THE LOOK AHEAD – DECEMBER 2023
Top Line Take Aways:
For the first time in what feels like forever we won’t have any budget brinksmanship threatening your holiday travel plans. HOWEVER, the House still has five bills it can’t garner 218 votes for and there’s no indication House and Senate Leaders are anywhere near agreeing on top line spending levels. However, Freedom Caucus Chairman Scott Perry said Wednesday that they’d agree to the $1.59 Trillion number from the Fiscal Reduction Act. The same spending level that cost Speaker McCarthy his job…curious. Meanwhile, Speaker Mike Johnson (R-LA) is threatening a full-year Continuing Resolution if the appropriations fight isn’t resolved by February 2. So, January will be…interesting.
House Retirement Watch: Already more than 3 dozen House and Senate Members have announced they won’t be returning in 2024. About half of these (17) are running for other offices, but a fair amount are hanging it up because it’s simply not worth it to them anymore. We expect several more to announce their departures before it’s all said and done. Here are relevant primary filing deadlines for December and January, which will force the issue for many members who may be considering retirement.
December 4th – Illinois; December 8th – California; December 11th – Texas; December 15th - North Carolina; December 20th – Ohio; January 5th – Kentucky; January 12th – Mississippi; January 27th – West Virginia.
FAA will [likely] need to be extended again. We are hearing the Senate Commerce Committee is very close to a deal on outstanding items. Unlike NDAA, not extending FAA has serious immediate consequences. House sources have privately expressed concerns to us that because of this an FAA extension could become a leverage point that keeps lawmakers busy through the holidays. Namely as a vehicle for unrelated tax provisions to ride along in FAA’s tax title (which as a reminder goes through Ways and Means, NOT Transportation and Infrastructure).
Chairman Graves and Ranking Member Larsen both prefer a clean extension and have also thrown cold water on the idea of any negotiated FAA bill hitching a ride in NDAA.
The NDAA Conference Report should be ready on the early side of the month, potentially next week. House Armed Service Committee Ranking Member Adam Smith (D-WA) is saying negotiators are down to the last few items. Many of the culture war type amendments from the House GOP will not make the final bill. Fortunately for Speaker Johnson, Conference Reports in the House are not amendable* and are not subject to a rule. The bill can simply be placed on the floor for an up or down vote.
Short of a holiday miracle on appropriations, NDAA will be the last best opportunity before 2024 for “ash and trash” priorities to ride along on a major legislative vehicle. Expect some less ideological provisions to get added like MARAD reauthorization. We hear the House is also pushing for a Coast Guard reauthorization to ride along, though this remains a long shot.
*You may be wondering about a Motion to Instruct Conferees, and what that means. More on that below in our “Get Smart” section.
Israel/Ukraine/Border/Taiwan Funding
The Senate is taking the lead on negotiating a supplemental funding package that would tie together security support for Israel, Ukraine, Taiwan and likely include some changes to federal policy at the southern border. There are a lot of dynamics at play here and we’ll try to tie them together. If you squint, you can see a place for a deal…
Israel: Obviously,, the House has already passed additional funding for Israel tied to cuts to the big boost in funding the IRS got as part of the Inflation Reduction Act. While the vote was bipartisan there weren’t nearly enough Democrats crossing over to make this a viable bill in the Senate, and indeed Dem leaders on the Senate side and the White House signaled the bill is going nowhere.
Democrats for their part have their own problem. A significant portion of their base, young voters in particular, oppose any security assistance to the Israeli government and are pressing their party to push for a ceasefire. Responding to this pressure from the left, many Democrats, including Sen. Bernie Sanders (I-VT) have begun pushing for “conditions” on aid to Israel. Leader Schumer, the Administration and Minority Leader McConnell have all rejected any sort of conditions. Republicans, and a sizable number (if not the majority) of Democrats are not going to go along with that.
