Congressional Update

The fiscal year ends in 22 days, and, at this point, there has been no discussion about any sort of Continuing Resolution (CR) to address the myriad federal authorizations that will terminate at midnight on September 30. The Senate returned September 5; the House returns on September 12. As a result, Congress is only going to have 12 in-session days to draft and avert a government shut down on October 1. Still, with Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Kevin McCarthy (R-CA) agreeing that a CR is necessary, a “clean” CR is not a sure thing, as the House Republican caucus and the Speaker have a few lawmakers that will make this process more difficult for the Speaker. This group, the House Freedom Caucus, has already indicated they would not be supportive of a “clean” CR, instead desiring significant cuts and policy riders that Senate Democrats will not support in a million years.

As such, it is our belief that a government shut down gets more likely by the day. In fact, some lawmakers have indicated they don’t think the FY 2024 appropriations process will be completed at all, given the automatic Continuing Resolution that was part of President Biden and Speaker McCarthy’s budget deal, passed earlier this year. That CR would automatically fund the government at 99 percent of current funding levels for all government programs if all 12 appropriations bills are not signed into law by January 1, 2024.

Senate Majority Leader Schumer has pointed out that each of his chamber’s appropriations bills have been approved by committee on a bipartisan basis and that he will bring them to the Senate floor this month. This is in stark contrast to the legislation in the House, where significant spending cuts and policy riders driven largely by far-right members of the House Republican caucus have made each bill fiercely partisan. In fact, some are so partisan, they cannot necessarily secure enough votes from within the Republican caucus to pass. As a result, to date, the House has passed only one of its 12 spending bills – Military Construction and Veterans Affairs. One area where there is agreement, however, is in eliminating funding for the East Coast’s gasoline reserve, which holds 1 million gallons of fuel in case of an emergency, like Hurricane Sandy, which is what initially spurred the program. Since language to repeal this program was included by the House and Senate, whenever FY 2024 appropriations are ultimately resolved, it is likely this provision will become law. EMA is opposing this change and arguing for additional funding for the Northeast Home Heating Oil Reserve’s (NEHHOR) storage capacity from one million to two million barrels. Both of these emergency reserves were created to buy time for industry to respond to supply disruptions which fuel state and local governments, hospitals and first responders after disaster strikes.

Earlier this month, the House Energy and Commerce Committee sent a letter to Ford regarding its partnership with Contemporary Amperex Technology Co., a Chinese-owned manufacturer with which it intends to invest in a Michigan-based battery plant for its EV production. The committee is interested to “learn more about whether this partnership, and others like it, will potentially exacerbate our reliance on China.” They noted further that “[s]hould China gain control of domestic electric vehicle production, the United States would be exposed to serious national security risks at a time of escalating geopolitical tensions.”

Finally, while Congress is still grinding back to capacity before a very busy September, the White House is still quite active, with the Administration announcing yesterday that it would block drilling in 10.6 million acres of land in Alaska – about the size of Switzerland. This includes canceling many contracts approved by the Trump Administration.

The House returns to action this week, and with that, we expect to get a clearer picture of what may (or may not) be feasibly accomplished this fall. Regardless, we look forward to keeping you updated as we learn more.