Budget Reconciliation in the House, September 23, 2021

Background and Next Steps

The FY22 budget resolution that began the current reconciliation process included instructions to 13 House and 12 Senate committees to write their portions of the bill. Only the House has conducted markups. House committees started holding committee markups on September 2 and concluded September 15, meeting its self-imposed deadline of September 15 for completion of committee action.

With committee work finished, all bills will be assembled into one package by the Budget Committee, which does not amend or alter the legislation but can make recommendations on amendments. The package will make one final stop at the House Rules Committee, which can and likely will make substantive changes before the reconciliation bill moves to the House floor.

The House Budget Committee has floated the possibility of scheduling the markup for a rare Saturday session on September 25, in an effort to get the package ready for the floor next week. Despite the lack of an overall agreement on the contents of the package with the Senate, the timeline on the budget reconciliation bill is likely being driven by the need to secure votes for the bipartisan infrastructure deal (BID). House Democratic leadership has promised moderate members that the House will vote on the BID by September 27. Progressives want assurances that the reconciliation package is moving as well before they commit to supporting the BID. Leadership is trying to satisfy both factions to avoid losing momentum on both measures.

Unless a pre-agreement with the Senate is reached, the package approved by the House under reconciliation will likely go through significant changes in the Senate. While Senate Majority Leader Chuck Schumer announced that a framework had been reached between Senate and House leadership and White House on the “menu” of revenue provisions, there has been no agreement reached on the top-line spending number. Senate rules will likely prevent several provisions included in the House bill from being considered in the Senate. One of the key substantive limitations during Senate reconciliation is that, with only a few exceptions, amendments to a reconciliation bill on the Senate floor cannot increase the deficit; they must either lessen the deficit or be deficit-neutral. Discussions about “pre-conferencing” the package in order to prevent moderate House Democrats from having to take tough votes on a package that would not pass the Senate continue. However, no pre-agreement has been reached and key Senate moderates continue to express skepticism about a $3.5 trillion package.

Another complicated factor will be whether the Democrats amend the budget reconciliation package to include an increase in the debt limit. They have been reluctant to do so but may need to take that step sooner rather than later to avoid a default.

Below is a summary of each House committee’s actions on reconciliation.

House Committee Action to Date

Oversight and Reform Committee (Target $7.5 billion)

On Thursday, September 2, the Oversight committee approved their portion of the package by a vote of 25-18. The committee’s spending title would provide roughly $7 billion for the USPS to purchase electric vehicles (EV) for delivery purposes and $5 billion for the General Services Administration (GSA) to procure EVs for other federal agencies. Other funds include $1 billion for the Technology Modernization Fund.

The Amendment in the Nature of a Substitute (ANS), as amended, passed by a voice vote. Also, the committee passed three other amendments. They include:

  1. The Keller Amendment, which increases funding for the National Archives and Records Administration (NERA) by $10 million to respond to backlogs for veteran’s requests for military personnel records.
  2. The Lynch Amendment which increases the funding to $7 billion for the United States Postal Service to electrify its fleet of postal vehicles and to build the EV charging stations necessary to charge those vehicles. The original specific funding amount was $2.4 billion.
  3. The Connolly Amendment which adds an additional $1 billion in Technology Modernization Fund funding to create an up to date and protective IT system. Also, the amendment provides $2 billion to the General Services Administration to assist agencies in employing innovative IT strategies and to prove how the government engages with its citizens through IT.

Committee Print

Natural Resources Committee
Target: $25.6 billion

On Thursday, September 2, the Natural Resources Committee approved their title by a vote of 24-13. The title provides roughly $31 billion over a decade for climate resilience, conservation, and other environmental initiatives. That spending would be partially offset by increased fees on oil and gas companies to reach the $25.6 billion net spending target set by the budget resolution. The spending includes $9.5 billion for environmental restoration in coastal areas and around the Great Lakes, $3 billion to create a Civilian Climate Corps at the Interior Department, and $2.5 billion for cleanup activities at abandoned mines.

