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September 30, 2021

Federal Legislative Update

Last Updated: September 30, 2021

Overview

September is proving to be the most stressful month of the new Biden Administration. Not only was pulling out of Afghanistan full of chaos and lost lives, but government shutdown could occur October 1, debt ceiling extension is required by mid-October, appropriations bills are stalled, and efforts to move historic legislation that would reshape the American economy over the next 10 years hit major hurdles in Congress. The sweeping 10-year $3.5 trillion spending plan marks the significant step in Democrats' drive to expand education, health care and childcare support, tackle the climate crisis and make further investments in infrastructure. But it is also raising major concerns among moderates in both chambers who worry some of the measures, including on drug pricing and climate, go too far and could result in Congress switching to Republican control in the next election.

Things are changing minute to minute, but G2G is tracking and happy to share updates. Please let me know any questions or feedback at lpowell@G2Gconsulting.com.

INFRASTRUCTURE PACKAGES STALLED

This is one of the most intense weeks on Capitol Hill with Democrats on the brink of defeating their own legislation and bringing down President Biden’s economic agenda. Late Wednesday, frantic negotiations continued as Speaker Pelosi (D-CA) vowed to bring the smaller $550 billion infrastructure and public works bill called the INVEST in America Act that passed the Senate 69 to 30 to the floor this week despite a revolt by progressives, determined to block that bill’s passage without the larger $3.5 trillion social services infrastructure bill including their priorities. The latter has moved its way through several House committees, each advancing their portion of the reconciliation bill to enable one of the largest spending bills to pass the Congress.

Democrats are very aware if they do not pass an infrastructure bill, many moderate Democrats in swing districts will lose re-election in 2022 and the House will switch to Republican control, however the party cannot agree on the larger package details at this point. The plan was always to pass both bills, but Democrats must achieve virtual unanimity in order to proceed with reconciliation that is necessary to avoid the Senate filibuster. Therefore, getting both progressives and moderates on board is vital to avoiding complete failure in enacting the Democratic economic agenda and paving the way for a Republican take-over in the next election.

Meanwhile, in the Senate, both Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) are key hold-ups to moving a similar $3.5 trillion bill through that chamber. On Monday, Senate Republicans opposed a Continuing Resolution to keep government open that included a debt ceiling extension in a procedural vote, failing by a margin of 48 in favor to 50 against, with 60 votes needed to bring the bill to the floor. But Senate Majority Leader Schumer (D-NY) announced lawmakers had reached a bipartisan agreement to avoid a government shutdown on October 1 and will lead the Senate in passing the Continuing Resolution today to extend government spending until December 3. This is a must-pass bill for the Democrats in charge since the new fiscal year starts this Friday and no FY2022 appropriations bills have passed Congress. The Republicans are united in opposing a debt ceiling extension and Democrats have about three weeks to get the votes within their party to pass this legislation alone. Aware of just how critical each of these pieces of legislation is for Democrats to declare success, the party is struggling as progressives and moderates continue to battle out just how much to tax and spend in the $3.5 trillion deal.

For a recap of what is in the $3.5 trillion budget resolution that spans from paid family leave to ACA expansions to child tax credit to clean energy to housing incentives which passed in August that set the framework for the details the Democrats are negotiating now in the follow-up legislation, see our August update here.

RESEARCH AND DEVELOPMENT FUNDING

Several House committees met this week to advance their pieces of the $3.5 trillion 10-year spending bill, which include billions for R&D and research infrastructure programs on top of the $45 billion the Science Committee apportioned last week. The Ways and Means Committee added $2.5 billion tax credit while the Energy and Commerce Committee added $16 billion for pandemic preparedness which partially aligns with President Biden's recent $65 billion Apollo Initiative proposal. In addition, the Financial Services Committee added $1 billion for state-run venture capital funds to support manufacturing and the Agriculture committee added $3.65 billion for agriculture and climate-related research.

R&D FUNDING DETAILS

Several House committees met this week to advance their pieces of the reconciliation bill, which include billions for R&D and research infrastructure programs on top of the $45 billion the Science Committee apportioned last week:

  • The Ways and Means Committee’s legislation would create a new tax credit that would provide $2.5 billion over five years to help finance research infrastructure projects at public universities. The legislation would also delay by five years a requirement that businesses amortize their R&D expenses over five years rather than deduct them in the year they occur. Critics of the requirement, which is due to take effect at the end of this year, argue it will reduce incentives for companies to conduct R&D in the U.S.
  • The Energy and Commerce Committee’s legislation includes $16 billion for pandemic preparedness initiatives, $3 billion for the proposed Advanced Research Projects Agency for Health, and $10 billion for a new manufacturing supply-chain resiliency program at the Commerce Department.
  • The Financial Services Committee’s legislation includes $1 billion for contributions to state-run venture capital funds that support development of “advanced manufacturing technology” and clean manufacturing processes, among other activities.
  • The Agriculture Committee’s legislation includes $3.65 billion for agricultural research facilities and hundreds of millions of dollars for climate-related research, including $380 million for the Agriculture Advanced Research and Development Authority pilot program established in 2018.
  • The Transportation and Infrastructure Committee’s legislation includes $788 million for the U.S. Coast Guard to acquire a fourth heavy icebreaker that is equipped with laboratory and berthing facilities for polar scientists.

