Supplemental Aid for Ukraine and Disaster Assistance Splits House and Senate Republicans

Members of Congress were back in session this week after the August recess, and they have begun laying the groundwork for what is expected to be a nasty spending fight through the end of the month. The fiscal year and the government’s spending authority end after September 30th. On October 1st, without a full spending package or a short-term, stopgap spending package passed, the government will shut down, leaving all non-essential government employees furloughed. But before we get to that point, Congress has a few weeks to try and resolve what is shaping up to be a massive budgetary gap between House and Senate spending bills, as well as a variety of political and policy issues.

The Senate is hitting the ground running with Majority Leader Chuck Schumer scheduling the FY2024 MilCon-VA, Agriculture, and Transportation-HUD bills to be introduced on the floor early next week. The Senate versions of these spending bills contain billions of more dollars in spending and lack the “culture war” provisions which the House Appropriations Committee approved. Senators are approaching the appropriations process in a bipartisan way and there is no appetite for a government shutdown.

Meanwhile on the House side, Republicans are running the show on their own; they weren’t able to get a single Democrat to vote for any of the bills in the House Appropriations Committee. Spending in these bills has been cut to well below the number reached in an agreement between Congress and the White House during the debt limit standoff earlier this year. House Speaker Kevin McCarthy is now put in the position to somehow wrangle an agreement out of all of this; he stands in the middle between his the far-right Republican Freedom Caucus and the White House and Senate which are mostly in lockstep with each other. Adding to the complexities of this budget deal are the need for a supplemental aid package which the White House and Senate want for disaster relief and to support Ukraine’s military. However, House Republicans want to cut out military assistance for Ukraine is exchange for additional funding and policy changes on the U.S.-Mexico border. Some Republicans have even suggested leveraging their support of any agreement for action by Speaker McCarthy to begin impeachment proceedings of President Joe Biden. As this budget fight continues, keep in mind that any one Member of Congress can issue a motion to vacate and attempt to oust McCarthy from his Speakership.

Here’s what else you may have missed this week:

Department of Defense going on the offensive against Senate blockade of military promotions. Senator Tuberville (R-AL) has been denying unanimous consent to all senior military promotions since February in retaliation for a Pentagon policy which grants leave and reimburses travel expenses for military personnel who cannot obtain an abortion or receive reproductive health care in the state where they are stationed. The backlog has now affected over 300 positions which need Senate confirmation, including those nominated to lead the Joint Chiefs of Staff. Throughout this week the Pentagon has taken the unusual, but not unprecedented, tactic of having its top military leadership write op-eds and conduct TV interviews to try and get Senator Tuberville to budge. They even spotlighted the issue in an article on their front page earlier this week. In taking the case to the American people, they are arguing that Tuberville is negatively impacting military readiness; Navy Secretary Carlos Del Toro claimed the Senator was “aiding and abetting Communist and other autocratic regimes around the world.” Despite this effort, the issue is likely to remain at a standstill with Pentagon officials and the White House refusing to budge on reversing the policy, Senator Chuck Schumer refusing to introduce each nominee one-by-one (to avoid creating a precedent in denying nominees for political expediency), and Senator Tuberville refusing to budge in his anti-abortion fight.

FDA and CDC set to approve new COVID booster as hospitalizations spike around the country. The Food and Drug Administration may approve the updated COVID-19 booster as early as today (so keep an eye on the news) which would pave the way for the Centers for Disease Control and Prevention, which is scheduled to meet on Tuesday, to give final approval on the vaccines as early as next week. This update comes as hospitalizations for COVID infections have increased for seven weeks in a row; even First Lady Jill Biden tested positive for the virus (she has since tested negative). The new booster shot will target the omicron subvariant and has been found to give additional protection against other variants as well.

Senate Minority Leader Mitch McConnell vows to finish his term despite health concerns. During the August recess Sen. McConnell captured headlines again after yet another protracted on-camera freeze during an interview which itself included questions about his health. Staff responded to the incident saying that the Senator was dehydrated. McConnell then took the issue a step further this week during a meeting with Senate Republicans where he presented letters from the on-site doctor in the Capitol for members of Congress who concluded that the Senator had not suffered a seizure or stroke. McConnell asserted that he would finish his term as leader, which ends in January, as well as his term in office, which ends in 2027 unless he runs for reelection. For the most part, McConnell has the support of the rest of his party, although Rand Paul, the junior Senator from Kentucky who himself is a doctor, has voiced skepticism that he could have really had a thorough medical evaluation. For the time being, McConnell has the important role of keeping his party and the Senate united throughout this appropriations process.

