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June 21, 2021

What to expect in Washington (June 21)

There is an increasing focus on timing for bipartisan infrastructure talks: Republican members of a bipartisan group of senators say they won't be rushed, but Democratic leaders have for weeks said they want a signal about the odds of success soon, in part because the June legislative period is passing by and scheduled days in session are limited in coming months. While most other tax increases would be out, Republicans signaled that a more modest tax gap proposal than what the President proposed could be in.

Timing — The Saturday Washington Post noted the House is in only nine days in July and said, "Democratic leaders are reluctant to say it out loud, but circumstances are about to dictate that they blow up the legislative calendar to build more time in Washington if they want to approve President Biden's ambitious agenda." Senator Rob Portman (R-OH), a leader of the group discussing $579 billion in new spending in a total package of $1.2 trillion who has taken issue with the suggestion that the White House wants the talks wrapped quickly, "voiced some optimism that this entire package could come together by the end of July."

Under the current calendar, the Senate is out June 28-July 9, then in for three weeks in July and one in August, then the August recess runs until the week of September 13. The House has two more weeks in session before a recess the week of July 5; returns for one Committee Work Week — meaning no floor votes — and two voting weeks in July; is out all of August; then has Committee Work Weeks before returning to voting September 20. Government funding and the highway reauthorization both expire September 30.






Recess July 5 week, in only 9 days in July

In recess all month

Committee Weeks until Sept. 20


In recess June 28-July 9

Recess begins Aug. 9

Returns week of Sept. 13

On Fox News Sunday, Senator Lindsey Graham (R-SC), a member of the bipartisan group, suggested decision time is near, saying, "President Biden, if you want an infrastructure deal of a trillion dollars, it's there for the taking. You just need to get involved and lead." He said he doesn't "want to raise taxes to pay for it," but adjusting the gas tax for inflation, an infrastructure bank, and unspent COVID money are viable provisions. "So, I would just say to President Biden, you've got a party that's divided. You've got a Republican Party that's willing to meet you in the middle for a trillion dollars of infrastructure."

Tax gap — On revenue eyed by the bipartisan group, Sen. Portman said on Meet the Press Sunday, "We have about a $63 billion pay-for that is hoping to close the tax gap that assumes about a $40 billion investment in the IRS, including, by the way, in better taxpayer service which is really important right now, but also enforcement and let's be sure that we're closing that tax gap." He said the Biden plan's $80 billion investment to collect $700 billion "really is not appropriate … but there's a bipartisan agreement on helping to close that tax gap."

Follow-on — Progressive Democrats want assurances from moderates like Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) that they will back a large Democratic follow-on bill, but a bipartisan infrastructure bill may need to cross the finish line for moderates to entertain a large Democrat-only bill. "The question the liberals face is: Would they really sink a bipartisan deal negotiated by the president, especially if they have the option to advance a second package under the terms of reconciliation, which would require a simple majority to pass?" said an analysis in the Sunday Washington Post. "However, a bipartisan bill of more limited scope might be the price Biden and liberals must pay to get support from [Sen. Manchin] and some other moderates on a second package."

A June 20 New York Times story, "Bipartisan Infrastructure Talks Collide With Democrats' Goal to Tax the Rich," reported on progressives like Rep. Alexandria Ocasio-Cortez (D-NY) fearing moderates will not support a reconciliation bill, as neither Manchin or Sinema has committed to supporting such a package until they see the details. "That is absolutely the concern," said Rep. Ocasio-Cortez. "It was at the insistence of the more conservative Democrats that we had to include how we were going to pay for the infrastructure spending … So this comes to the White House, the White House agrees, comes back and says, 'OK, we're going to tax the rich,' and then the same conservative wing that demanded, 'How are we going to pay for it?' is now saying, 'Wait, wait, wait — not like that.'"

A separate NYT story said discussions of a $6 trillion package between Senate Majority Leader Chuck Schumer and Budget Committee Democrats included talk of "potential measures including climate change provisions, caregiving subsidies, paid leave, tax increases on wealthy individuals and corporations, Medicare expansion and legal status for millions of undocumented immigrants," and that "lawmakers and aides acknowledge that it is unlikely that Democrats will have the votes for all those ambitions."

Health care — Senator Schumer tweeted yesterday: "There is a gaping hole in Medicare that leaves out dental, vision, and hearing coverage. This is a serious problem. I'm working with @SenSanders to push to include dental, vision, and hearing Medicare coverage in the American Jobs and Families Plans."

Supply chains — The Wall Street Journal reported, "The Biden administration is moving to end exemptions that allowed technology developed with U.S. government research funding to be exported for manufacturing overseas, Energy Secretary Jennifer Granholm said." As the story noted, the change was called for in the White House supply chain report released June 8.

Hearings — This week, the only hearings in the tax-writing committees are the SFC trade subcommittee hearing on "The Strategic Benefits of a Multilateral Approach to Trade Policy in the Asia-Pacific Region" on Tuesday, June 22; and a hearing on USTR and HHS nominations on Thursday, June 24.

On Wednesday, June 23, the House Education & Labor Health, Employment, Labor, and Pensions Subcommittee holds a hearing, "Examining Pathways to Build a Stronger, More Inclusive Retirement System."

On Tuesday, June 22 (10 a.m.), the Senate Health, Education, Labor and Pensions Committee holds a hearing on "Vaccines: America's Shot at Ending the COVID-19 Pandemic."


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