Policy Outlook for 2022 - A look at the policy landscape for calendar year 2022 December 7, 2021
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Policy Outlook for 2022
A look at the policy landscape for
calendar year 2022
December 7, 2021
Presentation Overview
I. Wrapping Up 2021 Priorities
II. Midterm Election Landscape
III. The 2022 Legislative and Regulatory Agenda
IV. What to Watch for in 2022
I. Financial Services
II. Tech & Competition
III. Health Care
IV. IIJA Implementation
V. Key Local Government Priorities
VI. Energy and Climate Change
I. Wrapping Up 2021 Priorities
Debt Ceiling
• Leadership is considering a multitude of policy and procedural options to address the federal debt ceiling by December
15.
NDAA
• House and Senate Armed Services lawmakers will need to craft a compromise version of the annual defense policy bill
prior to the end of the year.
Government Funding
• Appropriators struck a bipartisan agreement to punt the government funding deadline to February 2022 but remain far
apart on a broader deal for FY 2022.
2021 Policy Deadlines
• Several policies and programs are set to expire at the end of the year. Notably, COVID-19 packages included several tax
relief measures for businesses and families that are slated to end on December 31, 2021.
Reconciliation
• Senate Democrats are continuing their negotiations on provisions contained in the House-passed Build Back Better
Act, with the goal of passage by the end of this year. Unlike aforementioned issues, this item is not facing a codified
deadline.
Appropriations Update
Status of FY 2022 Appropriations Bills
Lawmakers reached a bipartisan Bill House Senate
agreement on a continuing Agriculture-FDA Passed House Passed full committee
resolution (CR) that would punt the Commerce-Justice-Science Passed full committee Not yet introduced
government funding deadline Defense Passed full committee Not yet introduced
to February 18, 2022. Energy-Water Passed House Passed full committee
Democrats and Republicans remain Financial Services and
Passed House Not yet introduced
General Government
far apart on a topline funding
Homeland Security Passed full committee Not yet introduced
agreement for fiscal year (FY) 2022.
Interior-Environment Passed House Not yet introduced
Issues pertaining to federal vaccine Labor-HHS-Education Passed House Not yet introduced
mandates, defense policy, abortion, Legislative Branch Passed House Not yet introduced
and border security stand out as key MilCon-VA Passed House Passed full committee
pressure points with respect to a State-Foreign Ops Passed House Not yet introduced
broader FY 2022 funding deal. Transportation-HUD Passed House Not yet introduced
The Latest on Reconciliation
House lawmakers passed the $1.7 trillion social spending
bill on November 19, 2021.
What ‘Build Back Better’
The Senate Parliamentarian's office has begun its "Byrd Policies Could Be Pared
bath" review of the $1.7 trillion social spending bill, which Back?
could result in provisions being struck from the House-
• Paid Family and Medical
passed bill if they are ruled as “extraneous” to the budget
Leave
resolution. • Immigration
Additional tweaks will also be needed to appease centrist • Clean Energy
Senators, including Sens. Joe Manchin (D-WV) and Kyrsten • Climate
Sinema (D-AZ), who have expressed uneasiness with a • Labor Protections
larger spending package due to underlying economic • Drug Pricing
concerns. • State and Local Tax Deduction
• Tax Reform
Final passage could slip into next year depending on the
length of these intraparty negotiations.
Key 2021 Policy Deadlines
Program Expiration Date
Debt Ceiling “X Date” December 15, 2021 (approx.)
