August is not a typically busy month for federal policymakers. However, this August has laid the groundwork for potentially significant and generational legislative victories for President Biden and congressional Democrats. Just this week, the Senate passed a bipartisan $1.2 trillion infrastructure investment package in a strong vote of 69-30. Following that effort, Senate Democrats moved to pass a $3.5 trillion budget resolution that sets instructions for a broader package of social, health, education, tax, and climate priorities. The basis for these efforts was proposed in President Biden’s American Jobs and Families Plans.
President Biden has repeatedly said he would invest in the U.S. economy and prove that Democrats and Republicans could still work together. The infrastructure investment package is the prime representation of those promises. The broader spending package contains expansive federal spending priorities that Democrats have sought for years. While business taxes were spared during the infrastructure debate, corporate tax changes and other fees are ‘on the table’ to pay for the package. At the center of each of these debates is the dynamic within the Democrat Party between moderates and progressives. Moderates have prioritized passage of the infrastructure bill, while progressives have demanded passage of the budget reconciliation package before any infrastructure spending.
These dynamics now shift the spotlight to House Speaker Nancy Pelosi – for months, she has sided with progressives in the party and steadfastly said she would not hold a vote on the infrastructure package until the Senate passes the reconciliation package. House moderates, however, could potentially impact that strategy as the House comes back into session during the week of August 23rd to consider the budget resolution (which sets the spending package instructions) and threaten to hold out votes for consideration of the infrastructure investment deal. There could be a set of House Republicans willing to vote for an infrastructure package, but no Republicans will vote for the budget resolution/reconciliation package.
Similar dynamics exist in the Senate related to the budget reconciliation package – any one Senator could impact the process, but Senators Manchin (D-WV) and Sinema (D-AZ) have already expressed concern about the funding levels and tax policy changes/increases being considered.
Combining all of these elements together could make for an explosive September, especially when the expiration of the debt limit gets added to the discussion.
HFA has been engaged with policymakers in Congress and the Administration throughout consideration of the infrastructure package given its potential impact to supply chain issues. Investing in roads and bridges will make the U.S. more competitive and deliveries more predictable. Part of it climbs back up the supply chain to port infrastructure. The bipartisan bill does contain about $40 billion for port investment which could help alleviate supply chain bottlenecks over time.
In recent days, Congressmen John Garamendi (D-3rd/CA) and Dusty Johnson (R-AL/SD) introduced the Ocean Shipping Reform Act to address the ongoing supply chain issues further. This legislation focuses on the Federal Maritime Commission by providing more tools to address ocean shipping concerns. It also requires ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry. It would then shift the burden of proof regarding the reasonableness of “detention or demurrage” charges from the invoiced party (retailer) to the ocean carrier or marine terminal operator.
HFA is a longtime supporter of infrastructure investment as long as it was done without penalizing furniture retailers through corporate tax rate increases. The Senate has accomplished that with its strong bipartisan product. Allowing those investments to confront ongoing supply chain issues would be a positive development for our industry and the U.S. economy as a whole.