Senate to Reconsider Veterans Bill, Budget Reconciliation Deal Expected to Move Toward Votes, August Recess Looms
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.
Senate recess scheduled to begin after this week: Under the current schedule, the Senate is expected to enter the August recess after this week, August 8 through September 5. The Senate will reconvene on Tuesday, September 6. This assumes, of course, that the Senate doesn’t stay in longer than scheduled. Still, the number of legislative days until the midterm is running out.
The Senate returns with a heavy workload: The Senate returns today at 3:00 pm to resume consideration of the nomination of Elizabeth Wilson Hanes to serve as a judge on the U.S. District Court for the Eastern District of Virginia. The cloture motion ripens at 5:30 pm. We expect a roll call vote on the cloture motion to begin at that time. We also expect a vote on the cloture motion for the Honoring Our Pact Act, S. 3373, today.
Manchin and Schumer have a reconciliation bill: After months of negotiations, confusion, and pressure, Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) have an agreement on a budget reconciliation bill, the Inflation Reduction Act, which will presumably be introduced in the form of an amendment to H.R. 5376 after it goes through the “Byrd bath” to remove extraneous provisions that violate the budget reconciliation process. According to a one-pager from Senate Democrats, the Inflation Reduction Act would raise $739 billion over ten years through a 15 percent corporate minimum tax, allowing Medicare to negotiate drug prices, enhanced IRS enforcement, and the elimination of the carried interest loophole. The bill would spend $433 billion over ten years, predominately on climate change provisions but also to extend the enhanced health insurance exchange subsidies that were set to expire at the end of the calendar year. Any savings that come through the passage of the bill would be used for deficit reduction–roughly $30 billion a year over ten years. Manchin’s statement on the agreement is here. Business groups aren’t happy about the agreement. Neither is Senate Majority Leader Mitch McConnell (R-KY).
Timing is everything: Schumer wants to vote on the Inflation Reduction Act this week, but it’s not clear that’s doable. The Senate parliamentarian is responsible for the Byrd bath of the legislative text. That could take some time to finish. The Senate will also have to go through a vote-a-rama, a process that allows for amendments to be offered, debated, and dispensed of through roll call votes. The process takes several hours. There were 43 roll call votes in the most recent vote-a-rama in August 2021, beginning at 11:52 am on August 10, 2021, and ending at 3:45 am the next morning. The Senate has been hit with a COVID-19 wave recently, the latest being Sen. Dick Durbin (D-IL), so any absences on the Democratic side of the aisle would hinder passage. On the upside, Sen. Patrick Leahy (D-VT) returns to the Hill this week.
Sinema has been really quiet: Don’t assume the Inflation Reduction Act is a done deal, though. Sen. Kyrsten Sinema (D-AZ) has not said how she plans to vote on the bill. She balked at closing the carried interest loophole. Obviously, if Sinema votes against procedural motions or final passage of the Inflation Reduction Act, the reconciliation effort will fail. It’s worth noting, though, that the revenues from this provision are only estimated to be $14 billion over ten years, so the impact isn’t huge and can be scrapped without having much of an impact on the projected deficit reduction.
McConnell’s plans to stall the innovation bill didn’t work out: McConnell said that he would take the innovation bill, the Chips-Plus Act, H.R. 4346, if Democrats moved forward on budget reconciliation. The Chips-Plus Act passed the Senate by a vote of 64 to 33. McConnell for it. Within hours, Schumer and Manchin announced the deal on budget reconciliation.
But Republicans tanked the veterans’ PFAS bill: The cloture motion on the Honoring Our Pact Act, S. 3373, which would access to healthcare for veterans exposed to harmful toxins, including per- and polyfluoroalkyl (PFAS) and radiation, failed shortly after the deal between Schumer and Manchin was announced. Republicans have insisted that the reason they denied cloture was over the lack of amendments. In particular, Sen. Pat Toomey (R-PA) wants to address what he calls a “budget gimmick” that he says could result in $400 billion being spent over the ten-year budget window in unrelated spending. Toomey and Senate Veterans’ Affairs Committee Chairman Jon Tester (D-MT) had back and forth about the issue after the cloture motion was defeated, with Tester getting quite agitated about the bill being held up. Toomey, however, will get a vote on his amendment. The Senate will vote on the cloture motion for the bill again today.
Appropriations bills released by Senate Democrats: Democrats on the Senate Appropriations Committee have rolled out the 12 appropriations bills totaling $1.7 trillion in discretionary spending–$850 billion for defense and $653 billion for nondefense. It’s highly unlikely that the Senate will get any of the bills done before the end of the year, though, considering the tight margins. Republicans have already pointed out that there are poison pills in many of the bills. As mentioned in the newsletter before, we’re looking at a continuing resolution at the end of September. What happens after that is anyone’s guess.
Senate committee schedule: Below are some Senate committee hearings that may be of interest. The full Senate committee schedule for the week is here.
