Produced By:

Bret Manley (bret@elevatega.com) former Chief of Staff to Rep. Rodney Davis (R-IL)

David Marten (david@elevatega.com) former Legislative Director for Sen. Maria Cantwell (D-WA)

Elevate Government Affairs (www.elevatega.com)

Balance of Power

Senate: 47 Democrats, 49 Republicans, 4 Independents Caucusing with Democrats

House: 220 Republicans, 213 Democrats, 2 Vacancies*

  • FL-01: Rep. Matt Gaetz resigned abruptly to (allegedly) avoid the release of a damaging House Ethics report and “prepare” for his nomination to serve as Attorney General. His tenure as presumptive nominee lasted less than one Scaramucci. Governor DeSantis scheduled the special election for April 1st, 2025. This is a safe Republican seat.
  • NJ-09: Rep. Bill Pascrell (D-NJ) passed away in August. The timing of Rep. Pascrell’s death meant it was too late to schedule a special election to fill the remainder of the term. State Sen. Nellie Pou (D) will replace Rep. Pascrell in the 119th Congress. The seat will remain vacant until then.

Top Line Takeaways:

  • Pardon Me: After previously, and repeatedly, saying he would not intervene in the prosecution of his son, President Biden issued a blanket pardon for all crimes Hunter Biden “has committed or may have committed” from January 1, 2014, to December 1, 2024. Certainly, the President has the authority to do this, but as a political issue, this is a massive gift to Trump and the Republicans. Not that there was any good will to begin with, but this probably eliminates any possibility that Hill Republicans play nice with the Biden White House to close out the year.
  • California is Still Counting: We’re almost there. The only race still up in the air is the rematch between Rep. John Duarte (R-CA) and Democrat Adam Gray. California counts votes like this on purpose; it’s a choice, not a conspiracy (doesn’t mean it’s a good idea). However, as a nation let’s be thankful that this race isn’t for control of the House…though it’s about as close as it could get. If Duarte loses, House Republicans will have 220 seats in the 119th Congress…217 (!) if/when Reps. Stefanik and Waltz leave to join the Administration before a special election is held to fill the vacated Matt Gaetz seat (they will leave before that).
  • House Dem Committee Chair Drama: After sleepy leadership elections for both parties, the only thing left to decide is who will lead their members as Chairs and Ranking Members. The Democrats mostly operate on a strict seniority system and unlike their Republican counterparts don’t have term limits. However, underlying tension between younger (relatively) members and their older counterparts has some potential drama brewing. Reps. Jim Costa (D-CA) and Angie Craig (D-MN) have officially announced a challenge to incumbent David Scott (D-GA) for the Ranking Member of the House Agriculture Committee. Concerns about Rep. Scott have been percolating for years in Dem circles. Meanwhile, internal caucus pressure has led Rep. Raul Grijalva (D-AZ) to announce he will step down from the top slot on the Natural Resources Committee, after Rep. Jared Huffman (D-CA) challenged him for the seat. And Jamie Raskin (D-MD) is now officially challenging Jerry Nadler (D-NY) for the top role on Judiciary. The Democrat’s Tri-Caucus will weigh heavily on the Ag Committee race while the Progressive Caucus, who counts Raskin as a member, is pushing the challenge at Judiciary. Republicans, for their part, have a slew of contested races that will be decided by the Steering Committee (but will need to be officially accepted by the full Conference) this week.
  • Still No Spending Plan: As we previewed in previous editions, with a Republican trifecta in the 119th Congress, the most logical thing for Congress to do this year would be to pass a long-term spending deal so the Trump Administration could avoid a huge spending fight to start off their second term, but the most likely thing would be a short term deal pushed by Freedom Caucus members under the idea that they’ll get a better deal (they won’t) in January. Well…guess what? It sure looks like a short-term CR is going to happen even though everyone in a position to actually…like…do something prefers a long-term deal. Speaker Johnson is the exception of course but you should read his comments as a play to get 218 votes on the floor January 3rd (or later if House and Senate agree to convene Congress on the 6th, we haven’t heard either way). As of right now, House and Senate negotiators still don’t have “top line” spending numbers so if an omnibus or series of mini-busses is going to happen we are rapidly running out of time.
  • Dun dun dun du du dun dun Debt Ceiling: Remember that pesky old debt ceiling thing? Not to be too much of a tease but the debt ceiling suspension that was included in the Fiscal Responsibility Act expires on January 2, 2025. “Extraordinary” – more like “ordinary” at this point – measures will mean they can stretch it out the “x-date” for a few additional months but keep this in the back of your mind.
  • Disaster Aid Is Here: The long-awaited disaster aid request was sent down from the White House and came in at a shade below $100 billion. You’ll hear a lot of griping from conservatives about it not being “offset” but this will pass easily. There’s an unwritten Congressional rule that you don’t stand in the way of disaster aid (as long as it’s a serious number and not a stunt) because you never know when disaster may befall your constituency, and you come calling for aid. The only question is what Congressional leaders can get attached to it.
  • Legislation That Can’t Be, Burdened By What Has Been: Congress had lofty ideas two years ago but several big ticket items will (without a miracle) have to go back to the drawing board. They include (in no particular order): the Farm Bill, flood insurance, anything related to immigration, AI, data privacy, kids online safety, crypto, SAFE Banking, etc.