As Congress prepares to return to action in September, it faces a lengthy and varied legislative to-do list. The gears of Congress have been grinding away throughout 2023, working to reauthorize a host of laws that expire at the end of the fiscal year on September 30. At the same time, appropriators have been working to advance the annual spending bills which fund the federal government before the start of Fiscal Year 2024 on October 1; absent action on those bills or on an interim funding bill, Congress may also be facing the prospect of a federal government shutdown.

To get a better understanding of how this works and what Congress has on its legislative agenda in September, we have assembled the following primer.

Authorization legislation: An authorization bill is passed by Congress to establish the structure of a federal department or agency and its programs or activities, along with recommended funding levels. Often, these authorizations are set to expire (or sunset) after a set period of time, with many measures requiring renewal within five years. In this case, Congress must pass legislation to reauthorize a given program, at which time Congress has the opportunity to change, reform, or update various federal government activities and keep federal programs current with the needs they were intended to address.

When an authorization is set to expire, it provides the deadline and impetus for Congressional action. If Congress can’t agree on a full-scale reauthorization of a given program, it often will extend the current authorization for a period of time. However, such extensions do not typically allow for new programs to begin or old ones to cease, or for changes in the way federal departments and agencies operate.

Appropriation legislation: This type of legislation permits agencies to take payments from the federal Treasury. Appropriations bills are ordinarily passed each year, with the federal fiscal year formally ending on September 30. However, in recent years, it has been common for Congress to fund the government through a continuing resolution (CR), which allows agencies to continue spending the same amount of money they were spending under the previous funding bill, for at least some period of time until there is agreement by Congress on a funding level for a department or agency for the full fiscal year.

In general, an authorization is required under House and Senate rules, and sometimes under statute, for Congress to appropriate funding for a particular program or activity.  However, unlike when an authorization lapses, if appropriations are not made for a particular activity before the end of a fiscal year, even on a temporary basis under a CR, that department or agency shuts down or ceases to administer a particular program.

The stakes for programs being reauthorized are getting higher, however, as in the 118th Congress, House Republicans have made a priority of programs being authorized to be eligible for continued investment in the annual appropriations bills. Without authorization, related programs could be more vulnerable to cuts in the future as the House and Senate write the annual spending bills.

Key Authorizations Expiring by September 30 Driving the Agenda: Many important programs are set to sunset on September 30th. Here is a selection of those measures that Congress is working to reauthorize before that deadline, and some of the key issues involved in those efforts:

• FAA Reauthorization.
  
  • Key issues: Training hours for pilots, self-defense training for flight attendants, and the allocation of additional flight slots at Reagan National Airport.
• The SUPPORT Act, which is the current framework for the federal response to the opioid epidemic.
  
  • Key issues:  New ways to respond to and reduce the proliferation of fentanyl, extension of state plan authority for relief from the Medicaid IMD Exclusion, and addressing the growing threat of xylazine.
• The Pandemic and All-Hazards Preparedness Act (PAHPA), the nation’s main pandemic preparedness law.
  
  • Key issues: Giving the HHS-Assistant Secretary for Planning and Response new powers in the next public health emergency, including contracting authorities that the Department of Defense facilitated for Operation Warp Speed, and surge staffing capacity, as well as provisions that would address medical equipment and medical countermeasures supply chain resilience, potential new authorities for review and approval of diagnostic tests, and more.
• The Children’s Hospitals Graduate Medical Education program, which funds training for pediatricians.
  
  • Key issues: Fights over gender appropriate care and attempts to prohibit federal funding from being used at facilities receiving GME funding for such care for people under age 18.
• National Flood Insurance Program (NFIP)
  
  • Key issues: Protecting policyholders in areas at risk for flooding from outsize premium increases by capping annual increases at nine percent, increasing funding for mitigation grants and modernization of flood maps, and reforms to the claims process in the wake of Superstorm Sandy.
• Farm Bill
  
  • Key issues: Implementation of new work requirements for beneficiaries, limitations on the growth of benefits, rural development including broadband access expansion, Chinese ownership of US farmland.

