Washington's Long, Partisan Summer
Memorial Day is the unofficial beginning of summer. In Washington, D.C. this year, the holiday will kick off a particularly long, ugly, and partisan few months.
The Biden administration and Congress already have passed or are coming up on several self-imposed and actual legislative deadlines that will inflame passions on both sides of the aisle and could have very real implications on the economy.
Let’s take a look.
Washington’s Self-Imposed Deadlines
There are several pieces of legislation that policymakers want to get done on a certain timeline, but there is no actual legislative deadline for them.
For example: a 2015 piece of legislation that reauthorized the trade negotiating objectives, notifications, and consultations known as Trade Promotion Authority, expires after July 1, 2021. These rules make it easier to for Congress to approve free trade deals. Without any new pacts on the horizon, however, Congress is unlikely to be in a big hurry to enact a bill reauthorizing these rules. And to be honest, there’s not a whole lot of attention inside the Beltway on urgently reauthorizing the legislation.
Another, more prominent self-imposed deadline elapsed just yesterday.
President Joe Biden had pledged to sign the George Floyd Justice in Policing Act by the first anniversary of Floyd’s murder. While President Joe Biden and Vice President Kamala Harris hosted the Floyd family at the White House yesterday — the anniversary of the killing — there was no bill on the president’s desk to sign.
Lawmakers are continuing to negotiate, however, and are hopeful this legislation can be passed in a bipartisan manner over the coming months. Sen. Tim Scott (R-S.C.), who is lead negotiator for the Republicans in the Senate, told Reuters, “We have a long way to go still, but it's starting to take form.”
Yet another self-imposed deadline is coming up this weekend.
President Joe Biden has said he wants the two parties to agree on an outline for an infrastructure spending bill by Memorial Day. In the absence of such an agreement, the President – and Democrats on Capitol Hill – has signaled his support for a partisan, Democratic-only package. But more on that in just a minute.
To review, here is where we are on infrastructure: last week, President Biden reduced the size of his proposed infrastructure package from $2.3 trillion to $1.7 trillion. That’s a nearly 26 percent cut. Meanwhile, Senate Republicans have promised to submit a $1 trillion proposal to the White House this week. That figure is $332 billion (58 percent) more than their original $568 billion outline.
So, while there has been some movement from both sides of the aisle, there is still a wide gap to bridge (pun intended). And perhaps more divisive than the spending itself is the question of how to pay for it. Democrats have proposed a suite of corporate tax increases. Republicans are preparing to offer to repurpose unspent pandemic assistance funds instead.
The White House’s Memorial Day deadline probably will not be met, especially since, as The Hill noted earlier this week, the president has not yet been able to attract moderate Republicans to his more ambitious spending threshold. Over the weekend, Sen. Susan Collins (R-Maine), a key swing vote in the upper chamber of Congress, said, “I think negotiations should continue, but it's important to note that there are some fundamental differences here, and at the heart of the negotiations is defining the scope of the bill. What is infrastructure? … We, Republicans, tend to define infrastructure in terms of roads, bridges, seaports and airports, and broadband. The Democratic definition seems to include social programs that have never been considered part of core infrastructure.”
That statement gets at the heart of why these negotiations are so difficult.
The infrastructure fight is about more than a number. It is even about more than the taxes and fees that will need to be raised to pay for the legislation. The debate is about an ideological shift in how the country defines infrastructure.
That struggle likely will take more than a summer season.
Biden administration officials did signal some wiggle room regarding this self-imposed deadline this week. U.S. Transportation Secretary Pete Buttigieg went on CNN Monday and said, “We continue to think there needs to be major progress by Memorial Day … All that is not going to happen by Memorial Day. But we really need to get this done this summer, which is why we continue to want to see, even just in the few days between now and the holiday, some real progress if we’re going to pursue this path.”
By “this path,” Secretary Buttigieg means a bipartisan one. As a reminder, the Senate parliamentarian has ruled the majority in that chamber (Democrats) can use budget reconciliation rules to pass an infrastructure bill. Those rules would mean the party would need just 50 votes to get legislation through the Senate, instead of 60.
We’ll see how this intense debate proceeds over the hot days ahead.
