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December 1, 2021

What to expect in Washington (December 1)

“It’s going to be a long month,” Senator Joe Manchin (D-WV) said November 29, in one of several comments made by senators about a potentially grueling December with a packed agenda and at least a couple deadlines. Manchin has yet to commit to backing one major item, the Build Back Better Act (H.R. 5376) budget reconciliation bill, and Senate Majority Leader Chuck Schumer (D-NY) won’t bring the bill to the floor without the support of 50 Democratic senators. “I heard an awful lot over the Thanksgiving break that prices were high, and people were very much upset about that and concerned about: Is inflation going to get worse?” Manchin said in a Politico report, reiterating previous concerns. Senator Debbie Stabenow (D-MI) said, “We could be in every weekend between now and Christmas.”

Senator Schumer said following the regular Tuesday party lunches that “my goal is to have the Senate take action to debate and pass the President’s Build Back Better legislation before we hit Christmas day. As soon as the necessary technical and procedural work with the Senate Parliamentarian has been completed – it continues on through this week – the Senate will take up this legislation as Senate Democrats are continuing to meet with the Parliamentarian and, once that’s complete, we’re ready to move Build Back Better to the floor.” The budget reconciliation process, which will allow the bill to pass with the votes of those 50 senators plus the VP, is unfolding behind closed doors through the “Byrd bath” to determine whether provisions comply with reconciliation rules. “As I’ve said many times, no one should expect legislation of this magnitude to be easy,” Senator Schumer said.

Senator Manchin met separately with Senator Schumer and Republican leader Mitch McConnell (R-KY) November 30. Senator Schumer said, “We had a good meeting with Senator Manchin today, we mainly talked about climate issues. And we’re going to get this bill done with 50 Democrats before Christmas, that’s our goal.”

POTUS – President Biden delivers a speech on supply chains at 12:35 p.m. today.

NDAA – Some of the foreboding comments over the Senate’s agenda stemmed from a delay in finishing the National Defense Authorization Act (H.R. 4350) after Republicans blocked a November 29 procedural vote on a substitute amendment. Senator McConnell said, “The dilemma we have on the floor at the moment with regard to the NDAA, which has passed every year for 60 straight years, is the Majority Leader’s been reluctant to enter into an agreement for a reasonable number of amendments related to the subject. This is still being discussed and I’m hoping we’ll find a way forward.” Others said Democrats had mismanaged the bill. “We can get it done this week. They don’t have their act together on reconciliation yet, so it’s not to delay that,” said Senator John Cornyn (R-TX), according to Politico. Additional information on the NDAA process and timeline may develop today.

SALT – The state and local tax deduction cap appeared to be the tax issue most under discussion in relation to the reconciliation bill. Senator Bernie Sanders (I-VT) wants to eliminate the cap for those under about $400,000 in annual income, while Senator Robert Menendez (D-NJ) wants a higher cap. There have been suggestions that Senator Sanders wants the proposal to raise money, which Senator Menendez opposes. Members are balancing relief for residents of high-tax states versus the perception that the bill’s benefits are tilted toward the wealthy. The Hill reported Senator Jon Tester (D-MT), who has expressed concerns about SALT cap relief, as saying following a meeting of members, “There is a path forward ... We’re not using the House version.” Senator Michael Bennet (D-CO), a Finance Committee member who has expressed concerns about SALT cap relief, was part of the meeting and said the House proposal is “terrible.”

Government funding – Congress could soon vote on a continuing resolution expected to extend funding beyond December 3 and perhaps into January. “The House is working to send us a CR that will fund the government until early next year, Senate Democrats are ready to pass this legislation, get it done as soon as possible,” Senator Schumer said. “We’ll also continue working with our Republican colleagues to do it, to move a CR quickly so we can keep the government operating and avoid a needless holiday shutdown.” The two sides appear poised to cooperate on this issue. “Nobody should be concerned about a government shutdown,” said Senator McConnell.

Debt limit – CBO projected November 30 that, if the debt limit remained unchanged and if the Treasury transferred $118 billion to the Highway Trust Fund on December 15, as currently planned, the Treasury would most likely run out of cash before the end of December. CBO also said, “The Secretary of the Treasury may have the authority to defer all or part of the transfer to the Highway Trust Fund. If payments were made to the Highway Trust Fund only in the amounts needed for immediate use, the government would be able to pay its obligations for a few weeks longer than it would if the payments were made in full—until sometime in January.”

There have been suggestions that Republicans, who say they won’t vote for a debt limit increase, could facilitate Democrats acting on their own by waiving procedural hurdles in the Senate. Punchbowl said one approach would be for Republicans to agree to limit the “vote-a-rama” that caps debate on reconciliation bills. “The government will not default,” Senator McConnell said November 29. “We’re having useful discussions.”

During a Nov. 30 Senate Banking Committee hearing, Treasury Secretary Yellen addressed the priority of raising or suspending the statutory debt ceiling, saying the government could default on its debt obligations soon after Dec. 15. “I cannot overstate how critical it is that Congress address this issue,” she said. In questions with Senator Mike Crapo (R-ID), who asked for an updated estimate from Yellen on when the Treasury could run out of money without an increase of the debt limit, Yellen said she has high confidence that Treasury would be able to finance the government through December 15, but there are scenarios where Treasury wouldn’t have funds beyond that date. Yellen added, “I didn’t say there is no way we can make it past Dec. 15.”

Health – A New York Times story noted that health provisions in the House reconciliation bill “would expand health care access for children, make insurance more affordable for working-age adults and improve Medicare benefits for the disabled and older Americans,” and “taken together, these policies represent the biggest step toward universal coverage since the passage of the Affordable Care Act in 2010.”

Congress – The 2022 House Calendar is available here.


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