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Legislative Update

House. The House this week will vote on the National Defense Authorization Act (NDAA), which provides $37 billion above the President’s budget request for defense spending. The Rules Committee will meet Tuesday to decide which of the 1,200 amendments that have been submitted will be voted on. Also on the House agenda are bills related to abortion and gun violence.

Senate. The Senate will continue to consider nominations, including Michael Barr to be the Federal Reserve Board’s vice chair for supervision. On Wednesday at 4 p.m., Administration officials will provide Senators with a classified briefing “on the global innovation and technology race and the bipartisan innovation bill which is vital for America’s long-term national security," according to Majority Leader Chuck Schumer’s office. The briefing will focus on the economic competitiveness legislation that has passed the Senate and House (USICA/COMPETES) but is moving slowly through conference committee negotiations. Senate Minority Leader Mitch McConnell said last week that Republicans would not support the competitiveness bill if Democrats continue to pursue passage of a reconciliation bill.

Two Senators who will not be joining Wednesday’s briefing are Schumer and Richard Blumenthal (D-Conn.), who have tested positive for Covid. While their absence, and the possible absence of Senator Patrick Leahy (D-Vt.) following hip replacement surgery, could affect which nominations will be voted on this week, Schumer’s spokesperson said that the Majority Leader, “through virtual meetings and his trademark flip phone…will continue with his robust schedule and remain in near constant contact with his colleagues.”

Reconciliation. Schumer’s flip phone and the ability to participate in virtual meetings will be necessities as he continues negotiations this week with Senator Joe Manchin (D-W.Va.) on reconciliation. Last week, the two agreed on drug pricing language that the Congressional Budget Office has now scored as saving $287 billion over 10 years. This week, Republicans who oppose the proposal will have an opportunity to raise challenges with the Senate parliamentarian.

There was also an agreement last week to include language in the reconciliation bill that would provide $200 billion to help shore up the Medicare Trust Fund. The new funding would be raised by extending the current 3.8% net investment income tax (NIIT) to active income from pass-through businesses. Pass-through businesses include sole proprietorships, partnerships, limited liability companies, and S-corporations. Under the proposal, the tax would apply to income over $400,000 for individuals and $500,000 for couples. The Senate parliamentarian will have to decide whether moving the revenue to the Medicare Trust Fund complies with the reconciliation rules.

An extension of the NIIT to pass-through businesses was one of three proposals in the House-passed reconciliation bill labeled as “tax increases for high-income individuals.” A second proposal in this category was a 5% surtax on individuals with income over $10 million and an additional 3% surtax on income over $25 million. There is speculation that this tax, which would raise $228 billion, could be significantly scaled back.

Another area where changes are reportedly in the works is spending on energy-related initiatives. Schumer and Manchin are said to be looking at devoting $300-$350 billion for climate provisions rather than the $555 billion provided in the House bill. Most of the incentives in the House bill were clean energy tax credits at a cost of $320 billion. Other House provisions included $105 billion in resilience investments; $110 billion in investments and incentives for clean energy technology, manufacturing, and supply chains; and $20 billion for clean energy procurement.

While Democrats view last week’s developments as positive in their quest to pass a reconciliation bill, Senator Manchin’s spokesperson cautioned that “suggestions that a reconciliation deal is close are false. Senator Manchin still has serious unresolved concerns and there is a lot of work to be done before it’s conceivable that a deal can be reached he can sign onto.”

January 6 Committee. The next hearing by the House select committee examining the attack on the Capitol will be Tuesday at 1 p.m. EDT and will look at the role played by extremist groups. The panel was also reportedly planning a prime time hearing on Thursday, but it appears that hearing has been delayed until next week.

Committee Action of Note:

  • Tuesday, July 12
    • Senate Commerce, Science, and Transportation Committee Hearing: "Examining the 2022 National Travel and Tourism Strategy"
    • Senate Judiciary Committee Hearing: "A Post-Roe America: The Legal Consequences of the Dobbs Decision"
    • Senate Banking, Housing and Urban Affairs Committee Hearing: "Advancing Public Transportation under the Bipartisan Infrastructure Law: Update from the Federal Transit Administration"
    • Senate Finance Committee Hearing to Consider the Nominations of Jay Curtis Shambaugh to be an Under Secretary of the Treasury and Rebecca Lee Haffajee to be an Assistant Secretary of Health and Human Services
    • House Select Committee to Investigate the January 6th Attack on the United States Capitol Hearing
    • House Rules Committee Meeting to formulate a rule on H.R. 7900, National Defense Authorization Act for Fiscal Year 2023; H.R. 8296, Women's Health Protection Act of 2022; H.R. 8297, Ensuring Access to Abortion Act of 2022; H.R. 6538, Active Shooter Alert Act of 2022
  • Wednesday, July 13
    • House Oversight and Reform Committee Hearing: "The Impact of the Supreme Court's Dobbs Decision on Abortion Rights and Access Across the United States"
    • House Ways and Means Committee Hearing: “Nowhere to Live: Profits, Disinvestment, and the American Housing Crisis”
    • House Science, Space, and Technology Subcommittee on Energy Hearing on Nuclear Waste Cleanup: Research and Development Opportunities for the Department of Energy's Office of Environmental Management
    • Senate Health, Education, Labor and Pensions Committee Hearing: "Reproductive Care in a Post-Roe America: Barriers, Challenges, and Threats to Women's Health"
    • House Transportation and Infrastructure Subcommittee on Aviation Hearing: "The State of General Aviation"
    • Senate Energy and Natural Resources Subcommittee on Energy Hearing on Pathways To Lower Energy Prices
  • Thursday, July 14
    • House Small Business Subcommittee on Contracting and Infrastructure Hearing: A Review and Assessment of the SBA HUBZone Program
    • House Judiciary Committee Hearing: What's Next: The Threat to Individual Freedoms in a Post-Roe World
    • House Select Committee on the Modernization of Congress Hearing: "Constituent Services: Building a More Customer-Friendly Congress"
    • Senate Banking, Housing, and Urban Affairs Committee Hearing: "Advancing National Security and Foreign Policy Through Export Controls: Oversight of the Bureau of Industry and Security."
    • Senate Homeland Security and Governmental Affairs Committee Hearing: "Protecting the Homeland from Unmanned Aircraft Systems"
  • Friday, July 15
    • House Select Committee on the Climate Crisis Hearing: Climate-Smart from Farm to Fork: Building an Affordable and Resilient Food Supply Chain

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