May Washington D.C. Preview
— Selling Biden’s American Families Plan to both the public and Congress is near the top of the administration’s agenda as it looks beyond its first 100 days. Pushing the tax and climate change elements, among others, may be the hardest.
— Democrats may need to revisit reconciliation to push Biden’s tax proposals. Biden will have to maneuver opposition from both sides of the aisle: Republicans object to most, if not all, of the hikes, and fellow Democrats have quite a few demands.
— Other proposals may sneak into a infrastructure legislative vehicle. Democrats are eyeing adding some of Biden’s promised health reforms, despite his call to deal with those separately.
Welcome to the May edition of the CEO Report, POLITICO Pro’s high-level outlook on the policy issues driving the month … and beyond.
WHAT'S BIDEN'S PLAN ON AGRICULTURE EMISSIONS? The Biden administration has big aspirations for how farmers, ranchers and foresters can help the president meet the climate goals he’s set in the first 100 days. Now comes the harder part: What’s the plan?
The Agriculture Department has spent the past month soliciting public input on how it should proceed. USDA is looking at how best to incentivize more climate-friendly farming practices, both by using existing programs and potentially launching new ones. The big thing to watch in the coming weeks and months is what exactly USDA will do to get the industry to cut emissions and sequester more carbon in farm and forestland.
There’s been a lot of political debate over a Biden administration concept to launch a carbon bank out of the Commodity Credit Corporation, a multi-billion-dollar fund that’s long supported traditional farm programs and other subsidies, but Republicans on Capitol Hill have repeatedly warned that doing so could threaten the current bipartisan cooperation on the issue. A bill to bolster voluntary, private agricultural carbon credit markets has broad backing in the Senate and could be cleared by the full chamber in the coming weeks.
The lack of clarity over the administration’s plans comes as the private sector is moving ahead with carbon offset markets, even though there are big questions about how to verify how much carbon farmers and others are really sucking down into their soil. Many business leaders and lawmakers across the political spectrum want to see USDA take a more active role in the space. — Helena Bottemiller Evich
HOT TRANSPORTATION SUMMER: Biden’s next 100 days for infrastructure will be almost totally consumed with trying to push his increasingly ambitious plan to boost investment in roads, bridges, broadband and more, through Congress.
The Democratic congressional leadership is on board and has set their own ambitious targets — House Speaker Nancy Pelosi has said she would like a bill on the floor by early July, and committees in both chambers are targeting markups in May. But to meet many of those yardsticks, lawmakers and the White House will have to start making difficult decisions, and soon.
It seems increasingly likely that Democrats will end up opting for pushing tax changes through reconciliation, and if they’re to meet their timelines that process will have to begin soon. Lawmakers also must begin deciding how the package will move — will it be a giant policy omnibus, or smaller separate pieces? For now it’s unclear how the puzzle fits together, but at least some of these questions will be answered in the coming months. — Kathryn R. Wolfe
TAX CHALLENGES AT HOME AND ABROAD: Biden’s domestic tax agenda for the next 100 days is pretty straightforward: Get the tax elements of the infrastructure and family-support plans he proposed in April through Congress. The first plan would be funded largely by tax increases on corporations, while the second would rely on higher taxes on individuals and families with high incomes. The package also includes some tax cuts for people with middle and lower incomes, notably expansions of the Child Tax Credit and the Earned Income Tax Credit.
Biden will face fierce opposition from Republicans for most, if not all, of his proposed tax hikes. But he will also have to maneuver through demands from fellow Democrats in Congress. Many of them, for instance, want to make the tax credit expansions permanent, while Biden has proposed extending most of their provisions through 2025 — though he has said he hopes they can be made permanent then.
Beyond domestic politics, the administration will also be trying to finalize a deal with more than 130 countries to overhaul international business taxation. The aim is to determine when countries are entitled to tax transnational corporations and to set a global minimum tax rate. Treasury Secretary Janet Yellen has energized the talks, being conducted through the Organization for Economic Cooperation and Development, after fits and starts under the Trump administration.
But reaching an agreement that satisfies everyone will be difficult, especially by the July deadline they’ve set for themselves. And if and when a deal is struck, Congress is likely to pick it apart, looking for any disadvantages to U.S. corporations. — Toby Eckert
College affordability: The American Families Plan includes $109 billion for two years of free community college with an option for students to use this benefit up to four years. The president also wants to put $85 billion more into the Pell Grant, a federal aid for college students with low income. Senior administration officials have said an infrastructure package passed over the summer could unlock the additional money for students in the fall.
Now, attention turns to Capitol Hill to cast lofty rhetoric into legislative text. There are already sweeping proposals to make public four-year colleges — and even private nonprofit minority-serving institutions — free. But the bill most likely to earn broad support among Democratic lawmakers is the America’s College Promise Act. The measure, backed by Education committee chairs Sen. Patty Murray (D-Wash.) and Rep. Bobby Scott (D-Va.), was introduced just before Biden addressed Congress, and it may seed the language folded into the president’s larger “human” infrastructure package.
