Washington Weekly - May 30

This Week:

The Senate is in session and the House is in recess (but could return for a debt limit vote)

Federal:

We Have a Deal: Over the weekend, House Republicans and the Biden Administration struck a deal to raise the debt limit and reign in discretionary spending for two years.  The deal includes a suspension of the debt ceiling until January 1, 2025, enact different caps for defense and non-defense spending, provide additional funding for the Veterans’ Affairs Toxic Exposure Fund, allow adjustments to spending caps to give flexibility for disaster relief spending, and give additional dollars to efficiency efforts within the Department of Commerce.   At the same time, the agreement would retract unspent COVID funds, take back $1.4 billion (of $80 billion) from the IRS that was provided in the Inflation Reduction Act, reduce the 2023 IRS staffing request, and redirect up to $20 billion in IRS funding to non-defense spending over the next two years.  Sixty days after June 30^th, waivers for federal student loan repayment programs will end. 

The Vote: As Speaker McCarthy previously committed to, House Republicans were given 72 hours to review the bill (H.R. 3746) and as of this writing, a floor vote is planned for Wednesday, May 31^st.  Several members of the House Freedom Caucus urged their Republican colleagues to vote against the bill at a news conference on Tuesday.  Rep. Chip Roy (R-TX) who is also a member of the House Rules Committee indicated that the bill may not make it to the floor, due to Republican members of that committee opposing discharge of the bill.  In the end, the Rules Committee passed the bill out 7-6, with two Republicans opposing.  House Democrats appear to support the bill and Senate Majority Leader Mitch McConnell (R-KY) also said he was in favor of the deal. 

New X-Date:  After previously targeting June 1^st as the day the federal government would run out of money, Treasury Secretary Janet Yellen modified her forecast to make June 5^th the new ‘X-Date.’  This provides some additional time for Congress to deal with passage. 

ASA Advocacy:

199A: ASA collaborated with its coalition partners in a letter to Sen. Steve Daines (R-MT) in supporting the Main Street Tax Certainty Act of 2023.  This legislation would make the 199A tax deductions for small to medium-sized businesses permanent. This is an ongoing issue that ASA has championed for and with our members, being joined by 145 other organizations on this letter. 

Politics:

It’s Official:  Last week, Gov. Ron DeSantis (R-FL) announced his campaign for President.  While much of the media focus has been on glitches during his announcement on Twitter, the real campaign has begun with DeSantis travelling across the country and in key primary states.  He is largely seen by many to be the strongest challenger to former President Donald Trump in the GOP Primary.  As a result, he has received the support of many major Republican contributors who see Gov. DeSantis as the best chance to defeat President Biden.   Currently, polling shows Donald Trump with massive leads over his Republican opponents.  With the Iowa Caucuses taking place on January 22^nd, there is a long way to go to close the gap. 

President Biden Job Approval (RCP Average): 42% Approve – 56% Disapprove. The House currently has a composition of 222 Republicans to 213 Democrats. The Senate is comprised of 51 Democrats and 49 Republicans. Rep. David Cicilline (D-RI) will retire from the House on June 1 (RI-1 Primary: 9/5/2023; General 11/7/2023), providing House Republicans a 222-212 partisan advantage.