What to Know in Washington: Democrats’ Divisions Stall Agenda

Democrats’ $2 trillion tax and spending package appears increasingly likely to slip into 2022 as it languishes in backroom negotiations.

Here’s what Bloomberg Government is watching for Thursday.

Congressional Schedule:

The Senate is back at 10 a.m. with no votes scheduled, but action possible on nominees and a bill banning goods made with forced Chinese labor.
The House has wrapped up work for 2021, but meets for a pro forma session at 11 a.m.
Click here for a complete list of today’s hearings and markups.

Biden’s Agenda:

Biden at 1:30 p.m. will award the medal of honor to three servicemembers at the White House.
At 3 p.m., Biden and Vice President Kamala Harris will meet with the White House Covid-19 response team to discuss the omicron variant.

Democrats’ Divisions Roil Agenda

Democrats are facing a sour end to the year, with party divisions and Senate rules stalling President Joe Biden’s economic agenda and a late pivot to voting rights threatening to hand the party another defeat before year’s end.

The Democrats succeeded in pushing through a $1.9 trillion coronavirus relief package in March and, more recently, a $550 billion infrastructure bill. But after other priorities like gun control, immigration and policing reform fell aside, Biden’s economic package, totaling roughly $2 trillion, was to be their crowning achievement heading into next year’s mid-term elections.

Sen. Joe Manchin (D-W.Va.) is holding up passage of that bill, which requires the backing of all 50 senators who caucus with the Democrats but is immune to a Republican filibuster under special budget rules. Biden has been negotiating directly with Manchin in recent days, but those discussions haven’t yielded any breakthrough.

The sudden shift in focus to voting rights yesterday signaled the Democrats’ growing sense that the tax and spending bill won’t get passed in 2021. Yet voting rights efforts have failed repeatedly this year, only underscoring Democrats’ inability to use their slimmest of majorities to realize the president’s domestic promises.

Biden said yesterday before leaving to survey storm damage in Kentucky that he hoped to get his signature Build Back Better measure completed before the end of the year, but acknowledged, “it’s going to be close.” Asked later if Democrats should turn their attention to voting rights and defer the spending plan until the new year, Biden said only that they should pass voting rights changes if they can. “If we can get the congressional voting rights done, we should do it. If we can’t, we got to keep going,” he said. “There’s nothing domestically more important than voting rights.” Read more from Steven T. Dennis and Laura Litvan.

ALSO HAPPENING ON THE HILL:

Sen. Marco Rubio (R-Fla.) will lift a hold on Biden’s ambassador pick for China if his bill limiting imports from China’s Xinjiang region becomes law, Rubio’s office said. Rubio had put a hold on Nicholas Burns’s nomination last month, saying the former State Department official and ambassador to NATO doesn’t understand the threat posed by China’s leaders. But the Republican senator has softened his stance now that the Uyghur sanctions bill is coming up for a vote in the Senate. Read more from Daniel Flatley and Nick Wadhams.
Sen. Ron Wyden (D-Ore.) blocked the bill that would ban goods made with forced labor in China’s Xinjiang region after Rubio rejected his request to add an unrelated extension of the child tax credit. The dispute between Wyden and Rubio delayed action on the bill. Rubio said he would try to pass the legislation again today, Daniel Flately reports.
Airline executives and lawmakers gave a full-throated defense at a Senate hearing for the value of the $54 billion in U.S. aid that went to the industry that was ravaged by the coronavirus pandemic. Sen. Maria Cantwell (D-Wash.), chairwoman of the Commerce, Science and Transportation Committee, began the hearing yesterday by asking whether the aid program had worked. “The answer to that question is yes,” Cantwell said. Read more from Alan Levin, Mary Schlangenstein, and Lillianna Byington.
The Senate last night confirmed Rostin Behnam to be chairman of the Commodity Futures Trading Commission, Se Young Lee reports. The nomination was confirmed via voice vote; Behnam has been leading the agency on an interim basis since January.
Alison Nathan, a federal appeals court nominee overseeing the sex-trafficking trial of Ghislaine Maxwell as a federal trial court judge, faced Republican questions at a Senate confirmation hearing about how she’s handled criminal cases. Nathan, who has served on the Southern District of New York for ten years, is now nominated for a seat on the U.S. Court of Appeals for the Second Circuit. Read more from Ben Penn.

Progressives Seizing Growth Opportunity in Midterms

Retirements, rematches, and redistricting are boosting progressives’ confidence they can expand their influence in the House Democratic caucus, even as the party could lose the chamber. Organizations such as Justice Democrats, Way to Win, the Progressive Change Campaign Committee, and Indivisible have so far endorsed about a dozen candidates in solidly Democratic districts where the incumbent is leaving Congress or a target for defeat because of ideological differences.

The swing districts are what will decide the majority, but the caucus makeup—which affects policy and leadership decisions—will also be determined in safer seats where the question often isn’t which party will win it but how far to the left on the political spectrum the next member of Congress will fall.

“Part of the reason Democrats keep losing is the critique that we’re out of touch with a lot of mainstream America,” said Leah Hunt-Hendrix, a co-founder and co-chair of Way to Win. “We really have to do this longer-term work of transforming who is holding these seats, whether or not that’s part of the effort to hold the House in 2022.” Emily Wilkins has more.

