Legislative Update - 2/12/2021

posted on Friday, February 12, 2021 in Public Policy Network

The Public Policy Newsletter (PPN) provides our latest analysis and updates from Washington, D.C.

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Issue Analysis and Updates 

New Members of 117th Congress

FHLB Des Moines has 12 new Members of Congress in our district. These new Members are: Rep. Kaiali'i Kahele (D-HI),Rep. Ashley Hinson (R-IA), Rep. Mariannette Miller-Meeks (R-IA), Rep. Randy Feenstra (R-IA), Rep. Cori Bush (D-MO), Rep. Michelle Fischbach (R-MN), Rep.Matt Rosendale (R-MT), Rep. Cliff Bentz (R-OR), Rep. Blake Moore (R-UT), Rep. Burgess Owens (R-UT), Rep. Marilyn Strickland (D-WA) and Senator Cynthia Lummis (R-WY).

Six House Members from our district sit on the House Financial Services Committee: Rep. Emanuel Cleaver (D-MO), Rep. Cindy Axne (D-IA), Rep. Blaine Luetkemeyer (R-MO), Rep. Ann Wagner (R-MO), Rep. Tom Emmer (R-MN) and Rep. Michael San Nicolas (D-Guam).

Seven Senators from FHLB Des Moines’ district sit on the Senate Banking Committee: Sens. Jon Tester (D-MT), Tina Smith (D-MN), Mike Crapo (R-ID), Mike Rounds (R-SD), Kevin Cramer (R-ND), Cynthia Lummis (R-WY) and Steve Daines (R-MT).


New House Makeup

The Democrats retained control of the House but with a thinner majority. The current count in the House is 221 Democrats and 211 Republicans. Several vacancies are expected to be filled over the next few months.

Rep. Ron Wright (R-TX) and Rep.-elect Luke Letlow (R-LA) recently passed away due to COVID.

Rep. Cedric Richmond (D-LA) left his seat to become a Senior Advisor to President Biden.

Rep. Deb Haaland (D-NM) and Rep. Marcia Fudge (D-OH) have been nominated to become the new Secretaries of Interior and Housing and Urban Development respectively.

When all is said and done, the new Democratic majority in the House will likely be 9 or 11 seats, which is down from 38 seats at the end of last year.


50/50 Senate 

Meanwhile, as a result of the Democratic sweep of the two Georgia Senate races, the Senate stands at 50-50. With Vice President Kamala Harris casting the tie-breaking vote, that gives the Democrats control of the Senate.

Last week, Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) agreed to split Committee membership and resources 50-50, similar to the agreement that Senate leaders reached in 2001, the last time the Senate was 50-50.

The Senate Banking Committee will have 12 Democrats and 12 Republicans. Sen. Sherrod Brown (D-OH) will be the new Chair, while Sen. Pat Toomey (R-PA) will be the new Ranking Republican.

How long will the 50/50 Senate last? 

As noted, the Senate was last tied 50-50 in 2001. Then Vice President Cheney gave control of the Senate to the Republicans for the first five months until Sen. Jim Jeffords from Vermont became an Independent and caucused with the Democrats.

The Democrats held control for the next 18 months until Jim Talent won the Missouri Senate seat.

Could a switch happen this Congress? It may depend on the political trends of a state.

Sen. Jeffords’ switch made him only the second Senator from Vermont to caucus with the Democrats. Sen. Bernie Sanders who won Jeffords’ seat in 2006 is the third Senator from Vermont.

Recently, West Virginia Gov. Jim Justice won as a Democrat in 2016 with 49% of the vote before switching 6 months into his term. He won his re-election as a Republican in 2020 with 65% of the vote.

The Republican Presidential nominee’s percentage of the vote in West Virginia has increased in each of the last three Presidential elections: 56% in 2008; 62% in 2012; 68.5% in 2016; and 69% in 2020.

Last Senate switch? 

Since 1890, 21 Senators have switched parties in the Senate. Sen. Arlen Specter was the last Senator to switch parties when he left the Republican Party on April 29, 2009 and became a Democrat.

Unlike Governor Justice’s switch, however, Sen. Specter’s was less successful. Sen. Specter lost in the Pennsylvania Senate Democratic Primary to Rep. Joe Sestak in 2010. Rep. Sestak went on to lose in the general election to the Republican Primary winner Sen. Pat Toomey.


Reconciliation 

Last week, both the House and Senate passed a Budget Resolution that allows Congress to use Reconciliation to produce $1.9 trillion in stimulus legislation.

Reconciliation is a parliamentary process that fast tracks legislation through Congress.

Reconciliation legislation in the Senate only requires a simple majority to pass. It cannot be filibustered. All other legislation in the Senate requires at least 60 votes to end debate.

Democrats wouldn’t need any Republican support to pass a Reconciliation bill in the Senate. They would need the support of all 50 Democratic Senators and Vice President Harris.

