Continuing Resolution / Debt Limit – This week, the House will consider a continuing resolution to fund federal agencies until December, provide disaster relief funding, and extend the debt limit until after the midterm elections.  The House is expected to pass the package and send it to the Senate, where Majority Leader Chuck Schumer (D-NY) and Senate Minority Leader Mitch McConnell (R-KY) are engaged in a high-stakes game of chicken.

We believe the White House and Democratic leadership are not taking McConnell seriously. They should.  Leader McConnell has said he and his conference are unified and will not support attaching a suspension of the debt limit to a continuing resolution or any other must-pass legislation.  Based on our sources, this means Republicans are prepared to filibuster a CR-debt limit bill.

While Democrats may wish to test Sen. McConnell, our colleague and Leader McConnell alum, Antonia Ferrier, put it best last week to the New York Times, “The left trying to move Senator McConnell with shame or pressure is like trying to move Mount Everest with a light breeze.”

So, what’s the upshot?  It seems increasingly clear that most Senate Republicans, at least at this point, seem willing, via the filibuster, to allow a government shutdown, at least for a short time.  In their minds, this would force a negotiation over the debt limit, which won’t become real until sometime in October, or later, depending in part on the level of September 15th quarterly tax payments.

Some Democrats seem to be coming around to the realization that they aren’t going to get sufficient Republican support on the debt limit, thus forcing them to do it on their own. House Budget Committee Chairman John Yarmuth (D-KY) publicly speculated on Monday on one such possibility, saying, “We can do it through reconciliation. Leadership has said they don’t want to do that. The reason is if we do that through reconciliation, we actually have to specify a number.”

If the Senate were to vote on a stand-alone CR with disaster funding and a few other anomalies, it would pass with Republican support.  What some Democrats haven’t yet grasped is that many Republicans see the debate on the debt limit as a proxy fight on reconciliation.  While Democrats say Republicans must pay for Trump-era spending, Republicans argue the next debt limit suspension would pay for the Democratic reconciliation package, and they should therefore revise their budget resolution to include new debt limit instructions.

 

Reconciliation – To date, the House Budget Committee has not yet announced when it will compile last week’s committee-passed text into one package, demonstrating that the reconciliation process will not conclude in the coming weeks as some had hoped.

The reason is straightforward: to date, CBO has only scored legislation from 3 of the 13 committees that have reported their respective pieces of reconciliation.  CBO’s remaining efforts will take time.  So far, no markup in the Budget Committee has been scheduled this week, and next week is looking dicey.  This timeline, albeit speculative, would push the vote on reconciliation into October, or well beyond the Sept. 27 deadline to vote on the bipartisan infrastructure bill that Speaker Pelosi promised her moderates in August (more on that below).

While the House Budget Committee’s effort is mostly procedural, the real work will be on the expected managers’ amendment to the reconciliation bill in the House Rules Committee.  There, Speaker Pelosi and her leadership team will have to concoct a near-miraculous legislative alchemy—through manifold tweaks, recissions, additions, and edits—to arrive at the magic number of 218.

The overriding goal at Rules will be to address unresolved issues from the various House committee markups.  There are open issues on the SALT deduction, drug pricing, and various proposed pay-fors.  House Democratic leadership must also address concerns from moderate House Democrats who are not comfortable voting for a bill that Senate Democratic leadership will likely change anyway.  There are five or more House Democrats who may have concerns with the direction the House has taken so far, including: Representatives Kurt Schrader (D-OR), Jerry Golden (D-ME), Kathleen Rice (D-NY), Scott Peters (D-CA), and Stephanie Murphy (D-CA). Several other members have SALT issues, and there are likely additional members who could raise other concerns. Any additional issue or complication could prove fatal as Democrats can’t afford to lose more than three votes.

What does this portend for the Senate?  As best we can tell, the Senate is intent on following its own muse.  Among other things, a wayward Senate means the House will have to vote twice on reconciliation, something Pelosi was intent on avoiding.  The Senate Finance and House Ways and Means Committees are battling over various tax provisions; Senate Energy and Natural Resources has had little input or coordination on key energy provisions with the House Energy and Commerce and Natural Resources Committees. In short, differences abound.

President Biden is now personally involved in talks with Sens. Joe Manchin (D-WV) and Krysten Sinema (D-AZ), which is a help for Democratic committee chairs and leaders who have been working with them to address their priorities.  However, media reports indicated that President Biden failed to persuade Sen. Manchin to agree to spend $3.5 trillion on reconciliation, with indications that he is still adamant about keeping spending levels at $1.5 trillion.  Another report stated that Sen. Sinema told President Biden that if the House delays its scheduled September 27 vote on the bipartisan infrastructure plan, or the vote fails, she won’t support a reconciliation bill.  This all illustrates how complicated it will be for Democratic leaders to solve these issues in the coming weeks if not months.

 

Transportation – House Majority Leader Steny Hoyer (D-MD) announced that the House will consider the Senate-passed Infrastructure Investment and Jobs Act the week of September 27, which is in line with the rule passed in mid-August.  Shortly after the vote announcement, Congressional Progressive Caucus Chairwoman Pramila Jayapal (D-WA) said her caucus will vote against the infrastructure bill unless the Senate and House have already passed the reconciliation package.  “It won’t have sufficient votes to pass the House,” she said bluntly.  Rep. Alexandria Ocasio-Cortez (D-NY) said today that, “I will not vote for the infrastructure bill unless reconciliation has passed both chambers.”

We don’t believe that either the White House or Pelosi would put the infrastructure bill on the floor if it were destined to fail.  A failed vote on a key pillar of the President’s “Build Back Better” agenda would be portrayed as a failure for both the President and the Speaker.  It’s important to note here that anywhere from 25 to 40 House Republicans could vote for the infrastructure bill, but only on one crystal-clear condition: that the bill is definitively separated, with plenty of calendar days in between, from the reconciliation bill.  If the infrastructure bill becomes an addendum to reconciliation, then nearly all House Republicans will bail.  Moreover, don’t expect a single Republican—including every member from the Tuesday Group to the Freedom Caucus—to become the 218^th vote on infrastructure.  If Pelosi is struggling in whipping votes, Republicans won’t throw her a lifeline.

 

Senate This Week – The Senate will process the nominations of Veronica Rossman to be a U.S. Circuit Judge for the Tenth Circuit and Margaret Strickland to be a U.S. District Judge for the District of New Mexico.

Last week, Sen. Alex Padilla (D-CA) vitiated cloture on the motion to proceed to S.2093, the “For the People Act of 2021.”  There is the possibility that Leader Schumer may file cloture on the motion to proceed to the recently introduced S.2747, the “Freedom to Vote Act,” which was developed by a group of senators that included Sen. Manchin.  The bill would mandate national standards for early voting and vote-by-mail, establish Election Day as a national holiday, and create new disclosure requirements for donors.  While Manchin hopes to secure Republican votes for the bill, Senate Republicans remain adamant that the bill improperly overrides the roles of state and local governments.

 

House This Week – In addition to considering the continuing resolution, the House will consider at the end of the week, H.R. 3755, the “Women’s Health Protection Act,” which would create a national right to abortion services. This is in response to the Supreme Court refusing to enjoin Texas’ anti-abortion law.

The House will also process H.R. 4350, the National Defense Authorization Act for Fiscal Year 2022, on Wednesday and Thursday.  The measure was previously adopted by the House Armed Services Committee by a bipartisan vote of 57 to 2.