This Week In Washington

Latest news from Washington, D.C. produced by Total Spectrum/SGA exclusively for members of the Arizona Chamber of Commerce & Industry

More Info: Michael DiMaria | Partner and SW Regional Director | 602-717-3891 | mdimaria@totalspectrumsga.com

Total Spectrum Spotlight: Senator Mark Kelly

Total Spectrum’s Erik Paulsen interviews Senator Mark Kelly, getting Kelly’s thoughts on his first impressions as a new member of the Senate, his policy priorities, and what to expect soon from the Biden Administration.


Thanks for your interest in Washington, D.C., and thanks for reading This Week in Washington.

I greatly appreciate feedback. One suggestion we have received is to limit the number of articles we place in each issue. Another suggestion has been to try to provide more immediate coverage of important and timely events. Both are great ideas, and we are going to do both.

Today’s “Heard on the Hill” focuses on the new Democratic majority, pendulum politics, some off-the-record comments from a member of the Republican Senate Leadership, and concludes with a tip of our hat to Glenn Hamer. Steve Ruhlen, our budget and appropriations expert, takes a closer look at budget reconciliation.

You will not want to miss today’s Total Spectrum Spotlight. My colleague Congressman Erik Paulsen sat down for an exclusive and candid interview with Senator Mark Kelly, where he talked about his priorities and first impressions of life in the Senate.

We will be back in two weeks for the next issue of This Week.

Stay well.

Steve Gordon, Managing Partner


Heard on the Hill

By Steve Gordon, Total Spectrum Managing Partner

Elections Have Consequences

The U.S. Senate makeup is at 50-50 with Vice President Harris breaking any necessary tie, so Democrats are now in the Majority. But until recently, Republicans were still committee chairmen, awaiting a power sharing agreement between Senator Schumer and Senator McConnell for this Congress.

Senator McConnell’s primary goal in his negotiations with Senator Schumer was to ensure that the filibuster would be protected, but he dropped his demand when both Senator Kyrsten Sinema (D-AZ) and Senator Joe Manchin (D-WV) said they would not vote to kill the filibuster.  Leader McConnell and Leader Schumer then worked out an agreement, which was approved by the Senate.

Democrats now have control of the Senate and its committees. A list of Democrats on Senate committees can be downloaded here, and a list of Republicans on Senate committees here.

Pendulum Politics: Hyper Partisanship, Reconciliation, Overreaching, and Off Year Elections

The President has proposed a COVID package that totals $1.9 trillion. There was some hope that a group of moderate Republicans and Democrats could produce a package that would start a negotiation process, but their package – estimated to cost $618 billion – was dismissed by those in the Biden White House who want the President to go big.

The House of Representatives is taking the lead on the President’s COVID legislation.  This week several House Committees marked up parts of the bill that will ultimately be voted on using the reconciliation vehicle. The Senate will proceed along a similar path.

Steve Ruhlen, our appropriations expert, has written an excellent article for this edition about reconciliation. I want to take a slightly different approach by looking at how our politics has become more and more partisan, how we have allowed reconciliation to change from its original use in the 1970s, and the inherent overreaching of partisan bills that setup turnovers in off-year elections.

Those who know only of today’s hyper partisan world would be surprised to learn that there used to be a different kind of politics in Washington. Rudy Boschwitz, my first boss and mentor in life, was elected in 1978 to represent Minnesota in the U.S. Senate and was sworn in the following January. Senator Boschwitz immediately started to host suppers at his home with both his Republican and Democratic colleagues. Then, relationships counted, and compromise was the how things got done.

Senators legislated, and fundraising was something you did back home. Prior to 1990, the National Republican Senatorial Committee did not allow Republican Senators to have a fundraising event in Washington, D.C. for their reelection until they were in cycle – in other words, during the last two years of their six-year term. Incumbent Senators did not campaign against their incumbent colleagues; it simply was not done.

Well, that was then. Moderate Democrats in the 1980s and 1990s ran against and defeated moderate Republicans, and moderate Republicans ran against and defeated moderate Democrats – and the red state/blue state rush was on. In 2001, 30 Senators represented a state that voted for the other party’s Presidential nominee. Currently, only six senators represent states that their party’s presidential nominee did not carry.

Compromise in Congress has become a four-letter word. Winning has become a zero-sum game.

