We are entering go time for the NDAA and the potential for incremental legalization! Our in-house view remains that Senator Schumer will not let SAFE in the NDAA for mid-term political reasons. That said, yesterday, Axios has provided a clear picture of the current NDAA process:
"Senate Republicans will press their Democratic counterparts this week on passage of the National Defense Authorization Act, the annual defense policy law that’s been renewed every year since 1961. Led by Sen. Jim Inhofe of Oklahoma, ranking member of the Senate Armed Service Committee, Senate Republicans will press Senate Majority Leader Chuck Schumer on the issue during a Tuesday press conference. GOP senators will also discuss Afghanistan during that presser.
If the Senate doesn’t take up the NDAA this week -- and there’s no sign at this point it’s going to -- this will be the third latest the chamber has ever begun consideration of the measure. The Senate Armed Service Committee passed its version of the NDAA in July, but Schumer hasn’t brought it to the floor yet. The House has already voted out its version of NDAA.
Senate Democrats counter that they have begun working with the GOP to try to figure out the floor process for the bill, which could take as long as two weeks to complete. “The chair and ranking member have been working together to identify amendments for a floor process for NDAA, which is routine communication,” said a Senate Democratic aide working on the issue. “To move the process forward, Dems ran a hotline last week. Republicans have not.” (A hotline tests support for a bill or amendments among senators.)
The big challenge is the overall Pentagon budget this year, as well as U.S. policy in hotspots such as Afghanistan, China, Iran and North Korea. The Senate Armed Services Committee voted to boost defense spending by $24 billion, which is in line with what the House approved. Progressives strongly oppose this increase, but following the disastrous U.S. withdrawal from Afghanistan and with growing “great power” competition with China and Russia, many lawmakers in both parties are eager to push more money for defense.
The big problem for Schumer here is the calendar. (Hedgeye: our in-house view remains is that if it's in the final Senate version Schumer pulls it.)
This Senate is in session this week, out next week for Veterans’ Day, then in one more week before it recesses for Thanksgiving. Schumer is also going to need at least a week of floor time if and when the House passes the Democrats’ reconciliation package. Speaker Nancy Pelosi and the White House are pressing for that vote this week, yet it's still up in the air. If it does happen, Schumer will move to take that reconciliation measure up as quickly as possible. Then he can move to NDAA and other pressing legislative issues. But that means December is more likely for NDAA consideration.
Of course, the NDAA only authorizes more defense spending. Congress still has to actually approve more money. The four leaders on the House and Senate Appropriations panels are meeting this week to try to begin hashing out an overall spending deal. Government funding runs out on Dec. 3. Republicans are calling for an increase in defense spending equal to that for social programs, while Democrats are pressing for more on social programs. The two sides are billions of dollars apart heading into Tuesday’s initial discussion."
Again, we hope we are wrong about Schumer and the NDAA but feel a conservative stance is important.
