Federal Update: Congress Caps Long Summer with Progress on Infrastructure, FY22

This morning, the Senate capped off an unusually long summer session with passage (50-49) of a $3.5 trillion FY22 budget resolution, on the heels of this week’s earlier vote (69-30) on the $1.2 trillion bipartisan infrastructure package, two of President Biden’s top domestic priorities. While both measures must still be considered by the House, their passage in the Senate sets up a packed congressional agenda for the fall, including a FY22 reconciliation bill (made possible by enactment of the budget resolution) to include tax, entitlement, and other mandatory spending, the FY22 funding bills, the annual Defense authorization, and legislation to address the federal debt-limit. With slim Democratic majorities in the House and Senate and significant ideological divides within the party, navigating a successful path forward will prove a difficult test for Congress and the White House.

Bipartisan Infrastructure and Partisan Reconciliation

Senate Majority Leader Chuck Schumer (D-NY, AB’71, JD’74) kept his chamber in session nearly uninterrupted for the past two weeks to complete consideration of the bipartisan infrastructure deal and the FY22 budget resolution that unlocks a procedurally privileged $3.5 trillion reconciliation bill. The bipartisan infrastructure bill invests a total of $1.2 trillion in roads, bridges, transit programs, clean water, climate resilience and adaptation, electrical grid improvements, and broadband access, of which $550 billion is new spending and remainder is redirected from other resources.

Many progressives in the House and Senate are skeptical of the bipartisan agreement on infrastructure, which falls short of the President’s initial goal of $2.2 trillion in new spending and does not include the other Democratic priorities in President’s proposed American Families Plan. They have signaled that their final support for the deal hinges on concurrent consideration of the $3.5 trillion reconciliation package teed up in this week’s Senate budget resolution. Although short on details, the budget resolution instructs committees to make sweeping investments in social safety net programs, health care, housing, climate, and green energy as well as education and research. Specifically, the instructions provide for two years of universal pre-K and two years of free community college, a substantial increase in the Pell Grant, new investment in HBCUs and other minority-serving institutions, a pathway to citizenship for Dreamers and other vulnerable groups, and funding research, including the new technology directorate at NSF, as envisioned by the authorizing legislation passed by the House and the Senate, and funding for research infrastructure. The reconciliation bill is also expected to include significant tax provisions, both to pay for the bill but also to advance the larger goals of the legislation including in higher education.

House leaders announced they will return to town briefly around August 23 to approve the budget resolution and begin the process of putting the reconciliation bill together. The resolution sets a soft target date of September 15 for committees to submit their portions of the bill. Even though the expedited reconciliation process would allow Democrats in both chambers to pass this package with a simple majority vote, reaching consensus in an evenly divided Senate and a sharply divided House will be a challenging balancing act over the coming weeks and months. Fights over the size of the package, the direction of its spending, and how it is paid for – even if only partially – will be difficult for the Democrats in both the House and Senate, particularly in the face of unified Republican opposition that will seek to exploit this debate to weaken the majority.

FY22 Appropriations

While the Senate focused on developing its bipartisan infrastructure deal, the House moved ahead with its versions of the FY22 appropriations bills and successfully moved all 12 bills out of committee, with 9 eventually passing the full House. In the Senate, appropriators used the extra time to begin their own work, with three (Agriculture, Energy-Water, and Military Construction-VA) of their bills advancing out of committee, although none of the spending bills have passed the Senate.

Without an FY22 budget resolution in place to set topline spending levels, the House deemed an overall spending limit of roughly $1.5 trillion, in line with President Biden’s budget request, and raised the spending allocation for the Labor-HHS-Education bill more than 36 percent over FY21. While all 12 subcommittees saw increases in their overall allocations, the Defense bill in the House only received a 1.4 percent proposed boost. While these figures will surely change as the House and Senate negotiate final appropriations on a bipartisan basis, they represent a significant statement of House Democratic priorities, and reflect encouraging enthusiasm for many programs important to research universities.

That said, time is short and, given these bills will require bipartisan support to pass in the Senate, it is expected that the Congress will extend the time for negotiations with a continuing resolution (CR) to fund all programs as current levels for some period. While usually routine, there are some indications that congressional leadership will use the CR to address the federal debt limit, which expired on July 31. The US Treasury has indicated provisions must be made to address and avoid default very soon. Republicans have been loath to engage on the debt limit given the rising concerns in their ranks about the deficit and concerns about the significant spending related to the pandemic and infrastructure.

Some of the highlights of the House-passed appropriations bills include a $6.5 billion overall increase for NIH, with $3 billion earmarked to create ARPA-H, a $400 increase for the maximum Pell Grant, large increases for campus-based aid and international and foreign-language education, and increases across the research enterprise. The only discouraging news among the House numbers is cuts to the DOD science and technology accounts, with an 8.6 percent proposed reduction to basic research. Full details of University priority accounts in the House-passed bills in the chart below:

Looking Ahead

The Senate is scheduled to return to work on September 13, and the House is set to return on September 20, although reports indicate both chambers are likely to cut those breaks short as the to-do list grows. With the current fiscal year ending on September 30, it is likely that Congress will enact a stopgap continuing resolution to keep the government funded as it finalizes its other agenda items.

As always, Harvard’s DC-based federal relations office will remain closely engaged in support of University priorities. If you have any questions, please feel free to reach out to Suzanne Day (suzanne_day@harvard.edu) or Kara Haas (kara_haas@harvard.edu).