Washington Update 05.18.21

Infrastructure –Senate Republicans will offer a revised infrastructure proposal to President Biden this week.  Sen. Shelley Moore Capito (R-WV) said the new plan will havemore definition, but maybe some different numbers too.”

As always, a central issue is how to pay for it.  Some Republicans favor increasing user fees, while others are interested in public-private partnerships, promoting government bonds, and establishing a new infrastructure financing authority.

Democrats have pounced on user fees, casting them as a regressive tax—not to mention President Biden’s pledge not to raise taxes on taxpayers making more than $400,000 a year.

Even so, Senate Republicans may be willing to go as high as $800 billion, higher than their initial $589 billion proposal but still far less than President Biden’s $2 trillion.  But many more Republicans are skeptical of cutting a bipartisan infrastructure agreement only to have Democrats follow with even more government spending in the “American Families Plan” passed via reconciliation.  What’s more, signs of incipient inflation loom over this debate—a fact that Republicans tie in no small part to Washington’s hyper-spending spigot.

Add to this volatile mix a surface transportation bill, soon to be introduced, by House Transportation & Infrastructure Chair Peter DeFazio (D-OR). The final text is expected to be similar to H.R. 2 from last Congress.  If that’s the case, expect a similar level of support from House Republicans: next to none.  If he is unable to complete work on it this work period, committee consideration will likely occur in early June.  House Democrats still hope to have a comprehensive infrastructure bill—which to a Republican eye will surely include provisions that cannot reasonably be defined as such—on the House floor before the July district work period.

China – This week, the Senate will consider S. 1260, the “Endless Frontier Act” which passed the Senate Commerce Committee last week by a vote of 24 to 4 (with “no” votes from Sen. Mike Lee (R-UT), Sen. Ron Johnson (R-WI), Sen. Rick Scott (R-FL) and Sen. Cynthia Lummis (R-WY)). We expect an open amendment process on the floor, with additional bipartisan provisions from the Senate Foreign Relations Committee, Senate Banking, Housing, and Urban Affairs Committee, and Senate Homeland Security and Governmental Affairs Committee potentially coming up for votes.  There continues to be discussion, but no resolution, on whether a China trade-related package from the Senate Finance Committee will be included. There is also an expectation that $50 billion will be deemed “emergency spending” and added to the package to address the current semiconductor chip shortage.

Due to the considerable number of amendments expected to be filed, consideration of the bill could stretch into next week. While subject to the 60-vote threshold to advance, Majority Leader Chuck Schumer (D-NY) and Sen. Todd Young (R-IN) are hoping a significant bipartisan vote will push the House to act in kind.

Budget-Appropriations Timelines – The White House Office of Management and Budget is expected to unveil its full fiscal year 2022 budget on May 27 and will include proposals for mandatory spending and revenue proposals. The US Treasury Department also plans to release its green book the final week of May, which should shed more light on the Administration’s tax proposals.

One consequence of the Administration’s dilatory budget submission is a delayed budget and appropriations process on the Hill.  The Senate is tackling infrastructure and China policy and hoping the House will follow suit, but the House may be focused on advancing spending bills by the time the Senate completes its work.

January 6th Commission – On Wednesday, the House is expected to debate and vote on two pieces of legislation related to the events of January 6th:

  • H.R. 3233, the “National Commission to Investigate the January 6 Attack on the United States Capitol Complex Act” (Rep. Thomspon–MS); and
  • H.R. 3237, the “Emergency Security Supplemental to Respond to January 6th Appropriations Act” (Rep. DeLauro–CT)

The Commission will be composed of ten members selected by the Speaker of the House, House Minority Leader, Senate Majority Leader and Senate Minority Leader, respectively, and will issue a final report no later than December 31, 2021. This is likely to be a highly charged and emotional investigation, with those who were present that day, including members and senators, having to relive what happened.