Moratorium on Medicare Sequestration December 31, 2021
Enhanced Child Tax Credit December 31, 2021
Expanded Earned Income Tax Credit December 31, 2021
Employee Retention Tax Credit December 31, 2021
Coronavirus Relief Fund for States and Localities December 31, 2021
Tax Extenders December 31, 2021
Medicare Radiology Oncology Rules December 31, 2021
Statutory PAYGO Sequestration December 31, 2021
PHE Extension January 15, 2022
Student Loan Moratorium January 31, 2022
Government Funding Deadline February 18, 2022
National Flood Insurance Program February 18, 2022
Temporary Assistance for Needy Families February 18, 2022
II. Midterm Election Landscape
Historical Trends. Historically, a sitting Approval
Year President House Senate
Rating
President’s party has been more likely to 1962 John F. Kennedy 61% -4 +3
1966 Lyndon B. Johnson 44% -47 -4
lose seats in a midterm election regardless 1970 Richard Nixon 58% -12 +2
of the President’s overall favorability. 1974 Gerald Ford 54% -48 -5
1978 Jimmy Carter 49% -15 -3
Current Outlook. According to current 1982 Ronald Reagan 42% -26 +1
1986 Ronald Reagan 63% -5 -8
aggregate polling data from 1990 George H.W. Bush 58% -8 -1
1994 Bill Clinton 46% -52 -8
RealClearPolitics and FiveThirtyEight,
1998 Bill Clinton 66% +5 0
Republicans are well positioned to make 2002 George W. Bush 63% +8 +2
2006 George W. Bush 38% -30 -6
gains in the 2022 midterm elections. In the 2010 Barack Obama 45% -63 -6
House, additional projections will develop 2014 Barack Obama 44% -13 -9
2018 Donald Trump 41% -41 +2
as states finalize their redistricting plans. 2021 Joe Biden 42% ? ?
Senate Prognosis
Senate projections from Sabato’s Crystal Ball
suggest that Republicans have a slight edge to
win the majority.
Out of the 34 seats up for reelection, 14 are
currently Democratic-controlled, and 20 are
Republican-controlled.
Republicans are expected to retain control over
19 of their seats, with Pat Toomey’s (R-PA)
retirement creating a toss-up seat.
Republicans also have a realistic chance to pick
up three Democratic slots from Sens. Mark
Kelly (D-AZ), Raphael Warnock (D-GA),
and Catherine Cortez Masto (D-NV) that
are projected to go for either party.
Departing Members of the 117th Congress
Republicans Democrats
House House
Rep. Mo Brooks (R-AL) (Senate) Rep. Ann Kirkpatrick (D-AZ)
Rep. Lee Zeldin (R-NY) (Governor) Rep. Tim Ryan (D-OH) (Senate)
Rep. Ted Budd (R-NC) (Senate) Rep. Charlie Crist (D-FL) (Governor)
Rep. Vicky Hartzler (R-MO) (Senate) Rep. Val Demings (D-Fl) (Senate)
Rep. Kevin Brady (R-TX) Rep. Conor Lamb (D-PA) (Senate)
Rep. Billy Long (R-MO) (Senate) Rep. Karen Bass (D-CA) (LA Mayor)
Rep. Jody Hice (R-GA) (GA Secretary of State) Rep. Ron Kind (D-WI)
Rep. Tom Reed (R-NY) Rep. Filemon Vela (D-TX)
Rep. Anthony Gonzalez (R-OH) Rep. Cheri Bustos (D-IL)
Rep. Adam Kinzinger (R-IL) Rep. John Yarmuth (D-KY)
Rep. Louie Gohmert (R-TX) (TX Attorney General) Rep. Mike Doyle (D-PA)
Rep. Devin Nunes (R-CA) Rep. David Price (D-NC)
Rep. Anthony Brown (D-MD) (MD Attorney General)
Senate Rep. Jackie Speier (D-CA)
Sen. Richard Burr (R-NC) Rep. G.K. Butterfield (D-NC)
Sen. Roy Blunt (R-MO) Rep. Peter Welch (D-VT) (Senate)
Sen. Pat Toomey (R-PA) Rep. Eddie Bernice Johnson (D-TX)
Sen. Richard Shelby (R-AL) Rep. Tom Suozzi (D-NY) (Governor)
Rep. Peter DeFazio (D-OR)
117th Republicans Who Have Already Left Office
Rep-elect Luke Letlow (R-LA) (died prior to assuming Senate
office) — Replaced by Rep. Julia Letlow (R-LA) Sen. Pat Leahy (D-VT)
Rep. Ron Wright (R-TX) (died in office) — Replaced by
Rep. Jake Ellzey (R-TX)
Rep. Steve Stivers (R-OH) (resigned 5/16/2021) — 117th Democrats Who Have Already Left Office
Special election primary 8/3/2021, general 11/2/21 Rep. Deb Haaland (D-NM) (Interior) — Replaced by Rep. Melanie Stansbury (D-NM)
Rep. Cedric Richmond (D-LA) (White House) — Replaced by Rep. Troy Carter (D-LA)
Rep. Marcia Fudge (D-OH) (HUD) — Special election primary 8/3/2021, general
11/2/21
Rep. Alcee Hastings (D-FL) (died in office) — Special election 1/11/2022
III. The 2022 Legislative and Regulatory Agenda
Congress. Ahead of the midterm elections, lawmakers
may shift focus away from large legislative packages and
instead look to pass legislation on secondary issues that
members can tout to voters back at home.
