Happy Thursday! It’s amazing how the prospect of having to work on a Friday can spur action in the Senate, where lawmakers were working through some last-minute snags holding up votes on a one-week extension of federal funding and the annual defense authorization bill.
Here’s what’s happening.
Senate Scrambles to Pass Defense Bill and Prevent a Shutdown
With government funding set to run out Friday night, the Senate is still working to pass a one-week stopgap spending bill to avert a partial shutdown of federal agencies. It advanced the measure in a 75-20 procedural vote Thursday afternoon and could clear a couple of hurdles to pass the bill as soon as Thursday night.
The House passed the week-long measure Wednesday night in a 224-201 vote. Nine Republicans voted for it, but most in the House GOP caucus opposed the funding patch and have also been at odds with their Senate counterparts over the year-long spending package being finalized by congressional negotiators. House Republicans had hoped to delay the annual spending bill until they took control of the chamber and had more leverage to cut spending.
“We should be passing a continuing resolution into next year instead of buying more time to rush through a massive spending package,” Rep. Kay Granger (R-TX), the top Republican on the Appropriations Committee, said.
The Senate is also preparing to vote on the annual defense policy bill, which calls for $858 billion in defense spending for fiscal year 2023. That bill was reportedly held up over a demand from Sen. Dan Sullivan (R-AK) for a vote on an amendment that would cap lawyers’ fees in lawsuits tied to water contamination at Marine Corps Base Camp Lejeune in North Carolina. “That’s the snag,” Sen. John Thune (R-SD) told reporters. “Democrats are a little apoplectic about how to deal with it.”
What’s next: Senate leaders are hoping to pass both the stopgap funding measure and the defense policy bill Thursday night. Assuming the Senate can pass the one-week funding bill, lawmakers will look to finalize the larger omnibus spending bill next week. House and Senate appropriators reportedly distributed to subcommittees the allocation levels for the 12 spending bills that comprise the omnibus. The appropriators are set to unveil the spending package on Monday.
The Senate will move first on the omnibus, and House Majority Leader Steny Hoyer (D-MD) announced that the House won't return for votes until Wednesday evening. "The House is also expected to meet on Thursday, December 22, and will stay in session until the omnibus is completed,” he said.
No Mo PAYGO: House Republicans Plan Rule Changes Aimed at Cutting Spending
House Republicans are poised to eliminate the PAYGO rule requiring spending cuts or revenue increases to offset the cost of new legislation. They will instead use what’s called CutGo, which requires mandatory spending increases to be offset by other spending cuts, not revenue increases.
“The House has often waived the PAYGO rule,” Punchbowl News notes. “But House GOP conservatives have made clear they are not interested in waiving rules, broadly speaking. So you should expect CutGo will play a big role in legislating.”
Rep. John Yarmuth of Kentucky, the retiring Democratic chair of the House Budget Committee, blasted the change. “House Republicans made this same rule change when they took power in the 112th Congress and it’s an even worse idea now than it was then. CutGo is the antithesis of fiscal responsibility,” he said in a statement. “If Republicans adopt this proposed rule change, it will not only take a toll on our nation’s budget and productivity, but it will take a toll on Americans’ lives and livelihoods.”
Punchbowl also points out that Republicans are set to reinstate a rule allowing Congress to zero out the salaries of government officials in spending bills. The Democratic-led Senate and President Joe Biden would be able to block such moves, but it’s another indication of where a House GOP majority is likely to focus its efforts.
EU Approves Corporate Minimum Tax
The 27 member states of the European Union plan to start collecting a 15% minimum tax on the profits of large corporations starting in 2024. Poland and Hungary had delayed an agreement to do so but dropped their resistance Wednesday after making a deal that involved additional aid for Ukraine and the release of EU funds that had been held back from Hungary.
The EU’s move could provide a boost for a similar plan supported by Treasury Secretary Janet Yellen, who reached an agreement last year with the Organization for Economic Cooperation and Development and its 137 member nations to implement a global corporate minimum tax that targets the use and abuse of international tax havens.
