from 2023 to 2027, which could increase to $1.9 billion if the FDA meets certain performance goals. Ranking Member Burr has indicated he is optimistic about getting user fee agreements signed into law with "a little more accountability," but that he is prepared to block the deals if nothing changes. A vote on the latest user fee agreements bill is expected in the next few weeks.
National Defense Authorization Act (NDAA): For 61 consecutive years, the NDAA has been signed into law. This year should be no different. The Biden Administration came in with expectations of flat or declining defense spending, but world events and inflation produced the topline number of $773 billion for the Pentagon in FY23, including $6.9 billion for the European Deterrence Initiative and NATO, $1.8 billion for the State Department and the U.S. Agency for International Development (USAID), $400 million for the "Countering the People's Republic of China Malign Influence Fund," and $1 billion in assistance to Ukraine across State Department, USAID, and Department of Defense (DoD) accounts. Some other notable increases are in procurement and research, readiness, advanced weapons, and pay raises for service members. The Senate Armed Services Committee (SASC) is set to markup its NDAA the week of June 13. The House Armed Services Committee’s (HASC) full committee markup is scheduled for June 22. HASC subcommittee markups will be held the week of June 6. As seen in FY22 negotiations, Republicans in both chambers call the topline insufficient, and Democrats argue for smaller growth or cuts. Even if both chambers pass their respective NDAAs on the floor by July, the squeezed Congressional calendar makes final passage of the NDAA conference report somewhat unlikely until at least the lame duck, or as was the case a few years ago, potentially as late as January 2.
High-Possibility of Action
USICA/America COMPETES Act: Negotiations on the China competitiveness package, which includes $52 for implementation of the CHIPS Act, are set to begin soon. The critical elements of both bills include funding advanced research in several high-tech areas through the National Science Foundation (NSF), providing subsidies to semiconductor manufacturers to restart domestic production of chips, and funding Department of Energy (DOE) research labs. Although the Senate bill passed with bipartisan support in 2021, the House passed its version in February with mostly Democratic votes after merging several other bills. In early April, Congressional leadership announced over 100 conferees tasked with resolving differences between the two bills. Stark contrasts remain between the two, most notably in trade, climate change, supply chain, research funding, and foreign relations with China. With the House on recess this week, the Senate will vote on a series of non-binding motions to instruct their conferees on provisions. The final product will likely look much closer to the Senate bill than the House version. There had been optimism that a compromise bill would find its way to the president's desk before the Memorial Day recess. However, that ambition seems to be fading. We heard from a few House Members last week who think the bill will get done, but one vulnerable House Democrat expressed fear that final passage may not happen until right around the early August primaries. Another staffer speculated the conference report could even be slipping to the lame duck.
Water Resources Development Act (WRDA): Last Friday, the Senate Environment and Public Works (EPW) Committee released a bipartisan water resources bill with roughly $24.6 billion for 21 Army Corps of Engineers flood and hurricane protection, harbor dredging, and other projects. This legislation builds on investments in the Infrastructure Investment and Jobs Act (IIJA), with the largest individual project allocation in the proposed bill totaling $19.2 billion for a coastal Texas restoration plan. Another large allotment is $1.5 billion for hurricane and flood protection in the Florida Keys. A critical change is funding shares for lock and dam projects, which would permanently increase the general fund's share to 75percent and trim the trust fund's share to 25 percent. The size of the 2022 WRDA bill could grow if Lt. Gen. Scott Spellmon, the Army's Chief of Engineers and Corps Commanding General, recommends additional projects in the coming months. Still, it should be noted that, as in past years, project authorizations in WRDA are subject to annual appropriations. The Senate EPW Committee will hold a markup on Wednesday. The House Transportation and Infrastructure Committee has yet to introduce its version. Lawmakers aim to have WRDA passed this year, which would continue the practice in recent years of passing the package on a biennial schedule.
COVID Relief: President Biden's priority of securing additional funding for COVID relief is not passing Congress in a hurry due to unrelated disputes about immigration. One option sought by Democrats is to link the COVID bill to Ukraine aid, which could grease the wheels for passing both. The Biden Administration and Democratic Senators would prefer to advance them together. However, Senate Republicans have expressed significant opposition. Offsets remain a sticking point, as has global vaccination funding, which Republicans oppose. Without at least 10 GOP votes, it cannot pass the chamber. The second option is to pass the Ukraine aid and COVID relief separately. Numerous Republicans prefer this approach, but Democrats fear it would leave COVID relief stranded without a clear path as federal funding for vaccines, booster shots, and therapeutics dries up.