A Realistic End to the 118th Congress: The Big Stuff

End of the Year Spending Package: We covered this extensively last month and as we previewed up top, it looks a lot like we’ll be getting a short-term CR for Christmas. The only person that can get Speaker Johnson out of his current predicament is President-elect Trump. It’s unclear at this moment whether his team wants to help or actually prefers Congressional disfunction which would, in theory, give him justification to take executive action. We’ve seen this before…who remembers the pen and the phone?

NDAA (Including Coast Guard): The Biden administration, whether on purpose or not, did Trump and Congressional Republicans a favor by leaving billions in weapons aid for Ukraine unspent. This gives NDAA negotiators the space to drop thorny Ukraine issues, and with Trump coming into office  Freedom Caucus types aren’t as motivated to fight over culture issues. Over the break, T&I made a big push with Congressional leadership to include the Coast Guard Reauthorization in the NDAA package. House leadership is engaged on unresolved issues. However, Sens. Cantwell and Cruz haven’t come to an agreement, which is a big problem as the four corners must agree on a final bill, and we’re told Senate leadership is deferring to them for now. We could end up with another FAA situation where the Senate gets rolled by the House. It doesn’t happen often but it can happen!

Disaster Package: The Administration sent to the hill their disaster aid request for $98.6 billion. It’ll pass, though there will be some wrangling over the inclusion of money for Francis Scott Key Bridge in Baltimore since many Members want to see what the insurance companies pay out and whether or not liability claims/lawsuits would negate the need for taxpayer funds. The big question is what they can attach to it. The most logical thing of course would be a long-term spending deal which would give cover to just enough House Republicans that the whole package would pass easily but the most likely is a CR of some length and some miscellaneous items that need to be extended or reauthorized. We hear a one-year extension to the FARM Bill is in play and possibly some heath care related items. This is a very fluid situation.

Get Smart – Reconciliation

You’re going to be hearing this word a lot in the next two years. Some reporters will make it about the small majority the Republicans have in the House. You, a smart well rounded insightful savant, understand that the House is a majority rules institution and reconciliation is only useful now because the Republicans ALSO control the Senate and the White House. The shorthand is that it’s an end around the Senate’s 60 vote filibuster threshold. Passing something under “reconciliation” means you only need 51 votes in the Senate (including the VP) and of course a President to sign it. Here’s what you need to know so you can impress your family and friends at your New Year’s Eve party…(please don’t talk about this at a New Year’s Eve party).

Ok Nerds, Let’s Get Specific, What Is This Exactly?: Budget reconciliation is a process that has its roots in Section 310 of the Congressional Budget and Impoundment Control Act of 1974 (whose origin itself is the General Accounting Act of 1921, both referred to as the Budget Act). There weren’t any interns dedicated to naming bills until the PATRIOT Act, true story*. The word “reconciliation” should be taken literally, in that legislation is produced to “reconcile” instructions included within a budget resolution passed by the House and Senate. In order for reconciliation legislation to be produced, the budget resolution must include instructions to relevant committees (example coming up) to produce legislation to reconcile with the goals of the budget resolution.

Does the Budget Have to Pass Both Houses?: Yes. Budget resolutions are “concurrent” resolutions, i.e. they are agreements between the two houses. If only one passes it, you’re out of luck. This is why you never hear of reconciliation unless one party controls both the House and Senate.

And then the President Signs It?: No, Presidents don’t sign budget resolutions. They don’t have the force of law. BUT, you need the President to sign the resulting legislative package that “reconciles” with the budget. Which is why, in addition to the House and Senate, you ALSO need control of the White House. Unless of course you think you could convince a President from the opposite party to sign your bill (you couldn’t…at least not in this political environment).

How Specific is the Budget?: Not as specific as reporters will lead you to believe. The actual text of a budget resolution is really not helpful unless you do this for a living. This is why they usually come with some fancy rollout package explaining everything. Don’t believe us? Here’s the budget produced by the House Budget Committee for FY2025. So, for the authorizing committees (any standing committee other than Appropriations) to know what to do, the budget resolution must have instructions in it.

Ok What About a Budget With Reconciliation Instructions?: Much more specific. Here’s the Fiscal Year 2022 budget resolution that resulted in the Inflation Reduction Act. Scroll down to Title II. There’s a whole dedicated title directing committees to report legislation that is simultaneously clear and vague. The idea is to give latitude to authorizing committees and try to get around the “Byrd Rule” (more on this later). If you don’t want to click here’s an example.

(f) COMMITTEE ON FINANCE.—The Committee on Finance of the Senate shall report changes in laws within its jurisdiction that reduce the deficit by not less than $1,000,000,000 for the period of fiscal years 2022 through 2031.

