CGCN WASHINGTON UPDATES
Next COVID-19 Package
The House and Senate will return to session next week with the expectation that discussions will begin in earnest on the next COVID-19 response legislation. We expect that Senate Majority Leader Mitch McConnell (R-KY) will share the outline of his legislative proposal with the Senate Republican conference next week, with the goal of trying to secure support from his colleagues. Leader McConnell’s objective is a package tailored to COVID-19 related issues, with a specific focus on providing federal resources for children, employment growth, small business assistance, health care resources, and liability protections.
House Minority Leader Kevin McCarthy (R-CA) has spoken multiple times over the last couple of days to Leader McConnell, ensuring that House Republicans are in sync with the Senate’s efforts. Leaders McConnell and McCarthy also have had direct contact with the administration, as well as with Senate chairmen and House ranking members. It is expected that White House Chief of Staff, Mark Meadows, will play a major role in future negations as well as Treasury Secretary Steven Mnuchin.
We anticipate that, unlike previous COVID bills that received unanimous votes, the final vote on this package may lose support from some more hard-lined members—on both sides of the aisle. Members who are likely to support an overall package are more likely to have their priorities considered during negotiations.
Here are just a few of the issues that may be discussed in the coming weeks.
- Liability Protections – Leader McConnell and Sen. John Cornyn (R-TX) continue to keep a close hold on their proposed language. There is an expectation that the initial proposal may have liability protections for several years for businesses, schools, and non-profits that attempt to comply with COVID-19 related health guidance.
- Individual Stimulus Payments – Several Republicans and Democrats have expressed support for additional payments to individuals. There may be an effort to limit future payments to a lower income threshold than was in the original CARES Act.
- State and Local Funding – State and local leaders have called for between $500 billion and $1 trillion in new federal assistance.
- Health Care Funding – The focus could be on expanding the use of telehealth and additional funding for testing and health providers.
- School Aid – Federal funding may be provided for schools that reopen and adhere to the Centers for Disease Control and Prevention (CDC) guidelines.
- Small Business Assistance – In addition to including more resources for the Paycheck Protection Program (PPP), there may be efforts to repurpose existing PPP funds with the goal of helping more underserved communities. There will also likely be debate about potentially increasing loan forgiveness for previous PPP borrowers.
- Tax Incentives – Employee Retention Tax Credit (ERTC) modifications, business deduction of personal protection equipment, capital gains holiday, and accelerated tax breaks are priorities for some members and the administration.
- Unemployment Benefits / Return to Work Bonus / Rehiring Tax Credit / Hazard Pay
- Direct Assistance for Certain Hardest-Hit Industries
- Additional Food Security Assistance
The House is expected to spend the first half of next week on the National Defense Authorization Act (NDAA). Following consideration of the NDAA, the House is then expected to consider the Great American Outdoors Act, which has cleared the Senate. At the end of the week, the House will vote on the first of two appropriations packages. The first minibus package will consist of Agriculture, Interior-Environment, Military Construction-Veterans Affairs, and State-Foreign Operations funding bills.
The following week, the House is also expected to process a second minibus appropriations package, in addition to considering H.R. 7575, the Water Resources Development Act. Finally, the House is expected to stay in session in order to pass any final negotiated economic recovery package, assuming progress in negotiations.
Senate Filibuster Rule
As we mentioned in our previous memo, momentum is growing among the Democrats to change the Senate’s legislative filibuster rule. This week, former Vice President Joe Biden signaled his potential endorsement of changing the current 60-vote threshold by stating, “It’s going to depend on how obstreperous they [Republicans] become.”
Senate Democratic Whip Dick Durbin (D-IL) has secured Biden’s and Senate Majority Leader Schumer’s (D-NY) pledge to put immigration reform first in the cue if Democrats take control of the Senate and White House. This may be the first test-case for those favoring the elimination of the filibuster.
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When the Senate returns from a two-week break in mid-July, the remaining weeks before the August recess will be very busy. The Senate will remain focused on nominations and commence negotiations on the next COVID-19 aid package. As to the latter, the list of issues in the mix includes unemployment and “re-hiring” benefits, state and local funding, additional individual stimulus payments, small business assistance, and liability protections. Senate Majority Leader Mitch McConnell (R-KY), along with many of the GOP rank-and-file, wants to keep the price tag as low as possible. McConnell has repeatedly said that a new COVID bill should focus on “kids, jobs and health care.” Last night, the Senate unanimously extended the PPP application period, a move that could very well help him constrain the size of the next bill. Many Senate Republicans are concerned about another package ballooning in size, cost, and scope.
