May 2023
Top Line Take Aways:
We are barreling toward a debt ceiling standoff with no realistic end in sight. Readers should not count on an extraordinary procedural process like a “Discharge Petition” to solve the problem, as we outline below.
The House Calendar is getting tight with only twelve legislative weeks before programs and spending authority expire October 1st, and legislation is piling up.
Big reauthorization efforts like FAA and Farm Bill are looking more and more like they will need—at minimum—short term extensions.
House Appropriators got their top line spending numbers Friday. Leadership has told them to mark to the FY22 enacted level of $1.5 trillion, below the FY 2023 enacted level of $1.7 trillion for discretionary spending. With a four-vote majority in the chamber, it’s highly unlikely they’ll be able to pass all twelve bills at this spending level. We are hearing some bills will be set at FY2018 levels.
The continued absence of Senator Diane Feinstein (D-CA), as well as Sen. Joe Manchin’s (D-WV) continued frustrations with the Administration’s implementation of the Inflation Reduction Act may dramatically slow down and limit the ability of the Senate to take action on controversial items and nominees.
With Title 42 Authority set to expire on May 11th, expect House Republicans to push Immigration reform more heavily. Reminder: Title 42 is a provision of U.S. code that has been used by both the Biden and Trump Administrations to expel individuals illegally present in the U.S. under the guise of public health during the pandemic.
On The Floor
House Immigration Bill: Majority Leader Scalise, House Judiciary Chairman Jordan, Homeland Security Chairman Green and Vice Chairman Guest held a press conference unveiling a border and immigration package on April 27th. It’s essentially a merger of the bills reported by House Judiciary and Homeland Security Committees. Allegedly, the bill will be on the floor May 11th but could easily slip as Leadership tries to whip the bill.
The Senate Legislative Graveyard...Except for CRAs: In the 116th Congress of 2019-2020, when Republicans were last in the majority, then-Minority Leader Chuck Schumer (D-NY) was fond of calling the Senate the “legislative graveyard” as bills passed by the Democratic House quietly died in the Senate. This time around? There’s not much from the GOP House that the Majority Leader is willing to consider...except what Senate procedure dictates the chamber has to. As we previewed in the March Look Ahead, Senate Republicans have had a string of successes passing Congressional Review Act (CRA) resolutions by picking off a handful of vulnerable Senate Democrats. With the House on April 28 taking up its latest CRA, this time on solar tariffs, expect more vetoes from President Joe Biden in the weeks ahead as this trend continues.
Get Smart – How Would A House Debt Ceiling Discharge Petition Work?
The Discharge Petition process in the House of Representatives is governed by Clause 2 of Rule XV. While the Senate technically also has a discharge petition process, its use is exceedingly rare. The petition is in essence a parliamentary procedure where any combination of 218 members of the House can force floor consideration of a measure. Notably, the death or resignation of a member does not invalidate their signature. It is invalidated however when a replacement member is seated for that district.
It’s important to note that this is not a quick moving process. Additionally, success is rare. The last successful discharge petition was in 2015 reauthorizing the Export-Import Bank, and you have to go back to 2002 before you find another effort that succeeded. You also only get one shot at success. If your bill is successfully discharged, but then fails to pass the House, you cannot try again. Rules prohibit successive efforts on bills that are substantially similar in nature.
Step One: The bill you wish to discharge must be considered “ripe,” meaning it has been introduced for at least 30 legislative days (not calendar days). The only way to speed up that process is to introduce a special “rule” bill to the Rules committee calling for consideration of a rule dictating consideration and amendment debate on a piece of legislation. This is the process under which then-Rep. Jeff Denham (when Bret served as Chief of Staff) set up the “Queen of the Hill” process for immigration reform. This route requires seven legislative days to “ripen”.
Step Two: A Member files a discharge petition with the Clerk of the House (the petition may only call up one bill or rule at a time) and the Clerk will make the discharge petition publicly available for Members to sign at the rostrum in the well of the House while the House is in session.
Step Three: Members must sign in person, at the rostrum. No virtual signatures are allowed, and no member may sign for another member. When a Member signs the discharge petition, the Clerk of the House publishes the name in the Congressional Record and makes available to the public the full list of signatures on the petition (there are no active discharge petitions in the House).
