Will Afghanistan Debacle Impact Timing and Details of Key Congressional Topics?

House returns to packed agenda which will not play out until October or later

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August 21, 2021 07:50 PM

House returns to packed agenda which will not play out until October or later

Washington Focus

The White House hopes the current political fallout over Afghanistan will be temporary. But some veteran observers aren’t so sure. Foreign policy rarely keeps voters’ focus, but President Biden will face plenty of congressional and media scrutiny, especially if the current situation gets worse and costs American lives.

Bottom line: While getting out of Afghanistan is popular, Biden’s handling of the issue is not, among both Republicans, Democrats and the general public. It is too soon to say whether the Afghanistan debacle will impact upcoming congressional votes on top issues for the White House and congressional Democrats, including the timing of votes ahead. More on those issues in the next item.

The House of Representatives returns Monday to Washington. House Speaker Nancy Pelosi (D-Calif.) wants to hold a procedural vote as soon as Monday to move forward with a few Democratic priorities: the $1 trillion bipartisan infrastructure legislation passed by the Senate, the $3.5 trillion Democratic plan to expand the social safety net, and a voting rights bill. She then wants to join the Senate in passing a budget resolution, the first step toward Democrats approving their massive spending plan without a Republican vote. Leadership’s goal in combining the three into one rule was to ensure that centrist Democrats wouldn’t block that too.

Nine House Democrats have pushed for final passage of the bipartisan infrastructure bill as they argue a later vote would delay projects to renew American transportation, broadband and infrastructure. The nine Democrats: Reps. Josh Gottheimer of New Jersey, Carolyn Bourdeaux of Georgia, Jared Golden of Maine, Ed Case of Hawaii, Jim Costa of California, Kurt Schrader of Oregon and Texans Filemon Vela, Henry Cuellar and Vicente Gonzalez. At least two of nine moderates, Vela and Golden, told CQ Roll Call they are planning to vote against the rule. Others said they’re considering it.

Another unknown is whenever the House deals with the bipartisan infrastructure package, will Democrats alter the current language enough to make enough Senate Republicans flip their prior support of the measure once it returns to the Senate?

The Democrats’ dilemma: They hold a narrow 220-212 majority in the House. Full attendance currently requires a majority of 217 votes to approve a measure, meaning Democrats can lose no more than three members on party-line votes. Budgets are partisan blueprints and rules are set by the majority, so they can’t count on any Republican support for either. Members who may oppose the budget could vote “present” or being absent entirely. For every two members who miss a vote or opt to vote “present” instead of the usual “yea” or “nay,” the threshold needed to pass a measure is lowered by one. But all nine centrist voting “present” wouldn’t be enough to get the budget over the finish line. Under that scenario, Democrats would be left one vote short. As for Republicans, “We are encouraging everyone to be in attendance and voting,” House Republican Whip Steve Scalise’s (R-La.) spokeswoman Lauren Fine said.

The go-it-alone Democratic spending plan is not expected to get through the Senate for months, which would put off the final passage of the bipartisan infrastructure bill, if Pelosi keeps her current plans. To keep her far-left members on board with the smaller infrastructure plan and centrists in line with trillions more in new spending, Pelosi has consistently said she will not take up either economic plan until the Senate passes both of them. Opposition from within her caucus has threatened to derail the speaker’s plans.

The White House endorsed Pelosi’s strategy to hold the procedural vote to advance the bipartisan infrastructure, social spending and voting rights plans, then pass the budget resolution. In a letter to her caucus, she said delays in passing the measure would jeopardize the party’s policy goals. “When the House returns on August 23rd, it is essential that we pass the budget resolution so that we can move forward united and determined to realize President Biden’s transformative vision and deliver historic progress,” she wrote.

Timeline: Wait until the fall. Under Pelosi’s current plan, the bipartisan infrastructure bill would await a final vote in the House — and then Biden’s signature — while both chambers of Congress write the $3.5 trillion spending plan. Senate Majority Leader Chuck Schumer (D-N.Y.) gave committees a Sept. 15 target to finish their portions of the legislation. The Budget Committee cannot assemble them for floor action until the budget is adopted. The proposal is widely expected to get scaled back as Senate Democratic centrists including Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have criticized the $3.5 trillion price tag. One Democratic vote against the proposal would defeat it in the Senate, which is split 50-50 by party.