FY2022 APPROPRIATIONS

Only the House has moved forward on their 12 appropriations bills. It passed seven in a consolidated appropriations package (HR 4502) before the August recess while the Senate still needs to organize markups and move their bills. The Senate pass the Agriculture-FDA, Energy & Water, and Military Construction-Veterans Affairs out of the full committee in early August. With both chambers including earmarks for the first time in 11 years, both Democrats and Republicans are more motivated to get the bills enacted by year's end. The full breakdown of the status of each of the 12 appropriations bills in each chamber can be found here but some highlights include:

House Labor, Health and Human Services, Education, and Related Agencies (LHHS-Ed)

  • The full Appropriations Committee marked up and approved the LHHS-Ed bill on July 15 by a vote of 33-25.
  • The House of Representatives passed the LHHS-Ed bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

House Commerce, Justice, Science, and Related Agencies

  • The House Appropriations Committee marked up and approved the CJS bill on July 15 by a vote of 33-26.

House Defense

  • The House Appropriations Committee marked up and approved the Defense bill on July 13 by a vote of 33-23.

Senate Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

  • The Senate Appropriations Committee marked up and approved the Agriculture-FDA bill on August 4 by a vote of 25-5.

12 APPROPRIATIONS BILL DETAILS

House

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

  • The full Appropriations Committee marked up and approved the Agriculture bill on June 30 by a voice vote.
  • The House of Representatives passed the Agriculture bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

Commerce, Justice, Science, and Related Agencies

  • The House Appropriations Committee marked up and approved the CJS bill on July 15 by a vote of 33-26.

Defense

  • The House Appropriations Committee marked up and approved the Defense bill on July 13 by a vote of 33-23.

Energy and Water Development and Related Agencies

  • The House Appropriations Committee marked up and approved the Energy and Water Development bill on July 16 by a vote of 33-24.
  • The House of Representatives passed the Energy and Water bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

Financial Services and General Government

  • The full Appropriations Committee marked up and approved the FSGG bill on June 29 by a vote of 33-24.
  • The House of Representatives passed the FSGG bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

Homeland Security

  • The House Appropriations Committee marked up and approved its Homeland Security bill on July 13 by vote of 33-24.

Interior, Environment, and Related Agencies

  • The full Appropriations Committee marked up and approved the Interior bill on July 1 by a vote of 32-24.
  • The House of Representatives passed the Interior bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

Labor, Health and Human Services, Education, and Related Agencies (LHHS-Ed)

  • The full Appropriations Committee marked up and approved the LHHS-Ed bill on July 15 by a vote of 33-25.
  • The House of Representatives passed the LHHS-Ed bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

Legislative Branch

  • The full Appropriations Committee marked up and approved the Legislative Branch bill on June 29 by a vote of 33-25.
  • The House passed the Legislative Branch bill on July 29 by a vote of 215-207.

Military Construction, Veterans Affairs, and Related Agencies

  • The full Appropriations Committee marked up and approved the MilCon-VA bill on June 30 by a vote of 33-24.
  • The House of Representatives passed the MilCon-VA bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

State, Foreign Operations, and Related Programs (SFOPS)

  • The full Appropriations Committee marked up and approved the SFOPS bill on July 1 by a vote of 32-25.
  • The House passed the SFOPS bill on July 28 by a 217-212 vote.

Transportation, Housing, Urban Development, and Related Agencies

  • The House Appropriations Committee marked up and approved the THUD bill on July 16 by a vote of 33-24.
  • The House of Representatives passed the T-HUD bill as part of a seven-bill minibus on July 29, by a vote of 219-208.

 

Senate

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

  • The Senate Appropriations Committee marked up and approved the Agriculture-FDA bill on August 4 by a vote of 25-5.

Energy and Water Development and Related Agencies

  • The Senate Appropriations Committee marked up and approved the Energy and Water bill on August 4 by a vote of 25-5.

Military Construction, Veterans Affairs, and Related Agencies

  • The Senate Appropriations Committee marked up and approved the MilCon-VA bill on August 4 by a vote of 25-5.

ARPA FUNDING OPPORTUNITIES

Highlights of key funding opportunities created by the American Rescue Plan Act out of the Economic Development Administration at the Department of Commerce include:

U.S. Economic Development Administration American Rescue Plan Programs

  • Under the American Rescue Plan, EDA was allocated $3 billion in supplemental funding to assist communities nationwide in their efforts to build back better by accelerating the economic recovery from the coronavirus pandemic and building local economies that will be resilient to future economic shocks.

U.S. Department of Treasury Coronavirus Capital Projects Fund

  • The American Rescue Plan provides $10 billion for payments to eligible governments to address many of the challenges laid bare by the pandemic, especially in rural America, Tribal communities, and low- and moderate-income communities. This fund will help to ensure that all communities have access to the high-quality modern infrastructure, including broadband, needed to access critical services.

