Author: Thorn Run Partners

• Next week in Congress… The Senate will return for legislative business on Monday to hold a procedural vote on the nomination of Christopher Koos to serve on the Amtrak Board of Directors. While the chamber continues to churn through nominations, a bipartisan group of senators will resume their efforts to produce a supplemental funding package that includes foreign aid funds along with border security policy changes. If a deal comes together over the weekend or early next week, Majority Leader Chuck Schumer (D-NY) is expected to file votes during next week’s session. Meanwhile, the House will be out next week and is slated to return on Monday, January 29.

Both chambers will meet for legislative business today as Congress races to pass another continuing resolution (CR) to avoid a partial shutdown later this week. Notably, the Senate advanced the legislative vehicle that will carry the stopgap funding measure during yesterday’s session on a bipartisan basis. Senators will now resume their discussions on reaching a “time agreement” to speed things along, but some amendment votes could be needed to ensure cooperation among the entire 100-member body. On the House side, lawmakers will consider a suspension bill out of the Ways and Means Committee that seeks to improve foster and adoptive parent recruitment and retention before moving onto a resolution that criticizes the Biden administration’s policies at the U.S.-Mexico border.

• Supplemental Update. House and Senate leadership will meet with President Joe Biden at the White House later this afternoon to discuss the state of talks regarding funding for Ukraine and border security policy changes. While a bipartisan group of Senate negotiators are hoping to unveil a deal on the long-anticipated supplemental funding bill this week, Speaker Mike Johnson (R-LA) and House Republicans have maintained their insistence that the GOP’s Protect the Border Act (H.R. 2) must be included in its entirety in order for additional foreign aid to pass the chamber. In addition to opposition from congressional Democrats and the White House, Senate Republican leadership has pushed back on the notion that H.R. 2 would receive the requisite votes needed for passage, both now and in a potential GOP-controlled Senate in 2025. As such, we’ll be watching to see if there’s any notable movement in border and foreign aid talks as a result of today’s White House meeting.

With Congress far behind on the appropriations process prior to this Friday’s deadline, Congressional leadership formally introduced another continuing resolution (CR) over the weekend that would extend both government funding deadlines into March. The stopgap funding bill would set a deadline of March 1 for Agriculture-FDA, Military Construction-VA, Transportation-HUD, and Energy-Water, with everything else — including Labor-HHS-Education — funded through March 8. Lawmakers will now race to pass this stopgap prior to the end of the week, and bipartisan cooperation will be vital toward avoiding a partial shutdown in a short period of time.

• Next Steps. The Senate is set to act first on the CR this week, and leadership will be seeking a “time agreement” to expedite the process so that Congress does not brush up too closely to the deadline. While the stopgap is likely to pass with strong bipartisan support, some politically-tricky amendment votes could be needed to ensure cooperation among all 100 senators to speed things along. Upon passage in the Senate, it is anticipated that House leadership will bring up the CR under suspension of the rules later this week.

• Health Update. In addition to extending government funding, the CR contains extensions for various expiring health care priorities. These extensions include: (1) community health centers, teaching health centers, and the National Health Service Corps; (2) special diabetes programs; (3) a delay of certain disproportionate share payment cuts; (4) Medicare’s work geographic index floor; and (5) the Sexual Risk Avoidance Education program. The stopgap does not address a range of other health care priorities that need to be addressed early this year, including various opioid and pandemic preparedness programs that are due for extensions. To that end, look for health care leaders in Congress to continue their efforts to craft a sweeping health care package that could carry these aforementioned policies, as well as other bipartisan efforts around Medicare physician pay, price transparency, and more.

Another short-term government funding bill is becoming increasingly likely as appropriators race to finalize spending bills for fiscal year (FY) 2024. Moments ago, Senate Majority Leader Chuck Schumer (D-NY) filed votes on a legislative vehicle for a continuing resolution (CR) ahead of consideration on the floor next week. This CR, which has yet to be formally released, is expected to punt funding for all 12 spending bills into March, possibly in line with the March 8 deadline to reauthorize the Federal Aviation Administration (FAA). Meanwhile, Speaker Mike Johnson (R-LA) did not explicitly rule out putting another CR on the floor despite strong opposition from conservatives on the House Freedom Caucus. Notably, 12 House Republicans blocked passage of a rule to govern debate on three bills unrelated to government funding during yesterday’s session. GOP leadership will look to try again on this rule later today, but it remains to be seen whether conservatives are satisfied with the current spending plan to vote in favor of resuming House business.