A Member may withdraw his or her signature at any time in writing before the petition reaches 218 signatures. Non-voting members and delegates are ineligible to sign.
Step Four: Congratulations, you’ve reached 218 signatures! Now the motion is placed on the Calendar of Motions to Discharge Committees (yes that’s a real thing) and things start to get tricky.
Discharge Petitions Can Only Be Considered on “Qualifying Discharge Days”: After sitting on the Discharge Calendar for seven legislative days, the motion may be called up by any signatory ONLY on the second and fourth calendar Monday of the month. Yes, the House must literally be in session on the second or fourth Monday of the month for this to be successful. This is one of two ways that…
Leadership Can Kill the Discharge Petition…If the discharge petition is discharging a bill directly (not a rule), the committee of jurisdiction (let’s say Ways and Means) can report the bill from Committee where it will be placed on the Calendar for the Committee of the Whole which is controlled by the Majority Leader and would thus moot the discharge petition. For this reason, any effort that wants to be successful should seek to discharge a special rule because…
…Rules Discharged By The Rules Committee…must be acted on within seven legislative days, otherwise any member of the Rules Committee (including Minority Party members) may call up the rule for a vote.
Leadership Can Also Refuse to Call the House in Session on the 2nd and 4th Mondays of the calendar month, thereby preventing a successful discharge petition. This option would be especially embarrassing politically. Though frankly once you get to 218, House Leadership would be in public relations hell.
The Magic Day—If This Is Going to Happen—is June 12th:
Based on the current iteration of the House Calendar, it would be next to impossible to execute a successful discharge petition on the debt limit. The only available Mondays for calling up a successful petition – before the debt ceiling is breached – are May 22nd and June 12th. The House isn’t in session again on an eligible Monday until October 23rd. The only available bill that would address this is Rep. Bill Foster’s (D-IL) H.R. 415 which eliminates a cap on the national debt outright (we doubt even the most moderate Republican would sign a discharge petition on that).
May 22nd is out since a bill would need to be introduced lifting the debt ceiling by a designated amount, in conjunction with a special rule governing debate of that bill, which would need to ripen. If a bill and rule were introduced May 2nd during pro forma, the earliest a discharge petition could be filed is May 17th. Even if you got all of the signatures on the 17th a discharge petition must sit on the calendar for seven legislative days before being eligible for discharge which is June 7th.
Therefore…June 12th is the only day this could happen (unless the House Calendar is changed). For June 12th to be successful, a discharge petition would have to have 218 signatures by May 22nd and a bill and accompanying special rule would need to be introduced before May 9th.
Our Conclusion: This isn’t going to happen. It’s possible 218 signatures are gathered on a petition and the PR outfall from that would force Speaker McCarthy’s hand, but that’s a different scenario. In our view, the most likely way this plays out is a series of short-term debt ceiling hikes dragging this process out until the Senate jams House Republicans. Either way, not ideal. It’s possible there’s a deal to be made between Speaker McCarthy and Leader Schumer, but McCarthy is certainly aware that it was then Speaker Boehner’s Debt Limit deal with President Obama that ultimately cost him the Speakership.
What to Watch in Committee
In the House
Appropriations: House Appropriators got their subcommittee topline spending numbers Friday, April 28th. You may have noticed the House still hasn’t passed a budget and still hasn’t “deemed” a budget number. We spoke with Members of the Appropriations Committee who told us Leadership wants to give Budget Chairman Arrington some space to get a budget together. Sounds reasonable…but time is rapidly running out. The Committee appears to be moving forward without waiting. Chairwoman Granger announced subcommittee markups will be held May 17th and 18th followed by full committee on May 23rd, 24th, and 25th. A second round of subcommittee and full committee markups will be June 7/8th and 13-15th respectively.
Armed Services: House Armed Services hopes to mark up the annual National Defense Authorization Act the week of May 22nd, teeing up a floor vote for June when the House returns from Memorial Day recess.
Judiciary: We have been told the Judiciary Committee plans to hold hearings on the emergence of AI technology and how it pertains to intellectual property rights before the August recess. They are looking for input from stakeholders and are currently tracking several court cases addressing these issues.
