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January 31, 2022

What to expect in Washington (January 31)

Congress returns from a one-week recess amid some indications that Build Back Better Act (BBBA) negotiations could be revived; a focus on the nomination and Senate confirmation of a Supreme Court Justice; pending competitiveness/supply chain legislation; and the looming expiration of government funding on February 18. Asked about the BBBA during a January 27 West Virginia radio interview, Senator Joe Manchin (D-WV) said of other Democrats, “There’s a lot of conversation going on now. They’ve been reaching out.” However, “We haven’t sat down physically and started any negotiations.” Senator Manchin said he’s still open to participating in negotiations around the spending plan but wants “to be realistic.” 

Some news stories have been skeptical about imminent progress on the BBBA. An analysis in the January 30 Washington Post said, “Biden and Democrats continue to insist that they are still pushing for the roughly $2 trillion Build Back Better legislation, but no one has laid out a timeline for reconsidering what had been the focal point of their efforts most of last year.” The analysis further said, “No real talks have resumed ever since [Manchin], the key final vote needed to advance the measure, announced his opposition to the House draft and broke off talks just before Christmas… Clearly, Democrats prefer to cobble together a less expensive Build Back Better bill that could win Manchin’s support.” 

On ABC’s This Week, Senate Majority Whip Dick Durbin (D-IL) said of the effort, “Let’s find the things that really make the biggest difference and let’s move them as quickly as we can. I don’t want to drag this process out and I’m sure most of the American people want to see it come to a positive conclusion.”

The Wall Street Journal reported January 30 that there is the sense that an insistence on specific priorities should be abandoned in favor of whatever package Senator Manchin will agree to. “Some Democrats expect it could be weeks or possibly months before he would agree to a package, and lawmakers are meanwhile turning to bills to fund the government after Feb. 18 and boost U.S. technology competitiveness,” the report said. “The party will also soon tackle the confirmation process for Mr. Biden’s eventual pick for the Supreme Court.”

There are some signs that a revival of the BBBA can’t be top-down and leadership-driven; rather, it must come from a groundswell of pressure from rank-and-file members. Punchbowl News January 28 said the BBBA is “on life support right now, but Senate Democrats want to revive it ahead of the midterms. Sen. [Manchin] – the main stumbling block – wants to scrap the agreement and start from scratch. Whatever this morphs into will have to be a product of rank-and-file Democratic senators coming together. Party leaders and the White House can’t and won’t be able to dictate the terms of a deal after the December debacle. So we’ll see whether his Senate Democratic colleagues can get Manchin back to the table.”

Still, some have suggested that a revised plan could come from leadership. Senate Finance Committee Chair Ron Wyden (D-OR) said January 25 that Democrats “will have a package soon” addressing expanded health care access, prescription drug costs, and tax incentives for clean energy, Bloomberg reported.

Global tax – Embedded in the BBBA, and stalled along with it, are the 15% GILTI rate and country-by-country calculation necessary to bring the US into compliance with the OECD-led global tax deal. Assistant Secretary for Tax Policy Lily Batchelder January 25 dismissed the question of whether there’s a backup plan for the United States to meet its pillar two agreement obligations if the Build Back Better Act fails to reach President Biden’s desk, Tax Notes reported. “We are really confident Build Back Better will move forward,” she said.

Competitiveness/supply chain – The House plans to vote as early as Wednesday, February 2, on the America COMPETES Act of 2022, a competitiveness/supply chain measure unveiled January 25 that is comparable to the U.S. Innovation and Competitiveness Act (USICA) that passed the Senate in 2021. Like USICA, the House bill includes over $50 billion in funding for CHIPS Act semiconductor R&D. The bill also includes Trade Adjustment Assistance for workers and a tax provision to make permanent the tax credit for health insurance costs – both of which are also in the BBBA – plus a long list of duty suspensions and reductions. House passage of the measure will allow the House and Senate to begin a process to negotiate a final bill that could pass both chambers.

Congress – When President Biden does nominate a replacement for Supreme Court Justice Stephen Breyer, he won’t need the support of Republicans, but he will need the votes of all 50 Democrats for confirmation if all Republicans are opposed to the nominee. Senator Durbin said of the process, “We’ll be ready from a staff viewpoint and logistic viewpoint. But the decision really starts with the president, as it should. When he chooses a nominee and sends it to the Senate, then we’re off and running. And that nominee and the background of the nominee – in terms of whether they’ve been before the committee, how recently they were there and how much information we can bring together quickly – will decide the timeline.”

Regarding government funding, Democrats and Republicans are working toward an agreement on discretionary spending levels as well as controversial policy riders, and it is possible a short-term funding patch could be required beyond February 18 when current funding expires. A story in the January 30 Washington Post said the infrastructure bill signed into law in November “authorized the money to be spent, but in many cases, it still needs a second round of approval in the form of an appropriation. Congress hasn’t been able to agree on spending for the budget year that began in October, and instead has been rolling forward last year’s appropriations. That approach does not include the increase in transportation spending.”

There are two health hearings in the Ways and Means Committee this week, on mental health and equity gaps for those with disabilities and chronic conditions. The Senate Finance Committee has scheduled a hearing on “The Hospital Insurance Trust Fund and the Future of Medicare Financing.”


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