July 2021 Federal Update #2 from The Partnership for America’s Children

FEDERAL UPDATE:

Competing Priorities and Finite Funds
What Child Advocates Can Do Now During Reconciliation Discussions

Key things to know:

1. The Senate is trying to pass both a bipartisan infrastructure bill and a budget resolution to set up passage for a reconciliation bill before it leaves on recess August 9 returning September 10.
2. Moderate Democrats want the bipartisan infrastructure bill to pass before the budget resolution passes. Senate Republicans blocked Senate Majority Leader Schumer’s motion to open debate on Wednesday on the grounds that it didn’t have actual legislative language. The negotiators confirmed that they would have legislative text by next week, as early as Monday.
3. President Biden’s priorities that do not get included in the bipartisan infrastructure package will likely be included in reconciliation, along with provisions from President Biden’s American Jobs Plan and American Rescue Plan. However, the funding levels are unknown.
4. The two bills will probably move in tandem; progressives do not want to support the limited infrastructure bill unless their priorities are met in the reconciliation bill.
5. Congress is getting ready to go on the recess break. This is a prime time to advocate for priorities that must be included in the reconciliation package, especially if members of your delegations sit on key committees.

Infrastructure Package, $1.2 trillion

On Wednesday, July 21, Senate Majority Leader Schumer introduced a motion to begin debate on the bipartisan infrastructure package on the floor to pressure the bipartisan group to reach a deal before the upper chamber goes out for recess.  The bill includes about $1.2 trillion in infrastructure spending, of which about half is new money and half is paid for by offsets. Senate Republicans blocked the motion, mainly because the bill language was only a placeholder; final agreement on full legislative text has not yet been reached. Senator Romney claimed that the bipartisan group will have a detailed outline by Monday.

The 22 senators who are negotiating the package are working to figure out how to pay for $579 billion in spending. The “offsets” (revenue raisers or budget cuts to cover the costs of the increased spending) are still a negotiating obstacle. An increase of $40 billion for IRS enforcement would bring almost $100 billion in revenue, but the Republicans forced the bipartisan group to drop that source of revenue. Democrats may include increased IRS enforcement in the reconciliation package.  Republicans proposed repealing the Medicare rebate rule that is intended to lower out-of-pocket spending on prescription drugs for patients. The argument is that this costs the federal government more because the government is responsible for paying higher premium subsidies. The Congressional Budget Office estimated that the proposal could generate $180 billion in savings. However, the White House is expected to use this revenue for the $3.5 trillion Democrat-supported reconciliation package. The amount dedicated to public transit in the package is another point of contention for Republicans.

Once the legislative text is complete and Democrat and Republican leaders agree, Senator Schumer can schedule another cloture vote immediately to open debate. This will allow a proposal to be offered as an amendment to the House bill. After that, senators can offer amendments. There will be two more cloture votes – one on the compromised plan (with amendments) and one on the underlying bill. The last step in the Senate would be passage of the package after the final vote. Then it will go to the House, which may also be a tight vote.

Budget Resolution, $3.5 trillion 

The Senate Budget Committee Democrats announced an agreement to pass a budget resolution (setting up a reconciliation bill) allowing a $3.5 trillion increase in the federal budget that would include most of President Biden’s initiatives through reconciliation, which would not require Republican votes. The budget resolution and the reconciliation bill both must get the support of all Senate Democrats and a majority of House Democrats. Provisions that will end within a 10-year window do not need to be “paid for” under reconciliation rules, although they largely will be due to the requirements of some Senate Democrats. Permanent provisions must be fully paid for so that there is no budgetary impact outside the initial 10-year window.

The budget resolution will allot spending amounts to various committees; it will not have detailed allocations or specific policy details. The budget resolution will include the key provisions of the President’s proposals for the American Families Plan and the American Jobs plan, health care provisions (including closing the Medicaid coverage gap), immigration provisions intended to create a pathway to citizenship for DACA recipients and others, and provisions that do not make it into the infrastructure plan. Major family initiatives include funding for child care, prekindergarten, paid leave, and extending the enhanced child tax credit.

Senator Schumer and Senate Budget Committee Chair Bernie Sanders wanted to begin debate August 2, but Senator Schumer may have to keep the Senate in session the week of August 9 to pass the budget resolution. Expect hundreds of amendments for a “vote-a-rama” (when amendments are voted on rapidly one after another with minimal debate).