Nothing better follows the changes in politics than reconciliation. It was originally part of the 1974 Budget Act, but only as a two-week exercise each year to modify spending and tax bills that had passed earlier in that legislative session but prior to the start of the new fiscal year.

Both parties have expanded its use. President Carter used it to get around Democratic committee chairmen.  President Clinton used it to pass his first budget over Republican opposition.  The urge to override potential filibusters came into its own during President George W. Bush’s first term, and he used it to enact a $1 trillion tax cut over 10 years, and again two years later to expand and accelerate the tax cuts.

Reconciliation is for numbers, not for policy. That is the basis for the Byrd Rule, named after the late Senator Robert Byrd of West Virginia. The Byrd Rule says that the Senate cannot consider ‘extraneous’ material on a reconciliation bill. Extraneous is defined as a provision that 1) does not produce a change in outlays or revenue; 2) produces changes in outlays or revenue that are incidental of the budgetary components; 3) increases outlays or decreases revenue during a fiscal year after the years covered by the reconciliation bill unless the provision’s title remains budget neutral—which is why the Bush tax cuts expired after 10 years.

Reconciliation was meant to handle short term budget fixes. Now it is used for policy trends. Both parties use it. But the new usage of this legislative tool is part of the change in our politics and some would argue part of the problem. Legislative give-and-take is out because compromise is not a clear victory and it is too time consuming. Each side knows they must move big to satisfy their constituencies… and move fast before the window of opportunity closes.

Reconciliation was not always a partisan issue. President Bush passed the 2001 tax bill using reconciliation, and twelve Democrats voted for it.  But the expectation is that this COVID bill will be almost completely partisan, and that Democrat majorities in the House and Senate will overreach. This could set up the possibility of an off-year election bounce that Republicans are hoping to get.

Off-the-Record Thoughts from a Member of the Republican Senate Leadership

“We just did $600 billion and we have already spent over $4 trillion on bipartisan COVID legislation. This will be the first partisan COVID bill. Fourteen hundred dollars per person is about 25% of $1.9 trillion – the target for the President’s COVID package. Targeting the $1400 probably saves around $200 billion.”

“Democrats have one more reconciliation package possible this year, and they could decide to use it on taxes. They will not want to do a tax bill next year – before the off-year elections – so watch for it yet this year.”

“Infrastructure is a big point of discussion, but the question is how to pay for it. Democrats would like to put it on the credit card. Earmarks will probably come back this year, and that would be fine with me. The end of legislating in Congress and the end of filibusters happened around the same time. Watch for earmarks on the infrastructure bill – if they can figure out how to pay for it.”

A Tip of the Hat to Glenn Hamer

This Week in Washington continues to grow, but it never would have started four years ago had it not been for the foresight of Glenn Hamer. He took a chance on our concept, and then last summer Glenn urged us to develop Total Spectrum Spotlight.  

Glenn has served Arizona and the membership of the Arizona Chamber well, and the future is bright for both because of his vision and great efforts. Glenn, congratulations on being named the next President and CEO of the Texas Association of Business. We join with all your friends in wishing you all the very best.


Budget and Appropriations Update

By Steve Ruhlen, Total Spectrum Partner

We’ve written before that some in Washington don’t give the (supposedly) annual budget resolutions their due respect.  True they don’t have the direct power of law, and, while they are supposed to set the annual appropriations spending levels, Congress doesn’t have the best track record of adopting them.  But they also are the prerequisite to reconciliation, a term you may have heard lately on your favorite news outlet. 

Without getting bogged down in arcane legislative process minutia, reconciliation is a process that allows Congress to address spending (outside of the annual appropriations bills) and tax matters.  Importantly, it’s a highly useful tool for any party that controls both houses of Congress, as reconciliation is exempt from the requirement of 60 votes for passage in the Senate.  If you control both chambers of Congress, you can do a lot to further your agenda – and that is just what President Biden and Congressional Democrats are poised to do.

Even though the spending bills for Fiscal Year 2021 eventually passed the Congress last year, Congress had never approved a FY 2021 budget resolution.  And because we are still in the 2021 fiscal year, Congress can consider a FY 2021 budget resolution.  In fact, both the House and Senate approved one in the last week, paving the way for consideration – probably in March – of President Biden’s massive $1.9 trillion spending package for pandemic relief.  

