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December 10, 2021

What to expect in Washington (December 10)

Majority Leader Chuck Schumer (D-NY) said on the Senate floor December 9 that Democratic meetings with the Parliamentarian have concluded and bipartisan “Byrd bath” meetings, “where both sides are together and make their case to the parliamentarian and argue back and forth – we expect those to start next week.” Bill text and CBO scores from five Senate committees – Banking, Commerce, Indian Affairs, Small Business, and Veterans’ Affairs – have been published here. Bloomberg reported Finance Committee Chairman Ron Wyden (D-OR) as saying Senate Democrats expect to release a “placeholder framework” for their version of the reconciliation package this afternoon.

Politico Morning Tax reported that Chairman Wyden said late Thursday he hopes to unveil new legislative text at some point today, but it won’t be the final draft because some issues need to be worked out, including state and local tax (SALT) deduction cap relief. “It will have some technical corrections, it will have some substantial changes as well,” he said. “The negotiations are going to continue because there are still some outstanding issues.”

Roll Call reported earlier this week, “After text is completed, Republicans will propose Byrd challenges to various provisions they think have only a merely incidental impact on the budget. This triggers the formal parliamentarian review, also known as ‘the Byrd bath,’ in which Democratic and Republican staff will present arguments on why the provisions should or should not be included in the reconciliation package.”

Regarding his current thinking on voting for the BBB Act this year, Punchbowl News reported Senator Joe Manchin (D-WV) as saying, “We haven’t even seen the complete scrub from the parliamentarian. We haven’t seen basically how it washes – the ‘Byrd Bath.’ And then we haven’t seen the final text. And they’re still negotiating with all different parts of it with [committees of jurisdiction].” Some Republican senators have been reported as expressing skepticism that the reconciliation process can be completed in time for a Senate vote prior to Christmas. Senator John Thune (R-SD) encouraged Democrats to recognize that deadline can’t be met because “as long as there is some belief on their side that they could possibly finish this before Christmas, I think that will keep dragging this process on,” Politico reported.

Senator Schumer reiterated that the BBB Act needs to get done in 2021 because the ARPA expanded Child Tax Credit payments expire at the end of December. “During the holiday season, American families are looking for every option to lower costs, make ends meet, so the best thing we can do is pass Build Back Better before some critical tax breaks from the American Rescue Plan – above all the Child Tax Credit checks – come to premature end,” he said. Ways & Means member Suzan DelBene (D-WA) has been expressing the same sentiment on the House side. She said during a Punchbowl interview December 8, “We absolutely have to do it by the end of the year. There’s a consequence to not getting it done earlier... The longer we wait, the longer we are not providing those resources.” The Center on Budget and Policy Priorities has said, “If Congress fails to act, monthly Child Tax Credit payments will not be made on January 15, and many families will struggle to make ends meet.” January 15 could be a deadline if year-end slips.

SALT – Add SALT cap relief to the list of concerns Manchin has with the reconciliation bill. Tax Notes reported (via tweet) that Senator Manchin says he is uncomfortable with the SALT provision because of the contrast between a tax cut to the wealthy and Democrats’ message that the wealthy will pay for the BBBA. Democrats from high-tax states say there won’t be a BBB Act without SALT cap relief, and it’s one of the most contested aspects of the bill. Manchin’s WV Senate colleague Senator Shelley Moore Capito (R-WV) has promised to offer an amendment to strip the BBB Act of any SALT cap relief. (Historical perspective: In October 2017, during consideration of the budget paving the way for the TCJA, the Senate passed a Capito amendment calling for a SALT deduction cap and Manchin was the only Democrat to vote in favor.)

The Wall Street Journal reported, “Democrats on several sides of that deduction issue met on Thursday but they haven’t announced any agreement. Senators from high-tax states such as New York and New Jersey say the $10,000 cap is unacceptable, but the House’s $80,000 cap has met resistance from progressives such as Sen. Bernie Sanders (I., Vt.) because of how much high-income households would benefit. They are trying to reach a deal that satisfies both camps, has a small effect over the 10-year budget window and can then pass the House.”

Energy – One focus of the current Senate process is the House bill’s EV credit bonus of $4,500 for manufacturing in unionized shops that Senator Manchin opposes given that it excludes manufacturers beyond the Big 3 automakers, including one with a facility in West Virginia. The provision was to be reviewed by the Senate Parliamentarian this week, Senator Ben Cardin (D-MD) said in a Bloomberg report noting that changes are under consideration in light of Manchin’s objection and the possibility the parliamentarian rules the provision doesn’t comply with a ban on using budget reconciliation measures to advance policy changes with “merely incidental” budgetary impacts.

The Washington Post reported on prospects for energy provisions given the Byrd bath and concerns by Senator Manchin, who says he thinks another provision, the methane fee, “would be duplicative of new methane regulations from the Environmental Protection Agency.”

Debt limit – The Senate December 9 approved a bill (S. 610) that will allow the Senate to increase the Federal debt limit by a simple majority vote. The process change was appended to a bill that includes an extension of the 2% Medicare sequester moratorium through the end of March, which passed 59-35 under a 50-vote threshold after clearing an earlier procedural vote that required 60 votes and drew support from 14 Republicans. The House and Senate must vote on a separate bill to increase the debt limit, likely early next week. The process change was necessary because Republicans won’t vote for an increase.

Health – On December 8, the Senate passed a measure disapproving the Administration’s vaccine requirement for private sector workers by a 52-48 vote, with Democratic Senators Manchin and Jon Tester (D-MT) siding with Republicans. The vote was largely symbolic, as the Democratic-controlled House is unlikely to take up the resolution of disapproval and the Administration would veto the bill should it advance. Under the mandate, which has already been paused by the courts and is not yet being enforced, workers at companies with 100 or more employees would have to be vaccinated against COVID-19 or take tests weekly.

Congress - The House and Senate are both out of session today, and services for former Senator Bob Dole continue at the Capitol.

There is already jockeying among Republicans to become Ways & Means Chairman if the party wins back control of the House in the 2022 midterms, following the announcement by next-in-line Rep. Devin Nunes (R-CA) that he is leaving Congress to join former President Trump’s social media company. The Committee chairmanship is not necessarily determined by seniority, and there have been examples of members leapfrogging over more senior colleagues over the years. Politico reported, “The next two most senior members on Ways and Means, Reps. Vern Buchanan of Florida and Adrian Smith of Nebraska, have already started talking to members of the Steering Committee — a little-known but highly influential GOP panel that decides committee assignments and leaders — about their interest, according to multiple lawmakers.”

Punchbowl News reported this morning that Rep. Buchanan has projected confidence in winning votes for the post from the Republican Steering Committee, and that Rep. Jason Smith (R-Mo.) is also interested in the chairmanship.


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