Washington, D.C. Update: Appropriations / Stimulus Outlook

Washington, D.C. Update: Appropriations / Stimulus Outlook

Appropriations / Stimulus Outlook

Amid continued uncertainty related to several key Senate races and a focus on the Presidential transition, the Senate reconvened yesterday and the House will reconvene next week.

With the return, I am most focused on the state of play on two key items – appropriations and stimulus.

Stimulus

Several coronavirus response programs are set to expire at the end of the year, including emergency leave and pandemic unemployment assistance programs. In addition to additional funding needed by state and local governments and key industries like struggling airlines and restaurants, there is some pressure to extend the date by which CARES Act state and local stabilization fund dollars must be expended – currently December 30.

While President Trump last month pledged a large post-election stimulus act, it was based on his assumption that he’d win re-election. He now has little political incentive to drive a deal through a divided Congress in his remaining weeks in office, though may want to work to pass this to enhance his own legacy. However, Senate Majority Leader McConnell does have an incentive to try to pass a package before President-elect takes office along with an anticipated more closely divided Senate.

While each side has called for renewed talks, and neither has advocated for holding off until next year, Democrats potentially have an incentive to wait until two Senate runoff races in Georgia in January make clear whether they’ll retake control of the Senate, a less likely but possible scenario. That would allow President-elect Biden, Leader Pelosi and Senate Democratic leader Chuck Schumer to push ahead with their own plan.

Republicans will face pressure not to deliver Biden a major legislative victory in the opening days of his presidency, however it is more than likely that a stimulus bill would pass soon after his swearing in. This is not a matter of if, but “when and how much?”

Appropriations

One vehicle for at least some COVID-19 assistance is passage of the spending bills that will be needed to avoid the federal government shutting down on December 11, when current funding runs out. Senate appropriators will release all twelve of their fiscal 2021 spending bills this morning. All twelve bills will be released by the Republican-controlled Senate Appropriations Committee, though Democrats traditionally have had input on the bills. The two parties agree on the vast majority of issues addressed in the bills, Senate Appropriations Vice Chairman Patrick Leahy said yesterday.

Speaker Pelosi said Friday she still wants both chambers to fund the government with a full spending deal, “not a CR,” or continuing resolution. “It is our responsibility to keep government open, to have an omnibus bill, and we intend to do that,” Pelosi said. Senate Majority Leader Mitch McConnell said on Nov. 4 he and Pelosi had “agreed that we ought to do an omnibus appropriations bill, and do it in December no matter who wins the election. It’s a basic function of government that we haven’t handled very well in recent years.”

Senate Appropriations Committee Chair Richard Shelby when asked about wrapping Covid-19 relief into spending bills yesterday said: “There’s been talk about that, but we haven’t seen that. It might not be a bad idea if we can agree on stimulus.”