The committee approved revenue raisers that:

  1. Increase leasing fees and royalty rates for onshore and offshore oil and gas extraction and require royalties to be paid for methane that’s vented or flared.
  2. Establish an oil and gas leasing moratorium on the Atlantic and Pacific coasts and in the eastern Gulf of Mexico.
  3. Repeal a previous authorization for drilling in the coastal plain of the Arctic National Wildlife Refuge and void nine leases in the area issued this year.
  4. Increase the royalty rate paid to the federal government on mining revenue.
  5. Withdraw more than 1 million acres around the Grand Canyon from mineral leasing.

Committee Print

 

Science, Space, and Technology Committee
Target: $45.5 billion

On Thursday, September 9, the Science, Space, and Technology Committee approved their title by a vote of 21-17. The measure includes $15.6 billion for Energy Department laboratory infrastructure, research, development, and demonstration activities, nuclear energy projects, and energy efficiency and renewable energy initiatives. Also, $11 billion for National Science Foundation research infrastructure and STEM research awards, scholarships, and fellowships, including $1 billion for minority serving institutions.

Additionally, the committee title includes: $4.4 billion for NASA infrastructure modernization efforts and climate change research and development activities; $4.3 billion for National Oceanic and Atmospheric Administration weather, ocean, and climate research, in addition to instrument and spacecraft delivery development and delivery; and $4.2 billion for National Institute of Standards and Technology facility construction and renovation and advanced manufacturing research.

The committee approved 10 amendments during the markup, which include:

  1. The LaTurner Amendment, which requires one-third of grants for cooperative agreements to be awarded to states that receive EPSCoR funding from the National Science Foundation or rural or underserved communities. No requirement originally existed.
  2. The Posey Amendment that encourages investment in domestic production for the solar energy supply chain.
  3. The Feenstra Amendment that ensures that biofuels are included in research and development for the Department of Energy. By 2050, biofuel car sales will still make up every four out of five cars, as estimated by the Department of Energy. No such assurance existed in the original bill.
  4. The Feenstra Amendment, which ensures that funding going to NASA for research and development for sustainable aviation fuel research also includes biofuels. No such assurance existed in the original bill.
  5. The Sherman Amendment that funds artificial intelligence (AI) research. No such funding was guaranteed in the original bill.
  6. The Meijer Amendment #R11 that reallocates $150 million to fund the Manufacturing USA Institute specifically on manufacturing on domestic semi-conductor technology. This does not detract from any other manufacturing funding.
  7. The Baird Amendment #10 that appropriates $150 million specifically for cybersecurity research and activities. Funding was more generally appropriated in the original bill.
  8. The Bice Amendment that reallocates 20% of funding to go to EPSCoR eligible states.
  9. The Waltz Amendment, which sets aside $25 million for NSF to ensure they have the resources needed to implement security measures against the increased fraud cases.
  10. The Gonzalez Amendment affirming that no company or country can receive a contract, subcontract, grant, or loan that has been involved with the human rights violations in the Chinese Communist Party of China. No such affirmation existed in the original bill.

Committee Print

 

Education and Labor Committee
Target: $779.5 billion

On Thursday, September 9, the Ed & Labor Committee approved their title by a vote of 28-22. The measure would provide roughly $111 billion for higher education, including by providing two years of free community college through grants to states and eligible tribal colleges and universities. The federal share of costs would start at 100% in the first year and decrease to 80% by the 2027-2028 award year. Also, the measure increases the maximum Pell grant by $500, allocated $9 billion for retention and completion grants to states and tribal colleges and universities to support students, and provides additional support to historically Black colleges and universities and minority-serving institutions.

The measure would provide $450 billion for child care and early childhood education. About $80 billion for workforce development and training programs, and impose increased civil penalties for employers who violate labor laws. Lastly, The about $35 billion for child nutrition programs and other activities to address child hunger.

