Legislative Outlook

With 30 legislative days away from the end of fiscal year (FY) 2023 and 74 legislative days away from the end of the calendar year, Congress still has a long to-do list. Following a debt ceiling deal between Democrat and Republican leadership a few weeks ago, this summer will likely be one of the busier periods, as Congress aims to agree on matters ranging from government spending for FY24 to the FY24 National Defense Authorization Act (NDAA).

All the while, the Biden Administration moves forward with rolling out Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) provisions and its regulatory agenda. It’s expected that Republicans in the House will continue their oversight of Biden Administration activities.

Below are some of the crucial pieces of legislation and other items to watch in the year's second half as well as Plurus Strategies’ "Congressional laundry list" of must-pass legislation, expiring provisions, and other measures being worked on during the rest of the legislative session.

The Big Four: Must Pass Legislation Ripe for Action

National Defense Authorization Act (NDAA)

The NDAA, which authorizes programs for the Department of Defense (DOD) for each fiscal year, has been enacted for 63 consecutive years. The House Armed Services Committee (HASC) and the Senate Armed Services Committee (SASC) have recently marked up their bills, with both committees approving overall funding levels that closely match the Biden Administration’s request of $842 billion in discretionary DOD spending: the House version, debated in a public session, matches the $842 billion request from the Administration, while the Senate bill would authorize $844 billion.    

The House version includes significant provisions such as a pay raise for service members, funding for initiatives to counter China militarily and economically, and $300 million to support Ukraine. The markup process involved negotiations on over 800 amendments during a 17-hour session. Notable points of discussion in the HASC debate included the relocation of the US Space Command, a sea-launched cruise missile program (SLCM-N), and proposals related to "culture war" issues and Diversity, Equity, and Inclusion (DEI). The minority achieved some victories, such as an amendment that would restrict the Pentagon from purchasing certain products containing per- and polyfluoroalkyl substances (PFAS). Despite some clashes between Members, only Rep. Ro Khanna (D-CA) voted against advancing the bill to the floor. Although many Republicans have praised the bill, its controversial amendments are likely to face obstacles during floor deliberations. Republicans are also expected to challenge proposals related to cultural issues.

Following a closed session mark up, the Senate Armed Services Committee (SASC) published a summarized version of their bill. SASC Chair Jack Reed (D-RI) highlighted that the legislation addresses a wide range of crucial issues, including strategic competition with China and Russia, disruptive technologies like hypersonics, artificial intelligence (AI), quantum computing, and the modernization of military assets. The proposed bill authorizes increased funding for various programs such as the LGM-35A Sentinel, Hypersonic Targets and Countermeasures, and Fleet Ballistic Missile Strategic Weapon System. It also supports the requested funding for the acquisition of naval vessels, combat aircraft, armored vehicles, weapon systems, and munitions. Additionally, it authorizes $1.9 billion to fully fund the San Antonio-class amphibious transport dock ship LPD-33. Some Republican Senators, with the backing of Minority Leader Mitch McConnell (R-KY), argue that the budget falls short of adequate defense spending, especially considering the growing threats posed by adversaries like Russia, Iran, China, and North Korea.

FY24 Appropriations

The end of the current fiscal year is September 30, giving Congress about three months to agree on a spending deal for FY24. Despite a lengthy debt ceiling negotiation, Democrats and Republicans in the House are not much closer to agreeing upon a comprehensive spending package. Freedom Caucus House Republicans are advocating for spending levels to be reduced to FY22 levels, whereas the Senate is generally aligning with the spending levels established in the debt ceiling deal.

During the full committee markup, the House Appropriations Committee adopted budget cuts for nearly every subcommittee except Defense, Homeland Security, and Military Construction. Markups allocate an additional 3.6% in funding for Defense, 3.4% in funding for Homeland Security, and 1% in funding for Military Construction compared to 2023 enacted levels. Notably, the House mark would significantly cut funding for subcommittees such as Agriculture/FDA, Commerce-Justice-Science, Labor-HHS-Education, State and Foreign Operations, Financial Services, and Transportation-HUD.

In contrast, the Senate Appropriations Committee mark adopted a 15.5% spending cut for the Commerce-Justice-Science Subcommittee and a 39% spending cut for the Financial Services Subcommittee. However, the Senate mark also included budget increases for several subcommittees including Agriculture-FDA (2%), Defense (3.2%), Energy and Water Development (5.1%), and Transportation-HUD (0.9%). It’s worth noting that the chair of the full committee, Patty Murray (D-WA), claims that the allocations in the markups still need to be finalized.

