That competitiveness bill the House passed would deliver a lot of money to the government itself

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House Democrats passed a nearly 3,000 page bill last week aimed at American Industrial competitiveness. There’s a lot in there for federal agencies, including the Commerce Department. But does it have legs? To learn more, the Federal Drive with Tom Temin spoke to Bloomberg deputy news director Loren Duggan.

Interview transcript:
Tom Temin: Tell us more...

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Best listening experience is on Chrome, Firefox or Safari. Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts or PodcastOne.

House Democrats passed a nearly 3,000 page bill last week aimed at American Industrial competitiveness. There’s a lot in there for federal agencies, including the Commerce Department. But does it have legs? To learn more, the Federal Drive with Tom Temin spoke to Bloomberg deputy news director Loren Duggan.

Interview transcript:

Tom Temin: Tell us more about this bill, the status and does it have any hope in the Senate?

Loren Duggan: Well, the version that the House passed on Friday may not be what eventually emerges here. But this is the House’s position on legislation that actually has a track record back to last year. The Senate passed a bill in June that was aimed primarily at competing with China. And one of the main ways that it would do it is put a lot of money into domestic programs for semiconductor production. And that’s actually an element of this bill that has bipartisan support in both chambers.

It’s more or less some of the other stuff that’s been tacked on to this bill as it’s moved that has made it in the House, at least a more partisan exercise. In the Senate, it was passed with a bipartisan margin. So what we’re likely to see here is maybe even an old fashioned House-Senate conference where people get in a room and hash out a bill to try and come to some sort of consensus on this legislation that I think members of both parties in both chambers and in the White House really would like to see something done on this bill, which to me suggests it has legs and one of the questions just maybe what all rides along with it as it moves.

Tom Temin: Yes. Because there is a lot of money for industrial policy types of initiatives at the Commerce Department. I think some of the health agencies would get money. I mean, there’s a lot, of the hundreds of billions, a lot of it goes to the government itself. So there’s a lot of, I guess, constituencies that would push for this. But is there anything in it that you’ve heard about that could produce, let’s call it for lack of a better word, the Joe Manchin effect?

Loren Duggan: Well, one of the provisions that Republicans have not liked and stood up and talked about a lot in press conferences, and on the floor, is money for things like the Green Climate Fund at the U.N. and some of these international climate change programs, which don’t always get the warmest reception over in the Senate from Joe Manchin. There are other things that they like, some sanctions against China for its policies against Uyghurs and or the things like that. But the money that’s in here probably will win support from folks like Joe Manchin and others. What’s interesting is the semiconductor funding is actually money that would go out the door, and it’s appropriation over a five year period. Some of the other provisions in here are authorization. So it’s Congress saying, as we write appropriations bills in the years to come, this is the level of funding we’d like to see for programs that National Science Foundation, National Institute of Standards and Technology, and then there’s just other requirements that agencies are going to have to live with under this. And when the House dealt with this, they also put things in here like reforming law so that people in the cannabis industry and states where that’s legal can access financial services, which is a provision that a lot of people have tried to move in different bills. There’s also something in here to reform ocean shipping laws, which haven’t been touched in a long time. And that’s to help the supply chain. So you’re right, this has far reaching effects throughout the government. But then obviously, out in industry, if this money starts flowing out the door, and the rules come into place.

Tom Temin: So semiconductor chips to cannabis, I can just see it now. Yeah, dude, I’ll make whatever chip you want, man. Well, we’ll see what happens there. But it’s a long way to go yet in the Senate at this point.

Loren Duggan: There is a long way to go. But I think if they made a concerted effort, this could go quickly, you know, there’s procedural steps that they’ll have to take to actually form this conference committee, if that’s the way they go. Otherwise, it may just be a more informal negotiation, House and Senate members behind closed doors. We’ll have to see. But I do think that there’s a win here for a lot of people and a lot of parties. And so that may give it a chance to move forward. If they can cut out the stuff that people don’t like and focus on what they do, you might have a compromise in the making here.

Tom Temin: And what would happen if the nominee for the Supreme Court drops into the Senate in the midst of all this?