Other issues on the table: tax policies, China-related measures, education, and child care. The Trump Administration is monitoring the results of past relief efforts. In this vein, it might advocate for additional, though targeted, relief for certain industries that have been especially hard-hit by the pandemic. The White House wants the effort focused on putting people back to work.
House appropriators will be busy this month. Subcommittee markups of State and Foreign Operations, Agriculture, and Military Construction and Veterans Affairs will begin on July 6. On July 7, Homeland Security, Interior and Environment, Legislative Branch, Energy and Water, and Labor, Health and Human Services, and Education will be considered; and on July 8, Commerce, Justice, Science, Transportation and Housing and Urban Affairs, Financial Services and General Government, and Defense. Once disposed of by the full committee, we anticipate several bills being combined into discrete minibuses for more efficient debate on the House floor.
Yesterday, the House Armed Services Committee began its markup of its NDAA. We expect the full House to take up NDAA in the coming weeks.
Looking ahead to next Congress, we expect a significant debate on changing the Senate’s 60-vote filibuster threshold on legislation if the Democrats take the chamber in November. If there’s any doubt about where the Democrats will end up, consider this from Sen. Chris Coons (D-DE), who last week emphatically stated, “I will not stand idly by for four years and watch the Biden administration’s initiatives blocked at every turn. I am gonna try really hard to find a path forward that doesn’t require removing what’s left of the structural guardrails, but if there’s a Biden administration, it will be inheriting a mess, at home and abroad. It requires urgent and effective action.” This is significant because Sen. Coons had previously been a defender of current filibuster rules and this demonstrates the political pressures to make changes. Sen. Joe Manchin (D-WV) publicly stated that he would oppose any efforts to change filibuster rules. Leader McConnell has warned Democrats about the boomerang effect of scrapping the filibuster. “Any time you start fiddling around with the rules of the Senate,” he said this week, “I think you always need to put yourself in the other fellow’s shoes and just imagine what might happen when the winds shift.”
The House Republican China Task Force has been very active this week. Republican members spent a significant amount of time at the White House Monday, with Administration officials discussing potential actions to take against China. Members also meet with Secretary of State Mike Pompeo this morning. Taskforce members are expected to introduce and push for consideration of standalone China legislation this summer and fall, with the expectation of a final report being released before October.
Sen. Tim Scott’s (R-SC) “JUSTICE Act” failed to receive the necessary 60 votes needed for cloture on the motion to proceed to the bill. The question for many is what happens next. Senate Majority Leader Mitch McConnell (R-KY) changed his vote and moved to reconsider the bill so that the legislation could be brought up again without the mandatory two-days wait. Sen. Scott stated bluntly before the vote, “if they (Senate Democrats) won’t even start it, that tells me that this is already over.” Senate Democratic members insist on negotiating legislation before it reaches the floor. Some policing reform issues could arise during consideration of the National Defense Authorization Act (NDAA), which the Senate will move to debate next week, or on appropriations legislation.
The House will pass the “Justice in Policing Act” today. Qualified immunity continues to be a major issue for both parties. House Republican Leader Kevin McCarthy (R-CA) and the Republican conference believe that without qualified immunity, good officers could face a barrage of unwarranted lawsuits that will undermine safety.
The Senate will now turn to the NDAA. Text of the bill was released Tuesday night. Leader McConnell has filed cloture on the motion to proceed. Amendments are being sent to the Senate Armed Services Committee for review and discussions on a potential manager’s package are already underway.
We expect various attempts to attach extraneous issues, given that the NDAA is one of only a handful of bills every year to become law. One such is more stringent regulation of perfluoroalkyl and polyfluoroalkyl substances, or PFAS, which has become a flashpoint in the NDAA debate. Senate Minority Leader Chuck Schumer (D-NY) is eyeing PFAS as part of the manager’s package, and Sen. Jeanne Shaheen (D-NH), and possibly others, could seek PFAS amendments on the floor. Senate Armed Services Committee Chairman Jim Inhofe (R-OK) is working hand-in-glove with Senate Environment and Public Works Committee Chairman John Barrasso (R-WY) to flag, and oppose, PFAS and other similar environmental amendments.