Ok the House and Senate Pass a Budget With Reconciliation Instructions, Then What?: All the committees instructed (like our friends at Senate Finance above) to produce legislation to reconcile with the budget, produce legislation that reconciles with the budget. They then pass these bills out of their respective committees, and the House and Senate Budget Committees package them all into one giant bill and pass it so the big full bill can go to the floor.

Wait Wait Wait…is ANYTHING Eligible for Reconciliation?: No. Well…if you’re creative yes, but no. Only provisions that have a direct budgetary impact –those addressing revenue, spending, or the debt limit — qualify. But you know…almost everything the federal government does costs money in some way. So pretty much everything, but you couldn’t do something like ban AR-15s, abortion, or owning a pit bull.

Can the Minority Party Do Anything to Stop This?:  No. They can hold/force votes to “instruct” the committees, which will happen, but they’ll all fail. In the event they did pass they can be ignored. It’s the Congressional equivalent of a strongly worded letter.

Prime Time…Floor Action: In the House, it’s straightforward. As a majority rules institution it’s up to the majority how many, if any, amendments are allowed. Recently, it’s been zero. If amendments are offered they have to be germane and comply with House rules (there won’t be any amendments…at least ones with a chance at passing). The Senate is a different story. We’ve already covered the big important difference: you only need 51 votes. There is no way to filibuster a reconciliation package. Additionally, there is a 20-hour limit to debate, but not a limit on the number of amendments that may be considered. As a result, once the 20-hour limit has expired, remaining amendments are considered with little or no debate — a process known as a “vote-a-rama.” This is a time-consuming process that typically keeps the Senate in session into the wee hours of the night (and sometimes the afternoon of the following day) in back-to-back amendment votes.

You Said Something About a Byrd Guy Who Has a Rule? Named after former Senator Robert Byrd (D-WV), this is the only real chance for the minority party in either chamber to challenge something in the reconciliation package. Basically, a Senator appeals to the Senate parliamentarian that a particular provision is not germane on account of it being “extraneous” to the budget. There are lots of examples we won’t bore you with but Republicans tried to sneak some immigration stuff into the Tax Cuts and Jobs Act which got bounced during the “Byrd Bath” (Yes, that is actually what the process of applying the Byrd rule is called). It’ll happen again and usually it’s stuff that is obviously not related to the budget. The person who decides is the Senate Parliamentarian, Elizabeth MacDonough, the non-partisan advisor of the Senate who “calls the balls and strikes” of Senate parliamentary procedure and keeps the chamber moving.

The Byrd Rule also prohibits legislative provisions in reconciliation measures that increase the budget deficit for more than a 10-year period (i.e. beyond the budget window – so called because the Congressional budget scorekeepers only provide estimates for a 10-year period). This facet of the Byrd rule is why the Tax Cuts and Jobs Act expires in 2025 in the first place – Congress in 2017 could not enact permanent tax cuts for many provisions due to the Joint Committee on Taxation’s (JCT) scoring of the bill.

The Byrd Rule can be waived, but it requires agreement among the Senators and creates a new Senate precedent for future reconciliation packages, so it’s unlikely that happens unless it’s something with incredibly broad support.

Ok the House And Senate Passed Their Packages, Then the President Signs It?: As long as the two chambers produce identical reconciliation packages, yes. If not, they’ll go to a conference and iron out the differences and then pass the amended version for the President’s signature. While the two chambers could pass different versions, they won’t.

Why Couldn’t Congress Do This, Like, Infinity Times?: Technically, there isn’t an explicit rule prohibiting Congress from passing 76 reconciliation packages. HOWEVER, practices (read: precedents) of the Senate limit it to three per budget year. Although to our knowledge no Congress has ever passed three, though two (American Rescue Plan and IRA for instance) have been moved under one budget package. The Senate has interpreted section 310(a) of the Budget Act (the one that says reconciliation must be about revenue, spending, or the debt limit) to mean that no more than one measure per eligible category would be considered as privileged. They can be combined (usually are) into one big package or two packages or separated into three packages.

  • Plot Twist: Because the federal fiscal year runs from October 1 to September 30, while the Congressional calendar is January 3 to January 3, there is a scenario where multiple budget resolutions with reconciliations instructions are passed in the same calendar year, resulting in up to six reconciliation bills in a calendar year. The Republicans won’t get to six but expect them to try and pass two budgets with instructions in the same calendar year to get multiple (at least two maybe three if they’re organized) bites at the apple.

What Are Some Recent Examples of Legislation Produced by Reconciliation?:

  • Tax Cuts: Both the 2001 and 2017 editions.
  • Healthcare: The Affordable Care Act, aka “Obamacare” after the death of Sen. Ted Kennedy and shock election of Scott Brown cost the Senate Democrats their 60 vote Senate supermajority. The failed attempt to repeal this bill was also run under reconciliation but failed when then Senator John McCain (R-AZ) famously cast the deciding vote by walking to the well of the Senate and holding up a “thumbs down”.
  • Spending: The Inflation Reduction Act and the American Rescue Plan under President Biden were passed using the budget reconciliation process.

* Not a true story.

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