Once it recesses again, the House is not scheduled to return to legislative session until Sept. 20, though leaders always have the option of calling members back or extending this week’s session if the budget is not adopted. Congress must also pass a government funding bill for fiscal year 2022, which begins Oct. 1. It also must deal with the federal government’s borrowing limit.

Economic Reports for the Week

The Federal Reserve Bank of Kansas City’s annual Economic Policy Symposium, usually held in Jackson Hole, Wyo., kicks off virtually on Friday (link). The gathering’s theme this year is “Macroeconomic Policy in an Uneven Economy.” It runs through next Saturday. The central bank hasn’t released many details about Fed Chairman Jerome Powell’s speech, but it comes after minutes from the last Fed meeting revealed hints that stimulus measures will be throttled back later this year. However, signs that the coronavirus delta variant is slowing down economic activity as well as persistent pockets of high inflation could complicate Fed officials’ timelines.

Economic data out this week include IHS Markit’s Manufacturing and Services Purchasing Managers’ Indexes for August on Monday. Both measures of economic activity are forecast to hold steady from July’s levels. On Wednesday, the Census Bureau releases the July durable goods report, which is seen as a decent proxy for business investment. It’s expected to have risen 0.8% last month. On Friday, the Bureau of Economic Analysis releases the Personal Income and Outlays report for July on Friday. The report also includes the PCE Price Index, which Fed officials prefer to measure inflation. That’s expected to have jumped 4.2% year over year.

Monday, Aug. 23

National Association of Realtors reports existing-home sales for July. Consensus estimate is for a seasonally adjusted annual rate of 5.83 million homes sold, about even with the June figure. Existing-home sales have slowed from the beginning of the year as prices continue to soar. In June, the median home price was a record $363,300, up 23.4% year over year.
IHS Markit releases both its Manufacturing Purchasing Managers’ Index and Services PMI for August. Economists forecast a 63.1 reading for the Manufacturing PMI and a 59.8 reading for the Services PMI. Both figures would be roughly even with the July data.

Tuesday, Aug. 24

Census Bureau reports new single-family home sales for July. Expectations are for a seasonally adjusted annual rate of 700,000 new homes sold, a 3.6% month-over-month rise from June. Much like existing-home sales, new-home sales are off sharply from earlier this year.

Wednesday, Aug. 25

MBA Mortgage Applications
Census Bureau releases the durable goods report for July. The consensus call is for a 0.8% monthly gain in new orders for manufactured durable goods, to $260 billion. Excluding transportation, new orders are expected to rise 0.9%, after increasing 0.5% in June.

Thursday, Aug. 26

Jobless Claims
Federal Reserve Bank of Kansas City hosts its annual Economic Policy Symposium in Jackson Hole, Wyo. This year’s theme is “Macroeconomic Policy in an Uneven Economy.” The confab runs through Aug. 28.
Bureau of Economic Analysis (BEA) reports its second estimate for second-quarter gross domestic product. Economists forecast a 6.5% seasonally adjusted annual rate of growth, unchanged from the BEA’s advance estimate from late July.
Fed Balance Sheet
Money Supply

Friday, Aug. 27

BEA releases the Personal Income and Outlays report for July. Consensus estimates are for both personal income and spending to rise 0.5% month over month. This compares with increases of 0.1% and 1%, respectively, in June. The PCE Price Index, the Federal Reserve’s favored inflation gauge, is seen jumping 4.2% year over year, after a 4.0% rise in June.

Key USDA & international Ag & Energy Reports and Events

Now that the Pro Farmer Crop Tour is completed, focus turns to crop development/weather and USDA’s Sept. 10 Crop Production report. Wednesday brings the Food Price Outlook report from USDA.

Monday, Aug. 23

Ag reports and events:

Export Inspections
Crop Progress
Chickens and Eggs
Cold Storage
Monthly MARS bulletin on crop conditions in Europe