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The Senate is now out until Tuesday, January 18, and plans to forgo a recess next week to consider voting rights bills and rules changes in a bid to pass the bills over Republican opposition, rather than working the weekend. The House and Senate will then both be in recess the week of January 24. Rules changes don’t appear likely after Senator Kyrsten Sinema (D-AZ) delivered a floor speech against weakening the filibuster, following which President Biden acknowledged, “I don’t know if we can get this done.”

Senator Joe Manchin (D-WV) expressed support for Senator Sinema’s speech and shares her views, and they remain the members who also hold the keys to the Build Back Better Act (BBBA) – whether it happens and what it looks like if it does. Senator Manchin said the December 2021 inflation report released January 12, showing a 7% increase in the consumer price index over a year prior, was “very, very troubling,” reiterating previous concerns he made regarding the BBBA, CNN reported.

The next measurable steps toward getting the BBBA back on track remain unclear, though House Democratic members, who have been put in the position of voting for tax increases in a bill that cannot currently pass the Senate, still see something getting done. Tax Notes January 12 reported Ways & Means Chairman Richard Neal (D-MA) as saying, “I think the challenge we’ve had with [the bill] is we know what Joe’s against, we just need now for him to tell us what he’s for … That’s the issue here. I still think this is entirely workable.” House Budget Committee Chairman John Yarmuth (D-KY) said he would like to see a renewal of efforts, along with a name change, because BBBA sounds like infrastructure. “I still think we’re going to end up passing something,” Yarmuth said. “It will have fewer elements, more robust funding.”

Tax – The longer it takes, the greater the chances there could be pressure on Congress to extend expired tax provisions, some of which have extensions embedded in the BBBA. The staff of the Joint Committee on Taxation has prepared a list of Federal tax provisions that expired in 2021 or are scheduled to expire in the future.

Senate Finance Committee Chairman Ron Wyden (D-OR) announced he is launching an investigation “into the Opportunity Zone Program and whether it has delivered on Republican promises to create jobs and drive investment in low-income communities, rather than just create a loophole for wealthy investors to avoid paying taxes.” He cited Government Accountability Office (GAO) findings concerning the lack of reporting requirements. A Ways & Means subpanel held a hearing on the issue in November prompted in part by GAO findings on compliance/reporting challenges.

Inflation – During a Senate Banking Committee hearing on her nomination to be vice chair of the Federal Reserve Board, Lael Brainard said despite positive signs for unemployment and economic growth rates, “Inflation is too high, and working people around the country are concerned about how far their paychecks will go. Our monetary policy is focused on getting inflation back down to 2%, while sustaining a recovery that includes everyone. This is our most important task.” In questions from Chairman Sherrod Brown (D-OH), Brainard acknowledged that the pandemic’s effect on global supply chains is part of what is driving high inflation. But she added, “We are taking actions on the monetary policy front that I have confidence will be bringing inflation down, while continuing to allow the labor market to return to full strength over time. So we’re going to achieve that maximum sustainable employment while we bring inflation down to 2%.” Brainard said she expected the current wave of high inflation to persist through the next couple of quarters.

Health – The Supreme Court January 13 blocked the Biden administration’s vaccine-or-test mandate for large employers but allowed it to stand for some health care workers.

Government funding – There was a meeting of top appropriators yesterday regarding an omnibus appropriations bill to fund the government past February 18, and, as is traditionally the case, the focus is on agreeing to topline numbers for discretionary spending on defense, which is more of a priority of Republicans, and non-defense spending, including on climate change, championed by Democrats. The Washington Post reported on the prospect of including COVID aid, saying “early talks about pandemic relief have explored ways to boost testing, expand the availability of vaccines, invest in therapeutics and shore up any small businesses that still need financial help,” plus providing virus-related paid leave.

With the federal holiday on Monday, What to Expect in Washington won’t be published. Alerts will be issued as events warrant.

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