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ADVOCACY & POLICY UPDATE - December 13th, 2021

Congress to Raise Debt Ceiling; Moves Forward On Build Back Better Passage

Washington Update

Build Back Better Act

This week Congress returned with Democrats’ sights set on passage of President Biden’s sweeping social spending package, the Build Back Better Act. The $1.7 trillion bill contains paid family and medical leave, child care, pro-union provisions, and more. Last week, Democrats finished meeting with the Senate parliamentarian, who decides which parts of the bill are eligible for budget reconciliation under the Byrd rule. This week, bipartisan meetings with the parliamentarian will begin. On Saturday, December 11, the Senate Health, Education, Labor, and Pensions (HELP) and Finance Committees released the text of their updated portions of the spending bill, which contained only minor changes to the language the House passed – such as making it clearer that faith-based child care providers are eligible for funding. Some provisions in the legislation are still at risk of being cut, such as paid family and medical leave, which faces opposition from Senator Joe Manchin (WV), and union-related provisions like language that would empower the National Labor Relations Board to levy fines on employers who violated labor law. Also vulnerable is the portion of the bill that expands federal aid to some undocumented students who are covered by the Deferred Action for Childhood Arrivals (DACA) program as well as excluding for-profit college students from the Pell grant increase. The legislation proposes restricting a $550 boost to the maximum Pell grant award to students attending public and non-profit colleges, excluding those at for-profit schools. Progressives want to preserve that provision but several House Democrats oppose the measure.

Another risk to passage of the legislation as is – soaring inflation. On Friday, December 10, the Department of Labor revealed a 39-year high in price increases and the Congressional Budget Office (CBO) released a Republican-requested report estimating the impact of the bill if its programs were all made permanent. The consumer price index jumped 6.8% from a year earlier, up from 6.2%. Republicans are using high inflation as a campaign issue ahead of next year’s midterm elections. While economists predict inflation will ease substantially next year as supply bottlenecks ease, the political fallout could cost President Biden support for the legislation. The CBO report estimates that the version of the BBB legislation without sunsets would "increase the deficit by $3 trillion over 2022 to 2031." The analysis assumes that any extension wouldn't be paid for. The current bill does not include such extensions to the provisions. Republicans want to show that the bill costs more than Democrats say it does, but Democrats argue many provisions sunset and the true cost is not what Republicans claim through the report.

Click here to access the CBO report.

Click here to access the Senate HELP Committee’s updated text of the bill.

Debt Ceiling

On Tuesday, December 7, after weeks of partisan standoff, the House passed legislation in a vote of 222-212 that would allow Democrats to unilaterally raise the nation’s debt limit and avert a disastrous default. On Thursday, December 9, in a vote of 59-35, the Senate passed the bill, which gives Democrats the ability to raise the debt ceiling in a simple-majority vote, with support from 10 Republicans. Senate Minority Leader Mitch McConnell (KY) and several other Republicans agreed to allow the chamber to raise the debt ceiling by simple majority. Once President Biden signs the legislation, both chambers will vote for separate legislation that actually increases the debt limit.

Senate Confirmation

On Wednesday, December 8, the Senate confirmed Michael Smith as the Chief Executive Officer (CEO) of AmeriCorps, the federal agency for national service and volunteering. AmeriCorps, formerly the Corporation for National and Community Service (CNCS), mobilizes Americans to tackle the country’s most pressing challenges through service.

Initial Jobless Claims

In the week ending December 4, the advance figure for seasonally adjusted initial claims was 184,000, a decrease of 43,000 from the previous week's revised level. This is the lowest level for initial claims since September 6, 1969, when it was 182,000. The previous week's level was revised up by 5,000 from 222,000 to 227,000. The 4-week moving average was 218,750, a decrease of 21,250 from the previous week's revised average. This is the lowest level for this average since March 7, 2020, when it was 215,250. The previous week's average was revised up by 1,250 from 238,750 to 240,000. The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending November 27, an increase of 0.1 percentage point from the previous week's unrevised rate.

Click here to access the full report.

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