Washington is bracing for a flurry of activity starting around Thursday, May 27, when the Biden Administration is set to finally deliver their full fiscal year (FY) 2022 federal funding request (also simply called the White House budget, or “the budget”) to Congress, nearly five months later than usual. The delayed request has forced a legislative pile-up, with Congress putting off planned action on infrastructure, tax, defense, and more into the summer. When the dam finally breaks later this month, however, expect Democrats to rush to advance a dizzying array of priorities before mandatory deadlines and a feared loss of power in next year’s midterm elections undercut their agenda.
The White House in its annual budget request outlines funding requests for the coming FY 2022, which begins on October 1, 2021. The budget includes proposed funding and policy for each executive branch plus revenue measures, such as proposed changes to federal taxes and fees. The White House’s request is non-binding, but Congress’ budget and appropriations-focused committees can use the request to write the laws authorizing and funding government operations.
In a typical year, the White House delivers its budget request to Congress in February, usually around the President’s annual State of the Union address. In the first year of a new Administration, however, incoming White House staff need an average extra 83 days to craft their own funding priorities. This was especially true in the transition from the Trump Administration, who sought major cuts to overall federal spending and reportedly refused to cooperate with their successors, to the Biden one favoring trillions in stimulus spending. The Biden team tried to deal with the delay by releasing a 58-page “skinny budget” on April 9 summarizing major Administration priorities, but this document lacked vital details. Slow progress on the budget hindered congressional leaders who had hoped to wrap major priorities, such as a new infrastructure bill, by this spring.
The Biden White House budget expected on May 27 will be a doorstopper of several thousand pages, including not just annual agency funding requests, but also the Treasury's “Green Book” revenue publication fleshing out the Administration’s proposal to raise taxes on corporations and select high-income investors while incentivizing manufacturing onshoring, plus essential details of the President’s previously-announced American Jobs Plan and American Families Plan infrastructure, climate, and social safety net investments.
On delivery of the budget to the Hill, expect congressional committees and leadership to move immediately on major priorities.
- The House and Senate Budget Committees use the White House request to help write an annual budget resolution setting funding caps for the coming fiscal year. The budget resolution can also be a vehicle for “reconciliation,” a complex procedure for enacting major spending adjustments with just a simple majority in each chamber. Congress already used reconciliation earlier this year to pass the American Rescue Plan, and may do so again to pass another stimulus and infrastructure package. Without a full White House budget request, the House Budget Committee has put off public work on a new budget resolution to at least June.
- The House and Senate Appropriations Committees abide by the funding caps set by the Budget Committees and consider the White House’s funding requests in writing their annual bills to fund federal operations before the new fiscal year starts on October 1. House Appropriations Committee Chairwoman Rosa DeLauro (D-CT), thanks to the delays, has an ambitious plan to squeeze committee work on 12 separate federal funding bills in a single month in June. The Senate Appropriations Committee, likewise, faces an even longer timeline. If appropriators can’t agree on federal funding for the coming fiscal year by October 1, a government-wide shutdown could result.
- Congressional committees developing a much-hyped infrastructure and climate proposal to update federal transportation programs have also put off major work waiting for the Biden budget. Congressional committees designing new federal highways, transit, and infrastructure policies will begin public markups of their proposals in late May. The House Transportation and Infrastructure Committee plans a blockbuster markup in late May or early June, with the goal of moving the bill to full House consideration in July. Likewise, Senate Environment and Public Works Committee Chairman Tom Carper (D-DE) has said his committee is putting the “finishing touches” on their own $300 billion proposal for markup soon after the budget’s release. Carper said his committee’s bill would not only consider roads and bridges, but also renewable fuels like electricity and hydrogen in transportation. Still elsewhere, the House Energy and Commerce Committee has developed the CLEAN Energy Act, their opening offer for a new climate infrastructure plan that aligns closely with the Biden agenda. Among other provisions, the bill would mandate a 50% emissions cut by 2030 and net-zero emissions by 2050; require all retail electricity suppliers obtain 100% of their electricity from non-polluting sources by 2035; and require public companies to disclose information about climate-related risks.
- Taxation-focused committees the House Ways and Means Committee and Senate Finance Committee are waiting for the Biden budget and “Green Book” in designing revenue measures to pay for trillions in infrastructure investment. Leaders here are trying to cope with a delayed budget by breaking a complex proposal into several parts: Senate Finance Chairman Ron Wyden (D-OR), for example, has announced his committee will in late May mark up his Clean Energy for America Act, consolidating dozens of clean energy and transportation tax breaks into “technology-neutral” incentives, for future inclusion in an infrastructure proposal. House Ways and Means Committee members, however, have coalesced around the GREEN Act, which takes a different approach to a similar goal by expanding current “green” tax incentives. A new Biden budget could help at-odds leaders settle on a final approach to climate-focused tax policy.
- The House and Senate Armed Services Committees use the White House’s funding requests plus funding caps set by the Budget Committees to design the annual must-pass National Defense Authorization Act (NDAA) setting national defense policy like troop pay, weapons acquisition, and warfighting funding. The Armed Services Committees usually have a rigid schedule of introducing their draft NDAA in April and May, but the late White House budget has delayed this process into at least June and July, drawing rare public complaints from HASC and SASC leaders.
With only weeks to go until the Biden budget kicks off a tidal wave of action on Capitol Hill, advocates at Michael Best Strategies are working hard to integrate our clients’ priorities into both the Biden Administration’s and Congress’ plans for the spring and summer. For more on any of these priorities, or to recruit the Michael Best Strategies team, contact us.