Jill Biden is part of the pitch too. The first lady will “be deeply involved” in how the free community college plan shakes out, the president told Congress last week. A community college professor, the first lady is poised to be a key White House surrogate on the issue.
Two-year colleges and four-year institutions are divided over Biden’s free college plan. Community colleges see it as a win, but four-year schools worry it’ll crush their enrollment and it’s possible these tensions pull lawmakers in different directions behind the scenes.
Summer school gets hot: Getting a majority of K-8 students back into their classrooms was the major education milestone of Biden’s first 100 days. The next 100 are being driven by a push to accelerate summer learning in a way that makes up for pandemic learning loss. The stimulus package approved in March included money for local education officials to launch or bolster summer programming — and the Education Department is already prodding them. The agency is urging schools and local leaders to offer voluntary, full-day summer school for five to six weeks and summer camps to address learning loss.
Universal Pre-K: The Biden administration has pitched a $200 billion proposal to make pre-K free for the nation’s 3- and 4-year-olds. Under the plan, employees in participating pre-K programs and Head Start would earn at least $15 per hour. The measure in Congress to keep an eye on is the Child Care for Working Families Act. — Bianca Quilantan
A PUSH FOR MORE BENEFITS, STRENGTHENING UNIONS AND A COVID-SAFETY REGULATION: Biden’s American Families Plan would deliver on several campaign-trail labor promises, including the injection of more than $425 billion into the childcare industry, the creation of a $225 billion paid-leave program, and unemployment insurance reform. Many of the proposals have been derided as “not infrastructure” by Republicans, who would prefer to keep the focus on more traditional investments like highways.
Biden has assigned Yellen, Health and Human Services Secretary Xavier Becerra, Education Secretary Miguel Cardona, Agriculture Secretary Tom Vilsack and Cecilia Rouse, chair of the Council of Economic Advisers, to lead negotiations on Capitol Hill and work with union allies and state and local governments on the plan.
The administration is also expected to shine a spotlight on another piece of legislation: the Protecting the Right to Organize Act , which has already passed the House and would make it easier for workers to unionize. But it will be mostly to highlight the bill for political purposes since it stands little chance of making it to Biden’s desk. Despite the conversion of moderates like Sen. Joe Manchin (D-W.Va.) and the tough rhetoric of union officials, the bill still only has 47 backers. In the meantime, Biden appointed a task force to issue recommendations on how the executive branch can pave the way for more unionization, to be led by Vice President Kamala Harris and Labor Secretary Marty Walsh.
On the regulatory front, the administration will be focused on implementing expected emergency workplace safety rules to combat the spread of coronavirus, even as the pace of vaccinations increases and concern about the virus’s spread is ebbing.
Shortly after taking office, Biden signed an executive order directing the Labor Department to determine whether an emergency temporary standard, which would create a set of enforceable safety rules, was necessary. But the March 15 deadline he set came and went amid Walsh’s insistence on additional review. Democrats ramped up pressure on the department to deliver, and it recently sent a plan to the Office of Management and Budget for review — the last step before they are released publicly and go into effect. — Eleanor Mueller
MORE SHOTS, NEW HEALTH FIGHTS: Biden made real progress against the pandemic in his first 100 days, but the next 100 will shape how well the country ultimately contains the virus. After Biden surpassed his vaccination goals, he now faces the pressing challenge of reaching people hesitant or unmotivated to get the vaccine. Meanwhile, his health team will have to manage a series of rolling outbreaks, possibly driven by more dangerous virus variants and the easing of restrictions as more Americans break free of their Covid bubbles this summer.
Biden is also looking to make progress on his broader health agenda, without disrupting intraparty harmony. He’s pushing Congress to permanently OK an expansion of Obamacare health insurance subsidies as part of the next big legislative fight over infrastructure and safety net spending, but his refusal to include drug pricing reform and other coverage expansions in that pitch frustrated many Democratic lawmakers. While Biden called for dealing with those issues separately, the lawmakers see the infrastructure package as the last major legislative vehicle of the year, and they're now weighing how aggressively to push those health reforms without Biden’s backing. — Jason Millman
BIDEN FACES TENSIONS AMONG DEMOCRATS OVER HOUSING PLAN: The White House will lean on lawmakers to craft legislation reflecting Biden's proposal to spend a historic $213 billion on housing as part of his infrastructure push. But cracks are already forming among Democrats on what to prioritize. Progressive lawmakers warn that the plan doesn’t do enough for public housing, with Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) introducing legislation that would roughly quadruple the White House’s proposed investment in public housing repairs. Biden also wants to offer cities new grants to encourage them to ease zoning rules that drive up housing costs. Housing advocates and economists are questioning whether the voluntary grants will be effective. — Katy O’Donnell
SEC TURNS TO CLIMATE DISCLOSURE: The SEC is about to begin laying the groundwork for new rules that would require companies to disclose their contributions to climate change and the potential risks they face from global warming. Lobbying of the SEC will intensify in the coming weeks as companies and disclosure advocates submit feedback the agency requested by June. Look for the SEC to send more signals on its potential approach now that Chair Gary Gensler is in place. Gensler has told lawmakers that companies "should not be able to hide" their climate risks from investors. Yellen has also said increased climate transparency is a priority and that her department will work closely with the SEC to promote "effective and consistent approaches" to disclosure rules internationally. — Kellie Mejdrich
ENERGY AND ENVIRONMENT
BIDEN FLIPS THE CLIMATE SCRIPT: The Biden administration has spent its first 100 days pursuing dual tracks on climate change: reengaging internationally with the goal of convincing the world the U.S. is serious this time about its commitments, and turbocharging the domestic move toward cleaner energy sources. Biden rejoined the Paris climate accord on Day One of his presidency and convened a global summit in April of 40 world leaders, where he pledged to slash U.S. emissions by 50 percent to 52 percent below 2005 levels by 2030.
