Legislative / Policy Update
Senate Floor. The Senate will continue to consider nominations.
House Floor. In addition to non-controversial bills that will be considered under suspension of the rules, the House this week will vote on the Forced Arbitration Injustice Repeal (FAIR) Act and a resolution to provide government funding in the fiscal year that begins Oct. 1. The FAIR Act would prohibit mandatory arbitration agreements in employment, consumer and other contracts. A continuing resolution (CR) is needed to keep the government open because Congress has not yet passed any of the appropriations bills for FY 2020. Details of the CR have not been released, but it is expected to provide funding through Nov. 21. The Administration has asked that the CR include language allowing funds to be used to build border fencing outside the Rio Grande Valley Sector. The CR is not expected to include the border language.
FY 2020 Spending Bills. The Senate appropriations process is not running smoothly. After the President signed legislation on Aug. 2 to raise the budget caps, the next step in the Senate was for Appropriations Committee Chairman Richard Shelby (R-Ala.) to divide up the total spending provided by the budget deal for FY 2020 – $666.5 billion for defense and $621.5 billion for non-defense programs. The problem is that Senate Democrats are not on board with Shelby’s allocations, and their votes will be needed for passage once the spending bills reach the Senate floor.
Committee Ranking Member Patrick Leahy (D-Vt.) argues that Shelby’s numbers provide extra money for Homeland Security to help pay for the border wall, money that should be going instead to programs funded by the Labor-HHS-Education bill. The committee was scheduled to mark up the Labor-HHS bill on Sept. 12 along with three other bills – Defense, Energy and Water, and State-Foreign Operations. However, the Labor-HHS bill and State-Foreign Operations bills were dropped from the schedule due to conflicts over potential family planning amendments. While the Energy and Water bill easily passed 31-0, the vote on the Defense measure was a party-line 16-15, a clear indication that the Defense bill doesn’t have the votes needed for Senate passage. Democratic Leader Dick Durbin noted that the Defense bill won’t “go anywhere until we get an agreement on the 302(b) allocations.”
As for action this week, three bills are on the schedule and a fourth has been pulled. Republicans want the Military Construction-Veterans Affairs bill to replenish the $3.6 billion in military construction projects that the President is diverting for the border wall. Democrats see that as an end run to fund the wall and are opposed, so the measure will not be on the agenda this week. The three bills that will be considered by subcommittees on Tuesday and the full committee on Thursday would fund Agriculture, Rural Development, and FDA; Transportation and Housing and Urban Development; Financial Services and General Government.
In addition to the controversy and uncertainty on the Senate side, the appropriations bills crafted by House Democrats will have to be adjusted upward for defense and downward for non-defense in order to conform with the new budget caps. It may be that House appropriators will wait until negotiations with the Senate to make these adjustments. Referring to the need for Congress to pass a continuing resolution to keep the government open, House Majority Leader Steny Hoyer said on Thursday that “we [are waiting] for the Senate to complete its work [on appropriations] so that we can begin conference negotiations.”
USMCA. On Sept. 11, U.S. Trade Representative Robert Lighthizer submitted his counterproposal to the list of changes House Democrats believe should be made to the U.S.-Mexico-Canada Agreement. Both sets of proposals remain private, but Lighthizer’s responses move the process another step forward. On the issue of data protection for biologic drugs, Lighthizer reportedly recommended, according to Politico, what is called a “negative ratchet” mechanism. Under this process, if Congress and the President approved legislation that would lower the current U.S. period of 12 years for data protection to, say, five years, the exclusivity provision in the USMCA would automatically ratchet down from 10 years to five to reflect U.S. law.
Committee Action of Note:
President Trump On the Road. The President travels to Rio Rancho, N.M. tonight for a political rally where he is expected to discuss his border wall, the economy, and rising job growth in the state since he took office. Winning New Mexico would be a major expansion of the map for President Trump. President George W. Bush was the last Republican to win the state in a Presidential election when he defeated John Kerry by 6,000 votes in 2004. The President will then head to California for two days of fundraisers to benefit a joint fundraising committee shared between the President’s re-election campaign and the Republican National Committee.
What the C-Suite Thinks of the 2020 Election. A recent CNBC survey found that two-thirds of North American chief financial officers believe the President will be re-elected in 2020, with a quarter of CFOs saying they believe former Vice President Joe Biden will win. The poll also found that while trade headwinds are affecting bottom lines, the CFOs do not believe a recession will occur before the election, an assessment that is guiding their opinion of who will ultimately win out.