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JT TAYLOR: CAPITAL BRIEF   - JT   Potomac banner 2

HOW WE GOT HERE:

SEQUESTRATION: Sequestration is the legislative act of reducing government spending in programs and agencies during the process of creating a federal budget. In 2011, the Budget Control Act (BCA) was passed to cut $1.5 trillion over a span of 10 years, requiring that annually Congress must pass a series of sequestrations amounting to $109 billion. Although the bipartisan Budget Act of 2018 blocked discretionary spending sequesters in 2018 and 2019, in 2020, mandatory sequestration is scheduled to go back into effect with over $300 billion in spending reductions.

2020 BUDGET PROCESS: Every fiscal year, Congress is required to pass 12 Appropriations bills that fund the government. For FY 2020, the House has passed 10 of 12 Appropriations bills, while the Senate has not passed a single one. It is not unusual for Congress to not pass appropriations bills on time- Congress has not passed all 12 on time since 1997. Considering that polarization is the name of the game in the 116th Congress, it is now expected that they will not pass all 12 bills. 

JT TAYLOR: CAPITAL BRIEF   - PewAPP

DEBT CEILING: The debt ceiling is the amount of debt that the U.S. Treasury can incur as decided by Congress. The Budget Act of 2018 suspended the debt ceiling from February 9, 2018, to March 1, 2019, however, on March 2, 2019, Congress did not move to raise the debt ceiling and Treasury has been forced to operate under extraordinary measures since then.  Following Treasury Secretary Steven Mnuchin’s warning that the U.S. will hit the debt ceiling sooner than expected, he and Speaker Nancy Pelosi have been hammering out a deal to avoid default giving both the House and the Senate enough time to pass it before August recess and the early September deadline.

 

SENATE FLOOR: The Senate this week is expected to confirm Mark Esper as Secretary of Defense and Stephen Dickson as head of the Federal Aviation Administration.  The Senate will vote today on an extension through 2090 of the 9/11 Victim Compensation Fund, which pays out claims for deaths and illnesses related to the 2001 attack.  The measure was approved 402-12 by the House on July 12 but failed to clear a unanimous consent request last week in the Senate when Senators Rand Paul (R-KY) and Mike Lee (R-UT) objected because the bill’s $10.2 billion cost was not paid for.  The two Senators will now be allowed to offer amendments, which do not have the support of the necessary 60 Senators, and then the Senate will pass the measure and send it to the president.

IN THE HOUSE: Among the non-controversial bills that the House will pass this week under suspension of the rules is the “Stopping Bad Robocalls Act,” aimed at protecting consumers from unwanted robocalls.  The Senate passed a similar bill in May.  Legislation that will be considered under regular order includes a measure dealing with loans to underfunded multi-employer pension plans and a bill requiring Customs and Border Protection to provide detainees with minimum standards of health care, food, and shelter.  Another bill that prohibits family separations at the border could also be added to the floor schedule. 

Of course, the most time-sensitive proposal that the House will consider – a debt limit/budget caps deal that was negotiated and finalized between Pelosi and Mnuchin late last night.  Pelosi hopes such a deal can be approved by the House before Members recess Friday afternoon until after Labor Day.  The Senate will take up the measure next week before they recess for the month.

DEBT LIMIT | BUDGET CAPS: While nothing is final until everything is final, the deal would reportedly suspend the debt limit through July 31, 2021 and raise the spending caps for both defense and non-defense in FY 2020 and 2021 by about $320 billion.  Approximately $75 billion in offsets are said to be part of the package.

MUELLER TIME: On Wednesday, former Special Counsel Robert Mueller will spend most of the day in Room 2141 of the Rayburn House Office Building.  Beginning at 8:30 a.m., he will testify for three hours before the House Judiciary Committee, chaired by Rep. Jerry Nadler (D-NY).  Then, at noon, members of the House Intelligence Committee, chaired by Rep. Adam Schiff (D-CA), will have two hours to question Mueller.  The Judiciary Committee is expected to focus on volume two of Mueller’s report, which deals with possible obstruction of justice, while the Intelligence Committee plans to examine volume one, focusing on the Trump campaign’s contacts with Russia and WikiLeaks.  Both Democrats and Republicans have been intensely preparing for the hearings, conducting mock hearings and studying video of Mueller’s testimony when he was FBI director.

 

Committee Action of Note:

 

July 23

  • Senate Foreign Relations Committee consideration of the nomination of Kelly Craft to be U.N. Ambassador.
  • Senate Banking Committee Hearing: “Challenges for Cannabis and Banking: Outside Perspectives.”
  • Senate Judiciary Subcommittee on Antitrust Competition Policy and Consumer Rights Hearing: “Oversight of the Enforcement of the Antitrust Laws.”

 

July 24

  • Senate Committee on Commerce, Science, and Transportation markup of S. 1148, the Air Traffic Control Hiring Reform Act, and S. 1349, Secure Traveler Act.
  • House Committee on Science, Space, and Technology markup of the Solar Energy Research and Development Act and other bills.
  • House Energy and Commerce Subcommittee on Environment and Climate Change Hearing: “Building America's Clean Future: Pathways to Decarbonize the Economy.”
  • House Oversight and Reform Subcommittee on Civil Rights and Civil Liberties hearing on the effect of the Trump administration’s attempt to add a citizenship question to the 2020 census and census preparation.

 

July 25

  • Senate Agriculture Committee Hearing: “Hemp Production and the 2018 Farm Bill.”
  • Senate Energy and Natural Resources Committee Hearing: “Energy Innovation.”
  • House Natural Resources Subcommittee on Energy and Mineral Resources Hearing: “Increasing Renewable Energy on Public Lands.”
  • House Transportation Subcommittee on Railroads: “Railroad Shippers Roundtable.”

 

July 26

  • House Committee on Oversight and Reform Hearing: “The Patient Perspective: The Devastating Impacts of Skyrocketing Drug Prices on American Families.”

 

POLITICS:

2020 House Democratic Primaries.  So far, 41 incumbent Democrats, six of whom are freshmen, will have primary opponents in 2020.  With the filing deadlines still four to 12 months away (depending on the state), that number is likely to increase, but it is, nevertheless, very rare for incumbents to lose in a primary.  Between 1999 and 2018, just nine out of 626 freshmen have lost a primary challenge, and incumbents have a 99% win rate with only 49 House members, including two Democrats in 2018, having lost in a primary.  As of today, Republicans have seven House incumbents facing primaries in 2020.

 

Second Democratic Primary Debates.  The second round of Democratic debates will be hosted on CNN from Detroit on Tuesday, July 30, and Wednesday, July 31.

  • July 30 debate (order on stage): Williamson, Ryan, Klobuchar, Buttigieg, Sanders, Warren, O’Rourke, Hickenlooper, Delaney, Bullock.
  • July 31 debate (order on stage): Bennet, Gillibrand, Castro, Booker, Biden, Harris, Yang, Gabbard, Inslee, de Blasio.

 

Senate Fundraising.  In the 14 competitively rated 2020 Senate races (8 held by Republicans, 4 by Democrats, and 2 open seats) Democrats have raised $34.1 million in total contributions in 2019, and Republicans have raised $29.3 million.  Incumbent Democrats are averaging four times as much money pulled in as their challengers, while in the two open seats, Democrats outraised Republicans $1.9 million to $763,771.