3.30.2022 Washington Update

Outlook: Presidential approval ratings provide a useful glimpse into the electorate’s often episodic mood about the nation’s chief executive.  With respect to President Biden, Americans seem to have grown more consistent in their views.  And they’re not pretty.

According to our friends at Public Opinion Strategies, over the last several months, “there has been no change in Biden’s job approval”—which is not good for the President or his party.  Biden’s approval has landed at about 40 percent for weeks.  The more things change, the more they stay the same.

There are myriad reasons for this, which we won’t bore you with.  But white-hot inflation—as manifested on every gasoline station placard—is surely one of them.  And when voters are paying through the nose for everything from gasoline to groceries, they’re gonna get mad.  The most recent new NBC News poll gives President Biden a 33 percent approval and 63 percent disapproval rating on his handling of the economy.  Moreover, a whopping 71 percent said the country is on the wrong track.  An even more eye-opening statistic from the NBC News poll showed 7 in 10 Americans expressed low confidence in Biden’s ability to lead, or even deal with, the Russian / Ukraine war.

It’s a cliché but worth saying nonetheless: 7 months is an eternity in politics.  Fortune is fickle, and voters, at times, capricious.  But the steadiness of the numbers over the last few months leaves the inevitable impression of steering a massive ship fast approaching an iceberg: which is to say, Democrats appear to be hard-pressed to avoid losing control of at least one, if not both, chambers in November.

We strain to find any legislative event that could turn this tide, especially if inflation continues to be a problem, which it likely will.  Signing a China competition bill into law?  A revised Build Back Better package?  Not likely, in our view.

On the regulatory front, even if the administration decides, as it has in some cases, to pull back proposals slated for final imposition on businesses, this will amount merely to a stay of execution. And knowing you’re going to die soon doesn’t inspire hope or certainty for the future.

What about peace in Ukraine?  It’s entirely possible that President Biden could experience some benefit from an end to the war, if only because it would enable him to focus more acutely on domestic concerns, which, according to polling, a majority of the public strongly favors.  But an end to the war won’t mean an end to inflation, an economic and political menace bedeviling an administration bereft of solutions to address it.

 

House Republicans: A lot of news came out of the House Republican retreat in Florida last week.  Minority Leader Kevin McCarthy (R-CA) noted that 2022 is “not going to be an election [like] 2010 where we win 60 seats.”  As McCarthy described it, in 2010, “we won 67 seats, but we lost a few. So, we ended up with 63 in 2010. We’re sitting at 213 with the three openings. If we win 18 seats, that’s equal to 1994. If we win 33 seats, that could be the largest in like 90 some years.”  He summed up this way: “I’ll make this one prediction — we’re going to win the majority. And it’s not going to be a five-seat majority.”

We’ve all seen House Speaker Nancy Pelosi (D-CA) and Whip Jim Clyburn (D-SC) wrestle with a narrow majority.  As you might expect, House Republicans not only want to win the House, but they also want maximum headroom to grease their legislative agenda.

Republicans want to prioritize energy independence, parental rights, border security-related legislation, addressing the fentanyl crisis, and legislation that allows the US to better position itself against China.  From a messaging standpoint, “Can you afford it?” will be the new relaying cry for House Republicans as inflation rages upward.  Members feel this is like their “Where are the jobs?” messaging in 2010.

McCarthy’s House Republican task forces have been hearing from members about their priorities; expect the task forces to release some of their proposals in the coming months.  The goal is to have a full legislative agenda starting on day 1, focusing on voters’ concerns rather than divisive internecine spats.

Given the realities of divided government and the prospects that major legislation will be difficult to find common ground on, House Republicans plan on having an aggressive oversight agenda not only looking forward but also on issues that have arisen during the first two years of the Biden Administration given that they had Senate and House Democratic chairs to protect them from public scrutiny.  House Republicans are expected to look at issues such as border security, COVID-19 origins, and issues related to Dr. Fauci, oversight of the Department of Justice and Federal Bureau of Investigations, and Russian interface and Russian influence, with a specific focus on environmental groups.

 

China Competition: We expect the conference committee to reconcile the respective House and Senate versions of legislation addressing competition with China to convene in April.  As we have mentioned before, Senate Republicans remain adamant that the final bill should track as closely to the Senate-passed version, “The United States Innovation and Competition Act,” or USICA.

The House-passed bill has been derided by Republicans as the “Green New Deal masquerading as a China competition bill.”  House Democrats will have to scale back their ambitions, which may be possible, given the strong desire from the White House to nail down a win heading into a difficult summer.  But reining in House Democrats is only one problem: given the number of committees involved in this bill, there is a decent likelihood that finding consensus will be difficult and time-consuming.

 

Budget & Appropriations: The President’s Fiscal Year 2023 budget was released yesterday, and it will formally set off the delayed appropriations debate for the year.  One of the headlines is President Biden’s proposed 20% minimum billionaire tax.  While logistically questionable, it’s a populist message not completely lost on the House Republican conference.  Some Republicans would not mind seeing Democratic billionaires take a hit or two in this political environment.

The House Budget Committee will have its hearing on the President’s budget today and the Senate Budget Committee will hold its hearing on Wednesday.  Senate Appropriations Committee Chairman Patrick Leahy (D-VT) and Ranking Member Richard Shelby (R-AL) have started their negotiations on top-line spending numbers.  Given that negotiations just recently occurred on fiscal year 2022 spending, with the upcoming election, and the fact that both Senators Leahy and Shelby, are retiring there is a strong motivation to get appropriations work done quickly this year as well as make up for the lost time.

Subcommittee programmatic and funding requests from member offices will likely be due throughout May.  Expect to see all the various cabinet members make their annual pilgrimages to the House and Senate Appropriations Committees to make their cases for their funding requests in the coming weeks.

 

Supreme Court: We expect the nomination of Supreme Court nominee Ketanji Brown Jackson to hit the Senate floor next week.  Could the vote be bipartisan?  The only likely Republican defections are Senators Murkowski (AK), Collins (ME), and Romney (UT).

Process-wise, the motion to discharge Ketanji Brown Jackson from the Senate Judiciary Committee will be on April 4 and her nomination will layover that night.  Leader Chuck Schumer (D-NY) will file cloture Tuesday, April 5 and the intervening day will be Wednesday, April 6.  The final cloture vote will be Thursday, April 7.