The committee approved four amendments approved:

  1. The manager’s Amendment to state that funding provided to the Office of Inspector General can be used for oversight activities. Also, it adds healthcare to the list as high-skilled and high-waged, living wages be provided under any programs for preschools, and allocates $50 billion for funding localities that choose to partake in the programs, despite declining participation in the states mentioned.
  2. The Fernandez Amendment that includes arts and entertainment in industry or sector partnerships that lead to more jobs and higher wages. These industries were not specifically included in the original bill.
  3. The Scott Amendment, which ensures funding for the administration for workforce development programs provided in the ANS. Funds will be available under other departments, not just for the Department of Labor programs.
  4. The Sherrill Amendment that expands eligibility for childcare and Pre-k funding to families of broader income. The scope of eligibility was not as broad in the original bill.

Committee Print

 

Small Business Committee
Target: $17.5 billion

On Thursday, September 9 the Small Business Committee approved their portion by a vote of 15-12. The committee funding includes:

  1. $9.5 billion to increase equity investment in underserved markets and key industries through a new subprogram within the Small Business Investment Company program.
  2. $4.47 billion for a direct loan product under the 7(a) Loan Program.
  3. $2.75 billion to create a direct lending subprogram under the 504 lending program that would allow Certified Development Companies to provide loans to small businesses, contractors, and manufactures in underserved markets.

Committee Print

 

Agricultural Committee
Target: $89.1 billion

On Monday, September 13, the committee approved their portion by a vote of 27-24.

The measure provides:

  1. $40 billion for forestry programs, including $9 billion for forest restoration and resilience grants and $4.5 billion for the Agriculture Department’s portion of a Civilian Climate Corps.
  2. $18.7 billion for rural development programs, including $9.7 billion for green upgrades to rural utilities.
  3. $7.75 billion for agricultural research.

Committee Print

 

Homeland Security Committee
Target: $500 million

On Tuesday, September 14, the Homeland Security Committee approved their title by a vote of 19-14. The measure would provide $865 million for the Cybersecurity and Infrastructure Security Agency, including to assist federal agencies with multi-factor authentication, endpoint detection and response, improved logging, and securing cloud systems.

The committee approved five amendments:

  1. The Slotkin Amendment, which allocates $60 million of the $210 million specifically for the Cybersecurity and Infrastructure Security Agency for enhancing the cloud architecture, migration advisory services, and cloud threat hunting capabilities of the Agency.
  2. The Clarke Amendment that allocates $75 million of the $210 million for the Cybersecurity and Infrastructure Security Agency for expansion and operation of the CyberSentry program.
  3. The Clarke Amendment to expand the scope for the $100 million cybersecurity workforce development and education project to include historically Black colleges and universities and other minority-serving institutions and community colleges.
  4. The Jackson Lee Amendment to allocate $50 million of the $210 million for the Cybersecurity and Infrastructure Security Agency for researching and developing means to secure operational technology, including industrial control systems, against cybersecurity vulnerabilities.
  5. The Torres Amendment that allocates the remaining $25 million of the $210 million for the Cybersecurity and Infrastructure Security Agency for operating a cyber range.

Committee Print

 

Financial Services Committee
Target: $339 billion

On Tuesday, September 14, the House Financial Services Committee approved their title, by a vote of 30-24.

The measure provides:

  1. $77.3 billion for formula and needs-based public housing programs.
  2. $75 billion for incremental Housing Choice Vouchers and support services, including for individuals at risk of homelessness and for survivors of domestic violence and sexual assault.
  3. $36.8 billion for the Housing Trust Fund and $34.8 billion for the HOME Investment Partnerships Program to fund the construction of affordable housing for low-income people.
  4. $15 billion for project-based rental assistance.
  5. $10 billion to offer down payment assistance to first-generation homebuyers.
  6. $10 billion to address lead paint and other health hazards in housing for low-income families.
  7. $10 billion for a new Housing Investment Fund to leverage private-sector investments to create and preserve affordable homes.