MORE POLITICS NEWS:

On the day before the Jan. 6 Capitol assault, a Republican congressman sent a text message to White House Chief of Staff Mark Meadows about how Vice President Mike Pence could throw out Electoral College votes from some states during the certification of the 2020 presidential election. A spokesman for the representative, Jim Jordan (R-Ohio), acknowledged that Jordan, an ally of then-President Donald Trump, “forwarded the text to Mr. Meadows, and Mr. Meadows certainly knew it was a forward.” Read more from Billy House.
U.S. intelligence officials are evaluating the likelihood of a resurgence of violence on the anniversary of the Jan. 6 attack on the Capitol and say they’re in a stronger position to root out any threats that arise. Federal agencies are in closer contact with their state and local counterparts, and officials at all levels are more focused on public platforms used to plan violent extremism, John Cohen, counterterrorism coordinator at the Department of Homeland Security, said during a virtual discussion yesterday. Read more from Ellen M. Gilmer.

Around the Administration

Federal Reserve Chair Jerome Powell rejected the idea that he had held off last month on a hawkish policy tilt until Biden had nominated him for a second term at the helm of the central bank. Powell said that, following the October consumer price report—on top of good readings on that month’s jobs figures and employment costs—“I just came to the view over that weekend that we needed to speed up the taper, and we started working on that.” Powell said he had made the conclusion that a faster pace of winding up the Fed’s asset-purchase program was merited 10 days before Biden picked him, Christopher Anstey reports.

Powell signaled inflation is now enemy No. 1 to keeping the U.S. economic expansion on track and returning the labor market to something approaching ebullient pre-pandemic levels. Powell also raised the possibility that th e central bank might begin to withdraw liquidity from the financial system before too long by reducing its massive balance sheet, Rich Miller, Steve Matthews and Christopher Condon report.

Biden will let a Trump administration rule cutting the percentage of lead pipes that need to be replaced annually take effect today, as environmental regulators craft a new rule governing toxic metal in drinking water, a senior Biden environmental official said. Officials will revise the standard, known as the lead and copper rule, by 2024, said a senior Environmental Protection Agency official granted anonymity to speak about the agency’s plan. In the meantime, the EPA will issue new guidance on implementation of the Trump-era rule, she said. The guidance will detail how drinking water systems will need to replace all of their lead service lines and develop inventories for existing lines. Read more from Courtney Rozen and Bobby Magill.

The Biden administration is planning to nominate a Citigroup lawyer and a former Republican Senate aide to fill the GOP’s two seats on the U.S. Commodity Futures Trading Commission, setting the stage for the main U.S. derivatives regulator to be at full strength next year. The White House said in a statement that it is set to tap Summer Mersinger, who now serves as chief of staff to CFTC commissioner Dawn Stump, and Caroline Pham, managing director at Citigroup, to join a key federal regulator of Wall Street. Read more from Ben Bain, Josh Wingrove, and Lydia Beyoud.

Biden plans to nominate former Olympic figure skater Michelle Kwan to be U.S. ambassador to Belize, and Caroline Kennedy, the daughter of former President John F. Kennedy and a former ambassador to Japan, to be ambassador to Australia. Read more from Jennifer Epstein.

Health-care spending in the U.S. spiked 9.7% to $4.1 trillion—or $12,530 per person—in 2020, driven by a torrent of cash from new federal Covid-19 programs, the Department of Health and Human Services said yesterday.The growth rate—more than double the 4.3% increase in 2019—was caused by the 36% boost in federal expenditures for health care in response to the Covid-19 pandemic, the Centers for Medicare & Medicaid Services said in an analysis. Read more from Sara Hansard.

What Else We’re Reading

A powerful storm rolling across the Great Plains has spawned tornadoes and left more than 400,000 homes and businesses in the dark, less than a week after twisters killed dozens across the South. High winds knocked out power lines from Colorado to Michigan yesterday, as a bow-shaped line of thunderstorms pushed east. The storms have triggered multiple tornado warnings and at least 20 tornado reports, the National Weather Service said. Read more from Brian K. Sullivan.
Sen. Kyrsten Sinema (D-Ariz.) supports the elections reform bill that Democrats are considering a year-end push to pass, but not a shortcut around the filibuster to get it done, Politico reports. Sinema is making clear that she intends to keep protecting the Senate’s 60-vote requirement on most legislation and she isn’t ready to entertain changing rules to pass sweeping elections or voting legislation with a simple majority, Politico’s Burgess Everett reports.
The Biden administration is scrambling to develop plans for providing compensation and improved medical care to diplomats, intelligence officers and other personnel affected by mysterious health incidents, part of an attempt to strengthen the response to a phenomenon known as “Havana Syndrome,” the Washington Post reports. But the effort is complicated by officials’ inability to establish a clear diagnosis for a spate of symptoms that while sometimes debilitating are also common, and to identify who or what is causing them. Read more from the Post’s Missy Ryan and Shane Harris.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com; Michaela Ross at mross@bgov.com