‘The Rent Eats First’: How Renters and Communities are Impacted by Today’s Housing Market (Banking, Housing, and Urban Affairs; Tuesday at 10:00 am)
Oversight of SBA’s COVID Economic Injury Disaster Loan Program (Small Business and Entrepreneurship, Tuesday at 10:00 am)
Future of Spectrum (Commerce, Science, and Transportation; Tuesday at 2:30 pm)
Antitrust Remedies: Solutions to Foster Competitive Markets (Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights; Tuesday at 3:00 pm)
Protecting Our Democracy’s Frontline Workers (Judiciary, Wednesday at 10:00 am)
Business Meeting (Homeland Security and Governmental Affairs, Wednesday at 10:00 am)
Revisiting Gain of Function Research: What the Pandemic Taught Us and Where Do We Go From Here (Homeland Security and Governmental Affairs Subcommittee on Emerging Threats and Spending Oversight; Wednesday at 10:00 am)
The Electoral Count Act: The Need for Reform (Rules and Administration, Wednesday at 10:30 am)
Nominations Hearing (Foreign Relations, Wednesday at 2:30 pm)
A System in Need of Repair: Addressing Organizational Failures of the U.S.’s Organ Procurement and Transplantation Network (Finance, Wednesday at 2:30 pm)
Oversight of the Federal Bureau of Investigation (Judiciary, Thursday at 10:00 am)
If you’re interested in watching any of these hearings online, you can find committee websites here.
The House is in recess: The House adjourned on Friday for the August recess. Under the current schedule, members aren’t expected to return for votes until Tuesday, September 13. However, this will undoubtedly change if the Senate gets the Inflation Reduction Act done. We’ll have an update on that should the House come back to finish the Inflation Reduction Act.
An update on what the House did before recess: Although there was some drama among Democrats noted in our midweek update, the House did pass the Assault Weapons Ban, H.R. 1808, by a vote of 217 to 213. The bill doesn’t really have a path forward in the Senate. Interestingly, the House didn’t take up the several police funding bills that moderate and vulnerable Democrats had pushed. It’s possible that these bills will hit the floor when the House comes back in September. The House also passed the Chips-Plus Act, H.R. 4346, by a vote of 243 to 187. The bill now heads to President Biden.
“So if it is a...bagel, the Fed thinks it's going to be a mild bagel”: The Bureau of Economic Analysis released its quarterly estimate of gross domestic product (GDP) on Thursday. According to the estimate, GDP contracted at an annual rate of 0.9 percent in the second quarter of 2022. This follows a 1.6 percent contraction in the first quarter. As I noted last week, a recession is usually defined as two consecutive quarters of economic contraction. So, this is technically a recession, however mild it may be. Obviously, though, the Federal Reserve is (finally) tightening monetary policy, but its aggressive actions could potentially slow the economy even more. Unemployment is a key indicator of the health of an economy. So far, the unemployment rate has held steady at a solid rate of 3.6 percent since March. A comparable recession could be the 2001 recession, which began in March of that year and lasted for eight months. GDP contracted by 0.3 percent. At the beginning of this recession, the unemployment rate was 4.3 percent, and it remained close to that for a few months until it began ticking upward. Although the recession officially ended in November 2001, the unemployment rate didn’t peak until June 2003 when it reached 6.3 percent. It didn’t fall back below 5 percent until December 2005. (There were also other events that took place during this time, including the September 11 attacks and the launch of the war in Afghanistan, which was followed by the war in Iraq.) My point is that unemployment is an indicator of economic health, but it’s also a lagging one. That said, the National Bureau of Economic Research’s Business Cycle Dating Committee determines what is a recession and when it begins. (For the uninitiated, the quote at the beginning of this section comes from The West Wing.)
Dire long-term budget report: The Congressional Budget Office (CBO) projects that the public’s share of the national debt will reach 185 percent of GDP by 2052. The public’s share of the national debt is projected to reach 98 percent by the end of 2022. The explosion in debt is driven largely by the growth of federal mandatory programs, also known as entitlements, and interest on the public’s share of the national debt. Revenues are higher than previously projected, hitting 19.6 percent of GDP in FY 2022. That’s good enough for the second-highest share of revenues as a percentage of GDP since 1962. The highest was 20 percent in 2000. Although revenues are expected to dip ever so briefly down to 17.6 percent of GDP in FY 2025 before climbing back up to 19.1 percent, federal spending is projected to grow from 23.5 percent of GDP to 30.2 percent. There’s a lot more to this, and I really hope I get a chance to explore the data on my own time soon.
And an equally dire report on demographics: Our population is aging, and we are dealing with low birth rates. As a result, according to a separate CBO report, by 2043, the only population growth that the United States will see will come from net immigration. The CBO projects that by 2049, the number of deaths will outpace the number of births. Although the report and related data don’t mention the labor participation rate, you can bet that it will decline substantially. It’s impossible to have a productive, internationally competitive economy when we don’t have enough workers. Sigh. Everything is terrible.
And, finally, we’re taking a break: We may have a bonus of Point of Order this week depending on how the week goes. Otherwise, unless the beginning of recess is delayed or the House comes back to vote on the Inflation Reduction Act, Point of Order will return on September 6. Enjoy your August, folks.
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