The committee adopted two amendments:

  1. The manager’s Amendment, which makes changes to the ANS to include the word “affordability” in 27 definitions in the bill for various purposes.
  2. The Wagner Amendment, which specifically adds Afghan refugees into the Minority Business Development Agency appropriations and grants.

Committee Print

 

Veterans Affairs Committee
Target: $18.0 billion

On Monday, September 13, the Veterans Affairs Committee approved their portion by a vote of 17-12.

The measure would provide $15.2 billion for infrastructure improvements to national cemeteries and memorials, medical facilities, and other property. It also would include $1.81 billion for major medical facility leases. Also, extends through fiscal 2026 the VA’s authority to enter into enhanced-use leases, which provide underutilized real estate to the private sector for supportive housing for homeless and at-risk veterans.

Committee Print

 

Judiciary Committee
Target: $107.5 billion

On Monday, September 13, the committee voted to approve their measure by a vote of 25-19.

The measure makes green cards and a pathway to citizenship available to Dreamers who were brought to the U.S. as children and reside here illegally, essential workers, and holders of Temporary Protected Status and Deferred Enforced Departure. Also, it rolls over green cards from year to year, allowing for additional visas to be issued following years when the numerical caps aren’t reached.

Additionally, the measure includes:

  1. $2.8 billion to U.S. Citizenship and Immigration Services to address visa processing backlogs.
  2. $2.5 billion to the Justice Department for grants and contracts to support community violence reduction programs.

Committee Print

 

Transportation and Infrastructure Committee
Target: $60 billion

On Tuesday, September 14, the committee approved their titled by a vote of 37-29.

The measure provides:

  1. $10 billion for high-speed rail corridors.
  2. $9.9 billion for new transit routes and expanded services in low-income and disadvantaged areas.
  3. $6 billion for unspecified local surface transportation priorities.
  4. $5.5 billion for the Economic Development Administration, including to develop regional economic growth clusters.
  5. $4 billion to reduce transportation greenhouse gas emissions.

The committee approved three amendments:

  1. The Gibbs Amendment to add a provision in the bill where the Comptroller General must provide a report to Congress for any equipment provided by the United States Coast Guard or the Army Corps of Engineers to any regime in Afghanistan and that has been left behind in Afghanistan.
  2. The DeFazio Amendment that reaffirms the policy of the United States that funds in this bill should not support child labor in any direct or indirect way.
  3. The Lynch Amendment to address the Davis Bacon Requirement – ensuring that all laborers employed by contractors or subcontractors using funds under this bill must be paid wages at or above prevailing rates for a project of similar character as determined by the Secretary of Labor. Authorizes the Secretary of Labor to enforce this requirement through already existing tools.

Committee Print

 

Ways and Means Committee
Target: $1 billion reduction

On Wednesday, September 15, the Ways & Means Committee approved their title by a vote of 24-19. The resolution directed the committee to reduce the deficit by $1 billion over 10 years. The measure covers taxes, health care, drug pricing, paid leave, infrastructure financing, community development, retirement, child care, and trade.

The package included tax changes, such as:

  1. Raising the top marginal personal income tax rate to 39.6%, from 37%, for individuals making more than $400,000 and joint filers making more than $450,000. A 3% surtax also would be imposed on individuals with adjusted gross incomes of more than $5 million.
  2. Increasing the capital gains tax rate to 25% from 20% for “certain high-income individuals.”
  3. Replacing the flat 21% corporate income tax rate with graduated rates: 18% on the first $400,000 of income, 21% on income up to $5 million, increasing to 26.5% for income after that.
  4. Generally requiring investment funds to hold assets for more than five years, rather than three years, for managers to get a preferential tax rate on their share of profits, known as carried interest.
  5. Reinstating a 16.4 cents-per-gallon tax on crude oil and imported petroleum products to fund Superfund cleanups of hazardous sites. It also would double the tax rate on sales of certain chemicals.
  6. Barring taxpayers from claiming losses on digital assets, such as cryptocurrencies.
  7. Increasing the current rate of excise taxes on cigarettes, small cigars, and roll-your-own tobacco, as well as on nicotine that’s been extracted, concentrated, or synthesized in tobacco products.
  8. Providing $78.9 billion in additional funding for the Internal Revenue Service to increase audits on wealthy individuals.