What to expect next 

Expect to see Democratic leadership use Reconciliation to pass a good portion of President Biden’s $1.9 trillion stimulus proposal over the next two months.

The House will act first on the Reconciliation bill and is expected to pass it before the end of February.

The House Financial Services Committee marked up its piece of the Reconciliation bill this week. That piece provides a total of $75 billion in stimulus provisions:

  • $25 billion for rental assistance ($19.05 billion for emergency rental assistance, $5 billion for emergency housing vouchers, $750 million for tribal housing assistance, $100 million for rural housing and $100 million for housing counsel)
  • $15 billion in support of airline workers,
  • $10 billion to assist struggling homeowners with mortgage payments, property taxes, property insurance, utilities and other housing related expenses,
  • $10 billion for state small business credit initiatives,
  • $5 billion for homelessness funding,
  • $10 billion for Defense Production Act (i.e. pandemic-related spending, N95 masks)

The House Financial Services Committee’s memo outlining its initiatives can be found at: https://financialservices.house.gov/uploadedfiles/hmtg-117-ba00-20210210-sd002.pdf

The Senate is expected to consider its Reconciliation bill the first week in March. Democratic leadership’s goal is to pass a final bill before unemployment assistance expires on March 14th.

How much will be in it? 

The chart below provides an overview of President Biden’s $1.9 trillion stimulus plan. How much of the $1.9 trillion will be in the final Reconciliation bill is still unclear. Isaac Boltansky from Compass Point believes the final bill will be no lower than $1.5 trillion.

Also unclear is how many Republicans, if any, will support the final bill. A lower price tag or a more targeted bill may attract some Republicans. It may also be needed for the support of Sen. Manchin (D-WV) who will likely play a key role in the final outcome.

Sen. Manchin voted for the Budget Resolution last week “to move forward with the budget process.”

However, he also said, “But let me be clear – and these are words I shared with President Biden – our focus must be targeted on the COVID-19 crisis and Americans who have been most impacted by this pandemic. I will only support proposals that will get us through and end the pain of this pandemic.”

Biden Relief Package

Sinema’s statement even stronger 

Sen. Manchin isn’t the only Democratic Senator pushing back on minimum wage. Here is what Sen. Sinema (D-AZ) said to Politico this week about the issue.

“What’s important is whether or not it’s directly related to short-term Covid relief. And if it’s not, then I am not going to support it in this legislation… The minimum wage provision is not appropriate for the reconciliation process. It is not a budget item. And it shouldn’t be in there.”


Byrd Rule

Only legislation that impacts federal spending or revenues is germane in a Reconciliation bill. Tax credits and funding increases are germane; changes to the minimum wage generally are not.

This germaneness test, known as the Byrd Rule, could be changed going forward. Democratic leadership has considered widening the scope of the Byrd Rule to allow for an increase in the minimum wage.

Earlier this week, Majority Leader Chuck Schumer said Democrats are “trying to work as well as we can with the parliamentarian to get the minimum wage.” In an interview aired before the Super Bowl, President Biden said he doesn’t believe a minimum wage increase would survive on a Reconciliation bill.

Sen. Manchin has said he prefers to not include the minimum wage on Reconciliation. He has also said he could support an increase to $11 an hour but not $15 an hour as President Biden has proposed.


Reconciliation, Part 2 

Democrats could use a second Reconciliation bill later this year to advance infrastructure, energy, and other tax proposals, as well as an increase to the debt ceiling.

The Budget Resolution passed last week which covers FY2021 allows for Congress to adopt an additional Budget Resolution covering FY2022 later this year.

The second Reconciliation bill could also potentially be used to advance less popular revenue proposals, such as tax increases on higher income levels.

Tax increases are not expected to be included in the Reconciliation bill currently moving through Congress. Any efforts to move such proposals would likely wait until the economy is more stable.


Impeachment Trial 

Opening arguments in the second impeachment trial of President Trump began this week. 

On Tuesday (Feb. 9), the Senate voted on whether it was constitutional to proceed on an impeachment trial of a President who is no longer in office.

Fifty-six Senators voted that it is constitutional, and the trial should proceed, while 44 Senators voted that it is not, and the trial should be dismissed.

Six Republican Senators voted with the Democrats to continue the trial: Sens. Lisa Murkowski (R- AK), Susan Collins (R-ME), Mitt Romney (R-UT), Pat Toomey (R-PA), Ben Sasse (R-NE) and Bill Cassidy (R-LA).

On a similar vote in the Senate last month, five Republican Senators voted to proceed with the trial. Senator Cassidy was the additional Republican to vote to proceed with the trial this week.

Tuesday’s vote followed opening arguments in the trial. According to Senator Cassidy, “The House managers had much stronger constitutional arguments. The President’s team did not.”

Sixty-seven votes in the Senate are required to convict in an impeachment trial.