Beyond these measures, Congress also is racing to advance the annual appropriations bills or otherwise agree on a Continuing Resolution before September 30. House and Senate leaders intend to bring some of the spending bills to the floor in their respective chambers in September, which could make incremental progress, but Congress is all but certain to need additional time in the fall.

While agreement on a Continuing Resolution of at least a month or two is typically non-controversial, there are some members of the House Freedom Caucus who have indicated they won’t support a CR unless additional spending and policy concessions are made beyond those agreed to in May to raise the debt ceiling and avoid default. Once again, Speaker of the House Kevin McCarthy will be walking a highwire attempting to balance the priorities of competing factions within the Republican Conference, or the risks of cooperating with House Democrats, while also seeking to avoid the drama and blame of a government shutdown.

Ultimately, the imperative of securing aid in response to natural disasters such as Hurricane Idalia and the wildfires in Hawaii may prove instrumental to securing the bipartisan support required to pass a CR.

On Wednesday night, eight Republican hopefuls took the stage for the first GOP presidential primary debate. As one commentary aptly described it, “The debate marked the end of the 2024 campaign’s preseason, a months-long sprint through fundraisers, town halls and early-state fried food…” The debate itself was fairly unremarkable, though if you want some post-debate commentary, this piece and this one are both worth a read.

The stakes are high in every presidential election year, but 2024’s stakes seem exponentially higher, each side’s detractors more relentless, the environment much more tense. With one party’s leading candidate facing multiple federal indictments and a slate of upcoming court appearances, and the other party’s sitting President facing ongoing intense scrutiny about the legality of his son’s business dealings, the end of the “preseason” will bring those issues even more to the forefront. The looming 2024 election will play a greater and greater role in the policy battles on Capitol Hill as both sides fight to retain or win congressional majorities. Razor-thin margins in both the House and Senate, combined with the internal policy divisions plaguing both congressional Republicans and congressional Democrats, have created an extraordinary setting leading into next year.

The most obvious practical impact of this political battle royale will be the congressional calendar for 2024. Expect to see fewer days “in session” in Washington so Members of Congress can spend time in their states and districts with constituents, and time on the campaign trail. (This provides some great opportunities for your organization to invite your Members of Congress for a site visit, ribbon-cutting, roundtable, health fair, or other event.)

But the impact on the legislative agenda will also be significant as Congress seeks not only to protect their own seats, but to promote their respective presidential candidates. Senate Democrats will look to highlight Biden’s accomplishments, while House Republicans will continue pursuing their aggressive oversight activities targeting the Biden Administration, as well as their “anti-woke” agenda. That makes large-scale, bipartisan legislative accomplishments hard to come by – at least before a potential lame duck session after the election.

Congress will still act on a number of policy and funding measures – look for more details in next week’s newsletter on expiring authorizations and what’s left on Congress’s “to do list.” The process may take longer. It may look different. It may even be downright painful, leaving us all wishing for some comfort food – maybe some of that “early-state fried food” from the presidential campaign trail…? But your WSW team will continue guiding through this extraordinary landscape, finding ways to advance your priorities and achieve your goals.

As reported last week, the US Congress is now in recess. Senators and Members of Congress will be visiting with constituents, touring workplaces, marching in Labor Day parades and participating in numerous civic and cultural events throughout the country. Elected officials actually thrive on the interplay with constituents.

But how can your organization plan for continued engagement, now that our society has reopened following two dreadful years of uncertainty?

Over the past seven months, WSW has facilitated over a dozen advocacy days and events on behalf of clients. Although we have all grown accustomed to Zoom and Teams meetings, the US Congress is now (re)open for business. Just this last month, House Speaker Kevin McCarthy was seen high-fiving young school students visiting the US Capitol. The imagery was not coincidental. Republicans took pride in the steps taken to resume normal operations.