Further, the package includes new tax credits, such as:

  1. Extending an expanded version of the child tax credit through 2025 and making it permanently refundable.
  2. Making permanent expanded versions of the earned income tax credit for childless workers and the child and dependent care credit.
  3. Making permanent the expanded availability under ARPA of the Affordable Care Act’s premium tax credits for health insurance purchased through the exchanges.
  4. Temporarily expanding the ACA tax credits to individuals with income below 100% of the federal poverty level, and providing enhanced cost-sharing subsidies to those below 138% of the federal poverty level.
  5. Creating a refundable income tax credit for union-made electric vehicles placed into service before Jan. 1, 2027, and extending several tax credits.

The measure creates a “Fair Price Negotiation Program” for the Centers for Medicare &Medicaid Services to negotiate the price of 250 covered drugs and insulin. Also, expands Medicare coverage to include dental benefits beginning in 2028, hearing benefits beginning in 2023, and vision benefits beginning in 2022. For dental benefits, Medicare would cover 50% of the cost of major treatments and 80% of the cost of preventive services. Hearing coverage wouldn’t include over-the-counter hearing aids.

The measure provides $10 billion annually for a fund to provide reinsurance payments to insurers operating in marketplace exchanges and assistance to individuals to reduce out-of-pocket costs. Also, provides up to 12 weeks of paid leave for eligible workers for the birth or adoption of a child, a personal health condition, caregiving for a family member, circumstances related to a family member’s deployment, and bereavement.

Other provisions include:

  1. Allowing state and local governments that issue qualified infrastructure bonds to receive a tax credit for a portion of the interest they pay, similar to Build America Bonds.
  2. Restoring a tax exemption for interest on advance refunding bonds.
  3. Establishing a 30% tax credit for state, local, and tribal governments to operate and maintain government-owned broadband systems.
  4. Making permanent and expanding the New Markets Tax Credit.
  5. Establishing a 30% tax credit for individuals and businesses that participate in a qualified wildfire resilience program.
  6. Increasing state Low-Income Housing Tax Credit (LIHTC) allocations.
  7. Establishing a neighborhood homes credit for rehabilitating homes in certain lower-income areas.
  8. $15 billion in state grants to help providers improve child care facilities.
  9. Requires employers with more than five workers to automatically enroll new hires for retirement benefits.
  10. Reauthorizes Trade Adjustment Assistance (TAA) programs for seven years and provide $3.4 billion annually for those programs, including $1 billion annually through fiscal 2026 for new grants to help communities affected by global trade.

Committee Print by Subtitle:

  1. Subtitle A: Approved by a vote of 24-19. Committee Print
  2. Subtitle B: Approved by a vote of 22-20. Committee Print
  3. Subtitle C: Approved by a vote of 23-19. Committee Print
  4. Subtitle D: Approved by a vote of 24-19. Committee Print
  5. Subtitle E Part 1: Approved by a vote of 24-19. Committee Print
  6. Subtitle E Part 2: Approved by a vote of 24-18. Committee Print
  7. Subtitle E Part 3: Approved by a vote of 24-17. Committee Print
  8. Subtitle E Part 4: Approved by a vote of 24-19. Committee Print
  9. Subtitle F, G, H, J: All approved by a vote of 24-19. Committee Print


Energy and Commerce Committee

Target $486.5 billion

On Wednesday, September 15, the committee approved their title by a vote of 31-26. The measure includes language related to health care, energy and environmental matters, telecommunications, and manufacturing. The panel didn’t agree to drug pricing provisions, similar to what’s in the Ways and Means package, in a tie vote with three Democrats joining Republicans in opposition.

