Congress started 2022 with a long list of difficult policy items including those related to pandemic recovery and high inflation. Unexpected items, including the Russian invasion of Ukraine and a vacancy on the Supreme Court, quickly changed the focus.
Supreme Court vacancies are both extremely politically important and time consuming for the Senate. President Biden’s nomination of Ketanji Brown Jackson’s to replace retiring Justice Stephen Breyer, was followed by weeks of introductory meetings, hearing preparation and strategy discussions throughout the Senate. The Senate Judiciary Committee held two days of confirmation hearings and individual meetings resumed almost immediately following. Democratic leaders hope to bring the process to an end soon with a committee vote on Jackson’s nomination on April 4 with a full Senate vote expected shortly thereafter.
As Congress turns its attention to other issues, the midterm elections will increasingly have an impact on decisions. Democrats continue discussions on a social spending package to deliver on one of Biden’s priorities, but narrow majorities continue to hamper those efforts.
Despite the challenges, Congress finally reached an agreement on FY2022 spending. This followed five months of short-term continuing resolutions that kept the government funded. The $1.5 trillion Omnibus spending bill includes $730 billion in nondefense discretionary spending, a 6.7% increase from fiscal 2021, and $782 billion in defense spending, a 5.6% increase.
Biden’s Budget Request
The Biden administration released its $5.8 trillion budget request for FY2023 which includes $1.6 trillion in discretionary funds, $813 billion for defense and $769 billion for nondefense. The budget includes deficit reduction of $1 trillion over 10 years, due in part to a new proposed tax on billionaires
The budget request for the Department of Housing & Urban Development is $71.9 billion which is a 20.5% increase over FY2022.The HUD request includes:
- $32.1 billion for tenant-based Housing Choice Vouchers
- $15.0 billion for project-based rental assistance
- $8.8 billion for the Public Housing Fund
- $3.8 billion for Community Development Block Grants
- $3.6 billion for Homeless Assistance Grants
- $2.0 billion for HOME Investment Partnerships
- $400 million to address lead and other health hazards
FY2023 Community Project Funding Requests
In early April, members of Congress will be able to submit up to 15 Community Project funding requests for FY2023 cycle to the House Appropriations Committee. The level of community engagement and support will be among the factors used in determining which projects are funded. The Committee will limit Community Project Funding to no more than 1% of FY2023 discretionary spending.
More information is available at
Executive Order on Digital Assets
President Biden recently signed an Executive Order outlining the government’s approach to addressing the risks and potential benefits of digital assets. The Order lays out a national policy for digital assets across six priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
The Executive Order:
- Directs the Department of the Treasury to assess and develop policy recommendations to address the implications of the growing digital asset sector and changes in financial markets for consumers, investors, businesses, and equitable economic growth. The Order also encourages regulators to ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.
- Directs the Department of Commerce to establish a framework to drive U.S. competitiveness and leadership in and leveraging of digital asset technologies. This framework will serve as a foundation for agencies and integrate this as a priority into their policy, research and development, and operational approaches to digital assets.
- Directs the Secretary of the Treasury to produce a report on the future of money and payment systems, to include implications for economic growth, financial growth and inclusion, national security, and the extent to which technological innovation may influence that future.
- Directs the U.S. Government to assess the technological infrastructure and capacity needs for a potential U.S. CBDC and encourages the Federal Reserve to continue its research, development, and assessment efforts.
The London Interbank Offered Rate (LIBOR) Bill Signed into Law
Language similar to the House passed HR 4616 “Adjustable Interest Rate (LIBOR) Act of 2021” was included in the Omnibus bill signed recently by President Biden. The bill provides for a transition to a replacement rate selected by the Federal Reserve Board of Governors in the event a contract referencing LIBOR does not have a fallback or a replacement rate provision in effect when LIBOR is retired. The bill also provides for conforming changes to these contracts, the continuity and enforceability of these contracts, and protections against liability resulting from the transition.
Philadelphia Public Bank
Philadelphia City Council voted 15-1 to pass legislation establishing the Philadelphia Public Financial Authority (PPFA), an entity that permits the City of Philadelphia to create the nation’s first municipal public bank. The bill became law without Mayor Jim Kenney’s signature.
The stated purpose of the PPFA is to provide financial support and resources to hard-to-lend-to businesses and organizations as well as local commercial development financial institutions (CDFIs). The stated goal of the PPFA is to offer credit enhancement products, such as letters of credit, that will provide greater opportunities for co-operatives, entrepreneurs of color, and other business organizations to access additional credit to help build cash flow and job growth.