In Congress, Biden has leaned into his American Jobs Plan, which includes massive climate policies like a clean energy standard that would decarbonize the U.S. electric sector by 2035 and $174 billion to fuel the rapidly-expanding electric vehicle market. It includes $100 billion to upgrade the nation’s aging electric grid and billions more to help plug abandoned oil and gas wells that dot the domestic landscape. Lawmakers will also pass a Congressional Review Act resolution to ax a Trump-era EPA methane rule that weakened the Obama-era effort to curb the potent greenhouse gas.
The administration has also moved swiftly to roll back a host of late-breaking Trump-era rules in federal agencies and reinstate stronger climate change policies across the executive branch. Notably, agencies will issue stricter fuel economy regulations for vehicles, and the Interior Department has paused new oil and gas leasing on public lands and waters while it rethinks the program. Biden also moved on Day 1 to cancel the Keystone XL pipeline after concluding it “disserves the U.S. national interest,” and his EPA is planning to pursue strengthened emissions limits for power plants. — Anthony Andragna
TARIFF TIMETABLES AND CHINA SCRUTINY: The tariff wars could be back in the news in the next 100 days. The European Union has threatened to double its retaliatory tariffs against the United States on June 1 if the Biden administration does not remove tariffs on steel and aluminum imports that former President Donald Trump imposed on national security grounds.
The United States could announce new tariff actions against six countries — the United Kingdom, Italy, Spain, Turkey, India and Austria — because of digital service taxes they have put in place.
The U.S. and the EU have temporarily paused retaliatory tariffs in a long-running Boeing-Airbus subsidy dispute, but duties could be reinstated if the two sides don’t reach a deal by July 5.
USTR is conducting a top-to-bottom review of U.S. trade policy with China, although U.S. Trade Representative Katherine Tai has not set a deadline for reaching a conclusion. That review is expected to examine all aspects of the trade relationship, including the tariffs that Trump imposed on more than $350 billion worth of Chinese goods. USTR is also evaluating whether to once again allow U.S. companies to ask for product exclusions from those tariffs.
As of late April, Tai still had not talked with her Chinese counterpart, Chinese Vice Premier Liu He, to discuss implementation of the “phase one” U.S.-China deal that Trump negotiated, or to discuss prospects for a “phase two” negotiation. — Doug Palmer
DEFENSE REVIEWS COME DUE: At the Pentagon, several major reviews are expected to be wrapped up in the next 100 days. One of the most far-reaching is the global force posture review, which looks at the deployment of U.S. forces worldwide and will inform major decisions about potentially moving troops out of the Middle East and toward the Asia-Pacific. Officials are also slated to wrap up a review of North Korea policy, just weeks after Pyongyang resumed missile testing.
Meanwhile, department officials are also expected to submit their annual budget proposal to Congress by Memorial Day, although that date could slip. The blueprint, while it requires authorization and appropriation from Congress to become law, is an important signal of the new administration’s priorities for the department. This year, the top line number is expected to be $715 billion, and officials will likely make cuts to some major defense programs while investing in shipbuilding.
The next 100 days will also likely see the confirmation hearings for nominees for top Pentagon posts, including Christine Wormuth, the pick for Army secretary, and Frank Kendall, the choice for Air Force secretary. — Lara Seligman
CHUCK’S WEED PLAN: All eyes will be on the Senate in the coming weeks. Senate Majority Leader Chuck Schumer has promised to unveil his marijuana legalization plan, which he’s been working on with Sens. Ron Wyden (D-Ore.) and Cory Booker (D-N.J.) Cannabis policy has never before received such a spotlight in the Senate. But it remains to be seen whether the legalization push will amount to more than rhetoric. Schumer faces resistance even from within his own caucus, and there doesn’t at present appear to be a path toward 60 votes.
Cannabis policy watchers will also be keeping an eye on the DEA to see if it finally makes good on promises to expand the number of cultivators who can grow weed for research purposes. Currently, the University of Mississippi is the only such licensed facility, but there are dozens of pending applications.
Another long-anticipated agenda item: FDA enforcement guidance for CBD products. Way back in July, the agency submitted draft guidance to OMB for review , but that document was withdrawn before it ever saw the light of day thanks to the Biden administration’s regulatory freeze. Hemp industry groups argue that the lack of regulatory clarity has stifled the fledgling market. — Paul Demko