When President Biden enters the White House on January 20 and begins to move forward on his
campaign promises, he will have several tools at his disposal, including executive orders, new
regulations, and legislative proposals. The first two are totally within control of his
Administration, but it is clearly on the legislative front where the new president will face his
biggest challenges. Those challenges, in some cases, would be easier to handle if Democrats
controlled the Senate, but that won’t be the case unless Democratic candidates can win both of
the January 5 runoffs in Georgia.
However, regardless of the outcome in Georgia, Biden’s more ambitious proposals are unlikely to see
signing ceremonies at the White House. This includes the Biden plans for creating a government-run health
insurance program to compete with private health insurance, implementing an ambitious climate change
agenda, and passing an expansive infrastructure package. Because of parliamentary restrictions, these
initiatives would not be good candidates to be considered through the reconciliation process that
precludes a Senate filibuster, thereby allowing passage in the Senate with 51 instead of 60 votes. Thus, buy-in
from Senate Republicans will be needed if these proposals are to advance. Other Biden proposals, such as changes in tax policy and certain legislative fixes to Obamacare, would have a clearer path to passage if Democrats were to control the Senate as well as the House. Without Democratic control, though, the reconciliation process, and its 51-vote threshold in the Senate is out of reach for Congressional Democrats.
REMAINDER OF 2020
The Senate and House are both back in session this week, and will recess the week of November 23
for Thanksgiving, so there are very few legislative days left before adjournment in
December. Only a handful of issues are on the legislative agenda, including additional Covid
relief, an appropriations measure to avoid a government shutdown, reauthorization of
national defense programs, extension of a number of Medicare and Medicaid provisions that
expire December 11, and extension of expiring tax breaks. Only appropriations action is considered
must-pass legislation. Not surprisingly, the Senate will continue to confirm judicial and
executive nominations.
Covid Relief: Senate Majority Leader Mitch McConnell says he wants to pass a Covid-relief
package in the lame duck session, but there are still numerous areas where agreements need to
be hammered out, including funds for state and local governments, extra unemployment
benefits, and liability protection for businesses. McConnell now says he’s open to money for
state and local governments and indicated a compromise could include a formula for state and
local governments to demonstrate that the additional funds are needed for pandemic-related
expenses. Treasury Secretary Steven Mnuchin is expected to step back from the negotiations
with House Speaker Nancy Pelosi, clearing the way for McConnell to become directly
involved in the talks - should they develop.
FY 2021 Appropriations: McConnell and Pelosi have reportedly agreed that lawmakers
should try to pass all the FY 2021 appropriations bills rather than temporarily extending
funding through a continuing resolution (CR). The House has passed 10 of its 12 bills (all except
Homeland Security and Legislative Branch). The Senate Appropriations Committee has not
taken any action. With so little time left in the session, the Senate panel will not hold markup
sessions on individual bills and instead will post the bills on its website Tuesday morning,
laying down its marker for negotiations with House appropriators. The target date for
enactment of all 12 bills is December 11, when the current CR expires, but if more time is needed to
wrap up negotiations, lawmakers could pass a short-term extension, say for one week, to
avoid a government shutdown.
Tax Extenders: Congress has a track record of not extending tax breaks until well after they
have expired. However, two tax breaks that are not normally included in the extenders
package may provide an incentive for congressional action before the end of the year. On December
31, lower excise taxes on beer, wine, and spirits are set to expire as is the Cares Act provision
that suspended aviation excise taxes on jet fuel and passenger tickets.
Party Leaders: House Democrats will hold their caucus leadership elections on November 18 and
19. There are only two contested leadership races at this time: Assistant Speaker, now held by
Rep. Ben Ray Lujan, who won his bid for the Senate, and Caucus Vice Chair, which is opening
up because the current Vice Chair, Rep. Katherine Clark, is running for Assistant
Speaker. Contests for the gavels of the Agriculture, Appropriations, and Foreign Affairs
committees will take place the week of November 30.
House Republicans are expected to re-elect their top leaders today and will hold elections for
their committee leaders beginning December 1. A heated race is shaping up to replace retiring Rep.
Greg Walden (R-OR) as ranking member of the Energy and Commerce Committee. Other
panels that will have new ranking members because of retirements include Agriculture,
Armed Services, Natural Resources, and Veterans’ Affairs. Choices for these various
committees could, in turn, create openings for ranking members at other committees.
Republicans on the Senate side, though, will engage in a round of musical chairs at the committee level
because of Republican rules limiting Senators to three terms as chairman and three as ranking
member. Finance Chairman Chuck Grassley will have to give up the gavel at Finance and
plans to head the Judiciary Committee. Judiciary Committee Chairman Lindsey Graham is
then expected to take Budget, with the retirement of Chairman Mike Enzi. With Grassley
moving to Judiciary, Banking Chairman Mike Crapo is looking to take the top Republican slot at
Finance and will likely be replaced at Banking by Senator Pat Toomey.
Like Grassley, Energy and Natural Resources Chairman Lisa Murkowski has served the
maximum terms as both chairman and ranking member. If Senator John Barrasso opts to take
Murkowski’s spot on Energy and Natural Resources, he would have to give up the
chairmanship of the Environment and Public Works Committee (EPW), with Senator Shelly Moore
Capito expected to take his place at EPW.