Organizations and individuals should be thinking about how to resume normal advocacy operations as well. There is no substitute for face-to-face engagement. One example to share: Earlier in 2023, one of our trade association clients brought their Board of Directors meeting to Washington, DC. Tacked onto the end of the program was an opportunity for Board Members to visit the offices of their Senators and Representatives. As a result, this August, a Member of Congress will be visiting the business of one of those Board Members and touring their workshop. This is a relationship that did not exist in January. But now, due to the interest generated by the meeting, this CEO and Congressperson will be fused at the hip, touring a work site and mixing it up with the employees.

Point being, it is time to begin planning your next advocacy day. Relationships are like gardens – they need to be tended and nurtured. But it is worth every effort and expense. Now that Congressional offices are fully open – forget about Zoom– and do that next meeting in person.

Now is the time to begin conversations with your WSW team lead and start the budgeting and logistics conversation for your 2024 visit to the nation’s Capital. We can’t guarantee a high-five from the Speaker of the House – or that your Member of Congress will be stopping by later this year. But as the saying goes, “If you don’t ask, the answer is always – NO!”

Have a great summer, and we look forward to planning your next visit in the weeks ahead.

GDP Numbers Remain Strong; Fed Raises Interest Rates

Members of Congress head into August recess after today and will return to a long “to do” list, with the end of the current fiscal year looming on September 30th. The House Appropriations Committee approved ten of the Fiscal Year (FY) 2024 bills out of Full Committee in June and July and passed one bill on the House Floor. That leaves two bills for the House Appropriations Committee to consider when they return to Washington after Labor Day: Labor, Health and Human Services, Education and Related Agencies as well as Commerce, Justice, Science and Related agencies, both of which are expected to be difficult to pass out of Committee. Before the House adjourned, the Military Construction, Veterans and Related Agencies appropriations bill passed the House floor. However, the Agriculture and FDA funding bill, which was also scheduled for a vote on the floor, faced pressure which divided moderates from House Republicans in the Freedom Caucus who demanded additional spending cuts beyond what was agreed to. Meanwhile, the Senate Appropriations Committee did something they haven’t done in years — they approved all twelve FY2024 bills out of Full Committee before the August Congressional work period. The Senate FY2024 Appropriations bills will likely see Senate floor action after Labor Day.

Looking forward to Congress’ return to session after Labor Day, the Senate returns September 5th and the House returns September 12th. That leaves about 15 or so legislative days until the end of the fiscal year on September 30th. Many in Congress, especially the House and Senate Appropriators, will work behind the scenes through the August Congressional recess to try and reconcile what is shaping up to be a massive budget fight. Keep in mind, the House and Senate proposed spending levels are more than $100 billion apart. The Congressional schedule does not leave much time before the September 30th end of the fiscal year, so a Continuing Resolution (CR) is all but assured to give the House and Senate Appropriators time to move the twelve Appropriations bills across each Chamber’s floor. A CR would fund the government at current FY 2023 levels and the timeframe at this point is unclear. Look for this legislation to come before both chambers in mid-September.

Here’s what else you may have missed this week:

The Federal Reserve raised interest rates to a 22-year high amid continued inflation fears. After a brief pause to rate hikes in the previous month, Fed Chair Jerome Powell on Wednesday announced another rate increase of a quarter of a percent in an effort to continue to tamp down inflation. Powell told reporters that if inflation did not cool to the projected 2% annual rate, that he would raise interest rates even higher. Although inflation has not been evenly felt across all products and services, on average it is currently sitting at about a 3% annual rate, nearly half of what it was a year ago. Despite these concerns and the Fed’s tightening of the economy, second-quarter growth of the GDP exceeded expectations yet again, outpacing some speculation of an impending recession.

UPS and Teamsters have reportedly reached an agreement, averting nationwide strike. After more than a month of building tension around the strike which could have impacted some 6% of the U.S. economy, Teamsters President Sean O’Brien announced a tentative agreement with UPS on Tuesday which includes higher pay, more union jobs, and A/C in all delivery vehicles. This victory mints the new Teamsters President as a force in organized labor, especially after he specifically directed President Biden to not get involved in the negotiation process. It remains to be seen if this development could have further reaching impacts in workforces around the country, perhaps where other companies have engaged in union-busting or unfair labor practices.

