Advocacy Update

​Busy weeks ahead as lawmakers return to Washington; avoiding a federal government shutdown; NDAA faces partisan challenges; and more. 

Busy weeks ahead as lawmakers return to D.C.
Even with Congress out on their August recess, the CUNA-League System continues to push forward on several credit union industry priorities. The stage is set for a busy and difficult legislative sprint to the end of the calendar year; when Congress returns in early September, it will be consumed by the 2024 appropriations process. With only 12 legislative days before the end of the government’s fiscal year, there will be little floor time for other legislative debates until Congress funds the government. If Congress can do so beyond the end of the fiscal year, it must then turn its attention to navigating potentially contentious partisan measures for the remainder of the calendar year. These include the FY 2024 National Defense Authorization Act (NDAA), rail safety legislation, expiring public health bills, the Farm Bill, and energy permitting reform legislation. Below is an overview of the anticipated legislative agenda.
 
Fiscal Year 2024 appropriations.  
The path forward on FY 2024 appropriations bills is unclear. September congressional action will primarily focus on the effort to avoid a shutdown of the federal government on October 1 or later, pending approval of either appropriations bills or a short-term continuing resolution (CR) to fund the government.  
 
The House Appropriations Committee has reported 10 of 12 FY 2024 appropriations bills and passed one (Military Construction, Veterans Affairs and Related Agencies) out of the full House of Representatives.
 
The Senate Appropriations Committee has reported all 12 of its FY 2024 Appropriations bills prior to recess. The Senate’s appropriations bills include spending levels above those in the House bills. The Senate bills’ spending total is consistent with the FRA but also anticipates including emergency and disaster relief funding that would raise spending of those bills above the topline levels in the FRA. Any plans for the Senate to move appropriations bills in September are uncertain, though the Senate will likely seek to group bills together as several appropriations “minibuses” to speed passage and save floor time.  
 
Further complicating the effort to reach agreement on FY 2024 appropriations bills, President Biden announced in early August a $40 billion emergency supplemental request including $24 billion in assistance to Ukraine along with significant funding for federal disaster assistance programs and securing the southern border. Importantly, President Biden submitted the request prior to full assessment of the wildfire damage in Maui as well as any other emergency funding needs that arise prior to the end of the calendar year.  

National Defense Authorization Act (NDAA).
Both the House and Senate passed differing versions of the NDAA for Fiscal Year 2024. The process of “conferencing” the two bills from the House and Senate will not begin in earnest until after the August recess. This delay in preliminary conference discussions among staff is a sign that the NDAA faces some partisan challenges unlike previous NDAA bills that largely enjoyed broad bipartisan support in the House and Senate.  
 
The House added several provisions aimed at addressing hot-button social issues to its NDAA package, ensuring passage of the bill would be a partisan exercise. Ultimately, the House passed its version of the NDAA by a vote of 219 – 210.  
 
The Senate version of the NDAA moved through the body in a more traditional manner with both parties working to limit non-germane amendments and seeking broad bipartisan support for the NDAA. The Senate did pass the NDAA by a vote of 86 – 11 and in doing so, set the stage for a very difficult conference with the House before eventually sending a finalized bill to President Biden for signature.
 
Banking and financial services.  
The House Financial Services and Senate Banking Committees passed several pieces of legislation that await floor action in both Chambers. Recovering Executive Compensation from Unaccountable Practices (RECOUP) Act, S. 2190, in September or October appears likely. While the Senate Banking Committee reported RECOUP by a 21-2 vote, there remains uncertainty in and around the amendment process and the parliamentary procedures governing its consideration. There has also been a significant uptick in press coverage regarding Senate Banking Committee work in and around the SAFE Banking Act, S. 1323. Over recent years, the House has passed SAFE Banking seven times with bipartisan support. The Senate has yet to act on the legislation. There remain myriad issues with the bill in the Senate including Democratic concerns about the scope of the regulatory protection provided in the bill, the need for additional Republican cosponsors, and issues related to Operation Chokepoint. However, there continues to be bipartisan interest in moving the legislation through the Committee in the fall.  
 
Finally, Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) will continue to seek opportunities for the Senate to vote on the Credit Card Competition Act, S. 1838. Senate supporters attempted to force a vote on the legislation during Senate consideration of NDAA but failed to do so. They indicated that they would continue to work with Senate leaders to attempt to move the bill.  
 