The retirements of Agriculture Chairman Pat Roberts and Health, Education, Labor, and
Pensions Chairman Lamar Alexander open up leadership roles that are expected to be filled,
respectively, by Senator John Boozman and Senator Richard Burr.
Biden Transition: The transition team has been working for months to review candidates for
a possible Biden administration, with special attention to diversity. Biden has pledged to
assemble the most diverse Cabinet in U.S. history, ensuring that women and persons of color
are named to top posts. Most of Biden’s Cabinet choices are expected to be announced around
Thanksgiving or early in December. The Biden team will have to take into account the
possibility that Republicans will retain control of the Senate, a factor that some feel could rule
out more progressive candidates for Cabinet posts. First on the agenda, though, will be the
president-elect’s choices for his senior White House staff, including chief of staff and directors
of the National Economic Council and the National Security Council.
In addition to vetting personnel for department and agency positions, the transition has teams
in place to develop domestic and foreign policy priorities, lead agency reviews, and to build
the Executive Office of the President, including legal, legislative affairs, outreach, the Office of
the President-elect, and operations. Heading the transition team is Biden’s long-time friend,
Ted Kaufman, who served as Biden’s chief of staff in the Senate, led the transition team when
Biden was elected as vice president in 2008, and was named to fill Biden’s seat in the Senate
until a special election in November 2010. Handling the day-to-day operations of the Biden
transition effort is Yohannes Abraham, who worked in the Obama White House. Biden’s
transition operation has ramped up from roughly 100 people at the beginning of October to
nearly 500 people as of this week.
Electoral College: On December 14, electors will meet in their individual states to cast votes for the
President and Vice President. By December 23, the official paperwork certifying the electoral votes
must be delivered to designated officials, including Vice President Pence in his role as
President of the Senate. At 1 p.m. on January 6, 2021, the House and Senate will convene in a joint
session to count the electoral votes and declare the results. If one of the party tickets has
received a majority of 270 or more electoral votes, the Vice President announces the results,
which “shall be deemed a sufficient declaration of the persons, if any, elected President and
Vice President.”
FIRST 100 DAYS
Executive Orders: After Biden takes the oath of office on January 20, he plans to quickly take
executive action on numerous priorities, including re-entering the Paris climate accords,
reversing President Trump’s withdrawal from the World Health Organization, and repealing
the ban on travel from some Muslim-majority countries.
On environmental issues, Biden will move to require that public companies disclose climate
risks and greenhouse gas emissions in their operations and supply chains, and he plans to use
the federal procurement system to purchase clean energy vehicles. Other executive actions,
the president-elect has said, will include steps to ensure that taxpayer dollars are used “to buy
American products and support American supply chains,” as well as orders targeted at
immigration, social justice, and racial equity.
Congressional Review Act: The Biden Administration will also propose new regulations to
reverse decisions of the Trump Administration. The regulatory process, though, is slow
moving, and Democrats are hoping they can expedite the rollback of Trump rules through the
Congressional Review Act (CRA). Through the CRA, Congress can pass a joint resolution that
overturns regulations that the previous Administration finalized within a certain time frame,
which is approximately 60 legislative days before Congress adjourns. Only a simple majority
vote in both chambers is needed to pass a CRA resolution, which would then be sent to the
president for his signature or veto.
Regardless of which party controls the Senate, 30 Senators can force a floor vote on a CRA
resolution. Thus, Democrats, even if they are in the minority, can compel the Senate to vote on
CRA resolutions, as they were successful in doing earlier this year to overturn a Department of
Education regulation. However, President Trump vetoed that resolution, and the veto was
upheld when the House failed to get the two-thirds vote necessary for an override.
When President Trump entered office in 2017, Republicans controlled both chambers and used
the CRA process to eliminate more than a dozen regulations implemented by the Obama
Administration. If Democrats are able to capture both Senate seats in the Georgia runoffs, the
Senate would be split 50-50 with Vice President Harris voting to break ties. This obviously
would give Democrats a better chance of successfully passing CRA resolutions, but Democrats
may still try to move CRA resolutions to the floor to see if they can win just enough
Republican support to overturn rules that were finalized in the last part of the Trump
Administration.
Reversing certain Trump regulations, either through the regulatory process or through CRA
resolutions, will certainly be an integral part of the Democrats’ policy plans, but most
Democratic initiatives will require Congressional action. House Democrats, no doubt, will
continue to pass legislation without Republican support to make clear the party position on
various policies, but there will be no Rose Garden signing ceremonies without bipartisan
support for legislation.
2021 PRIORITIES
Covid Relief/Economic Stimulus: If the current Congress fails to pass a Covid-relief package
in the lame duck session, Covid legislation will be #1 on the agenda in 2021. A shaky
economic recovery will be the driving force behind an expected Democratic stimulus bill early
next year that could either be considered on its own or added to a Covid-relief package.