Congressional priorities in September will likely include more investigations and possibly impeachment. September will be a busy month in Congress, and spending bills will likely take up the majority of floor time, but you should expect committees charged with investigations and oversight to still dominate the limelight like they have these past months. There is growing pressure, especially among House Republicans, to charge somebody with something, whether that be the president’s son, Hunter Biden, or the president’s cabinet, like Attorney General Merrick Garland or Homeland Security Secretary Alejandro Mayorkas, or maybe even President Biden himself. The calls for impeachment or indictment will likely only grow louder as news broke yesterday that former President Trump is being charged with additional crimes in the classified documents case which include efforts to delete security camera footage.

Senate Minority Leader Mitch McConnell causes concern after apparent health scare. Capitol Hill was abuzz on Wednesday after McConnell froze mid-sentence for an extended period during his weekly press briefing. He eventually was escorted away before returning minutes later to continue his remarks. Aides later said that the Senator felt lightheaded, but some have speculated that a more serious health concern is underlying the incident. McConnell has reportedly fallen several times this year, including one time in March which landed him in the hospital with a concussion. Similar health concerns have been shared about Senator Dianne Feinstein, the Senate’s oldest member.

President Biden Wraps up NATO Visit, Promises Continued Support for Ukraine

In another victory for Speaker McCarthy with his narrow House Republican Majority, the House passed the National Defense Authorization Act (NDAA) by a vote of 219-210, a significant departure from previous NDAAs which typically garner broad bipartisan support (last year the NDAA passed the House by a vote of 329-101). The Freedom Caucus forced votes on a slew of amendments including some which passed including prohibiting the Pentagon from covering travel expenses for abortion services, prohibiting the Pentagon from covering gender transition procedures, and prohibiting the Pentagon from funding diversity, equity, and inclusion initiatives. Other Freedom Caucus amendments which failed include blocking defense funding and security assistance for Ukraine, allowing military facilities to keep names of Confederate figures, and prohibiting the transfer of cluster munitions to Ukraine.

Here’s what else you may have missed this week:

House and Senate Appropriations Committees continue FY24 markups. The House Appropriations Committee has released all 12 FY2024 Appropriations bills and completed Full Committee markups on 8 of them. House Appropriations Chair Granger is hoping to bring several bills to the House floor before August recess; stay tuned for developments on this next week.

The Senate Appropriations Committee is also on track to complete 7 markups at Full Committee over the next 2 weeks before the August recess. Notably, Chairwoman Murray and Defense Subcommittee Chair Tester indicated the Defense bill would likely be marked up in late July. To track all the FY2024 appropriations developments please refer to the Congressional Research Service FY2024 Appropriations status table here.

Biden ended his 5-day trip across Europe on Thursday, touting NATO alliance and support of Ukraine. The President was in London before heading to the NATO Summit in Vilnius, Lithuania and wrapping up his travels in Helsinki, Finland. At each stop along the way, the President reaffirmed the United States’ support of Ukraine’s war against the Russia invasion and extolled President Volodymyr Zelenskyy’s leadership. This summit comes on the heels of several important geo-political developments, including Finland’s admission to NATO in April, Sweden’s expected inclusion in NATO, and a worsening military leadership situation in Russia, evidenced by the Wagner Group mercenary leader’s mutiny a few weeks prior. Ukraine has NATO members’ support but their ultimate membership in the organization will have to wait until the war ends.

House and Senate weigh in on PAHPA and PBMs. As part of the congressional effort to address the role of Pharmacy Benefit Managers (PBMs), the Senate Finance Committee released additional legislative drafts focused on regulating how PBMs are paid by health plans to negotiate with drugmakers. The major provisions would prohibit PBMs from getting any income outside of service fees, prohibit those service fees from being related to drugs’ list prices, and require PBMs to send annual reports to Medicare insurance plans about their rebate and price negotiations, a policy that would ban PBMs from charging Medicaid more than they pay for drugs (a practice called spread pricing), and a mandate for the Department of Health and Human Services to outline acceptable performance measures for pharmacies. A Committee markup of the legislation is scheduled for July 26.

