Washington DC Update – Jan 21, 2022

Congress returned to Washington earlier this month to begin the second session of the 117th Congress.  While high profile political issues will dominate the media and much of the public conversation in the coming months, several substantive legislative issues – including those related to the supply chain — are also likely to receive attention.

Supply Chain Remains At the Forefront of Lawmakers’ Concerns

Supply chain issues remain top of mind among lawmakers in Washington, as Americans and U.S. businesses continue to contend with empty store shelves, shortages of basic industrial goods, and spotty availability of consumer products.  Adding to the urgency of this problem as a political issue is the growing consensus that supply chain delays are a significant contributor to 40-year high inflation rates.

On January 19th, the House Homeland Security Committee held a hearing where industry representatives told lawmakers that ports need additional screening staff to process imports.  A day earlier, a bipartisan group in the House of Representatives relaunched the Congressional Supply Chain Caucus, which seeks to raise awareness and find solutions to ongoing supply chain issues.   Also, on January 3rd the White House issued a statement onmeat and poultry supply chains in the U.S., including new steps by the Department of Justice to investigate any anticompetitive practices.  Finally, last December, the House passed the “Ocean Shipping Reform Act” (H.R. 4996) as a step toward easing supply chain challenges at US. ports.

With President Biden’s public approval numbers dropping, and congressional Democrats also losing ground politically, many expect supply chain issues could get plenty of attention in the coming year.

California Incidents Highlight Need for Strong Supply Chain Security Measures

On January 11, 2022, Secretary of Transportation Pete Buttigieg visited the Ports of Los Angeles and Long Beach where he made remarks highlighting the Biden Administration’s commitment to bolstering supply chains.  Buttigieg spoke of the recent $52 million grant for the Port of Long Beach and mentioned the $17 billion that has been committed to ports from the Bipartisan Infrastructure Law, which Biden signed into law in November.

The visit came before recent high-profile crime incidents in California, including in Los Angeles where a Union Pacific rail line was targeted by cargo thieves.  Union Pacific officials reported that rail thefts have jumped 160% since December 2020, with an average of 90 containers per day being “compromised.”  In addition, recent “smash and grab” thefts at retail establishments across the state have also received a great deal of public attention.

With senior lawmakers from California serving in both the congressional leadership and in the Biden Administration, incidents like these should provide plenty of impetuous for strong supply chain security policies in Washington.

Defense Law Directs New Research into Supply Chain Vulnerabilities

Late last month, the President signed into law the National Defense Authorization Act (NDAA), legislation that establishes policy priorities and spending levels for Pentagon and defense-related programs at the Department of Energy.  A summary of the 900+ page bill can be found here.

Among the provisions included in the massive bill was language sponsored by Senate Homeland Security and Government Affairs Committee Chairman Gary Peters (D-Michigan) and Ranking Member Rob Portman (R-Ohio) directing the Department of Homeland Security to conduct research into ways that supply chain vulnerabilities may threaten the Nation’s safety.

“Build Back Better” May Have Been Dealt A Fatal Blow

President Joe Biden and Democratic Senate leadership are publicly expressing hopes that some version of the Build Back Better (BBB) legislation will advance this year.  As originally drafted, and passed by the House, the proposal contained initiatives to expand government spending on healthcare, education, child-care, climate change and green energy.  However, moderate Democratic Senator Joe Manchin (D-West Virginia) has made clear that he will not vote for the legislation as currently drafted, all but forcing the White House and Democratic leaders back to the drawing board to craft a smaller, less costly version of the bill.  Senator Krysten Sinema (D-Arizona) has also expressed concerns.  The legislation has been drafted as a “reconciliation bill,” meaning that it can pass the Senate with a simple majority vote.  However, this would require all 50 Democratic senators to vote for the measure, plus a tiebreaking vote from Vice President Kamala Harris.  No Republicans support the measure and, without support from Democratic Senators Manchin and Sinema, the bill will not advance.

