Going into week six of social distancing and self-isolation, we are all starved for a little bit of levity within the seriousness of this situation. Which is perhaps what led me to make this correlation – that of beloved TV gameshows and the legislative outlook for the remainder of the year. From Phase 3.5 (amended CARES Act) and stimulus Phase 4 and Phase 5 to must-pass legislation and the annual appropriations process, lawmakers will be busy as we inch closer to the election. And while some will be pressing their luck trying to push an agenda, all policymakers will be working to find the right price and ultimately, make a deal.
Press Your Luck
The back and forth between congressional leaders and the White House on Phase 3.5 and the groundrules for future packages eerily resembles the game, Press Your Luck. Both sides continue to allow various legislative policies to randomly and rapidly appear and disappear on a giant Capitol gameboard while the rest of America is eagerly awaiting the big red buzzer to be pressed and policymakers to yell, “STOP!” That happened this week and now the “cash or prize,” following passage in the Senate and House, awaits the president’s signature. Items included in the amended CARES Act (Paycheck Protection Program and Health Care Enhancement Act) are an additional $321 billion for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), $60 billion for SBA’s economic injury disaster loans and grants, $75 billion to support hospitals and healthcare providers and $25 billion to expand coronavirus testing.
For Senate Majority Leader Mitch McConnell (R-KY) and others in the Republican leadership, the Democrats’ proposal of $150 billion for state and local governments and a 15 percent increase in the maximum Supplemental Nutrition Assistance Program (SNAP) benefit was a dreaded “whammy” this time, but those policies will be back on the board when Congress returns to Washington. Other policies that may reappear following Phase 3.5 enactment: more direct payments to Americans, broader paid leave, expanded unemployment insurance, hazard pay for worker protection standards, tax incentives for restaurants, sports and entertainment, workforce development and training, additional tax changes including President Trump’s much desired payroll tax cut, provisions to address surprise medical bills and tweaks to previously appropriated election funds.
The Price is Right
Despite all the attention that Phase 3.5 demanded and the sustained focus surrounding future relief packages, Congress still has a full plate of other must-pass legislative matters. With trillions already out the door and the congressional calendar getting shorter, the fiscal year 2021 appropriations process could be a rather entertaining episode of The Price is Right.
Upon return to Washington, appropriators are poised to start their respective bidding on federal programs set to expire on September 30. The House has been assigned preliminary topline budget allocations (302bs) and are drafting their funding bills while the Senate has done some paper hearings but has yet to receive their approximate dollar amounts. The big question is, will the discretionary spending limits agreed to in the bipartisan Budget Act of 2019 be amended for certain COVID-19-related programs? These programs may include vaccine development or the Strategic National Stockpile in the
Labor, Health and Human Services, Education and Related Agencies Subcommittee and Federal Emergency Management Administration (FEMA) funding in the Homeland Security Subcommittee. Both chambers have toyed with the idea of amending budget caps and the White House has sent a budget amendment request to Congress asking for level funding rather than cutting programs critical to the response effort. Costs associated with responding to COVID-19 through regular appropriations will make the fiscal year 2021 caps difficult to stick to. The “right price” will likely be high even with debt and deficit reduction considerations. With this week’s $484 billion price tag, both sides are tolerant of mammoth funding bills for now. But as our new-normal sets in and Congress realizes the long-term effects of COVID-19 spending, there will no doubt be a future fiscal Showcase Showdown.
Let’s Make a Deal
As another order of business, Capitol Hill and White House officials will have to embrace the Let’s Make A Deal concept for impactful legislation such as the National Defense Authorization Act (NDAA) and the Fixing America’s Surface Transportation (FAST) Act to have a winning chance. The House and Senate Armed Services Committees are aiming to have their NDAA drafts done by the beginning of May and late May, respectively. Potential measures hidden behind Curtain #1 include funding an Indo-Pacific Reassurance Initiative to support allies in the region, reducing US dependence on Chinese pharmaceuticals, proposals related to weapons planning and procurement and support for military families. Curtain #2 could reveal COVID-19 provisions such as the mass production of test swabs and other materials, and aid for medium and small suppliers within the defense industrial base.
Additionally, along with the impending expiration of the five-year authorization comes a new emphasis for FAST Act trading and exchanging. It is unclear whether infrastructure legislation will be included in any upcoming COVID-19 stimulus and stabilization packages but remains a possible vehicle for surface transportation to hitch a ride should a stand-alone bill result in a worthless Zonk! Prior to the pandemic, President Trump called on Congress to invest $2 trillion to building and repairing the country’s crippled infrastructure with House Speaker Nancy Pelosi (D-CA) presenting a counter deal – the broader $760 billion five-year framework that includes surface transportation, airports, water, broadband, ports and hospitals. House Ways and Means Committee Chairman Richard Neal (D-MA) met with Treasury Secretary Steven Mnuchin in early April to discuss possible funding but there has been no known forward movement following those discussions. Because the FAST Act’s primary moneyman, the Highway Trust Fund, will become insolvent after FY2021, suggested fixes have included a gas tax indexed to inflation, a new tax on electric vehicles and a vehicle miles travel (VMT) fee specific to trucks.
By the time the gameshow credits roll, the Big Deal may become a series of smaller short-term reauthorization deals if COVID-19 response continues to suck up all the congressional energy. Just a handful of other programs on the urgent hunt for deals are the National Flood Insurance Program, National Institute of Health reauthorization, Workforce Innovation and Opportunity Act, the Child Care and Development Block Grant program and the Community Development Block Grant program.
Shellie Purvis is a senior vice president at Cogent Strategies where she keenly navigates domestic federal funding legislation. She has an astute ability to dig deep into appropriations policy and pinpoint creative opportunities working hand-in-hand with close contacts on Capitol Hill. For Shellie’s complete bio, click here.