Update From Washington, D.C.
Negotiations Continue on FY 21 Budget and COVID-19 Relief; House Set to Approve Cannabis Legalization Measure
This week, lawmakers returned to the nation’s capital for the final legislative push of the 116th Congress. With the current stopgap budget set to expire on December 11, spending talks were the most immediate priority for congressional leaders. For their part, House and Senate appropriators have set top-line spending levels for all 12 appropriations bills and also recently agreed to include an undisclosed amount of emergency spending as part of a final budget deal. While the details of the proposal have not yet been made public, the level of emergency funding was one of the major sticking points heading into this fall’s budget negotiations. In fact, earlier this year, House Democrats endorsed $247.4 billion in emergency funds, while Senate Republicans initially only supported $12.5 billion in additional spending.
With an agreement on top-line spending levels in place, lawmakers are currently negotiating funding for specific programs. However, in addition to programmatic funding levels, lawmakers will also need to address several controversial issues that have bogged down this year’s budget process, including potential new spending for border wall construction activities.
It’s also growing increasingly likely that an omnibus spending package could include some level of pandemic-related relief, although there have been no breakthroughs in negotiations as of this writing. At the urging of President-elect Joe Biden, Democratic leaders have scaled back their demands for a $2 trillion-plus stimulus package and have thrown their support behind a $908 billion proposal that was recently put forward by a bipartisan group of lawmakers. Of the $908 billion, state and local governments would receive roughly $240 billion in coronavirus-related fiscal aid. In addition, roughly $300 billion would be designated for small businesses and $180 billion would go toward extending unemployment benefits.
For its part, CSAC sent correspondence to the California congressional delegation urging members to approve legislation that provides additional federal fiscal support for ongoing state and local COVID-19 response efforts. In addition to making the case for a fresh infusion of direct fiscal aid to counties, the letter urges delegation members to support maximum flexibility in the use of those funds. Specifically, CSAC is requesting that entities be permitted to use federal dollars to cover COVID-19-related expenditures and lost revenues resulting from the pandemic.
Across Capitol Hill, Senate Majority Leader Mitch McConnell (R-KY) has yet to embrace the aforementioned bipartisan COVID-19 proposal. Complicating matters for McConnell, there are several conservative Republicans who either refuse to support any further stimulus or have only backed a very limited coronavirus relief package.
At this point, it remains unclear if lawmakers will be able to approve a new government funding bill and/or COVID-19 measure before Congress is scheduled to adjourn next week. Accordingly, lawmakers may need to approve another short-term budget package to keep federal departments and agencies operational. In addition to the budget and a coronavirus bill, House and Senate leaders also are looking to finalize the annual defense policy measure and a water resources development package.
House to Vote Friday on Cannabis Legalization Bill
The House is set to vote on a comprehensive cannabis reform bill (HR 3884) before the end of the week. The legislation, entitled the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, would remove cannabis from federal drug schedules under the Controlled Substances Act and create a pathway for resentencing individuals with prior cannabis-related convictions.
As originally drafted, the legislation would have imposed a five percent federal excise tax on cannabis products, the proceeds of which would be designated for various programs in communities that have been the most impacted by drugs. The tax provisions have since been modified to track more closely with the Marijuana Revenue and Regulation Act (HR 1120). Pursuant to the revised version of the bill, cannabis would be federally taxed at five percent for the first two years after implementation and then increased by one percent each year until reaching eight percent. After five years, taxes would be applied to cannabis products based on weight rather than price. Under the modified legislation, the resulting tax revenue would be designated for job training, legal aid, literacy programs, as well as youth recreation and mentoring services, among other things.
While the measure is expected to pass the lower chamber with some bipartisan support, it will not be considered by the Senate, where companion legislation (S 2227) sponsored by Senator and Vice President-elect Kamala Harris (D-CA) has not garnered any Republican cosponsors.