Ukraine: Support for additional funding in Ukraine has broad support in the Senate in both parties and in their respective leadership. The problem here as we know is the right flank of the Republican-controlled House. Notably, Speaker Johnson has reiterated his belief that it is important to continue funding Ukrainian resistance as a check on Vladimir Putin’s designs on Russian expansion. While there is a loud portion of the right in the House opposed to additional funding, there’s some daylight if certain transparency requirements are placed on the money, since Ukraine has long been a source of political corruption. Indeed, a bill to provide such requirements passed with broad bipartisan support earlier this month.
Taiwan: We don’t hear a lot about Taiwan funding in this package, in large part because there is almost universal agreement about the threat of China to the island and concerns about the PRC's continued aggression in the South China Sea. The White House’s October request to Congress included asks on funding for capacity building for Indo-Pacific allies along with funding to accelerate the construction of attack submarines and assistance to Australia as part of the AUKUS submarine agreement.
Border Security: One of your hosts (Bret) could write a novel about the political issues surrounding immigration legislation in Congress. Once upon a time he led the charge with then Rep. Jeff Denham (R-CA) and drafted Goodlatte II which failed (single tear) but was the last time Congress voted on anything remotely consequential in the immigration space. This is not that, or anywhere close, but some of the issues are the same. Namely the policy of 1) “catch and release”/”parole,” 2) safe third countries, and 3) what conditions exactly should qualify someone for “asylum.” We won’t get into the specifics of these but trust us when we say they are way more complicated than the slogans used in political ads.
Republicans generally want to 1) end “catch and release” and deport anyone caught back to their home country or make them remain in Mexico until their asylum claims are adjudicated, 2) deny asylum claims to anyone who passed through a safe 3rd country to arrive in the U.S. (e.g. if you flew to Canada and then crossed the U.S. border illegally then you can’t claim asylum because Canada is safe, eh), and 3) apply asylum laws to their initial intended purpose of providing refuge to people fleeing bona fide government and religious persecution, not simply poverty and poor economic conditions.
How much of this the Democrats will be willing to swallow remains to be seen, and certainly if it doesn’t go far enough Republicans in the House will almost universally use it as a reason to oppose any final package.
Ok I’m Squinting: If we’re squinting, we see a deal that provides money to Ukraine (but not as much as Dems want) with some transparency and accountability measures, money to Israel (but not as much as GOP wants) with some “restriction” language that is so weak it’s basically meaningless, money to Taiwan (nobody will talk about this part of the deal, but it’s still important) with very specific caveats on what it can be spent on to avoid sparking a larger regional conflict in the South China Sea, AND some changes to “Catch and Release” and what qualifies for asylum plus some cash for more “border security.”
What Are Committees Up to This Month?
The House
Agriculture: House Agriculture is going to have a Member Day hearing on the 6th. It seems clear that the House and the Senate are nowhere near ready for a FARM Bill reauthorization, notwithstanding the problems with House Agriculture Appropriations . Additionally, the behind the scenes drama over the Ranking Members engagement in the process has many Democrat members feeling like they’re unprepared for a floor battle with a more conservative House GOP.
Appropriations: House Appropriators, “officially,” aren’t going to be doing a whole lot of anything. Unofficially the poor souls that staff the committee are going to be working through December, and the Holidays to prepare for January. Additionally, we’ve heard from Appropriators that if there’s agreement on single issue bills with the Senate the Speaker will move them. That’s a big if though, based on what we’ve seen in the House so far and the fact that the House and Senate have yet to agree on topline spending levels.
Energy and Commerce: Word is Energy and Commerce is going to have a “mega markup” spanning two days next week, likely Tuesday and Wednesday. As of this writing the Committee was still determining what bills would be included for consideration. The big one being the Committee’s Right to Repair legislation, though we are hearing it might not be ready for Full Committee consideration.
Transportation and Infrastructure: T&I is going to hold its (likely) final markup of the year on the 6th for a PIPES Act reauthorization among other items. Additionally, the Committee will hold its first hearing to lay the groundwork for the next Water Resources and Development Act (WRDA) reauthorization.