To set the stage for the FY 2022 spending and tax cycle, the House and Senate are expected to pass another budget resolution in the spring, setting up a second reconciliation package in the same calendar year.  This second bite at the apple for the Democratic majority is expected to contain President Biden’s infrastructure spending plan as well as tax increases targeted at higher income Americans.  While two reconciliation bills in the same year is rare, it was done in 2017 when President Trump and congressional Republicans tried to unsuccessfully repeal the Affordable Care Act in the first reconciliation bill and later to pass sweeping tax reform in a second.

House committees are at work this week to incorporate their provisions in the reconciliation bill.  That includes billions in additional spending for numerous public assistance programs as well as an extension of unemployment benefits through August.  It also includes a highly contentious federally mandated $15 an-hour minimum wage.  However, even though reconciliation can bypass the Senate’s usual 60 vote procedural floor, it is still subject to certain Senate rules.  One of these is the Byrd Rule, designed to keep extraneous matters out of reconciliation bills.  Under the Byrd Rule, if the thrust of a provision is not really aimed at affecting outlays or revenues, but more about policy, then it can be tossed out.  Senate Republicans will certainly raise an objection to this provision on those grounds, and it will be up to the Senate’s parliamentarian to rule – for Congress watchers, a real fireworks moment.  

While the reconciliation bills will be the shiny attractive objects, the regular appropriations process will still be the thoroughfare for funding existing federal functions and projects and Total Spectrum will be keeping a focused eye on that important process.


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Hearing Report

By Ramona Lessen, Executive Director, Total Spectrum

Senate Homeland Security and Governmental Affairs Committee nomination hearing of Neera Tanden to be Director of the Office of Management and Budget (OMB)

Tuesday, February 9, 2021; 9:15 a.m.

To view a livestream of the hearing please click here.

Opening Statements

Senator Gary Peters (D-MI), Chairman

Majority Statement

Senator Rob Portman (R-OH), Ranking Member

Minority Statement

Witness:

Neera Tanden

Nominee for Director, Office of Management and Budget

Testimony


Congressional Calendar

Monday, February 8

  • 4 p.m. The House Education and Labor Committee holds a virtual business meeting to organize for the 117th Congress.

Tuesday, February 9

  • 9 a.m. The House Judiciary Constitution, Civil Rights and Civil Liberties Subcommittee holds a virtual hearing on preventing abuse of clemency power.
  • 9:15 a.m. The Senate Homeland Security and Governmental Affairs Committee holds a hearing on the nomination of Neera Tanden to be director of the Office of Management and Budget.
  • 11:00 a.m. The House Transportation and Infrastructure Coast Guard and Maritime Transportation Subcommittee holds a hearing on the U.S. maritime industry during the pandemic.
  • 12:00 p.m. The House Energy and Commerce Environment and Climate Change Subcommittee holds a virtual hearing on restoring federal climate leadership.
  •  3 p.m The House Education and Labor Committee holds a markup of a Committee Print to comply with reconciliation directives included in S.Con.Res. 5.

Wednesday, February 10

  • 10 a.m. The Senate Budget Committee holds a hearing on the nomination of Neera Tanden to be director of the Office of Management and Budget.
  • 2:00 p.m. The House Homeland Security Committee holds a virtual hearing on homeland cybersecurity.

Thursday, February 11

  • 10 a.m. The Senate Health, Education, Labor and Pensions Committee holds a markup to vote on the nominations of Miguel Cardona to be Education secretary and Marty Walsh to be Labor secretary.
  • 10 a.m. The Senate Commerce, Science and Transportation Committee holds a business meeting to organize for the 117th Congress.
  • 10 a.m. The House Judiciary Antitrust, Commercial and Administrative Law Subcommittee holds a hearing on ending forced arbitration.
  • 2:15 p.m. The House Judiciary Immigration and Citizenship Subcommittee holds a hearing on U.S. immigration system reform.

This e-newsletter is produced by Total Spectrum/Steve Gordon and Associates and the Arizona Chamber of Commerce and Industry. The views expressed herein may include subjective commentary and analysis that are the views of the editors and authors alone. Information in this e-newsletter is obtained from sources believed to be reliable, but that cannot be guaranteed as independently investigated or verified. Information in this e-newsletter is not an endorsement, advertisement, recommendation, or any type of advice; political, legal, financial or otherwise. For questions about the content of this e-newsletter, please contact the Arizona Chamber of Commerce and Industry.

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