Top Line Take Aways:

    • House and Senate Leadership are trying to cram an awful lot of legislation into three weeks before recessing for the summer. It’s inevitable that something will slip until Congress returns in September. We unpack everything we hear will see floor action in July below and you’ll get a sense of what we mean.

    • It’s crunch time for House Appropriators—without meaningful progress advancing bills in the House it will be impossible for Congress to avoid a Continuing Resolution and violate a signature pledge of Speaker McCarthy securing the gavel…that all 12 appropriations bills would move through regular order. Reality check: there’s a reason this never happens; it’s hard and takes time!

Depending on how spending legislation makes its way on the floor, expect to hear chatter from the Freedom Caucus about leveraging a government shutdown if they don’t get what they want.

  • On the Senate side, Leader Schumer has said it’s time to get back to the business of legislating and passing bipartisan bills. But with even the Senate’s must-pass items—NDAA, Farm Bill, FAA reauthorization, and Appropriations—in jeopardy of needing extensions, where’s the floor time (and the votes) for his other stated priorities on AI, competition with China, marijuana banking, and prescription drugs? The week of July 10 remains uncertain but bipartisan bills, like the rail package from Sens. J.D. Vance (R-OH) and Sherrod Brown (D-OH), legislation on failed bank CEO compensation clawbacks from Sens. Tim Scott (R-SC) and Brown and nominations are possible.

On The Floor

    • Appropriations, Appropriations, (or maybe not) Appropriations: There are two facts continuing to force delays in appropriations bills hitting the House floor. One is House Freedom Caucus (HFC) hard liners insisting on cutting spending below Fiscal Responsibility Act levels, in some cases by 30%. These are levels, depending on the bill, that more moderate members of the GOP Conference simply won’t support. The other issue is that if the Federal Government is operating under a Continuing Resolution at the end of the calendar year (note, NOT Fiscal Year), an automatic 1% spending cut goes into effect via sequestration. This means no matter what type of bill hits the floor there is some mix of 218+ House members with an incentive to vote no. This is an especially delicate dance for Speaker McCarthy, and we suspect HFC members, with possible assist from Trump World, will attempt to set up an impossible set of demands while trying to leverage the ability of a single member to vacate the Speaker’s Chair.

    • Tax Package Cometh Or Nah…? We talked in last month’s Look Ahead about Ways & Means Chairman Smith’s desire to have a tax package on the floor in June. The Committee marked up a bill and everything seemed on schedule until…nothing. Your hosts have learned that both Speaker McCarthy and Leader Scalise asked Chairman Smith not to mark up because they didn’t have the votes for the floor. Sure enough, in a meeting with New York GOPers, Chairman Smith was told flatly, without a resolution on state and local taxes (SALT), they’re voting no. Unless there’s some resolution here (color us skeptical) it appears the GOP tax package is dead. The most likely scenario as we see it is some pared down package of bonus depreciation and business expensing, pared with Child Tax Credit at the end of the year.

    • Bicameral NDAA Action: Majority Leader Schumer has stated that the Senate will join the House and move forward on passing the annual National Defense Authorization Act this month. The right flank of the House GOP conference is agitating for votes on all sorts of issues from gender policy and abortion to Ukraine funding. Additionally, we’re hearing the House may seek to attach the Coast Guard reauthorization to the package. While headlines will focus on the politically sensitive votes, NDAA has been passed by both houses every year for the last 63 years and we don’t expect that to change.  The Senate is expected to take up its version of the NDAA the weeks of the 17th and 24th.

    • FAA: House Leadership has promised Chairman Graves that his bill to reauthorize the FAA, which passed committee 63-0 with two abstentions. Only one issue broke the four corners agreement in committee, raising the pilot retirement age to 67, so we are watching how Chairman Graves and RM Larsen approach the floor amendment process. We expect a few changes in to form of a manager’s amendment at Rules to address the commitments made to members during markup and then a structured rule to give members votes on contentious issues without altering the final product in a way that disturbs bipartisan consensus. And with the Senate’s markup on their bill delayed until at least mid-July, the clock is incredibly tight to get the bill on the floor before August recess.

