Elections often result in a significant impact on policy, and 2020 is no exception. As the year comes to a close and legislators, congressional staff, and government affairs professionals look ahead to 2021, Bloomberg Government convened a panel of experts to discuss how several key policy areas might evolve under the Biden administration.
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Both the House and Senate, as well as President-elect Joe Biden, have said that one of the top priorities this coming year will be to reauthorize surface transportation programs. The most recent surface transportation law will expire at the end of September 2021, after being extended for a year. The extension was a stopgap continuing resolution intended to provide more time to come to an agreement.
“It’s going to be a difficult discussion and agreement – you have a divided Congress, you have a new president in the White House,” said Shawna Watley, a senior policy adviser at Holland & Knight. “This is a bipartisan issue, and everyone agrees something needs to be done. The problem is paying for it.”
Additionally, though H.R. 2, passed by the House in 2020, provides $145 billion to the Highway Trust Fund, there was “no finance mechanism” included to fund the reauthorization bill, Watley said. The dwindling Highway Trust Fund is funded by the federal gas tax, which hasn’t been raised since 1993.
Watley noted that the House bill also includes a focus on climate change, and “I think that’s going to be a hard pill for Senate Republicans to swallow.” Ultimately, Biden has expressed interest in a major infrastructure package, and surface transportation will likely need to be the backbone of it.
In terms of financing, Lauri Hettinger, a senior policy adviser at Holland & Knight, said indexing the gas tax – adjusting it for inflation – might be an option that members of Congress would consider. She noted that while working on the FAST Act and MAP-21 as part of the Senate Environment and Public Works Committee’s Subcommittee on Transportation, “some Republicans did seem willing to index it, but not call it a ‘gas tax increase.’”
Regarding health care policy, one of the major differences in a new administration will likely be the way the White House interacts with the agencies, according to Michael Werner, a partner at Holland & Knight.
“The current administration had much more of a top-down approach. The White House really strongly dictated, or tried to dictate, policy, even all the way to trying to push the FDA to approve products within a particular period of time,” Werner said. “I don’t think you’re going to see that quite so much. I think you’re going to see the next White House be much more deferential, particularly to the scientific agencies and particularly on issues like public health in terms of developing solutions and priorities.”
Given the divided Congress, legislative reforms will likely be modest. “I think the public option and some of the things that President-elect Biden campaigned on are probably off the table,” said Miranda Franco, a senior policy adviser at Holland & Knight. Most likely, she added, a lot of the immediate focus will be on developing a robust Covid-19 response, as evidenced by Biden’s swift announcement of his Covid-19 task force.
Other top issues, outlined by Werner and Franco, include regulatory changes, such as restoring Title X funding, rolling back Centers for Medicare and Medicaid Services (CMS) approval of Medicaid work requirements, and rolling back short-term and association health plans.
The Biden administration also may continue the Trump administration’s focus on drug pricing. “The idea of somehow tying drug prices to international prices is a concept that we’re going to see keep coming up,” Werner said. “If we assume that this administration sees drug pricing as a priority issue, I think they’re going to turn to CMS to try to take some administrative steps.”
While the divided Congress means that some of the policies Biden campaigned on are unlikely to progress, Franco said there are still goals in the health care space that are relatively bipartisan, telehealth expansion being a significant one that has only been further highlighted by the pandemic.
When President-elect Biden launched his transition website, it initially listed only four policy areas – one of which was climate change, noted Beth Viola, a senior policy adviser at Holland & Knight. Biden’s Build Back Better plan is a $2 trillion sustainable infrastructure and clean energy plan.
“I think he sees that plan as a jobs program, essentially investing money to upgrade our nation’s infrastructure, to deploy innovative clean energy technologies, and, most importantly, put people back to work while reducing emissions to ultimately reach a goal of net-zero emissions by 2050,” said Viola. “It’s a pretty lofty goal. I think a lot of it is achievable in a lot of different ways, but I think it’s definitely going to take on a little bit of a different tone with a divided Congress.”
Areas of opportunity for bipartisanship include carbon capture, utilization, and storage technologies; energy storage technologies; and tax credits and incentives for innovative technologies. Though a sweeping, comprehensive climate deal may be unlikely under this new Congress, even the Senate infrastructure bill still includes billions of dollars focused on climate change, such as reducing emissions from roads and ports, said Dimitrios Karakitsos, a partner at Holland & Knight.
Reducing use of hydrofluorocarbons (HFCs) is another area of agreement, he added. “It’s a great example of … broad bipartisan support, I think not only in Congress, but industry and the environmental community,” he said. “There’s pending bipartisan legislation being worked out now that could be moved by the end of the year, certainly next year.”
The new administration will likely reverse some of the Trump administration’s regulatory rollbacks related to energy, and President-elect Biden has also discussed reentering the Paris climate agreement.
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Budget and Appropriations
The final breakdown between parties in the Senate won’t be known until the two January runoffs in Georgia are complete, and that could have an effect on the appropriations process. Even before Biden takes office, Congress faces two major tests in terms of whether it will be able to achieve bipartisan agreement, one being the Covid-19 stimulus package talks and the other the omnibus appropriations package.
“Certainly the appropriations committee staff on both sides of the Capitol are totally competent enough to be able to pull together an omnibus bill, which of course includes the 12 independent appropriations bills that make up the entirety of the federal budget,” said David Whitestone, executive partner at Holland & Knight. “The challenge, of course, is what do you do with some of the thornier issues that are still going to be in existence? The Congress of December is the same Congress of October. … Whether it’s funding for the border wall, funding for things like health care, some of these SNAP benefits, these issues are still present.”
The runoffs may cast a unique shadow on omnibus negotiations, because both parties will be even more cognizant about seeking an advantage and not ceding control to the other side of the aisle in the appropriations process only weeks before the January elections.
In fact, Michael Friedberg, partner at Holland & Knight, expressed some pessimism about the process being completed before the runoffs.
“I have friends on the appropriations committee and they’re saying, ‘Hey, we’re going to be super busy working on the omnibus and getting it done so it’s ready for votes. And then we also need a continuing resolution that’s veto-proof,’” Friedberg said. He added that while a shutdown is possible, he doesn’t think it’s likely to be a big concern.
Regarding long-time speculation about the return of earmarks, Friedberg and Whitestone were somewhat divided. Given that Republicans will soon be looking toward the tough races they face in 2022, “I just don’t see earmarks coming back this Congress,” Friedberg said.
Whitestone, on the other hand, noted the “fair amount of pressure on the House to bring back earmarks.” He added that congressional earmarks were used to facilitate the passage of bills, and that since earmarks were eliminated, the number of appropriations bills that have passed as stand-alone bills has also diminished.
“There’s probably a graduate-level study to be done there, to look at the correlation between the two, but I’m convinced that there is a strong correlation,” Whitestone said. “And when you think about it, earmarks didn’t change the total amount of money that was spent by the federal government.”
While Whitestone does not think earmarks are off the table, he acknowledged that if they poll as a negative for Republicans in the lead-up to 2022, getting the Senate on board would be challenging.