Washington DC Update - August 2020
Congress Leaves Town with Much Left Undone
Washington lawmakers began August with three tall orders to fill. As unemployment hangs in the double digits, the need for another package of COVID-19 relief is growing more pronounced and key provisions of previous bills are expiring. And, with the September 30th deadline fast approaching, annual spending bills remain unfinished. And, looming just after the election, raising the debt ceiling will be a key need. Despite this consequential to-do list, Congress opted for a limited legislative schedule with long breaks in August and early September. That leaves only a few remaining months before a critical election for each party to act and make the case to the American for why their party deserves the mandate to govern.
Beginning the month was the possibility of Democrats, Republicans, and the White House reaching a compromise to pass another wave of COVID-19 relief. August is typically a month of recess for Congress, with little expected to happen, especially in a presidential election year. The House left town August 3rd as scheduled, with the caveat that if a compromise was reached, they would be called back to DC to quickly approve it. The Senate likewise was scheduled to leave town on August 10th.
At the opening of negotiations, Democrats had the $3 trillion HEROES Act passed in May, with Senate Republicans revealing the package their caucus was able to hammer out with the White House in late July, the $1 trillion HEALS Act. While there was some agreement initially, Democrats and Republicans started the negotiations with some considerable distance in their overall priorities and the dollar amount they were willing to spend. Democrats were willing to come down to $2 trillion but Republicans were unwilling to go above $1 trillion. Both sides immediately pointed the finger at the other, with Democrats accusing Republicans and the White House of continuing to not take the COVID-19 crisis seriously, and Republicans accusing the Democrats of using the crisis to jam in unrelated policy priorities. The Senate adjourned on schedule without a deal. Congress is now in recess until after Labor Day, with this stalemate unlikely to break anytime soon.
On the annual appropriations front, the House had taken up a number of the spending bills in large chunks (called Minibuses) before leaving town but the Senate has yet to pass an appropriations bill. With the government running out of money on September 30th and a looming election, it seems very likely that when Congress returns next month they will have to pass a continuing resolution (CR) to avoid another costly and damaging government shutdown. This will continue government spending at current levels and generally does not add new programs or policy changes. Whether this is a shorter-term CR that goes into December, or a longer-term one that kicks the can to the new Congress that will convene in January, is still an open question. The White House has called for this CR to be included in the next COVID-19 relief package, that they presume is coming before the end of September.
While the political future remains cloudy, the stage is set for either a big breakthrough in September on COVID-19 relief and/or annual spending packages, or for more disappointment and finger-pointing in the runup to a hotly contested election.