March 27, 2023
What to expect in Washington (March 27)
The Senate is back in today to continue consideration of S. 316, a bill to repeal the authorizations for use of military force against Iraq, with a vote on the motion to invoke cloture at 5:30 p.m. and amendment votes set up for Tuesday. The House is also back and the main business for the week is the Lower Energy Costs Act (H.R. 1), the Republican energy bill focused on increasing production and reducing regulatory burdens. Punchbowl reported, "parts of this package could find their way into any spending plus debt-limit deal" based on comments from House Speaker Kevin McCarthy (R-CA) that he wants to combine the two issues. Both the House and Senate are out for two weeks beginning next week.
H.R. 1, introduced by Majority Leader Steve Scalise (R-LA), aims to lower energy costs by:
A Wall Street Journal editorial said of the bill, "It would repeal the Energy Department's power to block cross-border purchases and sales of natural gas, letting producers import and export without months of preapproval. The move is inspired by Congress's elimination of the oil-export ban in 2015, which helped U.S. producers become the global leader as domestic drilling surged." Further, the editorial said, "House Republicans also plan to block wasteful and counterproductive programs in the Inflation Reduction Act. Their bill would repeal the fee that the last Congress imposed on methane emissions, which takes effect next year at $900 per metric ton and rises to $1,500 in 2026 … The new bill would also cancel the $27 billion 'green bank,' which is gearing up to fund local climate-friendly investments with federal dollars."
Bloomberg reported on an analysis last week that the IRA's climate policies would cost $1.2 trillion, "three times more than the official government forecast," but also spur trillions more in private-sector investments.
Trade - The House Ways and Means Committee's March 24 "Hearing on the Biden Administration's 2023 Trade Policy Agenda with United States Trade Representative, Ambassador Tai" aired concerns, also on display at the Senate Finance Committee a day earlier, about planned critical mineral and battery component trade agreements with the EU and Japan that the Administration says won't need congressional approval (because they don't involve tariffs). Chairman Jason Smith (R-MO) said, "Through so-called 'trade frameworks' that sidestep Congress and fail to establish durable agreements, this Administration is fueling the supply chain crisis and plunging American workers, farmers, and manufacturers into prolonged uncertainty."
Republicans otherwise expressed exasperation over what Rep. Kevin Hern (R-OK) said is the Administration's "timid approach" that has seen them take no steps toward renewing Trade Promotion Authority (TPA) that has expired. He said it would be a mistake for the Administration to turn a blind eye to TPA. Ambassador Tai said not every Free Trade Agreement has been processed under TPA. Rep. Greg Murphy (R-NC) told Tai she may be too nice for the job and "this administration above you has just shown no interest in trade," in remarks that generated coverage in the mainstream media.
Further, Rep. Vern Buchanan (R-FL) said reauthorization of a Miscellaneous Tariffs Bill (MTB) and Generalized System of Preferences (GSP) package should be an "easy layup." Tai said she believes an MTB and GSP deal has long been on the table, the two are congressional programs, and she has expressed support for GSP reauthorization.
Tax — The trade hearing had a tax angle as both Hern and Rep. Ron Estes (R-KS) asked whether the Administration would reactivate Section 301 investigations regarding Digital Services Taxes (DSTs) if Pillar One negotiations aren't successfully completed by December. Tai said 301 investigations are suspended, so that means they can be unsuspended.
Bloomberg Tax reported that Ways and Means member Adrian Smith (R-NE) led a March 24 letter with other members asking House appropriators to prohibit the US from giving any funds to the OECD. "OECD is the primary venue through which the Biden administration joined 130 nations in reaching international tax agreements on the taxation of digital services (Pillar 1) and an international corporate minimum tax (Pillar 2)," the letter said. "While U.S. participation in Pillars 1 and 2 requires legislative action, no majority exists in the House or Senate to enact these agreements. Despite this, OECD continues to produce implementation guidance for Pillars 1 and 2, which could ultimately lead to foreign countries levying additional taxes on American companies."
Expected sometime this week: guidance on the Inflation Reduction Act's (IRA) Section 30D electric vehicle (EV) tax credit critical mineral and battery component requirements, according to a Treasury Department announcement.
Health — The House Ways & Means Health Subcommittee will hold a hearing on "President Biden's Fiscal Year 2024 Budget Request with Health and Human Services Secretary Becerra" on Tuesday, March 28, at 2:00 p.m.
The Senate Finance Committee will hold a hearing on "An Oral Health Crisis: Identifying and Addressing Health Disparities" on Wednesday, March 29 at 2:30 p.m.
The Finance Committee will hold a hearing on "Pharmacy Benefit Managers and the Prescription Drug Supply Chain: Impact on Patients and Taxpayers" on Thursday, March 30, 2023, at 10 a.m.
Other issues — The House Ways & Means Work & Welfare Subcommittee will hold a hearing, "Welfare is Broken: Restoring Work Requirements to Lift Americans Out of Poverty," on Wednesday, March 29, at 2:00 p.m.
The Saturday WSJ reported that a Government Accountability Office (GAO) determination that the Administration's actions to extend a pause on federal student loan repayment and to cancel certain loan debts are a rule for purposes of the Congressional Review Act (CRA) could lead to Republican efforts to roll back the action. "Unlike other executive actions, that determination allows Republicans to use the Congressional Review Act, a legislative tool that allows Congress to strike down regulations within a set time frame," the story said. "Mr. Biden would likely veto any measure to nullify the $400 billion plan. But the move would force Democrats to choose sides on the contentious policy, which could put pressure on centrist lawmakers who are up for re-election next year." Further, "the new determination allows Senate Republicans to bring up the measure with just 30 senators signaling their support, and it can pass with a simple majority."