• Situational Awareness. While Senate leadership is expressing confidence that Congress can avoid a shutdown, House Speaker Mike Johnson (R-LA) is facing increased ire from his right flank on the topline spending deal he announced with Senate Majority Leader Chuck Schumer (D-NY). Another CR is also unlikely to go over well with certain members of the House Freedom Caucus, including Reps. Warren Davidson (R-OH), Ralph Norman (R-SC), and Chip Roy (R-TX) — the latter of whom left the option of filing another motion to vacate on the table in a recent interview with CNN.

• Meanwhile…The Senate will resume consideration of pending nominations, starting with Karoline Mehalchik’s nomination to be a District Judge for the Middle District of Pennsylvania. Senators may also attempt to override a presidential veto of a resolution that seeks to overturn the Consumer Financial Protection Bureau’s (CFPB) Section 1071 rule relating to “Small Business Lending Under the Equal Credit Opportunity Act (Regulation B).” However, this vote is not expected to meet the two-thirds majority needed to overturn the veto message.

Now that they have topline funding figures in hand, congressional appropriations leaders are in the process of negotiating each of the spending allocations for all 12 spending bills. Once Chairs Kay Granger (R-TX) and Patty Murray (D-WA) reach a deal on these 302(b) subcommittee allocations, appropriators can work out the final details of each bill ahead of floor action. Congress has until January 19 before the first government funding deadline for Agriculture-FDA, Energy-Water Development, Military Construction-VA, and Transportation-HUD, with everything else funded through February 2. With time running short, the latest intel from Capitol Hill suggests that Speaker Mike Johnson (R-LA) and Majority Leader Chuck Schumer (D-NY) could put another short-term funding patch on the floor to avoid a shutdown and provide more time. However, this option does come with some perils for the House speaker, as Freedom Caucus conservatives have railed against the current topline deal and remain opposed to another continuing resolution (CR).

• Supplemental Funding Update. Talks over a supplemental appropriations package for foreign aid and border security have hit another snag in the Senate according to Sen. James Lankford (R-OK), one of the leading negotiators on these issues. Sen. Lankford told reporters yesterday that he is pessimistic on the prospects of a deal coming together this week, with parole authority emerging as a fresh issue within the border and immigration talks. Negotiations are expected to continue throughout the week with the goal of producing an agreement sometime before the upcoming government funding deadlines.

• Today in Congress. Both chambers will be in session today, but floor activity will be scant. In the upper chamber, senators will hold a final up-or-down vote on John Kazen’s nomination to be a District Judge for the Southern District of Texas. Meanwhile, the House will gavel in for a procedural “quorum call” to kick off the second session of the 118th Congress before turning to suspension bills out of the Financial Services Committee tomorrow.

Congress will gavel back in this week as lawmakers race to fund the government ahead of the upcoming deadlines. Over the weekend, House Speaker Mike Johnson (R-LA) and Senate Majority Leader Chuck Schumer (D-NY) announced a deal on topline spending numbers for fiscal year (FY) 2024, setting the overall spending number for non-defense funding at $773 billion, with defense funding pegged at $886 billion — figures that are in line with those agreed to under the Fiscal Responsibility Act (FRA). Lawmakers have until January 19 to negotiate, finalize, and pass the spending bills for Agriculture-FDA, Energy-Water Development, Military Construction-VA, and Transportation-HUD. The remaining bills must be passed by February 2.

• Context & Next Steps. If leadership can make meaningful progress on a bipartisan “omnibus” spending package for FY 2024, it could be leveraged as a vehicle to carry bipartisan agreements on health care, tax, border security, foreign aid, and more. However, lawmakers must navigate a host of “poison pill” issues such as abortion, immigration, and spending cuts before this can become a reality. In addition to keeping the government funded and clearing the decks on a slate of 2024 priorities, leadership also appears motivated to avert a one percent across the board spending cut that would otherwise be triggered under the terms of last year’s debt ceiling agreement. This cut would take effect at the beginning of May through a sequestration order to be issued by April 30, 2024, thus providing Congress with less than three months to nix the FRA sequestration penalty.