As House and Senate Appropriations Committees markup spending bills, Congress is reminded by the recent debt ceiling agreement that they must pass all 12 bills before the end of the year. Failure to do so will result in an automatic 1% funding cut across the government; House Republicans are marking spending bills significantly below those levels. On the other hand, the Senate is not open to considering the lower chamber’s bills and instead wants to take on a more bipartisan approach to negotiating spending deals. While appropriations are being outlined this summer, finalized funding packages are not expected to be negotiated until the fall. In addition, although appropriations are supposed to be enacted by October 1, recent budget cycles have consistently seen lawmakers extending the deadline through at least one continuing resolution (CR).

Federal Aviation Administration (FAA) Reauthorization

Reauthorizing the FAA is another action item for Congress as its September 30 expiration date approaches. The five-year reauthorization in 2018 had followed a four-year reauthorization in 2014, which was preceded by many short-term reauthorizations.

The House Transportation & Infrastructure Committee leads along with Aviation Subcommittee leads introduced the Securing Growth and Robust Leadership in American Aviation Act in early June. The bill would reauthorize the agency for the next five years and provide new standards for aviation safety. The committee approved the bill in mid-June with a 63-0 vote.

Soon after the House introduced its version, Senate Commerce, Science, and Transportation Committee leads along with its respective Subcommittee introduced the FAA Reauthorization Act of 2023. However, the Senate Commerce, Science, and Transportation Committee has indefinitely delayed the bill's markup after an amendment on pilot training was introduced by Sen. John Thune (R-SD) and Sen. Kyrsten Sinema (I-AZ). The Senate markup will likely occur soon after the July 4 recess.

These bills will not only reauthorize the FAA for the next five years but also include funding for improving and modernizing aviation infrastructure, updated safety standards, additional consumer protections, and other provisions to maximize FAA efficiency.

Farm Bill Reauthorization

The Farm Bill, which authorizes programs ranging from nutrition to farm loans, expires on September 30. There have been delays in drafting the bill in the House and Senate Agriculture Committees: the House Agriculture Committee aims to have a draft by early September while Senate talks have been delayed.

Democrats are advocating for more nutrition funding, specifically Supplemental Nutrition Assistance Program (SNAP) funding, while some on the right are pushing for significant SNAP cuts. Many Republicans from predominantly rural areas advocate for more agriculture funding and farmer protections. House leaders must draft a bill with sufficient agricultural provisions and enough social welfare programs to get Democrats on board.

There is a similar situation in the Senate, as leaders attempt to keep spending for the Farm Bill at the agreed-upon levels in the debt ceiling deal. This means that there will likely need to be cuts in multiple spending areas, especially since the bill is expected to be the most expensive one yet ($1.5 trillion). Congress may pass a short-term extension of the enacted 2018 Farm Bill to give committees more time to negotiate a finalized bill.

Other Expiring Provisions in 2023

Expiring September 30

The Pandemic and All-Hazards Preparedness Act (PAHPA) expires on September 30. Reauthorization is traditionally done on a bipartisan basis every five years. However partisan disagreements, most recently seen in a House Energy and Commerce Health Subcommittee hearing in mid-June, could throw a wrench in its passing.

The main disagreement on PAHPA stems from Democrats wanting to give the FDA more authorities. Democrats are pushing to enable the FDA to better address potential future drug shortages. Republicans are against expanding the FDA’s authorities and funding. House leaders worry that the bill will not pass if FDA authorities are included in the reauthorization. GOP leaders, like House Energy and Commerce Chair Cathy McMorris Rodgers (R-WA), have made clear their intentions to work with Democrats on FDA authorities in legislation separate from PAHPA. Democrats remain hesitant to sign onto the current PAHPA version. Chief negotiators on the legislation, Rep. Anna Eshoo (D-CA) and Rep. Richard Hudson (R-NC), have met to negotiate the bill, but there has been increased tension between the majority and minority on the House Energy and Commerce Committee. While there is still no deal, the bill’s markup is scheduled for July 13.

The National Flood Insurance Program (NFIP) also expires September 30. NFIP, directed by FEMA, provides flood insurance to home and property owners whose insurance most likely does not cover flood damages. As hurricanes and extreme rainfall continue to impact Americans, millions of American households, businesses, and properties experience flood damage. Receiving funding from NFIP helps Americans quickly rebuild after a disaster. Sens. John Kennedy (R-LA), Bob Menendez (D-NJ), and Bill Cassidy (R-LA) introduced the reauthorization in late June; it reauthorizes, reforms, and expands coverage of the program.  Reps. Frank Pallone (D-NJ) and Clay Higgins (R-LA) introduced the House’s version.

The Temporary Assistance for Needy Families (TANF) Program was recently extended through September 30 when Congress passed the Consolidated Appropriations Act of 2023. TANF allocates funding to states for programs to provide cash assistance and other resources to low-income families with children. The recent debt ceiling deal imposes several restrictions on this program. Without any action from Congress, the program will expire at the end of FY23. 

