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Congress Heads for the Exits Until November
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Congress Heads for the Exits Until November

But first the House has to pass a government funding bill, and the lame-duck session is looking packed.

When Senate Majority Leader Chuck Schumer told reporters last week the Senate would come back for a work period in October, many in and around Capitol Hill took it with a grain of salt. Senators agree on few things more than preserving scheduled time outside of Washington, D.C.—especially in the month before midterm elections.

This week, once senators approved a stopgap government funding package, Schumer backtracked: The next Senate votes will come after the midterms in November. Democratic incumbents and other senators facing tight races likely breathed a sigh of relief; they’ll have more time to spend on the campaign trail. 

The scheduling decision means the chamber will face a tighter time frame for passing an annual defense authorization package before the end of the year.

“That agreement will probably happen in November sometime,” Democratic Rep. Adam Smith, who chairs the House Armed Services Committee, told reporters of the National Defense Authorization Act Thursday.

Averting the Looming Shutdown Deadline

Meanwhile, the House is set to consider the Senate-passed government funding bill today. It would avert tonight’s shutdown deadline and keep the lights on through mid-December, giving negotiators more time to hammer out a broader spending package. 

It mostly maintains government spending at current levels, but it also includes items lawmakers didn’t want to wait to pass, such as $12 billion in additional defense aid to Ukraine. It also directs $1.5 billion to rebuild American stocks of military supplies.

We wrote to you last week about whether Republicans will continue to support Ukraine aid in the coming months. The fact that GOP leaders allowed it into this deal indicates there is still substantial backing for it. Still, the vote today may not offer the clearest test of how much support for Ukraine aid remains among House Republicans. 

Some broadly oppose short-term spending bills regardless of what they contain, protesting a dysfunctional spending system. Others wanted this particular agreement to extend through January instead of December, when they might have control of the House and could wield more negotiating power in finalizing the broader spending bill. Determining whether the Ukraine aid was a deciding factor in any “no” vote may have to come from public statements or questions from the press.

The spending bill also contains roughly $19 billion for the Federal Emergency Management Agency’s disaster relief fund, which will help the agency respond to recent flooding and devastating hurricanes that hit Florida and Puerto Rico.

Congress May Tackle Outbound Investment

American investment helped fuel China’s rapid economic growth over the past three decades. Now, Congress has its eye on the national security implications.

Without new guardrails on American investment abroad, Sen. Bob Casey said during a hearing on the matter Thursday, “we risk funding threats to our own national security.”

The Senate banking committee hearing showed lawmakers are far from consensus on a new law, even though they agree on a goal: making sure U.S. companies don’t offshore critical supply chains and hand key technological and military advances to the Chinese government. 

Though an interagency committee reviews foreign investment in the United States, no equal government structure exists to monitor—and, if needed, block—U.S. investments abroad. A bipartisan group of lawmakers has introduced legislation to create such a government panel. But business pushback may water down the bill.

Republican senators are discussing a version that would require companies to notify the government of deals that may impact national security, are related to critical infrastructure, or pertain to advanced technology—but would not give the government new power to stop those deals from proceeding. Business groups and pro-free trade lawmakers such as Sen. Pat Toomey of Pennsylvania say a panel with the ability to stop investment could abuse its powers and undermine American economic competitiveness.

“Time and again, presidents of both parties have misused national security authorities in ways far beyond what Congress initially intended,” Toomey said during the hearing Thursday.

“Appropriately scoping an outbound regime is very, very important to preclude it from being used as a backdoor for trade protectionism in the future,” he added, recalling former President Donald Trump’s use of national security powers to slap sanctions on foreign steel and aluminum.

Sen. John Cornyn, a Texas Republican who sponsored an early version of an outbound investment review proposal alongside Casey, appears open to a more limited bill along the lines Toomey might accept. 

“We must not overreach,” he said before the Senate banking panel. “We need the scalpel, not the sword.”

He later told Politico members have “moved a long way from our initial start” to considering only new notice and transparency requirements for companies. (Casey hasn’t sounded the same note, reportedly standing behind a commission with the power to stop investments that may harm national security.)

Congress might not make the first move: Cornyn, who said he’s urgent to act, co-signed a letter this week asking President Joe Biden to approve an executive order imposing new limits on outbound investment as an interim fix while Congress figures out the legislative details. Casey also signed the letter alongside House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, and several House members.

“When we cede our manufacturing power and technological know-how to foreign adversaries, we are hurting our economy, our global competitiveness, American workers, industry and national security,” the lawmakers argued. “Government action on this front is long overdue to address the scope and magnitude of these serious risks we face as a country.”

A bill like this could have passed earlier this year: Lawmakers were close to an agreement on an outbound investment review board in June, when members were debating a sweeping China competition measure. The Wall Street Journal reported the contours of the deal at the time:

The revised screening measure would enable the federal government to restrict certain future transactions in any “country of concern,” defined as “foreign adversary” countries including China, according to the new text …

The bill would require U.S. entities and their affiliates to notify the federal government of activities in China if they concern sectors previously specified by the Biden administration as crucial to supply chains. Also covered would be investments that involve “critical and emerging” technologies identified by the National Science and Technology Council and the Director of National Intelligence as vital to maintaining the U.S. position as the world’s leading superpower, the text says.

Those sectors and technologies include semiconductors, large-capacity batteries, pharmaceuticals, rare-earth elements, biotechnology, artificial intelligence, quantum computing, hypersonics, financial technologies and autonomous systems such as robots and undersea drones.

But businesses made their opposition to that plan clear. The broader conference committee negotiations later fell apart, leading Congress to pass a slimmer competition bill without the outbound investment changes. 

Members of Congress hope to advance some new rules for American companies investing abroad by the end of the year, within the annual must-pass defense authorization measure.

You can watch yesterday’s full hearing on the topic here.

Of Note 

Haley Wilt is a former associate editor for The Dispatch.