FEMA Hazard Mitigation Assistance Grants

  • The fiscal year 2021 (FY 2021) application period for the Hazard Mitigation Assistance (HMA) Notices of Funding Opportunities (NOFOs) for the Flood Mitigation Assistance (FMA) grant program and the new Building Resilient Infrastructure and Communities (BRIC) grant programs will open on Sept. 30, 2021, and close at 3 p.m. Eastern Time on January 28, 2022.
  • FEMA’s two competitive mitigation grant programs provide states, local communities, tribes, and territories funding for eligible mitigation activities to strengthen our nation’s ability to build a culture of preparedness by reducing disaster losses and protecting life and property from future disaster damage.

Small Business Administration COVID-19 Economic Injury Disaster Loan (EIDL)

  • In response to COVID-19, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for the COVID-19 Economic Injury Disaster Loan (EIDL). FAQs can be found here.
  • On September 9th, the SBA announced new updates to the COVID-19 EIDL Program. The SBA has Increased Loan Cap to $2 Million, Expanded Use of Funds to Pay and Prepay Business Debt, Streamlined Review Processes, and Deferred Payments.

More details on infrastructure, social welfare, climate change and appropriations can be found within our August Legislative Update.

 

Overview

On November 15, President Biden signed into law the $1 trillion infrastructure package that passed both chambers with bipartisan support and includes $550 billion in new spending and $450 billion of redirected unused funds. While there was some bipartisan support for the measure, the Build Back Better bill is very partisan, requiring the reconciliation process to pass with a simple majority. It barely passed the House totaling $3 trillion, but is expected to be cut by half or more if a version of it can pass the Senate. It would fund a range of initiatives and raise $1.48 trillion in revenue over 10 years by increasing taxes on corporations and high-income individuals. See highlights outlined below and hear directly from former Assistant Secretary at the U.S. Treasury and other experts today at 12pm on what all this means for businesses.

Economic Development

The Build Back Better Plan

President Joe Biden's Build Back Better Act (BBB) finally passed the House. While significant changes are expected in the Senate, some highlights include:

National Science Foundation (NSF)

  • $1.52 billion to fund the Directorate for Technology, Innovation and Partnerships to accelerate use-inspired and translational research to address some of the world’s most challenging problems.
  • $675 million for NSF research awards, traineeships, scholarships and fellowships across all STEM disciplines.
  • $200 million for research capacity building at Minority Serving Institutions (MSIs)

Entrepreneurs & Small Businesses

$5 billion for Small Business Administration (SBA) programs that increase access to capital, foster entrepreneurial development, expand federal procurement opportunities and drive innovation that includes $1.9 billion to fund SBA’s 7(a) lending program, $1 billion to establish a nationwide incubator network to help entrepreneurs in underrepresented communities, and $35 million for nonprofits to operate federal entrepreneurship training programs to assist veteran small business contractors.

Economic Development
$5.25 billion for the Economic Development Administration, including $3.36 billion to create regional innovation hubs, $1.20 billion to provide RECOMPETE investments in persistently distressed communities, $240 million to provide assistance to energy and industrial transition communities, and $240 million for predevelopment in public works projects.

Clean Energy, Innovation and Communities

  • $40 billion in new loan guarantee authority
  • $3.6 billion to defray the costs of loan guarantees to support American innovation and new technology solutions to address climate change

BUDGET & APPROPRIATIONS

Year-End Packacge & Continuing Resolution

FY2022 Funding Bills

The Senate still has not moved their appropriations bills out of committee and onto the floor, making conference negotiations next to impossible. Due to infighting among Democrats and Republicans, no bills are expected to move this year. Instead the two chambers are moving toward enacting a longer term continuing resolution (CR) that level funds all programs and services and blocks any new initiatives from being funded. Some have said the CR would last until January while others have said it might last until April 2022. In either situation, it means Congress would be forced to complete FY2022 appropriations legislation in an omnibus package that likely would include other items such as Cures 2.0, ARPA-H authorization, tax extenders and other items, while the fiscal year is half over and at the same time they have to start the FY2023 appropriations process. This has happened before, but can be very messy to navigate. In any case, because the House passed their 12 appropriations bills in the form of mini-bus bills in early summer — and with earmarks included — they have the upper hand in these deliberations and in securing their earmarks in the final package.

Health

Cures 2.0

The follow-up legislation to the 21st Century Cures enacted at the end of the Obama administration called Cures 2.0 has built up enough support it may finally pass the House. However, in what form is another question. There are now competing bills that would authorize Biden's pet project, ARPA-H, and the fact that just weeks remain in the year to move it through both chambers. It now looks like it will be wrapped into omnibus legislation that is passed end of the year or next year. G2G prepared a Summary of Cures 2.0 and the original 21st Century Cures.

BARDA

G2G attended the annual BARDA Industry Days, which was virtual for the second year in a row due to COVID. While it still prioritizes COVID and pandemic response, BARDA has announced open funding opportunities for other medical countermeasures. G2G prepared a Report on the BARDA Conference and Priorities as well as an outline of the current Broad Agency Announcement topics.