The House Armed Service Committee has released baseline text of their version of NDAA and plans on having their full committee markup on July 1. Given the difficulty of voting on amendments on the House floor during the COVID-19 outbreak, expect more effort to address member priorities either through the committee process or larger en bloc amendments on the floor.
It’s becoming more likely that major spending fights will befall Congress this fall. Appropriations work has already been significantly impacted by COVID-19 response efforts and now Senate appropriators are locked in a partisan debate over additional COVID-19 aid and social justice and policing reforms. Senate Republicans want to keep the so-called ‘Shelby-Leahy agreement’ from last year, which aimed to prevent authorization language on appropriations bills at the committee level or “poison pill” provisions that could complicate floor consideration. Senate Democratic members now want to remove those constraints, seeking to broaden the scope of legitimate federal spending issues. Nonetheless, Democrats say Senate Republicans have the majority in committee and thus they can easily block amendments they deem contrary to last year’s agreement.
House Democratic members will soon begin an aggressive appropriations markup schedule, moving legislation that will undoubtedly draw veto threats from President Trump. Coupled with problems in the Senate, this could lead to a major spending showdown at the end of the year. This increasingly tenuous situation could induce rumblings of a continuing resolution (CR), lasting until November or December. Depending on the election outcome, we could then see a CR possibly extending well into next year. Note that even the debate over a short-term CR could lead to stalemate and mutual recriminations of blame over an impending government shutdown. In any case, this debate is starting to simmer, so stay tuned.
Senator Tim Scott (R-SC), with Senate Republican leadership, released the “JUSTICE Act” to address policing reform. Among other provisions, the bill incentivizes local police departments to ban the practice of chokehold, promote diverse police recruitment, increase greater use of body cameras, improves disclosure of police employment records, and makes lynching a federal crime. It would also reauthorize the Byrne/JAG and COPS programs for 5 years and develop best practices for policing tactics.
Republicans in the Senate and the House are expected to enthusiastically endorse Sen. Scott’s proposal. Senate Majority Leader Mitch McConnell (R-KY) announced that the Senate will consider the bill next week. Now that the Senate Republican bill has been released, we will see if bipartisan discussions can commence. Of note, 60 votes will be needed to begin consideration of the legislation. We expect Senate Democrats to vote to get on the legislation, but that does not mean the legislation will pass. We expect a robust debate and a fight over amendments. In response to the Senate Republican bill, House Speaker Nancy Pelosi (D-CA) said, “We don’t need a window-dressing, toothless bill.” As of right now, the politics on this issue remain very partisan.
Following today’s markup of the “Justice in Policing Act” in the House Judiciary Committee, House Democratic leadership still plans to bring back members for a vote on the bill next week. Rep. Pete Stauber (R-MN), a former police officer, who has coordinated and consulted regularly with Sen. Scott, is taking a leading position on policing reform for House Republicans.
COVID Package & Liability Protection
Senate Republicans continue to be in no rush to begin negotiations on the next COVID-relief package. With the economy on the upswing and a busy Senate schedule (policing reform, NDAA, nominations) over the next several weeks, we expect bipartisan discussions to begin in earnest after the July 4th recess. Of note, funds for the Paycheck Protection Program will remain available for the foreseeable future and the Federal Reserve’s Main Street Lending Program just started this week.
Leader McConnell and Sen. John Cornyn (R-TX) continue working with fellow Senate Republicans on any outstanding concerns. They are keeping close-hold on the draft bill, owing to sensitivity against overshadowing work on police reforms and the National Defense Authorization Act (NDAA).
At this stage, we believe discussions could center on a compromise between the GOP priority of liability protection (which, notably, is something colleges and universities want) and funding for state and local governments, a top concern of Democrats. As to the substance of the broader COVID-bill, it’s anyone’s guess, as members of all stripes are floating clean-energy grants, employment bonuses, and a payroll tax cut. Generally speaking, in the face of a V-shaped economic recovery, Republicans want to keep the next bill’s focus tight and its price-tag low.
NDAA and Appropriations
Text of the Senate NDAA is expected to be released soon and, as noted earlier, timing on floor consideration is still in flux due to policing reform legislation jumping it in the cue. Amendment drafts are already being sent to the Senate Armed Services Committee for consideration. Non-germane amendments will be sent to the committees of jurisdiction for vetting. Members will be trying to get their priorities in an amendment package—and we’re hearing there might be more than one.
Senate Appropriations Committee is still trying to begin markups of Fiscal Year 2021 funding bills. Several appropriations subcommittee chairmen and ranking members are expected to agree to bypass subcommittee considerations and move to full committee markups. It is unlikely all subcommittee bills will be marked up in the committee before the next recess starts.
