Must-Pass Legislation Has Democrats Reconfiguring Priorities and Racing to Beat the Clock

The congressional calendar continues to be overwhelmed with high-priority and must-pass legislation still awaiting action, and as midterm elections approach, it will become increasingly difficult to find enough bipartisan support to pass legislation with such narrow majorities. This week, House Appropriations subcommittees will begin their FY23 spending bills markups. Also, conferees continue to work behind the scenes to reconcile the House’s America COMPETES Act with the Senate’s US Innovation and Competition Act (USICA), but their self-imposed July 4 deadline to pass the bill is looking increasingly unlikely.  Democrats fear that if they don’t pass the bill before the August recess, the chances of passage before the elections are slim to none and such a package in a lame duck session is even less probable.

Rumors that the bill may get pared down have persisted even though several committee leaders have dismissed that idea in recent weeks. On Tuesday, Senate Majority Leader Chuck Schumer (D-NY) and Speaker Nancy Pelosi (D-CA) met for two hours on the package to discuss and strategize their legislative options. Today, it was revealed that House and Senate Democratic leaders have decided to limit the scope of USICA negotiations to areas where they have consensus. Schumer and Pelosi have charged committee chairs and key negotiators to put the pedal to the metal and reach a quick agreement. Among the items that could be cut are labor and climate provisions, as well as controversial trade provisions that have no chance of passing in either chamber.

The paring back of trade language is going to be a point of contention, especially among Senate Republicans. Ways and Means Ranking Member Kevin Brady (R-TX), said just last week that he believes negotiators can find common ground to pass a renewal of the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB). However, accelerating negotiations could leave these provisions on the cutting room floor.

Another hard deadline looms – there are only 107 days until FY22 on September 30. That means Democrats have just 108 days to pass a reconciliation bill before the FY 22 budget resolution expires. For weeks, there has been speculation about whether Senate Majority Leader Chuck Schumer and Senator Joe Manchin (D-WV) would craft a framework for a slimmed-down reconciliation bill, or what some are calling “Build Back Better” (BBB) lite, that would provide clean energy tax credits and make permanent the increase in premium tax credits (PTCs) for the Affordable Care Act (ACA).

In recent talks, the two senators are talking about a bill that is expected to include $300 billion to $500 billion in spending and $600 trillion to $1 trillion in offsets. Manchin wants the focus to be on inflation and restoring America’s public finances. This means that some measures from Build Back Better (BBB) will be converted into a package that could be described as cost cutting and domestic capacity. The real question, however, is whether an agreement can be reached and a package be finished in 108 days, or rather in the 52 days until the August recess. If these talks do not result in tangible progress by the time Congress returns from the July 4th recess the week of July 11, there is little chance of a reconciliation bill.

Any bill will have to stick to Manchin’s requirement to offset $2 for $1 in spending and make the spending permanent. This will accommodate the offset constraints of Senator Kyrsten Sinema (D-AZ) who may want to eliminate some BBB provisions such as the adjusted gross income, the Net Investment Income Tax on certain active income, and some international tax provisions. There is also a need to ensure that anything that has 50 votes is signed off on by the Senate parliamentarian. One potential offset that has attracted attention is a carbon border adjustment tax legislation introduced by Sen. Sheldon Whitehouse (D-RI). The proposal would include duties on imports from particularly carbon-intensive manufacturers.

House of Representatives Passes WRDA Bill

The House of Representatives passed its version of this year’s Water Resources Development Act (WRDA, H.R. 7776) on June 8 by a vote of 384-37. The nearly $40 million package, traditionally passed every two years, authorizes a number of water infrastructure and coastal resilience projects, as well as feasibility studies for 72 new U.S. Army Corps of Engineers projects and for nine project modifications with a stronger focus on environmental justice. The Senate has not yet indicated when it will vote on its version (S. 4136), which advanced unanimously out of the Senate Environment and Public Works (EPW) Committee on May 4. The Senate version included feasibility studies for far fewer new projects and modifications and provisions to establish an environmental justice advisory committee.

Neither version addresses EPA’s state revolving funds for clean water infrastructure. Instead, these priorities were included in last year’s bipartisan infrastructure package, with $2.75 billion for the Drinking Water State Revolving Fund program and $2.75 billion authorized for the Clean Water State Revolving Fund program for FY 2023, although they were not fully appropriated in either the bill or President Joe Biden’s FY 2023 budget request. Once the Senate passes its version, policymakers will need to reconcile the differences between the packages.

TSCA Issues Remain on Lawmakers’ Agendas

 

The Senate EPW will hold a hearing on June 22 oversight hearing on implementation of the reformed Toxic Substances Control Act (TSCA). The hearing comes at a time when agency officials are grappling with delays and missed statutory deadlines that they say are due to an underfunded toxics office struggling to manage greatly increased responsibilities. Just this week, the committee was deeply divided on Congress’ role in current TSCA issues as Democrats tried to push a bill to limiting asbestos through the committee.

On June 9, EPW held a hearing on the “Alan Reinstein Ban Asbestos Now (ARBAN) Act” (S. 4244), introduced by Chemical Safety Subcommittee Chairman Jeff Merkley (D-OR). The bill would go further than EPA’s proposed restrictions, banning the manufacturing, processing, use and commercial distribution of all six types of asbestos. The ranking member of the subcommittee, Sen. Roger Wicker (R-MS), repeatedly stressed that lawmakers should not bypass EPA and OSHA’s teams of “scientists” and experts who are better equipped to handle the issue and are already evaluating asbestos through the TSCA process. Although he himself has concerns that the current chrysotile asbestos rule from EPA is too stringent, Wicker believes that Congress imposing further restrictions and requirements would make a successful transition away from the use of the chemical, impossible and would jeopardize the domestic supply of a chemical that is critical to the production of chlorine for drinking water treatment.

Wicker and witnesses from the chemical and water treatment industries testified that a two-year deadline for phasing out the use of asbestos in the chlor-alkali industry would exacerbate current chlorine shortages, further drive up prices for utilities and ratepayers, and potentially create a major public health crisis in the availability of drinking water, especially for those in small, rural, and underserved areas. Wicker also pointed out that asbestos has been used safely as feedstock in the manufacture of pharmaceuticals, pesticides, and solar panels.

Merkley and proponents of the bill argue that there are other treatments that are not more expensive and that EPA’s regulations are more likely to be challenged by an influx of litigation. These advocates see ARBAN as a necessary path to ensure action on asbestos because courts have thrown out EPA ‘s actions in the past. Robert Simon, vice president of the American Chemistry Council’s Chemical Products & Technology Division said chemical stakeholders can’t determine the potential litigation, but argued that Congress’ reform of TSCA “has dramatically changed the process, for example, the risk evaluation process is very different than under the old TSCA. I think some of these important changes to the underlying statute would serve us well here.”