Healthcare Efforts

Several healthcare provisions expire before the end of calendar year 2023: Medicaid Policies & Extenders, Medicare Physician Payments, and Medicare Redesign & Drug Costs. These looming expirations have prompted several healthcare policy discussions this summer, and leadership is looking to an end-of-the-year package to advance select health provisions.

In addition to addressing expiring provisions, committees of jurisdiction have been looking at ways to reduce healthcare costs. Republicans on the House Energy and Commerce Committee have been advancing a number of bills ranging from physician-owned hospitals to Medicare payment systems for outpatient services (“site neutral” policies).

 Both Democrats and Republicans are focusing on the third-party pharmacy benefit managers (PBMs) as a way to generate savings in healthcare. In the Senate, the Judiciary, HELP, Commerce, and Finance Committees are all working on legislation to make PBMs more transparent and generic drugs more affordable–including insulin. Republicans most likely would not want to include insulin in the bill. Still, some Republicans – such as Sens. Susan Collins (R-ME), Kennedy, and Cassidy – have been actively collaborating on legislation.

There is also urgency to make telehealth provisions established during the COVID-19 pandemic permanent. Congress is working on legislation, and these bills would remove in-person exam requirements for telehealth appointments, expand telehealth benefits for employees, and remove requirements for deductibles for consulting done through telehealth.

Other Agenda Items 

Bipartisan Efforts

There are bipartisan efforts to compose comprehensive legislation on Ukraine assistance, AI, China, rail safety, banking, privacy, and more.

There is broad bipartisan agreement regarding the need to increase aid to Ukraine, particularly in light of the recent mutiny involving the Wagner Group in Russia. However, there are internal disagreements within parties, notably on the Republican side. Speaker Kevin McCarthy (R-CA) expressed concerns in June that securing additional funding would face significant obstacles in the GOP-controlled House. Conversely, Senate Republicans led by Minority Leader McConnell have consistently advocated for more funding. Despite a lack of consensus, it is highly likely that additional funding for Ukraine will be announced. This funding could potentially be included in a CR or the NDAA, or it could be pursued separately as an emergency supplemental measure. The ongoing Ukrainian counteroffensive further underscores the urgency of providing additional support. 

While multiple Senate Committees are carving out their own space in AI, Senate Majority Leader Chuck Schumer (D-NY) is pulling together a package, which could include some of his work that fell out of previous legislation like the CHIPS and Science Act. Schumer has proposed a “SAFE Innovation framework” – standing for security, accountability, foundations, and explain – to create federal regulation surrounding AI. Leader Schumer plans to lead bipartisan legislation surrounding AI regulations and standards, boosting AI innovation in the US, and other issues in the AI domain like misinformation, copyright, and liability.

In May, Leader Schumer introduced a broad China initiative, which would decrease the flow of technologies to the Chinese government, undermine China’s Belt and Road Initiative, limit the flow of capital to China, and increase domestic investments to increase US competitiveness with China. Multiple potential bipartisan efforts could be included in the package, such as legislation to ban the social media platform TikTok, undermine China’s global competitiveness, set up a screening process for investments in China, and more.

Another issue that is likely to see bipartisan action from Congress is rail safety. Following the East Palestine derailment earlier this year, along with other rail incidents, multiple concerns have been brought to the attention of Congress. In March, Sens. Sherrod Brown (D-OH) and JD Vance (R-OH) introduced the Railway Safety Act of 2023, which has since been advanced in the Senate Commerce Committee. The bill will most likely move forward to the full Senate after the July recess.

Another priority for Sen. Brown, who is up for re-election next year and who chairs the Senate Banking Committee, is banking reform. The matter has become a bipartisan issue following the catastrophic collapse of the Silicon Valley Bank in March. Although opposed by some, there was support on both sides of the aisle for temporary and permanent deposit insurance expansions. In late June, multiple bank reform bills were introduced by House Democrats to increase oversight of banking institutions. Republicans remain open to working on legislation for banking reform, but are hesitant on increasing the cap on deposit insurance.

Congress is working on legislation for marijuana banking reform. The SAFE Banking Act was introduced in both chambers and would provide certain protections for federally regulated banking institutions that serve state-approved marijuana businesses. The Senate Committee on Banking, Housing, and Urban Affairs held a hearing in early May. The House has yet to hold a hearing.

