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June 23, 2021

What to expect in Washington (June 23)

There has been a flurry of activity around bipartisan infrastructure talks:

  • President Biden met with Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) on Monday;
  • White House counselor Steve Ricchetti and Legislative Affairs Director Louisa Terrell were on Capitol Hill Tuesday to meet with a bipartisan group of senators, and meet with Democratic leaders today;
  • the bipartisan group is exchanging proposals for how to pay for the plan; and
  • Senator Manchin thinks a final plan is close at hand, but Senator Rob Portman (R-OH) said, “I think we’ve still got some work to do,” Punchbowl reported.

Senator John Thune (R-SD) said the White House is not interested in tax-free corporate bonds. “My understanding is that they’ve frowned on that,” he said in the report. Reports on the group’s funding and financing options have said private activity bonds and direct-pay bonds are in the mix. Sen. Portman previously announced, “about a $63 billion pay-for that is hoping to close the tax gap that assumes about a $40 billion investment in the IRS.” Other senators said the proposal was still under discussion. “We’re told Republicans are not going to embrace the more onerous regulatory aspects of this Biden proposal — beefed-up reporting requirements for banks — but they are open to some stepped-up enforcement and modernization of IRS customer service if it comes with proper guardrails,” Politico reported this morning. An infrastructure bank remains in play, Bloomberg reported.

The activity followed White House Press Secretary Jen Psaki saying June 21, of Congress moving through the budget process to enable a reconciliation bill, that a number of the President’s “priorities and his proposals that he’s put forward are not a part of this negotiation or are not a part of this discussion that’s happening in a bipartisan manner. So, he certainly would like to see that move forward, and he will make that case to others as well.”

On CNN June 23, Senate Finance Committee (SFC) Chairman Ron Wyden (D-OR) said of the bipartisan talks, “The president is being very patient, but patience doesn’t mean eternity.” He noted the SFC is working on “major policies, major initiatives to make the tax code fairer, to create incentives to reduce carbon, and we’ve got proposals to lower the cost of medicine. So, we are just going to keep moving forward with those major efforts.” Those priorities would likely have to be pursued in an all-Democratic bill. On EV fees discussed by the bipartisan group and opposed by the White House, he said, “Well, we’ll have to see what this next few days shows, but it doesn’t make sense to levy this big tax on the cars of the future, particularly when the Congressional Budget Office says it will cover just a tiny, tiny percentage of the shortfall.”

Axios reported, “Left-leaning Democrats want a commitment the Senate also will act on a reconciliation bill — and some are insisting they vote on one first. They fear getting left behind as lawmakers from both parties increasingly sign on to the G20 framework.” Senate Budget Chairman Bernie Sanders (I-VT) said, “It’s going to be either both or nothing. There will not be a bipartisan bill unless there’s a major reconciliation bill.”

“We have made our position clear, that the possibility of a bipartisan deal depends on a commitment to move forward on reconciliation,” Sen. Brian Schatz (D-HI) said Tuesday, according to Politico. The report said, “A group of White House officials will also meet Wednesday evening with House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer (D-N.Y.) to discuss both Biden’s conversations with rank-and-file Republicans and the party’s plans to make use of reconciliation…”

Congress – A procedural vote on the For the People Act of 2021 voting rights legislation failed on a party-line 50-50, due to the filibuster. The Washington Post reported, “Tuesday’s party-line vote also is a blow to the prospects of other bipartisan bills in the Senate. Senate Democrats and President Biden are still engaged in negotiations with Republicans over a potential $1 trillion infrastructure bill, largely because Manchin and [Sinema] have publicly pushed back on immediately using the reconciliation process to bypass the Senate’s 60-vote threshold and passing a Democrats-only bill.”

Supply chains - National Economic Council director Brian Deese will tell the Atlantic Council in a speech this morning that the coronavirus pandemic is a “wake-up call” to bring manufacturing jobs back to America. “Markets — on their own — will not make investments in the technologies and infrastructure that would benefit an entire industry,” he will say in prepared remarks, according to the report. “These failures require a different role for government, one where public R&D lays a foundation for breakthrough technologies, and government pulls forward the deployment and dispersion of innovation.” These sentiments are consistent with the June 8 White House report on supply chains, which, among other things, called for establishing a White House Supply Chain Disruptions Task Force.

Health care – On June 22, Chairman Wyden outlined his priorities for lowering prescription drug prices that include several components of bipartisan legislation Wyden co-sponsored last year with then-Finance Chairman Chuck Grassley (R-IA), including restructuring of the Medicare Part D benefit, limiting high out-of-pocket spending for Medicare beneficiaries, and a controversial proposal to require rebates for drugs whose prices increase faster than the rate of inflation. Also, on June 22, Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) released a discussion draft of their anticipated Cures 2.0 legislation, which would authorize Biden’s proposed Advanced Research Projects Agency for Health (ARPA-H).

Hearings – The House Ways & Means Oversight Subcommittee will hold a hearing on “Expanding Access to Higher Education and the Promise It Holds” on Tuesday, June 29 (2:00 p.m.).

Bills – Two energy tax bills were introduced June 21:

  • S. 2140 (Sen. Ossoff), to establish the advanced solar manufacturing production credit
  • H.R. 4024 (Rep. Pascrell), to establish a tax credit for production of electricity using nuclear power.

Trade – On June 22, Ways and Means Ranking Member Kevin Brady (R-TX) and Trade Subcommittee Ranking Member Vern Buchanan (R-FL) introduced the Trade Preferences and American Manufacturing Competitiveness Act to improve and reauthorize the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB).


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Washington Council Ernst & Young
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