July Washington D.C. Update
An impending budget resolution and a massive infrastructure bill could make or break the Biden administration's fall agenda before the 2022 midterm politics take over Capitol Hill. And several congressional committees are pressing ahead on environmental legislation as progressives pressure President Joe Biden to act on climate change.
For this month’s CEO Report, our POLITICO policy teams took a deep dive on the post summer agenda what to expect coming from Congress in the second half of 2021.
— Congress is getting ready to push through the mammoth infrastructure policies while working on a needed budget resolution before funding expires.
— Transportation, energy and education policy areas are all scrambling to get their priorities passed in an infrastructure package.
— Tax reform, especially a new global system for taxing corporate profits, will face its biggest obstacle in Congress.
Welcome to the July edition of the CEO Report, POLITICO Pro’s high-level outlook on the policy issues driving the month … and beyond.
Competition and climate on the agenda: The Agriculture Department is expected to be a vital agency as the Biden administration moves forward with its antitrust and climate plans. Congress will also be considering a budget boost for USDA and the FDA.
Writing regs: USDA is working on regulations aimed at bolstering protections for farmers and ranchers who deal with large agribusinesses, primarily the four biggest meatpackers. Agriculture Secretary Tom Vilsack has outlined several ways he will attempt to crack down on unfair practices and promote competition in agriculture, but the rulemaking process will take months, perhaps years.
The department will also continue building out its climate change agenda. USDA has already announced several climate-related initiatives, like expanding the Conservation Reserve Program that pays producers to take farmland out of production and offering crop insurance benefits for farmers who planted cover crops. But Vilsack has yet to roll out a key piece of the agenda: how USDA will pay farmers to trap carbon in their soil, which is a complicated and costly process.
Hill action: Congress also has until the end of September to pass fresh funding for the FDA and USDA. The House Appropriations Committee approved legislation that would raise funding for food and farm programs by more than 10 percent over the current budget. But the sharply divided Congress is expected to be mired in spending fights this fall, which will mean lawmakers will need to pass a short-term stopgap bill to keep the lights on until at least December. — Ryan McCrimmon
BUDGET AND APPROPRIATIONS
Ready for reconciliation: Congress will spend July getting the trains loaded for the “two-track” infrastructure push. And the budget committees in both chambers will be the key to unlocking the reconciliation process that gets the Democrat-backed plan going in tandem with the bipartisan deal.
Expect the Senate Budget Committee to adopt a budget resolution in short order that lays out the spending ceiling for that partisan plan and directs various committees to write the policy details. Senate Majority Leader Chuck Schumer just reiterated his goal of passing that budget resolution on the floor before August recess — a feat that will require a vote-a-rama that could force senators into yet another all-nighter in the chamber.
While leaders in the Senate have yet to announce markup plans for the 12 annual spending bills, appropriations season is in full swing in the House. After wrapping up committee action on the full dozen by week’s end, House Democrats plan to pass most of their fiscal 2022 funding measures on the floor this month. Their effort probably won’t pay off, however, before cash runs out at midnight on Sept. 30. Many lawmakers are already assuming a stopgap will get passed at that point, buying a few more weeks or months to work on final fiscal 2022 bills. — Jennifer Scholtes
Surface transportation bill slips into fall: Transportation's summer is proving to be an overheated race to the infrastructure finish line, but that burn may linger long into fall as lawmakers scramble to figure out the best way to move a massive infrastructure package forward.
Right now, there are three active packages: the House-passed surface transportation bill, which reauthorizes core road and transit programs plus some intended to combat climate change, pieces of a Senate companion bill that is not yet finished, and the bipartisan infrastructure framework that aides spent the July recess scrambling to turn into legislation.
The Democratic leadership in both chambers of Congress have set a blistering pace toward enactment for a big infrastructure package, which may not be possible to meet — but that doesn't mean they won't try. For the surface bill, that's a real and hard deadline of the end of the fiscal year — and if Congress decides to mesh all three measures together, which is a distinct possibility — then Sept. 30 becomes the real date to beat.
That doesn't count the reconciliation package that leaders and the White House have pledged to move in concert with the infrastructure framework, however. And that work, which has barely even begun, could bleed much further into fall.
Whatever process is used to push an infrastructure package through to enactment, it's likely to be a messy one that could still be churning even when fall temperatures begin settling over the land. — Kathryn A. Wolfe
Thinking big on climate: Democrats are pressing ahead with the plan to use their one-two legislative punch — a bipartisan infrastructure framework and a separate reconciliation package — to include vast investments in addressing climate change. The bipartisan deal announced in late June includes $15 billion for electric vehicles, $73 billion for the nation’s grid and $47 billion toward climate resilience — and would be funded in part through reinstating “Superfund fees for chemicals.”
