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Federal Legislative Update - Week of July 5, 2022

Congressional Outlook

The House and Senate are in recess until the week of July 11.

Upon their return next week, Congress will attempt to complete several legislative items before the August recess. The House will have a shorter time in session than the Senate, which will depart for its four-week summer recess on August 5. Last week, House appropriators finished full committee markups of all twelve Fiscal Year (FY) 2023 spending bills. Senate Appropriations Committee Chair Pat Leahy (D-VT) said he expects the Senate Appropriations Committee will begin markups of their versions of the FY23 spending bills when the Senate returns to Washington on July 11. Further complicating matters is the recovery of Chair Leahy, who recently fell and broke his hip. The process, however, can continue as Chair Leahy can vote via proxy for committee votes.

The House will consider the National Defense Authorization Act (NDAA) for FY 2023 (H.R. 7900) during the week of July 11, which the House Armed Services Committee marked up and passed on June 23 by a vote of 57-1. The legislation authorizes $840 billion for national defense in the fiscal year starting October 1. House members have filed more than 1,100 amendments to the bill. The version of the FY23 NDAA passed by the House will need to be reconciled with the version advanced by the Senate Armed Services Committee last month, which the upper chamber will likely pass in the coming months.

When the Senate returns during the week of July 11, it will consider three nominations made by President Joe Biden: Ashish Vazirani to be Deputy Under Secretary of Defense for Personnel and Readiness; Steven Dettelbach to be Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and Michael Barr to be a Member and Vice Chairman for Supervision of the Board of Governors of the Federal Reserve System.

The conference committee of the Senate-passed United States Innovation and Competition Act (USCIA) of 2021 (S. 1260) and the House-passed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (America COMPETES) Act of 2022 (H.R. 4521) will aim to resolve differences centering around international climate funding, labor, and trade-related issues. Many believe that if this legislation does not pass before the summer recess, it will fall by the wayside as Congress will have other matters on its plate right before the midterm elections. New to this bipartisan legislative item’s pathway to passage is Senate Minority Leader Mitch McConnell’s (R-KY) threat to block the bill, which would boost the semiconductor industry, if Democrats try to lower prescription drug prices and add taxes to America’s wealthiest individuals. The bill, commonly referred to as USICA, was the subject of a tweet by the Minority Leader stating, “there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill.” The USICA would invest $50 billion in semiconductor programs and advanced microelectronics research. Continued negotiations are sure to play out over the next few weeks.

The attempt, as mentioned above, to pass a budget reconciliation bill is a final attempt by Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) to revive segments of the Build Back Better (BBB) Act. Core to the reconciliation bill is the lowering of prescription drug prices, specifically allowing Medicare to negotiate prices with pharmaceutical companies. The reconciliation bill would also include climate and other social elements similar to what existed in the House-passed version of the BBB Act. Sens. Machin and Schumer have negotiated this smaller package over the past several weeks, and some believe considerable momentum exists. The package details have remained under wraps, but reports last week indicate that Senate Democrats may submit a “finalized agreement” in the coming days to ensure the package complies with the Senate’s budget rules. Crucial to an agreement on any tax provisions in the agreement will be Sen. Kyrsten Sinema (D-AZ), who has remained firm on her stance that she will not support higher tax rates. In order to advance any legislation, all 50 Democrats must vote for the bill.

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