Administration. Meanwhile, federal agencies will get
to work on executing directives from the Infrastructure
Investment and Jobs Act (IIJA) and possibly
implementing policies from the Build Back Better Act
(BBBA) upon passage.Forecasting Potential
Legislative Action in 2022
USICA Drug User Fees Reconciliation
Leader Schumer and Speaker Congress needs to authorize Action on President Biden’s
Pelosi struck an agreement to go FDA’s FY 2023 user fee signature social spending
to conference on the $250 billion agreements by September 2022, package could slip into the early
technology research and as current fee rates expire on part of next year if Senate
innovation package, which has September 30, 2022. Pieces of Democrats struggle to coalesce
been on ice since it passed the the Cures 2.0 package may be around a path forward.
Senate earlier this year. included in the PDUFA.
Appropriations NDAA Tax
Fiscal year 2021 funding has Lawmakers have sought to There have been preliminary
been extended into 2022. The leverage annual defense policy discussions between the Ways
lack of a broader funding bill as a vehicle to carry key non- Means and Finance Committees
agreement for FY 2022 could defense policy priorities with to do a 2022 tax package that
complicate implementation varying levels of success. tackles “extenders,” as well as any
efforts of President Biden’s Cannabis banking has emerged technical fixes to the BBBA.
agenda. as a key example.IV. What to Watch For: Financial Services
Nominations. Senate must act on several of President Biden’s pending financial nominees, including:
Nominated but not approved: Federal Reserve Chair, Federal Reserve Vice Chair, Comptroller of the Currency
Awaiting Nomination: Federal Reserve Vice Chair for Regulation, Two Fed Governor Seats.
Crypto. 2022 is shaping up to be a critical year for crypto as Congress and the Administration will
continue to grapple with how to regulate the emerging digital asset industry.
Bank regulators have announced plans to ramp up efforts to regulate the growing industry.
SEC and CFTC continue to jostle over jurisdiction, while FSOC hangs over entire industry.
ESG. Federal Agencies will continue to work on increased disclosures of environmental, social, and
corporate governance polices. Action is expected at the SEC, DOL and FSOC.
Flood Insurance. Lawmakers have been pressing for action on a long-term reauthorization for the
National Flood Insurance Program but competing priorities between lawmakers on committees of
jurisdiction have resulted in several short-term funding extensions.
Tax Extenders. Should BBBA not pass, Congress may be forced to act to address any expiring tax
provisions. In the event of BBBA passage, agencies will begin working to implement the bill's vast array
of tax policy changes.What to Watch For:
Tech & Competition
Data Privacy. As part of the ongoing
flogging of the Big Tech companies by both
sides of the aisle, lawmakers will again try to
find the sweet spot for creating a national
data privacy bill.
Section 230. Multiple bills have passed the
House Judiciary Committee but have yet to
debated in the House.
In the Senate, a bipartisan bill S. 2992 –
imposing limits on “dominant” social media,
marketplace, and search platforms favoring
their own products – may gain traction.What to Watch For: Health Care
User Fee Agreements. ”User fee” agreements that fund FDA activities – including PDUFA, BsUFA, GDUFA, ADUFA,
AGDUFA, and MDUFA – are set to expire at the end of FY 2022. The agency is currently in negotiations with industry
on reauthorizing these agreements, which Congress is expected to “rubber stamp” before the current agreements expire.
Cures 2.0. Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) recently introduced a sequel to their landmark 21st
Century Cures Act. While the redux has yet to gain buy-in from key committee leadership, some have speculated that the
legislation could be primed to move alongside the FDA user fee agreements late next year.