On the other side of the Hill the House Energy and Commerce Health Subcommittee held a markup to reauthorize the Pandemic and All-Hazards Preparedness Act (PAHPA) which sparked partisan fireworks over the omission of drug shortage and supply chain measures from the pandemic preparedness bills along party lines on Thursday. Republicans plan to write a standalone bill on drug shortages, but Democrats say that’s a stall tactic. The bill, which passed, would renew several of the federal government’s biodefense and pandemic-preparedness programs, which expire Oct. 1.

The House and Senate both return to Washington next week after an extended July 4th recess. They will be in session just 12 days before the traditional August break and in-district work period begins.

During the July session, both the House and Senate Appropriations Committees are expected to continue mark-ups of FY24 Appropriations bills at full committee, though a significant divide in overall spending remains. House Appropriators are marking up non-defense discretionary spending bills to FY22 levels or lower levels, which is estimated to result in a gap of $120b in overall spending between the House and Senate Appropriations Committee bills. Also, many Senators (and some House Members) – from both parties – have been advocating for increasing defense spending beyond the levels included in the debt limit agreement. These factors add up to a substantial gap that will need to be reconciled – with potentially great difficulty – during negotiations on any final spending package for FY24. And, as a reminder, the current fiscal year ends September 30th. Speaker McCarthy has signaled the House may pass an early-stop gap funding measure this month to pre-emptively address the potential of a government shutdown at the end of September. The Speaker continues to face pressure from hard-line conservatives for even greater spending cuts.

The House and Senate could also see floor action on the annual National Defense Authorization Act after Committee action in June, though thorny social issues and overall spending constraints could again pose challenges for Floor passage. Work is also expected toward other must pass legislation that expires this fall including the FAA Reauthorization, the Pandemic All Hazard Preparedness Reauthorization, and the Farm bill, among others. The House may also face Member- and Committee-led efforts to impeach Biden, as well as Attorney General Merrick Garland and Homeland Security Secretary Alejandro Mayorkas. Senate Majority Leader Chuck Schumer will be working on his side to move a host of Biden nominees including Judicial nominees and Labor Secretary pick Julie Su, who seems stalled, as well as try to build bipartisan consensus on legislation on a framework for governing artificial intelligence. Meanwhile, the Biden Administration continues to travel the country to tout strong economic numbers on the jobs front and tying that good news to their previous legislative victories and ongoing rollout of investments from the Infrastructure Investment Act, the CHIPS Act, and the Inflation Reduction Act. We can also expect ongoing developments on the campaign trail in the lead-up to the 2024 Presidential and Congressional election cycle.

Here’s what else you may have missed this week:

Recent Supreme Court decisions on student loans and affirmative action continue to reverberate throughout Washington. In these two decisions, conservative justices sided with plaintiffs and overturned actions by the Biden Administration or former established judicial precedent. Biden’s plan to forgive between $10,000 and $20,000 of outstanding student loans for borrowers was overturned. With the official end to the emergency powers authorized during the pandemic, students will again be charged interest on outstanding student loans and payments will resume as early as this fall. In addition, college admission decisions which considered race as a factor have been ruled unconstitutional and may add momentum to those targeting corporate diversity, equity, and inclusion policies. And still a third decision by the court, also made along ideological lines, found that a business could refuse creative services to a LGBTQ couple, despite the fact that key details in the case were contested, and possibly even fabricated.

Newly on the horizon is the specter of a nationwide UPS strike that could significantly impact the economy. After eight weeks of contract negotiations, UPS and the Teamsters Union which represents its 340,000 workers have yet to reach a deal, risking the potential for a nationwide strike beginning in August. Such a strike would be the largest by a single employer in US history and could impact a significant portion of the economy, some 6% of US GDP, that depends on UPS for shipping and logistics services. Many issues have been tentatively agreed to, including providing air conditioning in delivery vans, restructuring the work week, and reclassifying some employees. Issues still on the table include raising pay for part-time workers (the majority of UPS workers). Teamsters President Sean O’Brien has also used this contract negotiation as somewhat of a marketing tool for other laborers looking to organize, such as Amazon. “This is the largest collective bargaining agreement in any private sector union,” O’Brien said at a Saturday press conference, which could “set the tone and set the standard high for labor — not just the Teamsters but the entire labor movement.”