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October 1, 2021

What to expect in Washington (October 1)

Government funding has been extended through December 3 after Democrats delinked the measure from a debt limit suspension – that issue is on hold for now with a must-act date a few weeks away – and Congress passed a continuing resolution (CR) signed by the President before 8 p.m., staving off any shutdown suspense. There was plenty of suspense over whether the House would vote on the bipartisan infrastructure framework (BIF), as NEC Director Brian Deese and White House domestic policy adviser Susan Rice met late in the day and into the night with House and Senate Democratic leaders to try to forge a deal on reconciliation between progressives and moderate Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ).

The House didn’t vote but leaders are trying again today to reach a reconciliation deal that will allow passage of the infrastructure measure, which extends the now-expired highway authorization. The chamber technically stayed in session overnight to keep the same legislative day, which prevented the rule for consideration of the infrastructure bill from expiring. The House is expected to be out of session in Washington, D.C., in Committee Work Weeks the next two weeks.

House Speaker Nancy Pelosi (D-CA) met with members throughout the day after saying during a morning news conference that it was her plan to move forward with the vote but recognized the longstanding position of progressives that some type of agreement on reconciliation be in hand before voting for the BIF. Momentum Democratic leaders had been building for the effort, in part because of the interplay with the BIF, was met with a statement from Senator Manchin September 29 suggesting a framework would not emerge quickly because he can’t support $3.5 trillion more in spending. He also said “our tax code should be reformed to fix the flaws of the 2017 tax bill… but it should not weaken our global competitiveness…”

An outline of what he would support from late July (as the Senate was considering the FY2022 budget) published by Politico September 30 suggested a $1.5 trillion bill with a 25% corporate rate, 28% “all-in” capital gains rate, ending carried interest, keeping fossil fuels credits if solar and wind credits are extended, and giving the Energy & Natural Resources Committee he chairs sole jurisdiction on a clean energy standard.

Manchin suggested to reporters that Congress work on a $1.5 trillion plan “and they can come back with it later and they can run on the rest of it later. I think there’s many ways to get to where they want to, just not everything at one time.” More of a mystery is Senator Kyrsten Sinema (D-AZ), who made three visits to the White House September 28 and later said she had made her reconciliation objections known. She and Senator Manchin were meeting late last night, and also met with White House officials.

Progressives were not pleased with the $1.5 trillion target. Politico reported, “Democrats with knowledge of the discussions said party leaders had hoped to convince Manchin and Sinema to agree to a $2.1 trillion topline target for the broader package, without success.”

As the evening wore on, Senator Chris Van Hollen (D-MD), a former House leader, said according to the Washington Post, “I am confident that we will land the plane. ... Do I think it will happen tonight? No. There’s just too much that needs to happen to provide confidence in the way forward tonight.” Senator Bernie Sanders (I-VT) said a deal shouldn’t be sealed overnight and wanted a vote to defeat the BIF for now.

The Speaker earlier spoke positively of Senator Manchin and noted his statement did suggest a path forward, suggesting a deal was possible. Speaker Pelosi said she views the reconciliation bill as a culmination of her service in Congress because it is about children: their health, education, economic security of their families, and a clean safe environment. “Remove all doubt in anyone’s mind that we will not have a reconciliation… We will have a reconciliation bill for sure,” she said.

Debt limit - A standalone debt limit suspension bill that passed the House 219-212 September 28 could be considered in the Senate as soon as next week, Majority Leader Chuck Schumer (D-NY) said, though it is expected to fail given Republican opposition. Schumer and other Democratic Senate leaders are resistant to using the budget reconciliation process to suspend the debt ceiling, while Democratic House leaders have noted that it is a possibility. Politico reported that some House members feel the debt ceiling should be dealt with by reconciliation, which would require only Democratic votes, “Yet Schumer is eager to paint the GOP as the party of ‘default’ and wants to lambaste them for risking the country’s credit worthiness.” The Senate is scheduled to be out of session October 11-15 for the Columbus Day State Work Period.


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Washington Council Ernst & Young
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