Pandemic Preparedness: With National Institute of Allergy and Infectious Diseases (NIAID) and Chief Medical Advisor to the President Dr. Anthony Fauci controversially noting that the U.S. is "out of the full-blown explosive pandemic" phase last week, the Senate HELP Committee’s pandemic preparedness working group has been looking beyond COVID to the next pandemic. In March, the committee voted 20-2 to favorably report the PREVENT Pandemics Act. The legislation would modernize several aspects of public health, including data collection, strengthening the domestic supply chain, and providing more accountability for the U.S. Centers for Disease Control and Prevention (CDC). It also includes language to establish the Advanced Research Project Authority for Health (ARPA-H). This bill missed getting attached to the FY22 omnibus, but there is strong bipartisan support for it, and there is an intention to pass it before the end of the year, especially as a legacy for HELP leadership as Chairwoman Patty Murray (D-WA) looks to become the top Democrat on the Appropriations Committee and Ranking Member Burr retires. The House has proposed other significant biomedical innovation and pandemic preparedness bills, including CURES 2.0 and the ARPA-H Act. CURES 2.0 also has the potential to be a legacy piece, with lead Republican sponsor Rep. Fred Upton (R-MI) retiring this year, and it could be attached to this effort or the mental health or COVID packages. House Energy and Commerce Health Subcommittee Chairwoman Anna Eshoo (D-CA) expressed in the recent Department of Health and Human Services (HHS) budget hearing that she continues to disagree with Sec. Xavier Becerra over whether to place ARPA-H within the National Institutes of Health (NIH) or as its own separate entity.
Behavioral Health: There are a few “must pass” provisions related to mental health and substance abuse policy where action is likely this year. The Senate HELP and House Energy and Commerce Committees are working to reauthorize 32 related programs at the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA), which are set to expire at the end of September. The idea of expanding mental health services is gaining traction. The proposed FY23 budget includes new mandatory investments totaling $51.7 billion over ten years to improve behavioral health. Meanwhile, relevant committees in both chambers continue to ramp up mental health efforts. The Senate HELP Committee held a hearing focused on how the federal government can better support efforts to address mental health and substance use disorders. Committee members are working on a bipartisan basis, with HELP Chair Murray and Finance Chair Ron Wyden (D-OR) saying they expect a draft package to be introduced in early summer. The Senate Finance Committee recently held a third hearing on mental health, focusing on the lack of parity of treatment and insurance coverage for mental health issues versus physical health care.
Possible, But Less-Likely Candidates for Movement
Build Back Better (BBB), Reconciliation Bill, and Bipartisan Energy Bill: The days of a $6 trillion BBB package are long gone, and many believe that a reconciliation bill with clean energy tax credits along with deficit reduction is what Sen. Joe Manchin (D-WV) has in mind. The situation in Ukraine is viewed by many as a ripe opportunity to work on energy, although Republicans see that as “drill, baby, drill” and Democrats view it as “Green New Deal.” In recent days, discussions have developed around a bipartisan energy bill. It is our understanding that this grew out of a visit by Sen. Manchin to Alaska. This deal would address energy from the supply side.
BBB: “Build Back Better” was a trendy phrase in 2021, with waves of headlines publicizing the $3 trillion proposal that was designed to transform the U.S. social safety net. However, momentum has stalled this year due to intraparty disagreement over its size. Senate Appropriations Transportation, Housing, and Urban Development Subcommittee Chair Brian Schatz (D-HI) has said there could be a pathway for a budget resolution, but it would be severely reduced and contain minimal, if any, social spending. If a pared-down version does pass, its name will not resemble BBB in the hopes that Democrats can distance themselves from the failed negotiations in time for fall campaigns.