Democrats have set one other self-imposed deadline for this summer: passage of a major election overhaul bill. This legislation also has a tough road ahead. As Politico reported this week, “Democrats are still waiting to see if West Virginia Sen. Joe Manchin will switch course and join the other 49 members of his caucus in supporting it.” Without the ability to use budget reconciliation rules for this package, Democrats will need 60 votes to get it to President Biden’s desk.
As of this writing, every Republican senator opposes it. Why bother then?
As Politico explained, “Progressives have long viewed voting rights as the vehicle for a public fight over the future of the legislative filibuster.”
Could things get any hotter than the debate over the filibuster in the Senate? Oh yes.
Washington’s Must Pass Legislation
In addition to the legislation outlined above, there are several measures that lawmakers must deal with before the end of the fiscal year, or else there are severe consequences.
The first of these is legislation to increase or suspend the debt ceiling.
It seems like two decades ago, rather than two years, but readers might recall that back in the summer of 2019, lawmakers and President Donald Trump negotiated a bill that changed discretionary spending limits and suspended the debt limit until July 31, 2021. Once that suspension lapses, the U.S. secretary of the Treasury can use so-called “extraordinary measures” to meet the United States’ financial obligations. Those measures typically can tide the country over for a few months before the United States would default on its obligations.
According to Wells Fargo, extraordinary measures have been used six times over the last 10 years, and have lasted anywhere from three to eight months.
Does the federal government have that long this year?
The Treasury Department is not sure. In a statement issued the first week of May, Treasury Deputy Assistant Secretary Brian Smith said, “In light of the substantial COVID-related uncertainty about receipts and outlays in the coming month, it is very difficult to predict how long extraordinary measures might last.”
Republicans want to enact a set of spending cuts to go along with a debt ceiling increase. In fact, Senate Minority Whip John Thune has said it “unlikely” that he could produce 10 votes for the debt ceiling without spending cuts. (A debt ceiling increase also will need 60 votes to pass muster in the Senate.)
Democrats have rejected that demand outright.
As Politico reported earlier this month, “[T]he Democratic majority says it has no intention of negotiating with Republicans bent on slashing spending as a condition for avoiding default after the July 31 deadline. Democrats say they won’t haggle with the minority party over the faith and credit of the United States.”
The consequences of the two parties’ inability to come together to address the debt ceiling could have disastrous consequences. As Reuters pessimistically observed recently, “Add extreme partisanship, and it’s harder now than 10 years ago to rule out a standoff that ends in a default. That’s still very unlikely, but simmering tensions about government borrowing won’t go away.”
Of course, the debt ceiling is not the only must-pass bill Congress has on its plate. According to the Committee for a Responsible Federal Budget, other must-deal with matters include:
Federal Unemployment Benefits. Pandemic-related federal unemployment insurance expires on September 6, 2021. While many U.S. states already have cut off this $300 a week benefit, half have not. Congress will need to decide whether to extend the program. According to Politico, this issue is likely to be “divisive … even among Democrats” since moderates and liberals are “at odds over whether to extend the aid as vaccinations increase.” Republicans are unlikely to support extending these benefits.
Highway Spending Reauthorization. The 2015 Fixing America's Surface Transportation Act authorized $280 billion in spending over five years and extended authorization for highway and transit programs through fiscal year 2020. It expires September 30, 2021.
National Flood Insurance Program. The authorization for this program, which helps consumers recover after hurricanes and floods, expires on September 30, 2021.
Temporary Assistance for Needy Families. The authorization for these benefits, sometimes referred to as food stamps, expires on September 30, 2021.
Also expiring at the end of September: COVID-related sick leave provisions. Congress passed legislation in the spring of 2020 that required small employers and governments to offer two weeks of paid sick leave and an additional 10 weeks of paid family and medical leave for employees who are unable to work due to COVID. That program will go away on October 1 unless Congress extends it.
Finally, there is the small matter of funding the federal government. Congress must pass 12 discretionary spending bills – or pass a continuing resolution – or most federal government operations shut down as of October 1. It’s been more than 20 years since Congress passed all 12 bills on time, but this Congress is even further behind its predecessors, setting up a potential fight in September that could end in another government shutdown.
A long, hot, horrible summer indeed.