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Washington Weekly Update 12-18-23

Situational Awareness

The Senate returns to Capitol Hill today for a roll call vote on Martin O’Malley’s nomination as Commissioner of the Social Security Administration. This past weekend, lawmakers continued negotiations on finalizing a framework agreement on U.S. border enforcement policy reform in exchange for new aid to Ukraine. Last week, the Biden administration intervened in Senate talks with their own offer, days before lawmakers were intended to fly home for the December recess. The White House proposal includes giving the current and any future administration an additional expulsion authority under “Section 42” to respond to surges of crossings along the U.S.-Mexico border. Speaker of the House Mike Johnson (R-La.) criticized the Biden administration for its late entry in the negotiations and sent the House home for the December recess. If Senate negotiators can produce a framework agreement at the beginning of next week, it could provide the appropriate momentum for lawmakers to draft bill text and pass a supplemental package upon their return to D.C. from the winter recess. 

Members’ time management skills will be further put to the test upon landing as there are only a total of eight legislative days to finalize top spending numbers for military and Veterans Administration (VA) programs, agriculture and food agencies, and the Departments of Transportation and Housing and Urban Development. GOP House leaders have rejected the notion of passing any additional short-term spending measures. If lawmakers are unable to complete their work on the four appropriations bills set to expire Jan. 19, it could force Congress to adopt a year-long continuing resolution at current funding levels. This scenario would be detrimental for entities awaiting money from federal grants and Community Project Funding requests. Leaders in both chambers must also consider the cost of attaching controversial policy riders to any of the 12 appropriations bills that could divide lawmakers’ support and risk final passage of the legislation. 

Lawmakers Introduce Legislation to Remove PGA Tax Exempt Status

Two lawmakers on the House Ways and Means Committee introduced bipartisan legislation that would make sports leagues with annual gross receipts exceeding $1 billion during any of the preceding five tax years ineligible for tax exempt status as a business league under Internal Revenue Code Section 501(c)(6). According to the members’ official press release, the proposed merger between the PGA and LIV Golf was the primary motivation for introducing the bill. The merger came under the scrutiny of the Senate Finance Committee during a public hearing. Similar legislation was introduced in the Senate in July. 

Talks on Tax Package Continue

Reporting by Axios found that top tax policy writers in Congress, most notably Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Way and Means Chairman Jason Smith (R-Mont.) are working on a bipartisan tax package with an eye on passage in early January. Lawmakers are negotiating a revival of the expired Child Tax Credit in exchange for business tax breaks, including deductibility on R&D and “short-term” investments. Many individual provisions of the 2017 tax package are set to expire in 2025, raising the stake for members of Congress to secure any degree of progress on tax issues. 

House Transportation and Infrastructure Hearing on WRDA

Last week, the House Transportation and Infrastructure Subcommittee on Water Resources held a hearing to examine stakeholder priorities for the Water Resources Development Act of 2024 (WRDA). Witnesses testified on the importance of U.S. Army Corps of Engineers’ (Corps) civil works programs, such as coastal erosion and flooding mitigation efforts. During the hearing, President of the Lake Carriers’ Association Jim Weakley suggested that the Corps could broaden dredging windows to bolster efficiency for recreation and commerce-related projects. One member—Rep. John Duarte (R-Calif.)—raised concerns with the Corps’ efforts to revise its definition of Waters of the United States (WOTUS). In response to Rep. Calvert’s comments, Executive Director of Coalition to Protect the Missouri River Shane Kinne suggested that lawmakers direct the Corps to shift focus away from wetlands and dedicate its resources to “priority projects.”

Congressional Western Caucus Introduces ESA Flexibility Act

Congressional Western Caucus members, led by Chair Dan Newhouse (R-Wash.) and Vice Chair Pete Stauber (R-Minn.), re-introduced the ESA Flexibility Act. This legislation would expand Section 4(d) of the Endangered Species Act (ESA), which directs the U.S. Fish and Wildlife Service to issue regulations deemed “necessary and advisable to provide for the conservation of” threatened species. In addition, 4(d) rules streamline ESA compliance for actions that result in low levels of risk but do not threaten a species’ continued existence. In their official press release, the Western Caucus explains how the legislation would allow for more effective, fit-for-purpose management of endangered species while still supporting responsible land use and management. This year, the House has passed a number of disapproval resolutions for Fish and Wildlife Service rules related to expanding protections for several species, such as the northern long-eared bat and the lesser prairie chicken. 

Biden Administration Announces New Conservation Efforts for Colorado River

The Biden administration has announced new agreements with several California water agencies to conserve up to 643,000 acre-feet of water in Lake Mead through 2025. The agreements include approximately $295 million in new investments from President Biden’s Investing in America agenda, which funds projects for water conservation, water efficiency and protection of resources in the Colorado River System through the Inflation Reduction Act. The agreements build on previous commitments by California, Arizona and Nevada to reduce water use by 3 million acre-feet over three years.