The full House has yet to act on several pieces of legislation reported by the Financial Services Committee earlier this year. In the coming months the House may act on legislation related to stablecoin regulation, capital formation, data privacy, and environment, sustainability, and governance (ESG) policy. It is unclear if the Senate will take up any of these bills for consideration.  
 
Inflation Reduction Act Implementation and energy permitting reform.   
Two items are likely to dominate the energy policy debate through the rest of 2023 – Inflation Reduction Act (IRA) implementation and energy permitting reform legislation. Other items may include the Biden administration’s clean power plant rule, as well as more targeted legislation pertaining to nuclear and/or hydropower energy permitting and supply chain policy.  
 
The Biden administration recently celebrated the one-year anniversary the IRA’s enactment and has organized a roadshow for related project announcements, many of which are clean energy investments throughout the United States. The President, Cabinet members and other White House officials will continue to make the argument that the IRA is not only helping to address climate change, but also creating an American manufacturing renaissance. The policy work of IRA implementation will also continue with many agencies (Treasury, Department of Energy, Environmental Protection Agency, and Department of Interior among others) working through guidance for tax and grant programs, as well as application reviews and awards.  
 
Tax policy.   
Work on tax policy will likely remain particularly partisan throughout this Congress. House Republicans previously packaged three new tax bills as the American Families and Job Act, H.R. 3, to temporarily modify certain provisions from the 2017 Tax Cuts and Jobs Act (TCJA). Among the changes included in the legislation are 100 percent expensing for equipment investments, restoring the research and development (R&D) tax credit, and creating a bonus standard deduction for individuals through 2025. The legislation was largely offset by rolling back a variety of renewable energy tax credits and other recent tax law changes from the Inflation Reduction Act. Lacking Democratic support, the legislation stalled in the House after being reported out of the Ways and Means Committee (W&M) because of the resistance of a small group of Republicans in Biden-supporting districts who insist on including changes to the State and Local Tax (SALT) cap in the TCJA.  
 
Numerous Trump era policies expire in 2025. Although the Senate is unlikely to produce comprehensive tax legislation, it is still possible that an end-of-year tax package might pair certain business-focused tax provisions (e.g., R&D tax changes) with a modified extension of the more generous Child Tax Credit that existed during the Covid-19 pandemic. Offsetting such tax changes remains an open question as Senate Democrats and the White House will not support eliminating the “green” tax provisions used to offset the Republican W&M bill.  
 
Farm Bill. 
The Farm Bill authorization expires on September 30. Both House and Senate Agriculture Committees are working on legislative drafts, though an extension seems almost certain with the Democratic Senate and Republican House likely to adopt competing legislation that will require time to work through before a final bipartisan package is agreed to and sent to the President.  
 
The House and Senate Agriculture Committees continue to conduct agricultural policy listening sessions in preparation for this fall’s legislative proceedings. Across the country, agriculture producers continue to request reference price (subsidy payment thresholds) increases. Higher input costs led to tight profit margins and lower government payments across all major commodities over the last several years. While most Members of Congress support the higher safety net, funding for these increases remains challenging. In addition to subsidy issues, congressional Democrats are seeking similar increases in food security programs authorized by the Farm Bill. Identifying funding for these desired increases will be a key negotiating point as the House and Senate seek to reconcile their bills.  
 
House Republicans hope to move their version of legislation in late October or November. As they did with FY 24 appropriations, conservatives in the Republican Conference may complicate consideration of a Farm Bill. The Senate process has the potential to remain bipartisan. However, the balance between subsidy programs and domestic nutrition programs may prove insurmountable in the upper Chamber as well.  
 
Should the House and Senate prove unable to advance legislation by the end of the calendar year, they will likely pursue a one-year extension to provide agriculture interests with certainty for the upcoming crop year. An extension will also provide congressional negotiators with additional time to finalize a bipartisan deal on the legislation.  
 
Nominations.  
Pending an agreement to proceed on appropriations, defense or other legislation with bipartisan support, the Senate will continue to focus on confirmation of judicial and other Biden administration appointments. Judicial confirmations remain a particular priority for Senate Democrats as it is uncertain which party will control the Senate in 2025. Expect partisan rhetoric to increase with the Biden administration and Senate Democrats highlighting the national security threats related to hold on Department of Defense promotions and ambassadorial nominations. The Senate will also consider other nominations this fall, including members of both the Federal Reserve Board and the Federal Communications Commission.  
 
Feel free to contact Jeff Olson or Amy Kleinschmit with any advocacy questions.