Ways and Means: Ways and Means is still working on an end-of-the-year tax package. The usual caveats apply on SALT and the like but FAA extension runs out at the end of the month and the tax title of that bills runs through the Ways and Means Committee. They held a markup yesterday and the Committee noticed two hearings for next week, an executive session (read: not open to the public – including us!) with the IRS whistleblowers involved in the Hunter Biden case, and a tax subcommittee hearing on “policies to expand economic growth and increase prosperity for American Families.”
The Senate
Appropriations: As leaders and appropriators keep talking, behind the scenes the Committee is doing what it can absent a topline deal to ready for the expected December through January sprint. That includes things like finalizing a unified list of Congressionally Directed Spending projects so every member that wants one can get their pet projects funded. But until they’re told to write, it will be largely a hurry up and wait exercise for the committee.
Commerce, Science, and Transportation: FAA, FAA, FAA. Commerce held one full committee hearing in November as Chair Maria Cantwell (D-WA) and her team worked to negotiate deals on FAA reauthorization, privacy, and other priorities, and we expect the same behind the scenes, nose to the grindstone focus on negotiations in December as Commerce works against the clock. If a deal can come together and the committee can mark up the bill the first week of December, expect a possible push to get the bill to the floor before the holidays paired with a short-term extension so the committee can begin negotiations with House T&I or a decision to bypass the floor altogether and begin negotiations immediately. Meanwhile, we hear there’s interest in doing a hearing on Name, Imagine, and Likeness (NIL) before the year is out. Kids privacy and spectrum reauthorization and a number of other telecom funding issues also may be in play.
Finance: With end-of-year dealmaking comes end-of-year hopes of a tax package. Chair Ron Wyden (D-OR) has been working quietly with Ways and Means Chairman Jason Smith (R-MO) on a deal that would restore and extend R&D expensing, capital expensing, and interest deductibility that, as mentioned, could find a ride on the FAA tax title.
Get Smart – What is a Motion to Instruct Conferees
Isn’t a Motion to Instruct (MTI) Conferees Like a Motion to Recommit?: No, it’s not. Motions to Recommit are authorized under a rule issued by the Committee on Rules and have actual repercussions like permanently amending the bill if it passes (at least until some future Majority loses too many and just changes the Rules).
Wait so Motions to Instruct Don’t Amend Legislation?: Not even a little bit. In essence it’s a messaging vote between the House and the Senate. If one passes it means nothing, simply a recommendation to the Conferees from the House or the Senate, whichever body passed the MTI.
So What Are They For?: MTIs introduced in the House instruct House Conferees, while Senate MTIs instruct Senate Conferees. Notably the instructions go to both GOP and Dem conferees together. In this exercise it's House vs Senate so a typical MTI will instruct the conferees to insist on or recede to a particular provision of the bill under conference.
So, When Can MTIs Be Offered?: MTIs are privileged, so when the following conditions are met any Member may offer an MTI at any qualifying time and there will be a vote. First, Motions to Instruct Conferees can only be offered if a formal Conference Committee between the House and Senate has been established and the Conferees named. This is one of the reasons that process doesn’t happen very often which we get to in next paragraph. Second, the Conference has to have been in place for 45 calendar days and 25 legislative days before an MTI can be offered. FINALLY, they may be offered at any time during the last 6 days of a Congressional session, which just so happens to be coming up!
Ok So they’re Largely Meaningless, Why Are You Telling Me This?: Formal Committees aren’t named in large part to prevent anyone from offering an MTI that might be a politically difficult vote, like say one insisting on the House abortion language. Since they’re meaningless why put members in that spot.
Also we’re nearing the last 6 days of the session, and it’s a near certainty that many of the hot button “culture war” issues are going to get dropped from the final bill. So if you see someone offering an MTI, now you’ll know!
BUT BUT BUT BUT…Once a Conference is formally announced as “closed,” MTIs can no longer be offered because technically there is no more Conference! That means when you see an announcement of a deal on NDAA, it’s likely that the Big 4 negotiators will “close” the conference before announcing the full details in order to avoid these votes. But if they haven’t gotten there by Friday the 8th, we may see a Member or two take a shot at it.