In the wake of the killing of George Floyd, both the House and Senate are working on policing reform proposals. It is too early to say whether both chambers and the White House can agree on legislation, but work is proceeding in earnest.
Democrats earlier this week introduced the “Justice in Policing Act.” The legislation takes steps to end racial profiling, ban chokeholds and no-knock warrants, limit the use of military equipment by local law enforcement, and require that body cameras be worn by police. It would also make it easier to prosecute offending officers by amending the federal criminal statute to prosecute police misconduct and would reform qualified immunity for law enforcement. It also promotes new investigations in police misconduct, provides grants for community-based organizations to create task forces to reform public safety approaches, creates training programs, collect new data on police misconduct, make lynching a federal crime, and establishes new law enforcement accreditation standards.
The House Judiciary Committee will hold a hearing on the Justice in Policing Act and then markup the legislation. The plan then is for the full House to return June 25 and June 26 to vote on the legislation.
House Judiciary Committee Ranking Member Jim Jordan (R-OH) is working on a House Republican package that is expected to be released this week. House Minority Leader Kevin McCarthy (R-CA) is prepared to engage on the issue. Notably, Leader McCarthy has a very strong working relationship with Representative Karen Bass (D-CA), who is chair of the Congressional Black Caucus, dating back to their time as colleagues in the California State Assembly more than a decade ago.
Sen. Tim Scott (R-SC) has taken the lead in developing a Senate Republican package. Senators Lindsey Graham (R-SC), John Cornyn (R-TX), Shelly Moore Capito (R-WV), Ben Sasse (R-NE) and James Lankford (R-OK) are working with him. White House Chief of Staff Mark Meadows and Senior Advisor Jared Kushner are working with Sen. Scott as well. Thus far, the focus of the working group has centered around making lynching a federal crime, pushing states to report police use of force, expanding data collection on no-knock search warrants, providing incentives to recruit diverse officers, providing funding for body cameras, and creating a new criminal justice commission. The goal is to produce legislation by the end of the week.
The Justice in Policing Act is backed by House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY), who are calling on Senate Republican leaders to take up the legislation after passage in the House. It’s unclear whether Senate Democratic and Republican members can negotiate a bipartisan agreement after all proposals are made public.
Sen. Tom Cotton (R-AR) has introduced a Senate resolution calling for justice for George Floyd and also opposing efforts to defund the police. Majority Leader McConnell is a co-sponsor of the resolution; Cotton wants to pass the resolution by unanimous consent today.
Finally, the Senate Judiciary Committee is planning a hearing on police use of force and community relations next Tuesday.
We expect police reform policies will also be debated during consideration of the Commerce-Justice-Science appropriations bills as well as on the National Defense Authorization Act (NDAA).
NDAA and Appropriations
The Senate Armed Services Committee is marking up its version of the National Defense Authorization Act (NDAA) today. Following the markup, the legislative text of the bill is expected to be made public. The full Senate could take up the measure during the week of June 22. We expect an open amendment process for the bill. The House Armed Services Committee will begin subcommittee markups June 22 and June 23. A full committee markup will be on July 1.
The Senate Appropriations Committee is expected to begin markups the week of June 22. The House is currently planning to conduct subcommittee and full committee markups during the weeks of July 6 and July 13. House floor consideration of appropriations bills are likely to be the weeks of July 20 and July 27 and will likely move as two “minibuses,” with Labor-HHS and Defense wrapped into one of the packages.
Given the late start of the appropriations process, we still expect a short-term continuing resolution at the end of September to punt any potential bicameral agreements into the lame-duck session of Congress.
House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-OR) released a surface transportation infrastructure bill as opposed to a broader package that has been discussed. It is slated to be marked up on June 17 and be considered on the floor of the House in July. Due to controversial climate provisions, moving the bill through the process will likely be a partisan exercise. Senate Environment and Public Works Committee Chairman John Barrasso (R-WY) has said that the House bill is nowhere close to a workable bipartisan proposal and he continues to advocate for his legislation which still requires additional legislative provisions from the Senate Commerce, Senate Banking and Senate Finance Committees.
CGCN Group specializes in helping companies navigate the rigorous oversight of federal regulators and policymakers on Capitol Hill. We are here to promote your case to those who matter in Washington D.C. Contact us to learn how we can help you!