Transportation and Infrastructure: The T&I Committee is going to hold a markup at the end of the month on supply chain measures. The markup will be preceded by hearings designed to layout the arguments in favor of the package. Specifically, the Committee is looking at doing 12-15 bills with a mix of bipartisan and GOP bills focusing mainly on highways and trucking. They are going to look at existing grant programs to give priority to projects addressing supply chain bottlenecks. Other potential pieces of legislation could look at the Ocean Shipping Reform Act, truck parking, ports, addressing truck driver shortages and lowering the age limit for certain CDLs and (gasp) maybe some truck size and weight exemptions. This would almost certainly push a potential FAA markup to June, though Ranking Member Larsen has said he expects the base bill text to be introduced by early June. Notably the Tarkio annual air show, the Wing Nuts Flying Circus, takes place on July 9th. Chairman Graves is a prominent figure at the annual show, and we suspect he wants to fly into town (literally) having moved a bill through Committee by then.
Ways and Means: The focus of the Committee is going to shift to trade. On May 9th the Committee plans a field hearing in Rep. Malliotakis’ district, or adjacent to it, on port related trade issues. Additionally, we’re told the Committee is looking to mark up an economic package and send it to the floor. The three field hearings the Committee conducted – focused on Appalachia, The South, and The Heartland – will shape the package. Reviewing Chairman Smith’s statements from each hearing expect bills targeting green energy mandates, oil and gas infrastructure, small business regulation, provisions of TCJA, among others.
In The Senate
Appropriations: Chair Patty Murray (D-WA) and Vice Chair Susan Collins (R-ME) continue their no-drama approach to cobbling together their FY 2024 spending bills. While the two sides remain apart on setting topline funding numbers, Appropriations will continue to hold subcommittee hearings on agency budgets.
Banking: Expect Chairman Sherrod Brown (D-OH) to continue to hammer on greater accountability for leadership at underwater financial instructions, especially with the FDIC seizing First Republic Bank and selling it to JP Morgan on May 1st. Banking will hold a second hearing on bank failures the first week of May as he continues to work on legislation ratcheting up penalties for executives at failed banks.
Commerce, Science and Transportation: Commerce didn’t hold a markup in April, but Chair Maria Cantwell (D-WA) is aiming to end that drought in May and hold an executive session on two high-profile bills: the Railway Safety Act, introduced by Sens. Sherrod Brown (D-OH) and J.D. Vance (R-OH) following the East Palestine derailment, and possibly the committee’s version of an FAA reauthorization package. The question is, can they get there on the FAA bill? The hearing phase is done, and committee staff are heads down writing the bill, but we hear the drafting process is slow. Aviation Subcommittee Chair Tammy Duckworth (D-IL) has said she expects the FAA bill to be marked up this month, but the current dynamics lead us to believe that timeline could already be in doubt.
Environment and Public Works: Senate EPW will continue its oversight of legislation in its jurisdiction passed during the 117th Congress, holding hearings on the U.S. Army Corps of Engineers’ budget proposal and implementation of the 2022 Water Resources Development Act. Expect the committee to also look at water affordability and federal assistance for small water systems.
Health, Education, Labor, and Pensions: Secretary of Labor nominee Julie Su advanced out of HELP last week on party-line vote...but we think that’s likely as far as she’ll get. Su, who currently serves as Acting Secretary following the departure of Marty Walsh, has faced still opposition from Republicans stemming from her time leading California’s labor department. With everyone looking, as always, to Sens. Joe Manchin (D-WV), Kyrsten Sinema (I-AZ), and Jon Tester (D-MT) for answers on where they stand, it will only take one defection to sink Su’s nomination should Sen. Dianne Feinstein (D-CA) remain away from the Senate.
Finance: Who’s afraid of drug middlemen? The answer would seem to be “not Congress.” There’s a growing push on both sides of the Capitol for action on drug pricing transparency, with pharmacy benefit managers (PBMs) being the top target of lawmakers’ ire. In March, Sen. Cantwell passed her legislation with Sen. Chuck Grassley (R-IA) out of the Commerce Committee to give the Federal Trade Commission new tools to go after unfair and deceptive practices. HELP will be next up, with Chairman Sanders unveiling his PBM reform bill last week that the Committee will mark up on May 2. Sanders will also haul the CEOs of the three largest PBMs before the committee on May 10. And expect action soon after from Finance, with Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) recently releasing their framework to reform federal prescription drug programs. Look for proposals from each committee to be cobbled together on the floor later this year as Leader Schumer builds a drug pricing package.