If the Senate passes a FY22 budget resolution and reconciliation instructions in early August, the House could be called back to Washington to take up the resolution in August as well. If the House indeed makes changes to the resolution, the resolution must return to the Senate for a second vote. We know moderate Senate Democrats are reluctant to grow the topline $3.5T number. If Congress can agree on an FY22 budget resolution with reconciliation instructions in the coming weeks, then we could see House committees schedule mark-ups as soon as September or October.

A complicating factor for the timing is that the US officially reaches the debt ceiling August 2. Treasury can use extraordinary measures to move money around for a while after that, but no one has a good sense of how long that might work given pandemic expenditures. The debt ceiling can be raised either through regular order requiring 60 votes in the Senate or through the reconciliation bill requiring only 51. Senator McConnell has already indicated that Republicans will not vote to raise the debt ceiling, but Democrats might try to force his hand by including the provision in a must-pass bill such as the continuing resolution that will be needed to keep the government open past September. If this doesn’t work, or if the Treasury runs out of extraordinary measures before September 30, then the Democrats may have to accelerate the reconciliation package to raise the debt ceiling and avoid the U.S. defaulting on its obligations. In 2011, when the US defaulted briefly (about a day) S & P lowered the US credit rating.

Reminder: What is in the American Families Plan and American Jobs Plan for children and families?

• Addresses the Child Care need of families and providers
• Universal Pre-K for 3- and 4-year-olds
• Expanded Tax Credits
• Expand the Child Tax Credit through 2025
• Expand the Child and Dependent Tax Credit
• Expand the ACA premium tax credits in ARP
• Nutrition
• Allow formerly incarcerated individuals with a drug-related felony to receive SNAP
• Expand summer EBT to all eligible children nationwide
• Expand free meals for children in high poverty districts
• National paid family and medical leave program
• Modernize schools and early learning facilities

Federal Advocacy and Reconciliation

As soon as there is a budget resolution agreement with instructions for reconciliation in the Senate that the House agrees with, committees will be drafting the legislative text that the House and Senate will vote on. Advocates should work with their delegations and key members of committees that oversee family and child provisions. Congress will be deciding which priorities need to be included in the reconciliation package as well as the duration of the initiatives starting now. This is a major opportunity to get permanent change in key areas for families. During recess, advocates can remind their delegation that the provisions for young children and their families are interconnected; they make the most impact when implemented together, not itemized. Advocates can also reinforce child priorities along with adequate revenue raisers if encouraging permanency. This resource has a state-by-state estimate of the number of children that would be served with 10-years of full federal investment of child care and pre-k.

Key Committees to Target:

• House
• Education and Labor: CCDBG and child nutrition
• Ways and Means: tax credits, CCDBG (mandatory)
• Energy and Commerce: Medicaid expansion
• Senate
• HELP: CCDBG
• Senate Finance: tax credits, CCDBG (mandatory), Medicaid expansion
• Agriculture: Child nutrition

* As soon as we confirm which committees will have jurisdiction over preschool, immigration, paid leave, and child care facilities, we will send an updated alert.

DACA Decision

Last week, a Federal District Court judge in Texas issued a ruling that limits the DACA program, declaring it unlawful. The implications of this ruling in Texas v. US apply nationwide and are effective immediately. New DACA applications will no longer be approved by USCIS; however, people who currently have DACA or have a pending renewal application can proceed as normal. You can read more from this statement by NILC’s Director of Federal Advocacy as well as from these resources provided by NILC, United We Dream, and ILRC. This resource from the We Are Home Campaign provides a thorough overview of the court ruling as well as next steps for advocacy plans and political targeting.

Eviction Moratorium 

A federal appeals court ruled Friday that the Centers for Disease Control and Prevention (CDC) exceeded its authority by temporarily halting evictions amid the pandemic. The eviction moratorium is scheduled to expire at the end of July. Only a small fraction of the federal funds allocated to prevent evictions have been expended and many families are still at risk. It is unclear whether the CDC will appeal the decision and seek a stay of the order—it is also unclear whether the CDC will extend the moratorium or let it expire.

Police Reform

Recent reporting suggests that the policing conversations have stalled, even though the negotiators previously expressed agreement on a common framework. There is little hope for major development before the August recess.