The foundation of such a bill could well be infrastructure proposals. Infrastructure bills have
been on the table for two years now, beginning in July 2019 with unanimous approval by the
Senate and EPW Committee of a five-year, $287-billion surface
transportation bill designed to improve the nation’s roads and bridges.
House Democrats expanded on that effort in July 2020 with a $1.5-trillion proposal that added
funds for such priorities as broadband, clean energy infrastructure, clean water, housing, and
hospitals, as well as reopening and rebuilding public schools. The House bill would also
reinstate Advanced Refunding Bonds and Build America Bonds, and “unlock” the Harbor
Maintenance Trust Fund so that the funds can actually be used for harbor maintenance
projects.
The roadblock to final passage of infrastructure legislation has been the lack of an agreement
on how to pay for it. Existing federal gasoline taxes provide some funding but do not fully
offset the cost of either proposal. Given Democratic desires to take legislative steps to
stimulate the economy, House Democrats could move early next year to again pass their
infrastructure bill in an effort to put pressure on the Senate to respond. With Senate
Republicans expressing concern about legislation that increases the deficit, Democrats will be
looking to see what offsets Republicans would propose to fund infrastructure projects.
Bidencare: President-elect Biden would like to provide a “Medicare-like” insurance option for
all Americans, including those who are looking for a less expensive plan than that provided by
their employers. This public option proposal, however, faces fierce opposition that is likely to
stand in the way of enactment, even if Democrats narrowly control the Senate.
Still another part of Biden’s health care plan addresses drug pricing and includes proposals
that would allow Medicare to negotiate prices with drug companies and impose taxes on
pharmaceutical companies that raise drug prices above the inflation rate. While drug pricing
is an issue that was addressed in both chambers last year, there are not only disagreements
between the two parties but also internal party divisions on how to proceed. Drug pricing is a
complex issue involving not only the drug manufacturers but also insurance companies and
pharmacy benefit managers.
One of the most vocal proponents for action has been Senator Chuck Grassley (R-IA), who
co-sponsored the Grassley-Wyden bill approved by the Senate Finance Committee in July
2019. Because of Republican term limits, Senator Grassley will not chair the Finance
Committee next year, and Senator Mike Crapo (R-ID) will either take the gavel or be the
ranking member. While Crapo supports legislation to make drugs affordable for patients, he
would take a different approach than Grassley and, in fact, voted against the Finance
Committee bill. Continuing as the Democratic leader of the panel, Senator Ron Wyden (D-
OR) will continue to push for drug-pricing legislation.
Republicans will also see new leadership at the Health, Education, Labor, and Pensions
Committee, where Chairman Lamar Alexander (R-TN) is retiring, and Senator Richard Burr
(R-NC) is expected to take over. Senator Patty Murray (D-WA) will continue to lead
Democrats on the committee.
Tax Policy: Candidate Biden proposed a host of changes to the Tax Cuts and Jobs Act (TCJA)
enacted by Republicans in 2017, including an increase in the corporate rate from 21% to 28%
and a top individual rate of 39.6% on taxpayers with income over $400,000. Given Republican
opposition to changing their signature accomplishment of the Trump Administration, Biden
would likely have to rely on the reconciliation process in order to win Senate passage with 51
votes instead of 60. That option will be off the table if Republicans remain in control of the
Senate.
That’s not to say that tax policy won’t be on the agenda in 2021. For starters, House Democrats
could cherry-pick various proposals from Biden’s tax plan to offset the cost of their domestic
priorities, even if such moves will be blocked by the Senate. Also, House Democrats could put
Biden’s revenue raisers on the table to pay for extending provisions in the TCJA that are set to
expire. Beginning in 2022, TCJA provides that companies will no longer be able to
immediately deduct their research development costs and instead will have to amortize those
costs over five years (or 15 years for R&D conducted outside the U.S.). Also beginning in 2022,
TCJA will further limit the amount of interest expense that companies can deduct. In addition,
after 2022, the 100% deduction that companies can take for investments in capital property will
begin to phase down.
As lawmakers take up tax policy issues, those discussions will continue to be led by Reps.
Richie Neal (D-MA) and Kevin Brady (R-TX) at the House Ways and Means Committee,
and Senator Ron Wyden (D-OR) at the Senate Finance Committee, where Senator Mike Crapo
(R-ID) is expected to take the top Republican spot.
Additional Issues: With their candidate being sworn in as president on January 20, every group
that helped Biden win the White House will be making the case for their priorities. Labor
unions will push for legislation to raise the federal minimum wage to $15 and to bolster
troubled multi-employer pension plans. Environmentalists will be eager for Congress to act
on climate change initiatives, including proposals that would meet Biden’s goal of achieving
net-zero emissions no later than 2050.
OUTLOOK
As with any presidential campaign, the goals of the successful candidate will now
meet head-on with political reality. There will be battles within the Democratic party between
progressives and moderates. There will be battles between Democrats and Republicans. The
House can continue to pass legislation along party lines and send it to the Senate, but if
Democrats want to see their initiatives enacted they will have to negotiate with Republicans to
find bipartisan compromises. The only certainty after the inauguration is that Biden’s focus
will be on dealing with the pandemic and getting the economy back on its feet.
