Debt Limit Fight, Senate and the House Are Back This Week, State of the Union on February 7
By Jason Pye - Director, Rule of Law Initiatives
Point of Order is a (mostly) weekly preview of key congressional activity for those with more than a passing interest in federal policy.
Debt limit reached, and Treasury is in extraordinary measures: The statutory debt limit set in 31 U.S.C. §3101 note was reached on Thursday, according to a letter from Treasury Secretary Janet Yellen to Speaker Kevin McCarthy (R-CA). The Treasury Department will now use extraordinary measures to meet the United States' debt obligations. In this instance, extraordinary measures consist of suspending investments to and redeeming investments from the Civil Service Retirement and Disability Fund (CSRDF) and the Postal Service Retiree Health Benefits Fund (PSRHB). This round of extraordinary measures is expected to extend any potential default through June 5. The CSRDF and the PSRHB would be made whole when the statutory debt limit is increased or suspended. There are also other steps the Treasury Department can take, including suspending investments to the Exchange Stabilization Fund, issuing debt from the Federal Financing Bank, and suspending the issuance of State and Local Government securities.
We all knew this was coming, but it’s still a headache for Congress: House Republicans want to trade reductions in spending for any increase to the debt limit. I’ve written about how Republicans squandered spending reductions that they got through the Budget Control Act of 2011. The situation was similar. There was a Republican-controlled House, a Senate run by Democrats, and a Democrat in the White House. Granted, hyper-partisanship is a much, much bigger problem today than it was then. The White House and Senate Democrats want a clean debt limit increase. Presumably, this means an increase in the statutory limit, rather than a suspension of the debt limit. House Republicans may have problems internally. Keep in mind that McCarthy can’t lose more than four votes on any bill that he wants to pass. If Republicans in swing districts begin to get nervous or lose patience with trying to leverage the debt limit for spending cuts, conservatives may be left with nothing. It’s worth noting that Reps. Brian Fitzpatrick (R-PA) and Josh Gotteimer (D-NJ) are apparently working on a proposal that’s similar to a debt brake. The details of the proposal aren’t clear, but it would supposedly cap debt as a percentage of gross domestic product. (This is different from the Maximizing America’s Prosperity Act, which would cap annual federal spending as a percentage of potential gross domestic product.)
One more thing about the debt limit: I don’t know if I’m a believer in the rhetoric about the calamity that could ensue if the United States were to default on its debt. That being said, I don’t know that I’m not a believer in that rhetoric. We had a partial default in 1979, and interest rates jumped as a result. The United States experience a recession the following year. I’m not saying that the partial default was the reason for that recession, but rising interest rates to combat inflation were the primary cause. The same is true of the 1981-1982 recession, which was much deeper than the one in 1980, but we saw an economic boom as the economy recovered. Lawmakers, regardless of party, have to consider the potential impact of whatever they do. We do need reforms to federal retirement and health insurance programs. That’s approximately 66 percent of all federal spending. The cost of borrowing is already on the upswing because of recent interest rate increases. A downgrading of the United States’ credit rating, through spooking markets or default, will have consequences throughout the economy. The dollar, which is the world’s reserve currency, would take a hit. The stock market would undoubtedly respond very negatively, which impacts Americans’ retirement accounts. Would global catastrophe ensue if the United States defaulted on its debt? I don’t know, but I don’t want to find out. (I have a long-form version of this over at my personal spot,
.)The Senate is back in session: After a two-week recess, the Senate will reconvene today at 3:00 pm to resume consideration of the nomination of Brendan Owens to serve as an Assistant Secretary of Defense. A roll call vote on the confirmation of the Owens nomination will begin around 5:30 pm. We’ll know more about the Senate’s schedule after Point of Order goes out this morning.
Senate committee schedule: Although committees haven't been constituted yet, there's some activity this week in Judiciary. We do expect committee rosters this week.
That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment (Judiciary, Tuesday at 10:00 am)
Nominations Hearing (Judiciary, Wednesday at 10:00 am)
Executive Business Meeting (Judiciary, Thursday at 9:00 am)
If you’re interested in watching any of these hearings online, you can find committee websites here.
Schedule and suspensions in the House: No votes are scheduled today. The House returns Tuesday at 12:00 pm for legislative business. First votes are expected at 6:30 pm. Legislative business will begin on Wednesday and Thursday at 10:00 am. The House will meet at 9:00 am for legislative business on Friday. There are 12 bills (listed below) on the floor under suspension of the rules. Those bills will be considered at least Tuesday, Wednesday, and possibly Thursday.
H.R. 159, Chance to Compete Act (Oversight and Accountability Committee)
H.R. 300, Settlement Agreement Information Database Act (Oversight and Accountability Committee)
H.Con.Res. 7, Commending the bravery, courage, and resolve of the women and men of Iran demonstrating in more than 133 cities and risking their safety to speak out against the Iranian regime's human rights abuses (Foreign Affairs Committee)
H.R. 255, Federal Disaster Assistance Coordination Act (Transportation and Infrastructure Committee)
H.R. 259, Post-Disaster Assistance Online Accountability Act (Transportation and Infrastructure Committee)
H.R. 388, Securities and Exchange Commission Real Estate Leasing Authority Revocation Act (Transportation and Infrastructure Committee)
H.R. 346, NOTAM Improvement Act (Transportation and Infrastructure Committee)
H.R. 290, Commercial Remote Sensing Amendment Act (Science, Space, and Technology Committee)
H.R. 342, Cost-Share Accountability Act (Science, Space, and Technology Committee)
H.R. 400, Investing in Main Street Act (Science, Space, and Technology Committee)
H.R. 399, Small Business Advocacy Improvements Act (Small Business Committee)
H.R. ____, Microloan Transparency and Accountability Act (Small Business Committee)
Bills that come to the floor under suspension of the rules require two-thirds of members present and voting for passage. This is the most common way that bills considered by the House come to the floor. Some of these bills may be passed by a voice vote, rather than a roll call vote. Most bills that come to the floor under suspension aren’t widely considered controversial, although leadership may occasionally test a bill under suspension to gauge opposition or sneak a bill through the chamber.
