Legislative Analysis

Mehlman Consulting’s Crystal Ball: What to Expect on the Hill in 2022

Will Congress ever officially go out for the year this week? Next? Who knows?!?! But what we do know is this: 2022 will start even if 2021 never ends. And if legislating hasn’t proven complicated enough this year, it is sure to be made even more complicated by the political implications of the upcoming midterm elections (h/t Sabato’s Crystal Ball for title inspiration). Yes, 2022 is sure to be a chaotic year.

While everyone is wrapping up end of year reports (and let’s be honest, is still in town to hit the D.C. holiday party circuit after a year hiatus) we wanted to give you our predictions on what to expect on Capitol Hill next month.  So, go ahead! Indulge in too much eggnog and champagne this holiday season. We’ve got you covered so you can hit the ground running on January 3^rd!

Policy & Legislation

Overview

Here’s the deal: While conventional wisdom says that election year gridlock will make it less likely for Congress to move on (capital M) Major pieces of legislation in 2022, there’s still MUCH for Congress to accomplish in the New Year and lawmakers will be anxious to score more bipartisan wins (in addition to the infrastructure deal) before November. FUN FACT: Since 1947, Congress on average has consistently passed more legislation in election years than in off years. Another fun fact? The Civil Rights Act, Tax Reform Act of 1986, American Disabilities Act, Welfare Reform, and the Help America Vote Act, all passed with bipartisan support in election years.

In addition to advancing ‘must pass’ legislation in 2022 (more on that below), we expect Congress to also focus on oversight of implementation of the major pieces that managed to squeeze by this year, a.k.a. American Rescue Plan, Infrastructure Bill, and the Build Back Better Act (assuming it passes at some point, which we do – more likely in Q1 with an outside chance of the end of this month).

• Democrats are likely to push partisan issues to define the midterms (think voting rights, abortion rights, guns, etc.).
• At the same time, House Republicans can be expected to formulate their “policy agenda” – which is intended more as a November sales job and a framework upon which they would govern if they take back the House. On this front, expect the House Republican Task Forces to pick up steam in January and February and start producing public positions late-winter or early-spring. Senate Republicans, on the other hand, are not expected to release any policy agenda but will hold steady on their attacks of the Biden administration and Senate Democrats.

2022 Legislative Must-Do’s: Times Ticking on These Key Initiatives

Despite lawmakers’ instinct to play ostrich in election years, Congress still must find a way to pass several key initiatives. And, in addition to “must pass” items, there are dozens of others that may get traction. We note some of the more significant ones below. Make sure to ask Santa for a new desk chair because 2022 is shaping up to be quite the matchup.

• Bringing Home the Bacon (FY22 Appropriations): Congress must wrap-up work on the FY22 Approps by February 18 to avert a government shutdown. We’re hearing lawmakers are hopeful to reach an agreement on a topline number and 302(b)s in early January (or after BBB is concluded) to give them time to create an omni or cromni by the 18th. At the same time, it is very possible that they will be unable to resolve differences on Homeland and be forced to CR that into next year.
• Countering China: Capitol Hill has been abuzz lately with a swarm of ideas on how to stand up to China. Chatter on China is only expected to get louder as Congress moves to pass anti-China legislation as well as conduct China oversight all year (concurrent with the Beijing Winter Olympics in Q1 and beyond). This might be the one area of bipartisan agreement, but House and Senate Republicans are likely to “one-up” whatever the majority puts forward to appear more hawkish on China. USICA is a potential 1st quarter initiative that may get conferenced and more likely than not attached to a 1st quarter spending deal.
• Shoring Up the Supply Chain: The House and Senate will also need to chalk up some victories related to supply chain breakdowns which will likely result in minor one-off legislative pieces rather than a comprehensive supply chain package.
• Taking on Big Tech: We expect a flurry of Congressional hearings about Big Tech. These are less likely to result in significant new privacy or antitrust laws, but you can expect many flashy headlines.
• Forging Ahead on the Next Farm Bill: Congress will need to begin work on the next Farm bill. We expect work to begin with a robust hearing process beginning in Q1 with drafting of legislative text.

• Reaching Reauthorization of FDA UFAs: Congress will also need to reauthorize the FDA user fee agreements or UFAs for prescriptions drugs, medical devices, and biosimilars.
• Pandemic Preparedness: In the wake of the COVID-19 pandemic that has been so disruptive to our nation’s health and economy over the past two years, we also expect significant bipartisan efforts in Congress to address gaps in our ability to better to prepare to protect against future pandemics.
• Speaking of COVID: Many of the authorities and flexibilities that have helped patients get care during the pandemic, such as Medicare patients’ broadened access to telehealth, are tied to the Public Health Emergency declaration. With the PHE likely to sunset some time in 2022, lawmakers will likely scramble to find ways to continue providing popular benefits and access to programs like telehealth through more permanent program extensions.

• Addressing Mental Health: It’s clear that the pandemic has taken a toll not only on the physical health of our nation, but also on our collective mental health. In fact, recent Centers for Disease Control and Prevention (CDC) studies found that the “percentage of U.S. adults with symptoms of anxiety and depressive disorders increased nationwide from August 2020 to February 2021,” and that “drug overdose deaths rose by close to 30% in the United States in 2020, hitting the highest number ever recorded.” Lawmakers in both parties have indicated a desire to pass legislation providing additional coverage, support, and resources for behavioral health and addiction. One notable bipartisan effort to watch is the Senate Finance Committee, where Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) issued a request for information (RFI) from stakeholders last year and are likely to work on putting together a package in 2022. Additionally, other members of Congress have also expressed an interest in mental health reform have issued their own RFIs in the fall and winter of 2021, such as Senators Murphy (D-CT) and Cassidy (R-LA), and Senators Bennet (D-CO) and Cornyn (R-TX). 

• Confirming Judges & Administration Officials: Currently the Biden administration’s nominations are on a record slow pace of being filled. Congress will need to confirm and many important positions so they can oversee implementation of the BIF and eventual BBB package.

• A Penny for Your Thoughts? (FY23 Budget Predictions): Although current spending legislation is delayed, we don’t expect that to have much impact on the submission of the administration’s FY23 budget. They seem to be in line for a March release which would allow appropriators to quickly move into FY23 work. We also expect the Member request databases to run on the normal schedule opening in late February and running into April. The biggest question is if Democrats will look to move another FY23 reconciliation package of some kind. This would certainly be the desire of progressives but would need to be much more tailored than the current BBB. It will likely depend upon “how big” Democrats think they need to be before the November elections and could very well see a vast difference in opinion on that between the Senate and the House.

Phew… But hold on, we’re not finished yet! In addition to tackling this onslaught of legislative priorities, expect huge battles over inflation and oversight of the pandemic response and programs to all play out in the background. Both parties are also likely to take swings at ‘Big Business’ with Republicans criticizing mask/vaccination mandates and ‘corporate wokeism’ and Democrats decrying share buybacks and executive compensation, while raising climate and DEI concerns.

Meanwhile, the Biden-Harris administration will continue staffing up and ramping up with a key focus on: 1) climate change; 2) agency engagement towards corporate America; and 3) supply chain initiatives. The administration will also continue to reengage the rest of the world to promote the U.S as a world leader, coordinate international pandemic response, pushback on China and Russia, and react to regional flareups.

Ok, now we’re finished. Thanks for sticking with us and we hope you enjoy your holiday season!