2022 Appropriations Countdown Continues

The House of Representatives worked late into the evening Wednesday to pass the overdue $1.5 trillion Fiscal Year 2022 appropriations bill. That same day, the House passed a four-day stopgap bill to fund the government beyond March 11 deadline and give the Senate time to pass the larger spending package.

While President Biden’s “Build Back Better” domestic agenda is in limbo, Democrats had hoped to use the omnibus bill to provide what Senate Appropriations Chairman Patrick Leahy (D-VT) calls “the biggest increase in non-defense programs in four years.” Congress has also includes $13.6 billion for military and humanitarian assistance to Ukraine, as requested by President Biden.

The bill was expected to include $15 billion in new funding for COVID -19 relief, an amount that Democrats had to shave down due to Republican opposition to setting aside new money for COVID relief when there is unspent money from the previous relief bills. But shortly after the 2,700-page bill was released and scheduled for a vote on the House floor, several Democrats sent the package’s fate in disarray. Leadership had to halt floor activity and address lawmakers from several states who objected to how the COVID relief would be offset. In the afternoon, Speaker Nancy Pelosi (D- CA) notified Democrats that the coronavirus money would be cut, calling into question the president’s COVID relief strategy.

The FY2022 appropriation for Energy and Water Development and Related Agencies is $54.97 billion, an increase of$3.2 billion above the FY2021 enacted level. Of that amount, a total of $8.3 billion is designated to the Army Corps of Engineers for water infrastructure. This is an increase of $548 million above the FY2021 enacted level and $1.6 billion above the budget request. The bill provides $2.49 billion for construction, $2.05 billion for Harbor Maintenance Trust Fund projects for waterway infrastructure, and $500 million in funds for the Water infrastructure Finance and Innovation Program.

 

As part of the FY2022 Interior and Environment appropriations, the package also includes $2.77 billion Clean Water (CWSRS) and Drinking Water State Revolving Funds (DWSRF) which is equal to the 2021 enacted level.

 

Biden Delivers the State of the Union

On March 1, President Biden delivered his State of the Union address amid the backdrop of tanked approval ratings, a divided Congress, an ongoing pandemic, high inflation, and an embattled Ukraine at the center of an escalating war in Europe.

 

Notably absent from the President’s speech were the overarching and ambitious Democratic proposals laid out in much of his signature “Build Back Better” plan. In fact, the three B’s were not mentioned aloud even once. Instead, Biden outlined a revamped domestic agenda and pleaded with Congress to come together on some of his stalled core agenda including lowering prescription drugs, increasing the minimum wage, a China competitiveness bill, home- and long-term care, enacting the Paycheck Fairness Act, immigration reform, paid leave, and passage of the stalled voting rights acts.

 

Biden highlighted his bipartisan success in getting the $1 trillion infrastructure bill passed and “hit the ground running” on  getting the funding for new investments and jobs for Americans while listing a string of new projects and programs that were included in the massive law.  “That legislation is going to allow us to replace all the lead pipes in this country so every child can turn on a faucet at home or at school and drink clean water, the President said to applause.

 

Biden said he’s choosing to fight inflation by spending. “One way to fight inflation is to drive down wages and make Americans poorer,” Biden said. “I have a better plan to fight inflation: Lower your costs, not your wages.” Republicans and even some Democrats in his own party are skeptical, believing that additional spending would accelerate inflation. Biden rejects that charge, saying the plan would not be inflationary because it would not deepen deficits, while continuing to push for higher taxes on corporations and individuals earning more than $400,000 a year. If his plan is adopted, he claims, the deficit will drop to less than half of what it was before I took office.

 

To make further economic progress, President Biden emphasized the need to continue to focus on increasing domestic manufacturing and supply chain resilience, which he said will increase U.S. jobs and counter dependence on China and foreign supply chains.  Just last week, one year after signing Executive Order 14917 directing agencies to identify supply chain vulnerabilities, the White House released its plan to revitalize U.S. manufacturing and secure critical supply chains, expand domestic manufacturing, build the domestic workforce, and help the U.S. outcompete China.

It released reports for seven different agencies identifying key weaknesses in some of the nation’s most crucial supply chains, as well as the final report outlining key actions the administration has taken over the past year to reduce supply chain vulnerabilities in a number of key sectors. The administration plans additional “concrete” actions, including bolstering Buy American Act rules, the Defense Production Act Investment Program, roundtables with U.S. manufacturing institutes, investment in domestic production of critical minerals, and new domestic manufacturing initiatives through the Export-Import Bank (EXIM).

 

 

SCOTUS Case Could Determine EPA Authority

On Feb. 28, the Supreme Court of the United States heard more than two hours of oral arguments on the Environmental Protection Agency’s (EPA) authority to curb greenhouse gas emissions from the nation’s power plants, which could seriously impede the Biden administration’s climate change plans and its goal of cutting emissions in half by the end of the decade. The justices gave few clues as to their stance. Neither side appears to have the full support of the majority, but depending on how the judges decide to issue a decision, it could also limit EPA ‘s authority to implement other regulations without explicit congressional authorization.

In West Virginia v. EPA, Republican states and coal producers are suing over an appellate court decision that petitioners contend revived the Obama administration’s Clean Power Plan (CPP), which requires fossil fuel power plants to reduce GHGs using the “best system of emission reduction.” They argue that EPA misinterpreted the Clean Air Act (CAA) by extending regulatory control beyond individual power plants (“inside the fence”) to the entire energy sector as a whole (“outside the fence”), which Congress did not explicitly authorize in the law.

The administration and environmental groups argue that states are not harmed because there is no rule in place. The appeals court last year struck down the Trump administration’s replacement rule, called the Affordable Clean Energy rule, but did not explicitly say the CPP was back in force. In addition, they contend that SCOTUS is premature in considering the issue because the administration intends to issue a new rule in its place. However, the court seemed interested in continuing to hear the merits of the case.

Petitioners argue that the “major question doctrine” requires Congress to clearly state whether it intends to grant EPA authority to reshape the power industry through a generation-shifting scheme, because Congress did not provide such a statement, EPA lacks authority. However, some judges seemed unsure how they would procedurally rule on how EPA could regulate power sector emissions under Section 111(d) of the Clean Air Act, or whether they would even need to apply the major question doctrine to issue a decision.

It is not known whether the court will issue a broad or narrow ruling. A broad ruling would weaken regulatory efforts that extend well beyond the environment, including consumer protection, workplace safety, and public health. On the other hand, a ruling that limits EPA ‘s authority under a traditional statutory interpretation would still be a “setback” for the Biden administration’s climate change-focused rules. But it could give the administration some leeway to enact its own version of a power plant rule that meets its goals for the energy sector.