That plan, however, needs to be approved by Congress, where there is plenty of opposition to the proposed minimum tax. “Prospects for U.S. implementation of the agreement … look even dimmer next year with Republicans taking control of the House of Representatives in January,” The Wall Street Journal’s Paul Hannon and Richard Rubin wrote Thursday.
In a letter to Yellen this week, the Republican members of the Senate Finance Committee and House Ways and Means Committee made it clear they have no intention of enacting the tax agreement. “For the past two years, the Biden Administration has routinely made commitments in the OECD negotiations it has no authority to fulfill,” they wrote. “Despite Treasury’s actions to date, it cannot dictate U.S. tax law or compel Congress to act.”
Meanwhile, U.S. companies face with a different, more limited minimum tax that was included in the Inflation Reduction Act this past summer.
White House Revives Free Covid Test Program
The Biden administration is making another round of free Covid-19 tests available to the American public as part of its newly announced “Covid-19 winter preparedness plan.”
The free test program was suspended in September after the White House said it had run out of funds and Congress refused the administration’s request to provide more money. But administration officials told NPR that they shuffled money between various programs to enable the purchase of more tests for the national stockpile.
“While COVID-19 is not the disruptive force it once was, the virus continues to evolve, and cases are on the rise again as families are spending more time indoors and gathering for the holidays,” the White House said in a fact sheet released Thursday. “The Administration is encouraging Americans to use at-home COVID-19 tests when they have symptoms of COVID-19, before and after traveling for the holidays, or visiting indoors with immunocompromised or vulnerable individuals.”
Each U.S. household can order a set of four tests through the website Covid.gov. Shipping will be handled by the U.S. Postal Service, starting next week.
News
- Allocations in Hand, Appropriators Ready to Wrap Up Omnibus – Roll Call
- Senate to Vote on Defense Bill That Rescinds Military Covid Vaccine Mandate – CNN
- GOP Tempers Flare as McCarthy Pans McConnell’s Spending Strategy – The Hill
- Moderate Republicans Weigh Hardball Tactics to Counter Anti-McCarthy Crew – CNN
- 5 House Conservatives Plan to Vote as Unit on McCarthy's Speaker Bid – Axios
- In Congress, Republicans Confront Divisions Posing Long-Term Threats – Washington Post
- Lawmakers Aim to Deep-Six Pentagon ‘Wish Lists’ – Roll Call
- US Economy Shows Signs of Cooling Even as the Labor Market Holds Strong – Bloomberg
- How to Hand Out Billions in Climate Subsidies? Very Carefully – New York Times
- Top Tax Writers Diverge on Lame-Duck Social Security Fix – Roll Call
- Inflation Is Eroding the Power of Basic Income Checks in America – Bloomberg
- Biden's Student-Loan Forgiveness Plans Are 'a Titanic Heading Straight for an Iceberg,' a Top Republican Lawmaker Says – Insider
- Post-Pandemic, CDC Faces ‘Uphill Battle’ for Backing in New Congress – Roll Call
- US Intel Agencies Likely Missed Chances to Investigate Covid Pandemic’s Origin, House Democrats’ Report Says – CNN
- Youngkin Proposes $1 Billion in Tax Cuts, Higher Spending in Virginia Budget Plan – Washington Post
Views and Analysis
- Don’t Make the Wrong Mistakes on Inflation – E.J. Dionne Jr., Washington Post
- The Fed’s Soft Landing Might Still Be Possible – Bloomberg Opinion Editors
- Cooling Economy Is Giving US Workers a Lift – Conor Sen, Bloomberg
- They Say This Is Good Economic News. It Might Not Feel Like It – Zachary B. Wolf, CNN
- Falling Inflation Rates Are Great News — Unless You’re a GOP Politician – Jennifer Rubin, Washington Post
- Will Investors Care if the Fed Lessens Its Commitment to 2 Percent Inflation? – Nicholas Sargen, The Hill
- The Untimely, Infuriating Death of the Deal to Save 2 Million ‘Dreamers’ – Greg Sargent, Washington Post
- Seven Scenarios for McCarthy’s Speakership Vote — Ranked Least to Most Likely – Emily Brooks and Mike Lillis, The Hill
- Time Is Short for Congress to Enhance Retirement Security for All Americans – Kenneth E. Bentsen, The Hill