The very brief shutdown that started within the parts of the Transportation Department is now over. Members of Congress agreed to reauthorize the Highway Trust Fund that funds several DOT agencies during a vote on Saturday. But that’s about all they got done. Agreement is still elusive on the big federal spending questions, including the infrastructure bill, the president’s Build Back Better package, not to mention annual appropriations bills for the fiscal year that just started last week. Loren Duggan, deputy news director at Bloomberg Government, brought Federal Drive with Tom Temin up to speed on where things stand.
Jared Serbu: Hey Loren, thanks for joining us.
Insight by Galvanize: During this webinar Marianne Roth, the chief risk officer of the Consumer Financial Protection Bureau, will provide a deep dive into enterprise risk management at CFPB. Additionally, Dan Zitting, the CEO of Galvanize, will discuss how making better use of data and technology can help federal agencies more rapidly allow decision makers address and mitigate risks.
Loren Duggan: My pleasure. Thanks for having me.
Jared Serbu: So let’s start with the infrastructure bill, of which the Highway Trust Fund issue was originally wrapped up in. They broke that off separately just to extend it while they continue to haggle over everything else. But where do things stand with the rest of these issues?
Loren Duggan: Yeah, that’s right. The infrastructure bill is a $1.2 trillion package over several years. And part of the core of it is a reauthorization of highway transit and safety programs that they typically do every five years or so. They had already kicked that down the road for a year and the time had come to do that, again. That’s wrapped up in the infrastructure package. Had they had that vote by Thursday night, like they had originally intended, everything would have been fine. Once that vote was delayed, however, that caused a problem for the DOT agencies that receive an authorization through there. And unlike some authorizations that don’t matter, this one really does. Because without the ability to spend money from the trust fund, you can’t pay the salaries, the people who do this work, you can’t necessarily send money to the state, so a lot of downstream effects. So that shut down a little after midnight on Friday, but by the House passing a bill Friday night, and then the Senate clearing it on Saturday that reopen those agencies for a month, while they figure out what to do on the larger package on that month deadline may give a new deadline as well to doing something on that infrastructure package, which passed with bipartisan support in the Senate came over to the house, and is really mired in the debate over what to do over the larger spending package. Though, how large that is is under debate, and probably something we’ll touch on later. But there wasn’t enough support within the Democratic Caucus, and even cobbling together the Republican votes there may have been to get that over the line last week. So what they’ll be doing over the next several weeks is figuring out how to get that bill over the line with this other package.
Jared Serbu: So no real prospect of any near term action on any of those – either of those big infrastructure bills, right? I mean, we’re basically where we were on Friday, when it looked like there might be something happening. But there’s really no new deadline in place, not even a soft deadline, it looks like, in terms of when leadership wants to get something done here.
Loren Duggan: I would say on the the physical infrastructure bill the $1.1 trillion plan with $550 billion in new spending, they they’re penciling in Oct. 31. For that, again, because the programs expire, the bigger package, there’s really not a deadline other than if there’s a line in the sand that you have to move them together, then that would suggest next month might be it but assembling a bill of the size that they’re talking about. Squaring away all the details getting everyone on board, you could easily see that going more than a month. So you know, one of the questions here is, what do they need to have with the bigger package to allow infrastructure to move forward? Is it a, you know, a table of contents or an agreement on what the policies will be? At the very least they need to agree probably on a top line number for that bill, which is part of the dispute at the moment. And that could allow that to move forward. But you know, what’s, what may concern some people is there was already a date written down – Sept. 27 – to take up the infrastructure package. And that slipped by a couple of days, and then they pulled that vote all together. So you know, the deadlines are a little softer than some people would like and the fact that one of them has come and gone without it actually resulting in a vote has caused problems in the Democratic Caucus.
Jared Serbu: And going back to what you teased up for us a second ago, is there any more clarity? Or is it starting to become clear what the size of this second overall package might end up being?
Loren Duggan: It’s not totally, Joe Manchin has floated a $1.5 trillion number, he wrote that down on a piece of paper. But it’s not just a number, in that number are the policies that will cost money to add up to that and then also policy that could save money on the mandatory side and allow you to spend more. The top one there is allowing Medicare to negotiate prescription drug prices and other provisions related to that. That’s come into some problems on the House side, or some moderates haven’t agreed to it. So you know, if they could have that $700 billion, that would allow them to spend more. If they don’t have it, it may deepen their problem and trying to find a way forward here. So there’s a lot of complicated arithmetic going on here with adding up the costs of programs and then subtracting out either the tax increases or other spending changes. So a lot to figure out for Democratic leaders.
Jared Serbu: And let’s talk about annual appropriations bills -is there any clear path forward on those before we get to the next Dec. 3 deadline?
Loren Duggan: There’s not, there’s time. Obviously nine weeks is a good chunk of time as opposed to these other issues we were talking about. We have a continuing resolution in place, we don’t have a handshake agreement between the House and the Senate and Republicans and Democrats on how much to spend. One complication is these other spending packages that we’re talking about, even though they’re outside of annual appropriations, they’re on the mandatory spending side. There’s still some pressure there, how much do you want to put in annual bills when you’re spending money over there, and there could be calls to reduce some of the costs in the annual bill. So the one consensus we’ve seen on the authorization side is on defense, where both chambers the House as a whole, and then the Senate Armed Services Committee agreed to spend about $25 billion more than the president wanted on defense programs, if that holds up as a consensus that may help the process move forward. But an agreement on the non-defense side is a little trickier. And pretty much everything we’re talking about here is on the non-defense side in terms of highways and social services, programs, climate change, and although the like there.
Jared Serbu: Yeah, it seems to me under that situation, what you might end up with hypothetically, is they pass defense appropriations bills, get those through and leave the rest of the government operating under a CR, which certainly has happened before.
Loren Duggan: It has, but you could see Democrats fighting back because they like to have defense – you vote for the defense increase, I vote for the non-defense increase, and we get the whole boat lifted and over the line. So that that’s another issue that we’re working on very closely in the next coming weeks, especially. But, the most pressing thing we haven’t touched on it yet, is the debt limit, which needs to be increased sometime this month, according to the Treasury Department. And that’s, I think, where a lot of the initial focus is going to be even with the House, mostly away on committee workweeks the next two weeks and the Senate scheduled to be out next week for the holiday week. We’ll have a lot of discussion over the coming weeks on what to do on the debt limit. And that’s going to raise specters of spending not only on annual basis, but also on these two packages. So I think spending is very much in everybody’s focus these next couple of weeks.
Jared Serbu: You bet. All right, Loren Duggan, deputy news director at Bloomberg Government. Thanks a lot, Loren.
Loren Duggan: Thank you.