Partisanship & Proxy Voting
When one party in Congress sues the other, expect bipartisanship and decorum—already ailing—to take a big hit. The occasion? More than 70 House members voted via proxy during Wednesday’s session. This was the culmination of a weeks-long partisan battle over how to operate the House of Representatives during a pandemic.
House Republicans want no part of it: they sued Speaker Nancy Pelosi (D-CA) in U.S. District Court (D.C.) over the new Democratic proxy voting rule. Republicans charge that it breaks over 231 years of precedent, violates the Constitution, and is a dereliction of duty for elected officials. House Democrats counter that it makes sense given the health crisis and difficulty traveling to and from the Capitol. This fight may reverberate beyond the House chamber and the courts: Senate Majority Leader Mitch McConnell (R-KY) and President Trump may not accept or process any legislation considered under House proxy voting, given the legal and Constitutional uncertainties.
The attempt yesterday to pass the foreign surveillance bill demonstrated the inherent problems with proxy voting. Leadership is severely hindered when it can not work directly with members to resolve disagreements or develop potential solutions. The largest loss of power comes at the expense of centrist-leaning members who are often the ones trying to reach a deal but now can face a progressive member who holds as many as 10 votes, thus dramatically tilting a potential vote.
The White House continues to develop and release new executive orders ranging from free speech, immigration visas, regulatory reform, and China. Many can be viewed as warm-ups for President Trump’s re-election campaign.
Yesterday’s decision by Twitter to attach a fact-check to a tweet from President Trump on mail-in voting has intensified the public debate over whether social media platforms should be allowed to censor political content. Trump responded by signing an executive order attempting to weaken the liability shield that these and other tech companies have under Section 230 of the Communications Decency Act.
While the focus of the new executive order may center around liability, there is a larger debate worth watching regarding federal regulation of the Internet, which the Federal Communications Commission and Republicans have long opposed—a position that appears to be softening somewhat in the Trump era.
The President has also been under pressure from immigration hardliners to broaden the prohibition of certain temporary foreign workers, while also facing push back from industry and corporate interests. A new executive order could come soon, but we expect a robust internal White House debate on this subject prior to public release.
Given its dubious response to COVID-19 and its ever-tightening grip over Hong Kong, the Trump Administration is considering new policy positions, such as further curtailing trade, imposing new sanctions, and implementing visa restrictions against China. China has threatened to retaliate if the U.S. interferes in what it views as its internal domestic affairs.
Congress is ignoring China’s threats. In fact, China is the one issue that unites both parties. Anti-China bills are flying through both chambers: Yesterday, the House passed 413 to 1, and the Senate (before Memorial Day) by unanimous consent, a bill that would sanction Chinese officials involved in the detention of Uighur Muslims in China’s Xijiang province. This should come as no surprise: a Pew Research found that two-thirds of Americans “have a negative view of China and only a quarter have a positive one.” Members are eager to display their anti-China bona fides. As we’ve noted previously, China will be a top-tier issue (along with the economy) in the 2020 campaign cycle.
When the Senate returns next week, much of the focus will be on the National Defense Authorization Act (NDAA). The Senate Armed Services Committee will commence consideration on June 8, with an expected full committee markup on June 10. Outside of the next COVID-related package and appropriations bills, NDAA will be one of the few major catch-all legislative packages that have a chance of becoming law this year, so expect members to try to attach various miscellaneous proposals to the package (including anti-China provisions).
Overall Republicans believe that now is not the time to take up another COVID-relief package, as states and localities continue to reopen, but we see that Republican position shifting heading into July. We continue to expect that Republicans will advocate for a package that is focused on short-term economic relief, legal liability protections, and tailored worker benefits. It’s possible that Democrats counter with proposals for more unemployment benefits and funding for states facing financial distress, due in part to COVID-19. The Republican base is vehemently opposed to the latter, seeing it as federal encouragement for state fiscal recklessness. We wonder if Democrats will try to exchange state financial support for some degree of liability protection favored by Republicans—a trade that would pose difficulties for GOP negotiators. Of course, at this early stage, we see no public support from Democrats for liability protection.
While we understand much of the legislative product is drafted in the House, the schedule and process for moving appropriations bills remain elusive. Appropriations majority staff has stated publicly that the committee will not pivot to Fiscal Year 2021 bills until the next COVID relief package “is completed.” In the Senate, Appropriations Chairman Shelby (R-AL) has indicated several bills will be marked up before the July 4th break.