Washington Update 5.11.21

Infrastructure – Work continues this week on the development of a multi-year surface transportation bill in the Senate Environment and Public Works and House Transportation and Infrastructure Committees. The goal is to produce draft legislation by the end of the month, though this timing could slip into June. The bipartisan “America’s Transportation Infrastructure Act” from the 116^th Congress continues to be the basis of negotiations between EPW Chairman Tom Carper (D-DE) and Ranking Member Shelly Moore Capito (R-WV).

Without the support of Senators Joe Manchin (D-WV) or Kyrsten Sinema (D-AZ), Democrats will not have the votes to pass their infrastructure package through reconciliation. Without an assured 51 votes, President Biden may be forced to continue his dialogue with Republicans.

To that end, the President is expected to resume talks this week with the Senate Republicans who drafted their conference’s infrastructure proposal. This includes Senators Capito, Crapo (R-ID), Wicker (R-MS), Barrasso (R-WY), Blunt (R-MO), and Toomey (R-PA).

At this point, the central debate is over how to define “infrastructure.” For their part, Republicans focus on roads, highways, bridges, broadband and airport facilities. Resolving this question—assuming it’s resolvable—could help narrow the gap between the Senate Republicans’ $568 proposal and President Biden’s $2.3 trillion package. Senate Republicans would like to see a counterproposal from President Biden, which would provide them with some reassurance that negotiations are genuine.

Big Four Meeting — On Wednesday, President Biden will meet with House Speaker Nancy Pelosi (D-CA), House Minority Leader Kevin McCarthy (R-CA), Senate Majority Leader Chuck Schumer (D-NY), and Minority Leader Mitch McConnell (R-KY). Behind the scenes, Leaders McConnell and McCarthy continue to coordinate on strategy.

Following the lackluster April jobs report, Republican leaders are raising concerns about federal transfer payments disincentivizing workers to return to work, especially the disproportionate number of women and minorities who have withdrawn from the labor force.

House Republicans – With a lack of floor activity, expect House Republicans to focus on creating media opportunities surrounding key issues such as the economy, jobs, and supporting law enforcement. House Republicans also are discussing how to put House Democrats on the record regarding potential court-packing plans for the Supreme Court.

At the Republican retreat in Florida, Leader McCarthy announced the leadership for the Conference’s new policy task forces. These task forces have begun the process of putting together very substantive legislative proposals. The purpose of these efforts is two-fold: 1) Ensure House Republicans are prepared with substantive policies if/when they get to the negotiating table on policies this year; and 2) Prepare a longer-term policy agenda should Republicans regain the majority next Congress.

We are advising clients to engage with these groups:

Jobs and the Economy, chaired by Rep. Patrick McHenry (R-NC);
Big Tech Censorship, chaired by Rep. Cathy McMorris Rodgers (R-WA);
Future of American Freedoms, chaired by Rep. Jim Jordan (R-OH);
Energy, Climate and Conservation, chaired by Rep. Garret Graves (R-LA);
American Security, chaired by Rep. John Katko (R-NY);
Healthy Future, chaired by Reps. Devin Nunes (R-CA) and Brett Guthrie (R-KY);
China, chaired by Rep. Michael McCaul (R-TX).

The media narrative this week will be focused on Wednesday’s House Republican Conference meeting during which members will vote on a resolution calling for the removal of Rep. Liz Cheney (R-WY) as Conference Chair. There appears to be sufficient support for Rep. Elise Stefanik (R-NY) to take over the role. House Republicans will be glad to have this saga behind them.

China Package – The Senate Commerce Committee will resume their markup of the “Endless Frontier Act” on Wednesday. Last week, efforts were made to educate committee members and garner more support for the legislation, as well as negotiate amendments for potential inclusion during the markup. Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Crapo (R-ID) are nearing completion of their portion of the package that addresses forced labor and other trade practices.

Leader Schumer intends to bring the complete China package to the Senate floor as soon as possible, and consideration could stretch more than a week due to the sheer number of amendments expected to be filed. So far this has been a Senate-only exercise without House lawmakers being a part of the process.

Rep. McMorris Rodgers (R-WA), Ranking Member of the House Energy and Commerce Committee, has expressed skepticism of the Senate’s approach, saying, that “creating new, duplicative multi-billion-dollar programs is not the answer.” Schumer and Sen. Todd Young (R-IN) are focused on garnering the largest bipartisan vote possible in the Senate and then deal with the House later.

Energy – On Wednesday, the House Financial Services Committee will markup H.R. 2570, the “Climate Risk Disclosure Act.” The bill would require the Securities and Exchange Commission to require all public companies to disclose annually their investments and risks related to various climate change scenarios. Companion legislation was introduced in the Senate by Sen. Elizabeth Warren (D-MA).

While the legislation is unlikely to garner sufficient support in the Senate, energy and financial services companies are eyeing the bill closely given actions already underway at Treasury and the SEC. Last month, Secretary of the Treasury Janet Yellen told the Institute of International Finance, “It will be important to build on existing work to improve climate-related financial risk disclosure.”

Budget / Appropriations / NDAA – The full FY 2022 budget request from President Biden and the Office of Management and Budget will likely be made public during this work period. The release of the budget will help facilitate multiple congressional work streams which have thus far been delayed.

House Budget Chairman John Yarmuth (D-KY) and Senate Budget Committee Chairman Bernie Sanders (I-VT) could begin laying the groundwork for an FY 2022 budget resolution, which would outline top-line spending levels as well as potentially provide new reconciliation instructions to House and Senate committees. Should an FY 2022 budget resolution be brought to the Senate floor this summer, another politically charged ‘vote-a-rama’ will take place.

As a result of the delayed release of the President’s budget, work on the National Defense Authorization Act has also been shelved. The Senate Armed Services Committee will not mark up their version of the NDAA until July, which creates a tight timeline to secure a bicameral agreement by the end of the year.

Upon release of the President’s budget, House and Senate appropriators will begin developing appropriations bills at the subcommittee level, with the House attempting to have their bills ready for the floor as soon as July, an ambitious target.

Senate Floor This Week – The Senate will consider the following nominations this week:

Andrea Joan Palm, of Wisconsin, to be Deputy Secretary of Health and Human Services.
Cynthia Minette Marten, of California, to be Deputy Secretary of Education.