Loren Duggan: Well, that could change a lot, obviously. The timing of that is still TBD. But there will be a longer process, anyhow. Once that nominee is named by the president, there will be a long round of taking him or her in this case, because we know that Joe Biden wants to nominate a Black woman for this job. She’ll be taken around the Senate, meet with a number of the senators, eventually get her hearing in the judiciary committee, then a markup and then head to the floor. So that could take some time. I wouldn’t expect that to happen too quickly, especially with Ben Ray Luján, the senator from New Mexico being out for several weeks because of a stroke that he had, which has sidelined him. The Senate is still functioning, but a lot of those things that may have been 50/50 propositions might get sidelined and they’ll focus on things where the Democrats have a little bit more margin to work with.

Tom Temin: I’m sure Senator Schumer himself is delivering the blood thinner.

Loren Duggan: He’ll do whatever he needs to, I’m sure.

Tom Temin: We’re speaking with Loren Duggan. He’s deputy news director at Bloomberg Government. And behind all of this, of course, the CR, the continuing resolution expires next week.

Loren Duggan: Yeah, so we have only two weeks ago. Feb. 18, is the date circled on the calendar for that to lapse. There were talks last week that didn’t necessarily yield an outcome that appropriators had hoped for where they could get agreement on things like the top line spending, how much to spend on each of the 12 bills that make up the appropriations process and then which riders to include or omit. And that last part might be one of the key sticking points going forward. Also in the mix are earmarks, those projects that members from the House and Senate request for their states and districts. Those are still being discussed, as I understand it. So we’ll have to see if they can make progress this week toward an agreement. Next week was scheduled to be a committee work week in the house, but that might change, maybe members will come back into town. If there’s something to act on.

Writing an omnibus that covers the entire government may take more time than they have between now in the 18th. So even an agreement may require another short term CR> If they can’t come to an agreement, then we’ll be talking about a longer CR and in the back of some people’s mind is still a year long CR, although the military and DOT and other agencies would probably push very hard against that as would other people who rely on this money, because we’re still living under the deal that was signed by President Trump at the end of 2020, which is not how Democrats want to run the government, obviously, with the funding levels and the policies that they’d like to see. There’s a lot of pressure to get this done. There’s still a long way to go on that.

Tom Temin: Because President Biden did sign an authorization bill for defense at that higher number that both I think the ranking and chairs of the Armed Services committees had agreed to. So is there any possibility they could at least do the DoD budget in time to get past the CR and let the rest of the government sail along?

Loren Duggan: Well, there’s at least consensus on that defense authorization level, as you say, but not a dollar has left under that authorization unless that’s signed into an appropriations law. The thing is that Democrats would be reluctant to lock in a defense increase without also locking in what they want to see on the non-defense side. And Republicans don’t want to see too large an increase on non-defense unless there’s also an increase on defense so much as we saw for years with the defense and non-defense spending caps having to raise about the same amount or in parity to get this bill over the line, they’re going to need to have some sort of consensus that allows both to grow for Democrats. So I think that that’s going to be a sticking point. But you’re right, that NDAA bill as it were, was a sign that Congress is open to more defense funding, but that has yet to be signed into law in the way that flows to the DoD.

Tom Temin: And finally, there’s the Russian situation, which kind of looks like a big pile of pickup sticks and little movement here, a little movement there. You don’t know when the whole thing is going to come crashing down. And that could really throw a lot of monkey wrenches into the normal Washington works, couldn’t it?

Loren Duggan: Oh, absolutely. And Capitol Hill got some briefings last week on the Ukraine situation. And they’re going to continue, I think, to push the administration for answers. And for more information on what the plans are. What we may see Congress do is something in the sanctions realm. There’s discussions going on, particularly in the Senate and the Foreign Relations Committee on a package of sanctions that could be signed into law. They might not be immediate sanctions, but they might be triggered by aggression on Russia’s part of incurring into Ukraine. So Congress very much has this in mind. We’ll see if that also bleeds into the appropriations debate. Do they need more money? Or is there going to be an ask there for some sort of additional support to allow the military to prepare if they need to. And we know that not everyone on Capitol Hill agrees with the Biden administration’s position on this. So I would expect pushback and a lot of voices rising about this as this situation continues to develop.

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