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January 29, 2021

What to expect in Washington (January 29)

The House and Senate are planning to vote on an FY2021 budget resolution the week of February 1 to tee up the budget reconciliation process for President Biden's $1.9 trillion COVID/stimulus bill if Republican support doesn't materialize. House committees are slated to work on reconciliation legislation the second and third weeks in February, with House and Senate consideration possible prior to a March 14 deadline when pandemic-related unemployment benefits expire.

"I'll bring a budget resolution to the floor next week, and then we'll send it over to the Senate. Then if they change it, then we'll take it back and address it. By the end of the week, we will be finished with the budget resolution, which will be about reconciliation, if needed. And I hope we don't need it, but if needed, we will have it … " House Speaker Nancy Pelosi (D-CA) said.

While the current approach is to seek a bipartisan deal but use reconciliation if necessary, congressional Democrats and the Administration have suggested that demonstrating a willingness to go it alone on relief for the broadly concerning pandemic could bring Republicans to the table. "I do think that we have more leverage getting cooperation on the other side if they know we have an alternative as well … " Speaker Pelosi said. "I would think, if we're talking about additional funding for vaccines to be — not only production but their distribution — if we're talking about putting money into the pockets of the American people with direct payments, if we're talking about supporting state and local government so that they're able to implement all these things, open our schools … ? I would hope that the Republicans would be supportive of that … "

"We want it to be bipartisan, always, but we can't surrender if they're not going to be doing that. Instead, we will pass it," she said.

The Administration pushed back on suggestions that it may seek bipartisan approval of broadly supported items under the plan, then move the more divisive elements under reconciliation. Similar to the Speaker's comments that the core elements should appeal to members of both parties, White House Press Secretary Jen Psaki tweeted January 28, "The needs of the American people are urgent from putting food on the table, to getting vaccines out the door to reopening schools. Those aren't partisan issues. We are engaging with a range of voices — that's democracy in action — we aren't looking to split a package in two."

New York Times: "Many Democrats say privately that they see little hope of attracting the 10 Republican votes they would need to overcome a filibuster and avoid using the budget reconciliation process to advance the bill unless they significantly scale back Mr. Biden's ambitions. Haunted by what Senator Chuck Schumer of New York, the majority leader, referred to as the 'mistake' of 2009, when the Democratic Party was in control of both chambers and the White House but was 'too timid and constrained in its response to the global financial crisis,' top Democrats are pushing to avoid settling for a small package."

Beyond meeting the March UI expiration deadline, Democrats are likely motivated by the desire to move onto other agenda items beyond COVID relief/stimulus. "We got a lot to do. And the first thing I got to do is get this COVID package passed," President Biden said when asked when he would propose health care legislation.

It remains to be seen whether Democrats can hold together all 50 of their Senate members and, with the support of Vice President Harris, pass a reconciliation bill. Senator Joe Manchin (D-WV), a centrist Democrat who has discouraged the use of reconciliation in favor of a bipartisan approach, was quoted by news outlets as saying, when asked if he will support next week's effort regarding the budget resolution, "we're gonna make Joe Biden successful." Of course reconciliation wouldn't be possible if Democrats hadn't won two runoff races in Georgia (establishing the 50-50 Senate split), and those new members, Jon Ossoff (D-GA) and Raphael Warnock (D-GA), called for swift action on the Biden plan's $1,400 direct payments, saying the proposal was key to their victories, the Washington Post reported.

Questions remain about whether some provisions of the $1.9 trillion Biden plan like the minimum wage increase to $15/hour can fit within budget reconciliation rules. The NYT reported January 27: "G. William Hoagland, a former senior Republican budget official in the Senate, said Democrats could have a difficult time using reconciliation for the wage increase or for funding the reopening of schools. But he suggested that Democrats could try to push the limits, for example, by arguing that increasing the minimum wage nationwide might lead to more income tax revenue. Vice President Kamala Harris could also overrule the parliamentarian, but that has not been done since 1975."

The reconciliation bill is expected to include an increase in the federal debt limit, the Wall Street Journal reported Senator Chris Van Hollen (D-MD) as saying, though he wasn't sure yet how much. Health care — President Biden signed an executive order on "Strengthening Medicaid and the Affordable Care Act," under which HHS is expected to open for a "Special Enrollment Period," from February 15, 2021 — May 15, 2021 to give Americans that need health care coverage during the pandemic the opportunity to sign up, and federal agencies are directed to reconsider rules and other policies that limit Americans' access to health care, and consider actions that will protect and strengthen that access. He also issued a memo on "Protecting Women's Health at Home and Abroad."


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For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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