The measure would close the Medicaid coverage gap for lower-income individuals in states that didn’t expand the program under the Affordable Care Act. Also, provides $10 billion annually for a fund to provide reinsurance payments to insurers operating in marketplace exchanges and assistance to individuals to reduce out-of-pocket costs. Expands Medicare coverage to provide dental benefits beginning in 2028, hearing benefits beginning in 2023, and vision benefits beginning in 2022.

The measure would make the Children’s Health Insurance Program (CHIP) permanent and appropriate “such sums as are necessary” for it. It also would allow states to increase the income level needed for families to participate in CHIP and require states to provide one year of continuous eligibility for children enrolled in CHIP.

The measure provides: $35 billion for public health infrastructure, including $10 billion for hospital infrastructure projects and $10 billion for community health center grants; $15 billion for pandemic preparedness, including $1.25 billion for the Centers for Disease Control and Prevention to strengthen vaccine confidence; and $3 billion to establish the Advanced Research Projects Agency for Health (ARPA-H) to invest in breakthrough technology and advancements in medicine.

Further, the committee package includes:

  1. $150 billion for a Clean Electricity Performance Program that would charge or pay electric utilities based on the share of clean energy they supply to consumers. Utilities would be eligible for grants if they increase the share of clean energy in their portfolios by at least four percentage points each year. Utilities that don’t meet that benchmark would pay a fee.
  2. $30 billion to replace every lead water service line in the U.S.
  3. $27.5 billion to support nonfederal financing of zero-emission technology deployment.
  4. $18 billion to support home energy efficiency and appliance electrification rebates.
  5. $17.5 billion to decarbonize federal buildings and vehicle fleets.
  6. $13.5 billion for electrical vehicle charging infrastructure.
  7. $10 billion for cleanup activities at priority Superfund sites where federal agencies are the responsible parties.
  8. $9 billion to improve the reliability and resiliency of the electric grid.
  9. $5 billion for grants to replace school buses, garbage trucks, and other heavy-duty vehicles with zero-emission vehicles.
  10. $10 billion to implement Next Generation 911 services that facilitate sending text messages, photos, and videos to emergency responders.
  11. $4 billion for the Emergency Connectivity Fund, established under Public Law 117-2, to supply students, teachers, and others with internet-connected devices.
  12. $1 billion to the Federal Trade Commission to establish a new bureau focused on data privacy and identity theft.
  13. $10 billion for efforts to strengthen and diversify critical manufacturing supply chains that affect interstate commerce.

Committee Print by Subtitle:

  1. Subtitle A: by a vote of 31-26. Committee Print
  2. Subtitle B: Approved by a vote of 31-26. Committee Print
  3. Subtitle C: Approved by a vote of 31-25. Committee Print
  4. Subtitle D: Approved by a vote of 30-27. Committee Print
  5. Subtitle E: Vote resulted in a tie. Not adopted. Committee Print
  6. Subtitle F: Approved by a vote of 31-27. Committee Print
  7. Subtitle G: Approved by a vote of 30-27. Committee Print
  8. Subtitle H: Approved by a vote of 30-27. Committee Print
  9. Subtitle I: Approved by a vote of 30-27. Committee Print
  10. Subtitle J: Approved by a vote of 31-27. Committee Print
  11. Subtitle K: Approved by a vote of 31-25. Committee Print
  12. Subtitle L: Approved by a vote of 31-26. Committee Print
  13. Subtitle M: Approved by a vote of 31-26. Committee Print
  14. Subtitle N: Approved by a vote of 31-27. Committee Print
  15. Subtitle O: Approved by a vote of 31-27. Committee Print
  16. Subtitle P: Approved by a vote of 31-27. Committee Print