Rule bill: The House will consider the Strategic Production Response Act, H.R. 21. The Strategic Production Response Act limits the drawdown of petroleum in the Strategic Petroleum Reserve until a plan is developed to increase the percentage of federal land to be leased for oil and gas production. What’s notable about this bill is the fact that it’s coming to the floor under a modified open rule. With the exception of suspensions, which need two-thirds for passage and generally aren’t controversial, the House has operated under structured or closed rules. Structured rules are cleared by the House Rules Committee before they go to the floor while closed rules prevent any opportunity for amendments. A modified open rule allows amendments under certain circumstances. (See more about the various types of rules here.) The House hasn’t seen a bill come to the floor under a modified open rule since May 26, 2016. (That was the Energy and Water Development and Related Agencies Appropriations Act for FY 2017, H.R. 5055.)
The House will vote at some point to replace the income tax: News broke right after the recess began that the House will vote on a national retail sales tax to replace the income tax. Being from Georgia, and a listener of Neal Boortz’s radio show before he lost his mind, I’m very familiar with the proposal. The FairTax Act, H.R. 25, would replace the income tax with a 23 percent national retail sales tax. However, the sales tax is contingent on the repeal of the 16th Amendment. The proposal is slammed by opponents as regressive, but it also includes a “prebate” to households for necessities up to the federal poverty line. This may give some people pause considering that this would be a massive entitlement program. The FairTax Act also includes a provision that would sunset the sales tax if the 16th Amendment isn’t repealed. The FairTax Act has been introduced in every Congress since the 108th Congress. It was originally introduced by Rep. John Linder (R-GA) and Sen. Saxby Chambliss (R-GA). When Linder left, Rep. Rob Woodall (R-GA), who represented the same district and worked for Linder, picked it up. Sen. Jerry Moran (R-KS) carried the bill in the Senate through the 115th Congress. No one has carried the bill since. Rep. Buddy Carter (R-GA) is now the lead sponsor of the FairTax Act in the House. Personally, just give me a flat tax with a large standard deduction. That’s more likely than a national retail sales tax.
Committees are slowly being constituted: No hearings are scheduled this week. House Republicans have announced returning and new members over the past week or so. So far, rosters have been announced for Agriculture, Appropriations; Energy and Commerce; Financial Services; Foreign Affairs; Homeland Security; Judiciary; Natural Resources; Oversight and Accountability; Science, Space, and Technology; Transportation and Infrastructure; and Ways and Means. We're still waiting on Republican members for other committees. Well, either that, I couldn’t find them. I haven't seen announcements for House Democrats yet, but I'll make sure to include them when I do.
We have a new senator: Pete Ricketts has been appointed to fill the seat left vacant by the resignation of Sen. Ben Sasse (R-NE), who has taken over as president of a school that has lost five of its last six games against the Georgia Bulldogs. (I couldn't pass that up.) Ricketts served as Governor of Nebraska between January 2015 and January 2023. He is expected to be sworn in today. Ricketts will have to run in a special election in 2024 before running for a full term in 2026. Sen. Deb Fischer (R-NE) is also in cycle in 2024. Ricketts brings the Senate back to 100 members, 48 Democrats and three independents who caucus with Democrats and 49 Republicans.
SCOTUS leak update: The Supreme Court still hasn't identified the individual responsible for the leak of the draft opinion in Dobbs v. Jackson Women's Health Organization. “For these reasons and others, the Court immediately and unanimously agreed that the extraordinary betrayal of trust that took place last May warranted a thorough investigation. The Chief Justice assigned the task to the Marshal of the Supreme Court and her staff. After months of diligent analysis of forensic evidence and interviews of almost 100 employees, the Marshal’s team determined that no further investigation was warranted with respect to many of the ‘82 employees [who] had access to electronic or hard copies of the draft opinion,’” the statement from the Court says. “In following up on all available leads, however, the Marshal’s team performed additional forensic analysis and conducted multiple follow-up interviews of certain employees. But the team has to date been unable to identify a person responsible by a preponderance of the evidence.”
Sentencing Commission proposes amendments: The U.S. Sentencing Commission met last week and proposed amendments to the Sentencing Guidelines, including amendments related to the First Step Act. The Commission is also seeking comment "on whether the guidelines adequately address certain sexual abuse offenses, how it should address important circuit court conflicts, and whether the guidelines appropriately account for acquitted conduct, among other matters." The proposed amendments are available here.
State of the Union: President Biden will give the annual State of the Union address to a Joint Session of Congress on Tuesday, February 7, at 9:00 pm. We’ll note that the concurrent resolution necessary to provide the joint session hasn’t yet been introduced.
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