But progressives want to go much further and have seized upon the mantra of “no climate, no deal.” Among other priorities they’ll push for is a federal clean energy standard, mandating steadily more clean energy in the utility sector; generous tax incentives for the wind, solar and electric vehicle sectors; and a civilian conservation corps, which would restore ecosystems around the country and help put millions of young people to work.
The water sales pitch: Upgrading the nation’s aging and failing water infrastructure has been one of the Biden administration’s top refrains as it’s sought to sell the country on the bipartisan deal, particularly its promise to remove the estimated 6 to 10 million lead service lines that continue to deliver water to homes across the country, disproportionately in communities of color and low-income. The bipartisan framework deal includes $55 billion for water infrastructure, but utilities are hoping they’ll get a second bite at the apple in a Democrats-only bill, since the initial tranche isn’t likely to cover much beyond the lead issue.
Helping low-income families afford their water bills has become a top priority for Democrats and some Republicans, as well as water utilities who see such programs as a prerequisite to being able to charge the rest of their customer base the true cost of their services. Lawmakers approved a new $1.1 billion Low-Income Household Water Assistance Program as part of coronavirus relief legislation last year and House Democrats approved another such program, along with provisions to boost EPA’s ability to regulate drinking water contaminants, as part of a massive transportation and water bill earlier this month that could become part of infrastructure negotiations. — Annie Snider
EMPLOYMENT AND IMMIGRATION
NLRB, Labor look to be fully stocked — Biden will be able to appoint a Democratic majority to the National Labor Relations Board for the first time since 2017 at the end of August, when the term of one of the agency’s GOP members expires. The five-member board, which enforces the National Labor Relations Act and interprets workers’ protections under the law, currently has a 3-to-1 Republican majority. Biden has already named picks for the current empty seat and the upcoming vacancy — but the Senate will have to confirm the nominations before they can be installed. With Democrats controlling the board’s agenda, the NLRB is expected to turn its attention to reversing several Trump-era NLRB rulings, including those regarding independent contractors and joint employers. The agency’s Biden-appointed chair, Lauren McFerran, told POLITICO in June that she plans to interpret labor law “far more broadly” than her predecessor.
Over at the Labor Department, Julie Su is likely to be on board as deputy secretary. The Senate has finally filed cloture on her nomination, meaning it will soon vote on her confirmation. While Su stirred GOP criticism over her leadership as California’s labor secretary during her Senate nomination hearing, one Republican did vote to approve her nomination out of committee in April. Democrats are expected to have enough votes to advance her nomination despite their razor-thin majority — and with that, fully staff some of the most senior levels of the Labor Department. With Su and Labor Secretary Marty Walsh installed at the agency’s helm, they will be much more aggressive about the administration’s agency priorities, including expanding workers’ ability to organize and strengthening oversight of employers. — Eleanor Mueller and Rebecca Rainey
Waiting on tech and telecom nominations: Biden has been slow to fill several key roles on tech and telecom policy within his administration, including setting a modern record for any president's delay in nominating someone to fill the Justice Department's top antitrust slot.
Tech watchers are also eager to see whom Biden selects to be the permanent chair of the Federal Communications Commission, as well as a third Democratic FCC commissioner and the chief of the Commerce Department’s National Telecommunications and Information Administration.
The big storyline to watch is whether Biden nominates more progressive favorites, as he did when picking Lina Khan to chair the Federal Trade Commission.
Tech industry leaders will also be on high alert for how, when and if House leaders choose to move to the chamber floor the major antitrust package that advanced out of the Judiciary Committee earlier this year. Those bills would make it easier to break up giant tech companies such as Facebook and Google or block their acquisitions of smaller rivals, while placing restrictions on platforms like Apple's App Store and Amazon's Marketplace. — Cristiano Lima
A global challenge: One of the Biden administration’s biggest tax policy objectives — a new global system for taxing corporate profits — could face its biggest obstacle yet in coming months: Congress. Negotiations to hammer out an agreement have been moving at a brisk pace since the administration breathed new life into them not long after Biden took office. The Organization for Economic Cooperation and Development, which is facilitating the talks, announced an agreement on a framework earlier this month, and it has been endorsed by the G-20 finance ministers.
The plan is aimed at establishing a global minimum tax and halting what critics call a “race to the bottom” among countries vying to lure businesses by offering them the lowest tax rates. For Biden, it's also an ingredient in his plan to raise the U.S. corporate tax rate to fund some of his spending plans. The OECD hopes to have an implementation plan by October, but there are numerous issues still on the table, including how to bring around countries like Ireland that are balking at the deal and smoothing over a dispute between the U.S. and the EU over the latter’s plan to implement a tax on goods and services sold online.