January 2024
## Federal Government Relations Update
### Congress and the Administration
**Government Funding -- Avoiding a Shutdown?**Earlier this month, House Speaker Mike Johnson and Senate Majority Leader Chuck Schumer reached agreement on an overall spending level of $1.59 trillion in fiscal year 2024, reflecting the bipartisan budget agreed to last year between President Biden and then-Speaker Kevin McCarthy. To give Congress more time to pass full year appropriations bills within the newly negotiated framework, Congress then approved, and President Biden signed, a short-term government funding extension into March to avert a government shutdown. The measure provides two new deadlines, March 1 and March 8, for Congress to pass full year appropriations bills. Despite the extra time, the likelihood of Congress being able to meet those deadlines, particularly with House Republicans split on many issues, is suspect at best.
Border Security and A National Security Supplemental Package
In the meantime, a national security supplemental aid package – i.e., continued support for Ukraine, Israel, and other priorities – is being held up, primarily by House Republicans demanding passage first of a border security bill. A bipartisan group of Senators continues to work on such a compromise bill, although it appears Houe Freedom Caucus members and other hard right House Republicans are backing away from whatever compromise border security measures are negotiated.
Tax Bill
One issue Congress may be able to agree upon is a bipartisan tax bill being negotiated between Jason Smith (R-MO), Chairman of the House Ways and Means Committee, and Ron Wyden (D-OR), Chairman of the Senate Finance Committee. The measure would extend expiring business tax breaks enacted as part of the 2017 tax cuts in exchange for extending the Child Tax Credit. The business tax provisions restore business tax deductions for research and development expenses and capital expenditures for plant and equipment. The Child Tax Credit provisions expand the child tax credit and boost the low-income housing tax credit. The changes, if enacted, would apply to 2023 taxes. Despite bipartisan support, passage of the measure is not guaranteed. There is vocal opposition from Republicans who oppose the Child Tax Credit provisions and from Democrats who don’t think the provisions go far enough.
Department of Labor
President Biden once again nominated Acting Secretary Julie Su to be the Secretary of Labor. Last year her nomination was unable to muster enough support for it to be brought up for a vote on the Senate floor.
Election Year Politics
This year is a Presidential election year where both parties look at any Congressional issue through the lens of Presidential election politics. Democrats will look hard for wins to provide Biden and Republicans will try equally hard to make sure Biden can’t claim a win on anything they do. This makes it doubly difficult to pass substantive legislation. Political pundits are already claiming the general election has begun with Trump the presumptive Republican nominee and Biden the Democratic nominee. With that as background, other than the issues outlined above, it will be very difficult for both the Democratic controlled Senate and the Republican controlled House to agree on significant substantive legislation this year.