Telehealth. The public health emergency (PHE) is up for renewal on January 15, 2022, at which point many regulatory
flexibilities are set to expire. However, the emergence of the Omicron variant of COVID-19 may lead to another PHE
extension. Congress could also move to codify PHE flexibilities, such as removing originating site restrictions.
Digital Identity. With the 117th Congress on a path to eliminate the ban on the Unique Patient Identifier as part of the
FY 2022 Labor-HHS Appropriations package, there may be more efforts around utilizing digital identity more broadly.
Pandemic Preparedness. Building on an earlier effort from the 116th Congress, Senate HELP is expected to unveil a
package that would not only include measures that anticipate and address future pandemic concerns, but also prioritize
a bolstering of the country’s public health care infrastructure system.
FDA Administrator. The Health, Education, Labor, and Pensions (HELP) Committee will hold a hearing on
December 14 for Robert Califf to lead the FDA. A full Senate vote will likely take place in early 2022.
HHS. Should BBBA not make it to President Biden’s desk, the Department is likely to pursue policies aligned with the
bill through regulation (including CMMI), such as efforts to lower drug costs, focus on health disparities, and encourage
access to government health care programs, among other things.What to Watch For: Implementation of IIJA
Federal agency hiring spree looms.
Department of Energy reportedly considering hiring
1,000 new employees.
Department of Transportation may need to do
something similar.
State DOT’s may have to also hire more staff, not to
mention construction companies, etc.
Existing grant opportunities with new funding
should have applications open within 90 days or
so.
New grant opportunities will need to be
developed; may require public participation.
5-year bill, so funding will trickle out over time.
Will allow for good planning to prepare for
opportunities.What to Watch For:
Key Local Gov’t Priorities
Flood Insurance. Disagreements between lawmakers on the Financial Services and Banking
Committees on a long-term reauthorization for the National Flood Insurance Program (NFIP)
continue to persist.
Additional short-term reauthorizations are likely needed to keep the program afloat, though
stakeholder concerns about Risk Rating 2.0 could ultimately break the logjam on a multi-year
extension.
WRDA. A new bill to authorize policies, programs, and Army Corps of Engineers projects
through the Water Resources Development Act (WRDA) may be necessary next year.
Congress hopes to address WRDA by summer or fall 2022.
State and Local Relief Funds. A bipartisan group of House lawmakers is seeking action on a
Senate-passed bill that would provide additional flexibilities for state and local governments to
use Coronavirus Relief Funds on infrastructure projects.
The State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief
Flexibility Act could be taken up under suspension of the rules as soon as this month or slip into
2022.What to Watch For: Energy & Climate
Biden Agenda. There are several climate and energy provisions contained in the new Bipartisan
Infrastructure Law, as well as the pending Build Back Better Act.
Implementation of the Bipartisan Infrastructure Law is underway, with a plethora of new grant opportunities set
to open up next year.
The BBBA includes several climate and energy opportunities pertaining to a greenhouse gas reduction fund, clean
energy tax credits, natural infrastructure, forest conservation, and carbon capture.
The administration is also expected to continue rolling out its energy and climate regulatory agenda, including
rollbacks of key Trump-era initiatives on emissions, clean water, and more.
Electric Vehicles. With an ambitious goal of installing 500,000 charging stations by 2030, the IIJA provided
$7.5 billion toward electric vehicle charging networks, $5 billion for zero-emission and clean school busses, as
well as $2.5 billion for low-carbon ferries. Implementation of these provisions is underway.
The reconciliation package would spend additional funding on domestic production grants for plug-in electric,
hybrid, and hydrogen fuel cell electric vehicles.
EV buyers could also receive a $12,500 refundable credit for electric vehicles under BBBA.
Hydrogen. The IIJA provided roughly $8 billion for new clean hydrogen hubs for which the Department of
Energy has begun to conceptualize.
The BBBA bill also includes a host of tax credits for clean hydrogen production.Key Takeaways Before turning to their docket for 2022, lawmakers will address remaining 2021 priorities. As Congress heads towards the mid- term elections, the likelihood of further comprehensive legislation wanes. Smaller scale, bipartisan legislative activity remains possible. But as Biden Administration fully staffs up at agency level, an increased regulatory agenda is expected.
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