Reconciliation Bill: Obtaining the support of moderate holdouts Sens. Manchin and Kyrsten Sinema (D-AZ) remains the key challenge in passing a reconciliation package. Sen. Manchin recently met with Senate Majority Leader Chuck Schumer (D-NY) to discuss a new package, which would reform the tax code, potentially including new clean energy tax credits, and assist in reducing the national deficit. He has indicated he would like to raise the top capital gains rate from 23.8 percent to 28 percent, close the carried interest loophole, and increase the corporate tax rate from 21 percent to 25 percent. However, he has already begun to feel the heat from corporate America on the latter. Additionally, he would like no social spending to be considered, including that of paid-family leave and childcare. Easing childcare costs remains a high priority for the president, a stance that could prevent an agreement with Sen. Manchin. Congress also faces a hard end date to get this bill across the finish line, as reconciliation authority runs out on September 30.
Bipartisan Energy Bill: Sen. Manchin, along with Sen. Lisa Murkowski (R-AK), has expressed willingness to negotiate a clean energy package. The bill would further investment in clean energy and aim to reduce American dependence on foreign energy. Sen. Manchin also has a clear interest in reforming the federal oil and gas leasing process. Other areas of focus could include domestic pipeline aid and efforts to bolster the production of liquefied natural gas (LNG). Through a working group of Senate Democrats and Republicans, this latest energy package would attempt to replicate the bipartisan dynamic that resulted in the bipartisan infrastructure law.
Lots of Talk, But Less Likely Action
Immigration: Ongoing clashes over immigration policy likely means there is little to no, or, as Sen. Bob Menendez (D-NJ) put it, "zero," chance that Congress makes any move on comprehensive immigration reform this year. Immigration has recently been in the spotlight following the Biden Administration’s decision to end Title 42 immigration restrictions, a Trump-era policy that cited the pandemic to expel nearly 1.8 million migrants at the southern border, including asylum seekers. While progressives have applauded the move, it has been met with intense criticism by moderate Democrats and Republicans. Late last week, a bipartisan group of Senators convened to discuss a possible immigration package, but no one has indicated specifics, given how early the talks are. However, it is hard to see any agreement coming together before the midterms, as immigration policy and the surge in migrants at the border have emerged as winning issues for Republicans. Meanwhile, some House Democrats have shifted strategy to attempt smaller-scale reform measures, but it is unlikely they will be successful. If some bipartisan immigration bills can move in piecemeal, these might include measures to provide unused visas to healthcare workers and reforms for immigrant farmworkers.
Privacy: As individual states enact privacy laws, federal policymakers suggest that privacy remains a priority for this year. The “four corners” on the Senate Commerce, Science and Transportation and House Energy and Commerce Committees (Sens. Maria Cantwell (D-WA) and Roger Wicker (R-MS) and Reps. Frank Pallone (D-NJ) and Cathy McMorris Rodgers (R-WA)) are continuing talks on bipartisan privacy legislation. Committee staff are looking at various draft bills, but there is no clear timeline for reaching a final product. Despite reports that progress is being made, preemption and private right of action remain potential stumbling blocks to getting a privacy bill across the finish line. Separate from the privacy activity in the committees of jurisdiction, Sens. Richard Blumenthal (D-CT) and Marsha Blackburn (R-TN) have continued to work on their own privacy proposal and appear eager to introduce a bill. If efforts aimed at advancing comprehensive privacy legislation fail, it is possible that legislation targeting children’s privacy, such as Sen. Ed Markey’s (D-MA) Children and Teens Online Privacy Protection Act, or kids’ safety online, such as Sens. Blumenthal and Blackburn’s Kids Online Safety Act, could move on some larger vehicle.
Antitrust: Both the House and Senate Judiciary Committees have advanced bipartisan antitrust legislation targeting big tech platforms. For example, the American Innovation and Choice Online Act seeks to promote competition by prohibiting dominant digital platforms from unfairly preferencing their own products and services, and the Open App Markets Act aims to bolster competition and strengthen consumer protections within the app market. Although both bills were reported out of committee on a bipartisan basis, Leader Schumer has indicated that no legislation will come to the floor until Competition Policy, Antitrust, and Consumer Rights Subcommittee Chairwoman Amy Klobuchar (D-MN) can prove there are the 60 votes needed to advance the bills in the Senate. Assuming it will be difficult to secure the votes needed for passage of major bills, minor antitrust bills, such as the Merger Filing Fee Modernization Act, could hitch a ride on other vehicles, such as the USICA/America COMPETES Act conference report.