Congress returned from its July 4th recess yesterday to a long to-do list.
Here’s a look ahead at several of the issues that will dominate their agenda for the rest of the year. As always, we’ll continue to keep an eye on what is – or is not – happening in our nation’s capital and provide updates as appropriate.
Thanks much,
The Bridge Team
China Competition Bill: Legislation aimed at strengthening U.S. competitiveness against China is in jeopardy after Senate Minority Leader Mitch McConnell (R-KY) threatened to pull Republican support for the bill if Democrats move forward with a budget reconciliation deal. The proposed legislation would authorize billions of dollars in funding to bolster U.S. research and development, especially in the domestic semiconductor industry. Provisions related to trade, climate, and labor have been stripped out of the bill. Although the legislation is a priority for the Biden administration, as well as several members of Congress, its enactment is unlikely if it does not pass before the upcoming August recess.
Fiscal Year 2023 Appropriations: The House began its work on fiscal year 2023 appropriation bills in June, with all 12 clearing the House committee. Senate Appropriations Chairman Patrick Leahy (D-VT) recently announced that the panel will begin making up its fiscal year 2023 appropriations bills during July even without a bipartisan, bicameral appropriations deal. Despite this progress, final appropriations bills are not expected until after the November elections, meaning that at least one stopgap spending bill will be needed before the end of the federal fiscal year occurring on September 30th.
National Defense Authorization Act (NDAA): Both the House and Senate Armed Service Committees have finalized their authorization bills for the U.S. Department of Defense for fiscal year 2023, although both bills need to be approved by their respective chambers. Both bills rejected President Biden’s request for $802 billion national defense proposal and voted to increase defense spending, though by different amounts. Final enactment of the NDAA is expected late this year, which would be the 62nd year in a row that Congress has completed an annual update to the national defense bill.
Privacy Bill: In early June, a bipartisan, bicameral group of lawmakers released the highly anticipated text of a federal consumer privacy bill entitled the American Data Privacy and Protection Act (ADPPA) – the product of months of negotiations and input from industry experts on both sides. The bill’s authors include three of the “four corners” of the House and Senate Commerce Committees – Senator Roger Wicker (R-MS), Representative Frank Pallone (D-NJ-06), and Representative McMorris Rodgers (R-WA-05) – but, notably, does not include Senator Maria Cantwell (D-WA), who chairs the Senate Commerce Committee and has her own privacy legislation and has not yet supported the ADPPA. The prospects of the legislation passing have become additionally complicated by complexities around the recent Roe v. Wade decision. If it does not become law this year, the legislation will almost certainly be a priority in 2023 as the new Congress convenes.
Reconciliation: Democrats continue to hold out hope for a reconciliation deal to materialize before the end of the year as Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) continue their negotiations. The revised proposal under discussion is a much smaller package that focuses on lowering drug costs, investing in green energy, and making changes to the tax code to reduce the deficit. Thus far, Senator Manchin has held out his support of any reconciliation agreement due to spending concerns amidst record-high inflation, but the latest round of discussions has Democrats hopeful that an agreement can be reached before August recess.
Roe v. Wade and Midterms: Last month in a historic 5-4 ruling, the Supreme Court struck down Roe v. Wade and sent abortion policy back to the states. In response, President Biden called for suspending the Senate filibuster to guarantee abortion rights, although chances of a change in the Senate remain slim. In a runup to the midterm elections, Democrats hope to use this issue to energize their base to increase voter turnout in November, while Republicans hope that voters will care more about inflation, gas prices, and the economy.
Job Numbers: Last week, the Department of Labor announced the economy added 372,000 jobs in June despite record-high inflation and rising interest rates. The unemployment rate remained at 3.6% — near where it was prior to the pandemic. The jobs numbers mean the Federal Reserve is on track to raise interest rates by 0.75% at its meeting later this month.