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  • Allon Advocacy

Sprinting into August

The White House and Congressional Democrats have an ambitious summer agenda. Will they be able to get everything across the finish line?

Senate Majority Leader Chuck Schumer (D-N.Y.) tested positive for COVID-19 over the weekend. While his staff said the senator is doing well and is working remotely from Brooklyn, his absence is another reminder that Democrats are only one vote away from not having a majority in the upper chamber of Congress.

With just 18 months under her belt, Vice President Kamala Harris has cast 23 tie-breaking votes in the Senate. That is just six fewer tie-breaking votes than the nation’s first vice president, John Adams, cast in his eight years in that office and it is only eight votes shy of the record 31 tie-breaking votes cast by Vice President John Calhoun who served as vice president from 1825 to 1832.

If even one Democrat is physically absent from the Senate, Democrats lose the majority that Vice President Harris affords them because, unlike the House of Representatives, where leaders have allowed proxy voting since the beginning of the pandemic, senators still must be physically present on the Senate floor to cast their votes.

Democrats will need their majority over the next three weeks because Majority Leader Schumer has a robust to-do list to complete before Congress’ August recess. As Politico noted this week, “August in an election year unofficially marks when appetite for compromise or major legislative action usually runs dry as focus turns in earnest to the midterm election races. And Democrats want to bring home wins to sell on the campaign trail.”

Will the Build Back Better Act Finally Get Passed?

When it comes to the “will they or won’t they” Build Back Better bill, Democrats are not only running up against the August recess deadline. As a reminder, to pass the legislation with a simple majority, Senate Majority Leader Schumer must rely on budget reconciliation rules to allow him to get this bill approved amidst unanimous GOP opposition. He currently has the right to use those rules through the current fiscal year, but that ability expires on September 30, 2022 at midnight, when the federal government begins fiscal year 2023.

Majority Leader Schumer has been working feverishly with moderate Sen. Joe Manchin (D-W.Va.) over the last several months to reduce the size and scope of the legislation. Sen. Manchin, as a reminder, blocked passage of Build Back Better Act 1.0 late last year over his concerns that high levels of government spending will only exacerbate already-historic levels of inflation. He wants a less expensive – and a less expansive – piece of legislation.

While neither Majority Leader Schumer or Sen. Manchin have revealed the entire scope of where they have made compromises, there reportedly is general agreement between them and the White House on a piece of legislation that could be voted on before the Senate leaves for recess on August 8. Indeed, last week Senate Democrats released the drug pricing portion of a new bill and submitted it to the Senate parliamentarian to ensure it complies with reconciliation instructions.

Senate Democratic aides expect additional legislative language on other pieces of the bill to be released soon, possibly even this week. These elements will include a minimum corporate tax rate of 15 percent, an increase in the tax rate for pass-through income for high-earning small business owners, deficit reduction, and climate and energy provisions. That language also will have to be reviewed by the parliamentarian to make sure it does not violate budget reconciliation rules.

While this momentum indicates increasing confidence on the part of the White House and Senate leadership that a new iteration of Build Back Better may actually finally pass the Senate, hurdles remain.

First, while a reconciliation bill is not subject to a filibuster, it is subject to a “vote-a-rama” in the Senate: an open amendment process during which an unlimited number of amendments on almost anything in the budget is germane. If Majority Leader Schumer does bring a bill to the floor this month, Republicans, looking to score points ahead of the midterms, will seek to force Democrats to take difficult political votes across a spectrum of hot-button issues.

Second, it remains unclear whether all 50 Democrats are united in their support for the framework agreed upon by Sens. Manchin and Schumer, particularly Sen. Kyrsten Sinema (D-Ariz.), who has previously voiced her opposition to any tax increases.

Third, and finally, we have yet to hear any definite reaction from House Democrats to the contours of the Schumer-Manchin talks. Some have been critical of their Senate colleagues for not trying to do more while the party holds the majority. Progressive Democrats in particular could raise objections to a bill they view as too narrow. With only a small margin of error to work with in the House, the Democrats can’t afford to lose more than a handful of their members in that chamber to be successful in passing a bill there.

The Build Back Better Act is not the only piece of legislation on Congress’ to-do list, of course. Another major initiative that lawmakers hope to address before the recess — and one that is supposed to be bipartisan — is legislation to meet the challenge of growing competitive threats from China.

All That and a Bag of CHIPS

In June 2021, the U.S. Senate approved S. 1260, the U.S. Innovation and Competition Act (USICA) – the so-called CHIPS bill – which contains provisions to invest $52 billion in domestic semiconductor research, design, and manufacturing. In February 2022, the House approved the America COMPETES Act, which also includes $52 billion in CHIPS Act investments. A conference committee has been working to reach a negotiated agreement between the two chambers on the legislation. That negotiated bill would need to be approved by both the House and Senate. And in the Senate, it would need the support of 60 senators. No tie-breaking votes for this one.

The House and Senate talks seemed to be going well last week … until Senate Minority Leader Mitch McConnell (R-Ky.) sent a tweet promising that no Senate Republicans would support final passage of the legislation if Democrats moved forward with the partisan Build Back Better Act.

While Republicans support the semiconductor legislation, according to Politico, they are on board with Sen. McConnell’s plan to stall it unless Build Back Better is put on the shelf. On Twitter, Sen. Todd Young (R-Ind.) said, “We have a national security imperative to get USICA done. I’m disappointed that it is getting sidetracked once again by Democrats’ reckless partisanship, which will only worsen the economic hardships Hoosiers are already facing.”

Sen. John Cornyn (R-Texas) told Politico, “USICA is a national security imperative, … I interpreted that as Sen. McConnell’s firm indication that he wants us to deal with that and not a partisan reconciliation bill.” Indeed, on Monday Minority Leader McConnell said the Build Back Better Act would “crowd out” would “paralyze” the chamber, keeping it from passing legislation related to the country’s competition with China.

Other Issues with which Congress Must Contend

Federal lawmakers are also working furiously on the fiscal year 2023 spending bills. While it is virtually impossible for appropriators to finish work on these pieces of legislation before the end of the fiscal year, much less in the next three weeks, the fact that this work will remain undone means lawmakers will need to start crafting a continuing resolution Congress can pass before September 30, 2022 to keep the federal government operating.

In the nearer term, this week the House is working on a bill that would create public alerts in active shooter situations and the annual National Defense Authorization Act (NDAA). Lawmakers have filed more than 1,200 amendments on the NDAA alone. The House also will work on legislation that will respond to the U.S. Supreme Court’s decision last month to overturn Roe v. Wade.

In the Senate this week, Michael Barr was confirmed as the Federal Reserve’s vice chair of supervision. Barr, who was a senior Treasury official during the Obama administration, is expected to position the Fed as a much more engaged player in the regulatory space, with a particular focus on bank partnerships with technology providers, data privacy, and financial institution capital and liquidity requirements.

Finally, while it is unlikely the Senate will vote on a data privacy bill before the August recess — and may not even before the end of the 117th Congress — lawmakers will continue to try to move forward on this issue amidst bipartisan breakthroughs on some of the thorniest policy issues that have hamstrung Congress on this score for the last several years.

Majority Leader Schumer will need every Democrat to be around for these events. If even one contracts COVID, it could derail the schedule entirely.

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