All this has left the White House scrambling to develop a version of the bill that can pass muster with both House and Senate Democrats.  Whether that can be accomplished, remains to be seen, and many feel that a sweeping “Build Back Better” bill is finished for this Congress.

ISCPO will continue to closely to monitor this situation.  Even though the BBB as a large-scale, stand-alone proposal may be on life support, individual provisions could easily be “broken out” and added to legislation that has a better chance of advancing.  Of possible interest to the supply chain protection industry, the bill includes several “green energy” and tax provisions that should be watched.

Other Issues That Could See Legislative Action

While President Biden’s “Build Back Better” legislation may be on the ropes, other issue areas could see action in this session of Congress.  While many bills will be debated and even voted on for messaging and political purposes, several measures are expected to receive serious legislative attention.  Issues that could advance in this session of Congress include:

  • Prescription Drug User Fee Reauthorization (PDUFA) – Every five years, Congress reauthorizes PDUFA to provide critical funding for the FDA’s drug approval process.  Often, this bill carries additional language related to prescription drugs and other aspects of FDA’s public health mission.
  • Fiscal Year 2023 Appropriations – Each year Congress must pass appropriations bills to provide funding for government agencies and programs.  The process starts in the Appropriations Committees in the winter of each year and tends to stretch into the later days of the calendar.  But, because these bills are needed to provide funding that keeps the government operating, they are “must-pass” pieces of legislation.
  • Defense Authorization – Each of the last 61 years, Congress has approved the National Defense Authorization Act (NDAA), legislation providing top line spending levels and policy priorities for the Pentagon.  This year should be no different with the House and Senate Armed Services Committees marking up legislation in late Spring or early Summer.
  • COVID-19 Response – COVID-19 continues to be a major healthcare problem around the globe, especially as new, more transmissible variants emerge.  It is not clear at this point whether Congress will take additional legislative action, but given the attention this issue receives in the press and from public health experts, it is possible that additional legislation could emerge to deal with testing, prevention, treatment and staffing shortages.  Economic relief for specific industries could also be a priority.

Appropriations Deadlines Looming

The government is operating under a “continuing resolution” (CR) which extends last year’s spending levels through February 18th.  Before then, Congress and White House will be working to negotiate spending for the rest of the fiscal year — which began on October 1, 2021 and ends September 30, 2022.   While there has been some conversation about extending the CR to last through the entire fiscal year, neither party is excited by that prospect, hoping instead to enact legislation to fully fund their priorities and deliver the the “congressionally directed spending” contained in the bills.  Once the Fiscal Year 2022 spending agreement is finalized, Congress will begin the process of crafting the FY 2023 appropriations bills.  Supply chain leaders may wish to advocate for priority spending in that process.

Biden Approval Ratings Continue to Slide

The latest presidential approval numbers offer more bad news for President Joe Biden, with 52.4% of Americans disapproving and only 41.7% approving of the job he is doing.  This is notable, since the single biggest factor determining which party wins the majority in congressional midterm elections is the President’s job approval.  In addition, a recent Gallup Poll survey indicates that recent political preferences have shifted from a 9-point Democratic advantage to a 5-point GOP edge.  Mid-term elections are upcoming on November 8th, and with both the House and Senate narrowly controlled by Democrats, political observers believe it is likely that Republicans will take control of the House, and distinctly possible they could gain a majority in the Senate.

Congressional Calendar Offers Opportunities for Direct Advocacy

The House and Senate released their legislative calendars for 2022, including the dates for “district work periods”.  These times present excellent opportunities for constituents to meet with their elected lawmakers from Washington to discuss key issues of interest.  Other opportunities for constituent involvement include attending town hall meetings, organizing political events, or volunteering for campaigns.  If you are interested in learning more about opportunities to communicate with or on behalf of your elected officials, please let us know.  We will be happy to work with you on this important aspect of your advocacy efforts.

— For Questions, please contact Paul T. Kelly, President, Capitol Advocacy & Government Affairs, LLC., at pkelly@capitol-advocacy.com.