Privacy is an issue that has increasingly become less bipartisan, but it will likely continue to be a talking point for both sides of the aisle and parts of proposals could make it into to other packages, such as the China Competition bill or the NDAA. Two children’s privacy bills, the Kids Online Safety Act (KOSA) and Children’s Online Privacy Protection Act (COPPA) 2.0, have yet to be scheduled for a mark up by the Senate Commerce Committee. Other children’s privacy proposals, including Kids Protecting the Information of our Vulnerable Adolescent Children and Youth (PRIVACY) Act, Eliminating Abusive and Rampant Neglect of Interactive Technologies (EARN IT) Act, and Strengthening Transparency and Obligation to Protect Children Suffering Abuse and Mistreatment (CSAM) Act remain stagnant. The House is focused on more comprehensive efforts; however, while there was chatter Energy and Commerce Committee Chair McMorris Rodgers would reintroduce her privacy bill, the American Data Privacy Protection Act (ADPPA), it is now looking unlikely.

A major discussion item late last year, bipartisan permitting reform could see some movement. Supporters of it have been calling for the reform of federal agency permitting mechanisms to increase US energy production, accelerate the clean energy transition, reinforce the grid, and build transmission lines. There have been several permitting bills introduced so far, and it is likely that Senate Energy and Natural Resources Committee Chair Joe Manchin (D-WV) will continue leading on permitting reform.

Party-Led Efforts

Both Democrats and Republicans are currently engaged in addressing hot-button issues ahead of the 2024 election. While substantial progress is unlikely, these topics shed light on important matters to the caucuses and their bases.

Democratic priorities this year are tied to immigration, abortion, voting, and consumer protections. Although no comprehensive legislation has yet to be introduced, Democrats have continued their message on immigration reform. The Dobbs ruling and the overturning of Roe v. Wade protections were shown to have been top of mind for many voters in last year’s mid-terms, and Democrats will continue advancing the issue although it will likely see challenges in the Republican-led House. Voting rights enforcement is another agenda item for Democrats, who seek to safeguard voters, particularly in Republican-led states where GOP laws may present obstacles. While no legislation has been proposed to restore the Voting Rights Act of 1965, Democrats remain focused on this issue. Finally, with the recent push around "Bidenomics," Democrats in Congress may be looking to bolster the President's efforts around consumer protections, such as around junk fees.

On the other hand, the GOP is concentrating its efforts on the Congressional Review Act (CRA) and oversight of the Biden Administration. Through the CRA, Congress can nullify recent agency rulings. In both chambers, Republicans aim to use CRAs to address issues like repealing Waters of the United States (WOTUS) and overturning environmental, sustainability, and corporate governance (ESG) rulemakings. In the GOP-majority House, enhanced oversight of the Biden Administration is planned, potentially involving measures such as reducing agency budgets, initiating FBI and DOJ investigations, or even impeaching Cabinet officials.

Congressional Laundry List

Congressional Countdown

  • 24 Legislative Days Until the End of FY23

  • 48 Legislative Days Until the End of 2023

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MUST PASS LEGISLATION (the “Big Four”)

  • FY24 NDAA: Passed HASC and SASC; to be considered in the full House week of July 10.

  • FY24 Appropriations: CR likely; many against omnibus.

  • FAA Reauthorization: Passed House Transportation and Infrastructure Committee in June; Senate markup likely this month.

  • Farm Bill Reauthorization: Short term extension likely to buy more time for reauthorization deal.

SERIOUS CANDIDATES FOR EXTENSIONS

Expires Sept. 30

  • Pandemic and All-Hazards Preparedness Act (PAHPA)

  • National Flood Insurance Program (NFIP)

  • Temporary Assistance for Needy Families (TANF)

  • Medicaid Policies & Extenders

  • Child Care Funds (CARES Act and the American Rescue Plan)

Expires at the end of 2023

  • Medicare Physician Payments

PRIORITIES WITH HIGHER POSSIBILITY OF ACTION

AGENDA ITEMS BEING WORKED, BUT LESS LIKELY ACTION

Party-Led Priorities

Democrats

  • Supreme Court Ethics: Several proposals introduced. Sen. Richard Durbin (D-IL) expected to announce this week when Senate Judiciary will take up legislation.

  • Voting Rights: Expected to mirror updated John R. Lewis Voting Rights Advancement bill that came together last year with involvement of Sen. Joe Manchin (D-WV).

  • Abortion: Several Senate bills were pushed in the wake of the anniversary of Roe v. Wade being overturned, but all failed. Could see renewed efforts as election grows closer.

GOP

  • Congressional Review Act (CRA) Related: For example, rolling back Environmental, Social and Corporate Governance (ESG) rules. House investigative hearings to continue this month.

  • Voting Rights: Updated version of legislation introduced last year. American Confidence in Elections Act to be led by Rep. Bryan Steil (R-WI).

  • Biden Administration Oversight: Could include further DOJ and FBI investigations, potential impeachment of cabinet officials, or targeting agency funding.

Valentina SalinasPlurus Strategies senate, house, congress, republican, democrat, ndaa, appropriations, fy24, expiring provisions, FAA reauthorization, farm bill, National Defense Authorization Act