    • Rail: Leader Schumer has promised to put “good bipartisan bills” on the floor this month. The Railway Safety Act, led by Sens. Sherrod Brown (D-OH) and J.D. Vance (R-OH) is one of the prime candidates to see action, but the path to 60 remains uncertain. Sen. John Thune (R-SD) and many of his colleagues remain skeptical of the bill’s ambition, with the two-person crew mandate still a major sticking point. Should enough votes for cloture not materialize soon, look to a consolidated vehicle to crack down on pharmacy benefit managers and Sen. Brown’s bipartisan bill on clawing back compensation from executives at failed banks as potential options to fill out the calendar.

What to Watch in Committee

In the House

Agriculture: House Agriculture is aiming for September markup of its Farm Bill reauthorization, though that could easily slip. Even if it doesn’t, that will give the House just a couple weeks to reconcile with a yet to be seen Senate bill.

Appropriations: The Committee still needs to deal with Commerce-Justice-Science, Financial Services, Interior-Environment, Labor-HHS-Education, State-Foreign Ops, and Transportation-HUD. The delay in T-HUD is notable in that it hasn’t even been introduced. THUD is typically one of the most popular bills because that’s where the bulk of Member Directed Spending (aka “earmarks”) exist. We hear there are issues both with the level of spending and possibly some adjustments in the ratio of earmarks given to Democrats, perhaps as a result of a deal to get the Fiscal Responsibility Act to the floor.

Armed Services: House Armed Services will be all hands on deck for NDAA floor action and if the Senate passes their bill will immediately pivot to reconciling the differences between the two.

Transportation and Infrastructure: One of the Committee’s signature pieces of legislation, reauthorizing the FAA will be on the floor mid-July, and its Coast Guard Reauthorization is likely to ride along with the reauthorization of the National Defense Authorization Act. While the bulk of Committee energy will go to managing efforts to amend FAA on the floor, we also hear DOT Secretary Pete Buttigieg will testify before the Committee on July 19. We have not heard of any markups the Committee might hold in July.

Ways and Means: The Committee on Ways and Means will hold a field hearing in Minnesota on July 10th and will hold a Healthcare themed markup, allegedly looking to address various jurisdictional issues with other committees in the health care space.

In The Senate

Appropriations: Senate Appropriators will keep rolling after they set FY24 toplines and approved the Agriculture and Military Construction-VA bills before leaving for the July 4th recess. The Committee is looking to hold markups on the week of July 10th on the Financial Services and General Government, Commerce-Justice-Science and Legislative Branch appropriations bills. Expect Energy and Water to be next up the following week.

Commerce, Science, and Transportation: The Committee’s planned markup last month of its FAA reauthorization bill (the same week as the House markup, giving every aviation policy staffer and lobbyist a heart attack) didn’t exactly go off as planned. With an amendment from Sens. Sinema and Thune on pilot training along with an unresolved agreement on a DCA slots deal forcing a postponement of the markup at the last moment, the Committee is looking to regroup and complete the markup as soon as mid-July after the Senate returns. But with the pilot training issue unresolved, we’ll keep a close eye on the Senate calendar as negotiations continue and an extension looms. Meanwhile, Chair Maria Cantwell (D-WA) will look to marshal votes ahead of possible consideration of the rail bill on the floor and is aiming to hold hearings during the July work period on artificial intelligence.

Energy and Natural Resources: White Chairman Joe Manchin (D-WV) continues to hammer the Biden Administration on the implementation of the Inflation Reduction Act, the Committee will aim to look forward on a series of public lands bills in July. ENR will hold a hearing on 17 bills, nearly all of which focus on federal lands across the West. Look for these bills and others to be cobbled together into a public lands package in the coming months.

Small Business: It’s been more than two decades since the Small Business Administration has been reauthorized, but the agency’s remit has expanded significantly since, having been charged during the pandemic with carrying out the massive Paycheck Protection Program among other new responsibilities. As Chairman Ben Cardin (D-MD) seeks to cement his legacy ahead of retirement, SBC plans to mark up a SBA reauthorization bill in July. Expect plenty of bipartisan talk but also a good dose of partisan wrangling as Republicans seek greater regulatory flexibility