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News stories in recent days have raised the prospect that a potential Republican majority in one or both chambers could make 2023 look something like the 2011—2013 period, when Republicans controlled the House under a Democratic President (Obama) and conservative members sought to extract concessions in exchange for their support of government funding and debt limit bills, leaving Congress lurching between fiscal deadlines.

Conservative Republicans won spending reductions in exchange for allowing government funding in 2011, and a debt limit fight led to the Budget Control Act, the failed Supercommittee effort to reduce spending, and the resulting "sequestration" fallback spending caps that Congress routinely raised. More funding and debt suspense followed in 2013.

A Roll Call story said of Republicans' split on whether to back a continuing resolution (CR) until December 16 or push for a funding patch into 2023, to ward off lame-duck spending and potentially give them a stronger hand in spending and other negotiations should they win control of one or both chambers: "internal GOP disagreements presage further challenges ahead if Republicans win control of the House or Senate. Previous GOP Speakers John A. Boehner of Ohio and Paul D. Ryan of Wisconsin faced monumental difficulties in rallying enough Republicans behind some spending bills due to objections from conservatives. Demands from tea party-backed freshmen and others led to a series of stopgap bills that cut spending in early 2011, almost led to a partial government shutdown, and then resulted in a CR for the rest of the fiscal year for every agency but the Defense Department — with no earmarks. Later that year, a debt-ceiling standoff with President Barack Obama led to more spending cuts and almost caused the Treasury Department to run out of funds to finance government commitments. Two years later, the government shut down for 16 days."

A story in the Saturday Washington Post said some conservatives are now pressing House Republican leaders for rules changes to strengthen the power of rank-and-file members prior to leadership elections, should the party take control of the House, which is seen as a signal from the Freedom Caucus that, if their demands are not met, they may withhold their leadership votes.

"The undercurrent of tension serves as an early preview of the difficulty that House Republicans, who haven't had the reins of power since 2019, will face in the majority with various factions making demands of leadership on legislative priorities," the story said. "Recent polls suggest that GOP gains in the House could be smaller than previously expected — a worry for lawmakers who believe a new class of Trump allies could embolden the ultraconservative House Freedom Caucus and shore up their influence over leadership in a way that halted the passage of legislation in the [Boehner] and [Ryan] speakerships."

Government funding — Senator Joe Manchin (D-WV) is advocating for his energy permitting reform bill, which would require federal agencies to issue all approvals and permits for the construction of the Mountain Valley Pipeline and set a two-year target for National Environmental Policy Act (NEPA) reviews for major energy and natural resource projects, to be included in the CR. Senator Manchin made a case for the permitting measure, which faces opposition from both progressive Democrats and Republicans, on Fox News yesterday and in a Wall Street Journal op-ed.

"These essential reforms have been advocated by developers of all types of American energy — oil and gas, electric transmission, mining, solar and wind, and more. In fact, it is the kind of balanced and all-of-the-above energy approach America needs if we are to defend this nation's energy security from those who seem hell-bent on weakening it," the op-ed said.

A Tuesday Senate cloture vote (Congress is out today for Rosh Hashanah) on H.R. 6833, the legislative vehicle for the CR, could demonstrate that the permitting addition can't advance and clear the way for Democrats to offer a mostly "clean" version including Ukraine aid and a five-year reauthorization of the Food and Drug Administration (FDA) user fee program. Government funding expires September 30 and delays in clearing the CR could have the House voting over the weekend.

There are no hearings this week in the House Ways and Means Committee or Senate Finance Committee.

Friday, September 30 (12:00 p.m.), is the EY Webcast, "Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments." Register.

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