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03.09.21 Washington Update

Overview—This week, the Senate will confirm Rep. Marcia Fudge (D-OH) to be the 18th Secretary of Housing and Urban Development (HUD).  Along with the expected confirmation of Rep. Debra Haaland (D-NM) to be Secretary of the Interior, Democrats will be left with just 219 votes in the House.  It will be several months until special elections are held to replace each of them. If anything, this points to a widely overlooked fact: though in the minority, House Republicans really do matter.

The Senate sent its version of the Biden COVID bill back to the House, where it surely will pass, but not without griping (both public and private) from some rank-and-file Democrats.  That will signal difficulties ahead, as Congress moves to a months-long, and highly uncertain, process to consider an infrastructure package, the scope and contents of which are highly variable, depending on whom you ask.

President Biden, and many Democrats, define infrastructure expansively, including climate change and other policies, which tend to defy any definitional limits.  Republicans conceive it much more narrowly, confining it mostly to roads, bridges, highways, rail (to some extent), and water projects.  To make matters more complicated, Democrats see infrastructure mostly (yes, there are exceptions) through an urban lens; Republicans through a rural one.  It should be noted that both centrist and swing-voting senators Joe Manchin (D-WV) and Krysten Sinema (D-AZ) represent large rural constituencies and consider those voters when bucking progressives.

Over the weekend, Sen. Joe Manchin suggested the infrastructure price tag could reach $4 trillion, paid for by unspecified tax increases.  Surely, at least in theory, few, if any, Republicans would support such a bill.  But that’s not the interesting part.  More interesting is how Speaker Pelosi (D-CA) could pass such a bill, or something along those lines, in the House with such a razor-thin majority.

This is not a partisan jab, but merely noting what is becoming a perennial predicament, one that faced previous Republican leaders, though with larger margins.  With 219 votes, it’s reasonable to ask about, among other things, House difficulties in passing infrastructure and climate spending under reconciliation; or controversial appropriations bills (e.g., Defense, Labor HHS); or defense authorization; or immigration reform.  What about tax increases?

The answer is: nobody really knows.  What is clear is that Republicans, with just a handful of Democratic moderates, can make or break some major Biden initiatives moving through the Senate and the House.  The vote on Sen. Bernie Sanders (I-VT) amendment to raise the minimum wage proved this point as seven Democratic members and independent Sen. Angus King voted against it, showing it could not even achieve a majority vote threshold.  To prepare for this potential eventuality, House Republicans, specifically ranking members of key committees, are contemplating drafting legislation on various topics.  They are preparing to have bills scored by the Congressional Budget Office (CBO), with cosponsors (both Republican and Democratic), ready for prime time, that is, if needed as part of larger packages or to break legislative stalemates.

So, just as former Speaker Boehner (R-OH) needed House Democrats, Speaker Pelosi may need House Republicans—likely more so, given the realities behind the math.  And while the business community and official Washington speculate endlessly about Delphic statements from Sen. Manchin or parliamentary procedure in the Senate, just as notable is what may, or may not, happen in the House of Representatives in the coming months.  Stay tuned.

 

Senate – With the COVID reconciliation bill completed, Senate Democrats will now turn to their spring agenda items. The priority will be confirming Biden nominations on the Senate executive calendar. This week, the Senate will hold confirmation votes on Rep. Marcia Fudge to be Secretary of Housing and Urban Development, Merrick Garland to be Attorney General, and Michael Regan to be Administrator of the Environmental Protection Agency. Other nominees still awaiting Senate confirmation include:

  • Martin Walsh to be Secretary of Labor;
  • Isabella Guzman to be Administrator of the Small Business Administration;
  • William Burns to be Director of the Central Intelligence Agency;
  • Katherine Tai to be United States Trade Representative;
  • Adewale Adeyemo to be Deputy Secretary of the Treasury;
  • Debra Haaland to be Secretary of the Interior.

Last week, the Senate Finance Committee deadlocked 14 to 14 on Rep. Xavier Becerra’s (D-CA) nomination to be Secretary of Health and Human Services. The tie vote will still allow Senate Majority Leader Chuck Schumer (D-NY) to bring the nomination to the full Senate for a vote, although the path is more complicated. In accordance with the Senate’s power-sharing agreement, the Majority or Minority Leader may–only after consultation with the chairman and ranking member of the committee–make a motion to discharge Becerra’s nomination.  Debate is then limited to 4 hours on the nomination. Following the use or yielding back of time, the Senate would then vote on the motion to discharge and if agreed to, the nomination could then be placed on the executive calendar to be further considered under standard nomination procedures.

Along with clearing nominations, Schumer has directed committee chairs to begin drafting a legislative package dealing with China, which could include the U.S. chipmaking industry’s competitiveness with China. While the legislation will focus on spurring U.S. manufacturing and research and development, other anti-China related provisions could be discussed. Issues such as trade enforcement, sanctions, and limiting China’s access to U.S. capital markets could also be brought up again. If enough Republicans become engaged in the discussions, which is a distinct possibility, a potential agreement could be reached for consideration as soon as April on the Senate floor.

The other major initiative is the surface transportation reauthorization bill. The one-year extension of the Fixing America’s Surface Transportation (FAST) Act expires on September 30.  Senators have been asked to submit their legislative requests to the Senate Environment and Public Works Committee by March 19th. The EPW Committee is hoping to vote on its package by Memorial Day.

While the process is beginning in a bipartisan manner, there are major sources of disagreement around how to pay for the package, tradeoffs between climate change policies and significant permitting reforms, as well how to strike a balance between transportation priorities in rural areas with those in dense urban settings.

 

House – The House votes on the Senate version of the COVID-19 reconciliation bill this week.  Notably, Rep. Alexandria Ocasio-Cortez (D-NY) retweeted comments of Democratic rank-and-file about their disappointment that certain priorities, such as a minimum wage increase, were removed from the bill. The revised COVID package will likely pass the House, but as noted above, the process won’t be easy, and surely won’t augur well for legislative battles ahead, including infrastructure.