Legislative Outlook for the 118th Congress, 2nd Session

In 2024, Congress is expected to face headwinds in passing substantive legislation – particularly as House Republicans continue to pursue an impeachment inquiry into President Biden in the middle of an election season.

A divided Congress in which House Republicans hold a slim majority will continue to empower a few conservatives to hold up legislation, or at least seek major concessions. At least until February 13, when a special election will be held to fill former Rep. George Santos's New York 3rd congressional district, Republicans will only have three votes to spare on any party-line vote. After January 21, their majority will be down to two votes with the resignation of Rep. Bill Johnson – until Rep. Brian Higgins's (D-NY) departure on February 2.

However, there are several "must-pass" legislation heading into the new year that will force Congress to act – and perhaps provide legislative vehicles for smaller bills. In addition to the 12 appropriations bills that must clear Congress to fund government operations, Congress will consider a $110.5 billion emergency supplemental package to provide funding for Israel, Ukraine and Taiwan.

To win support for aid to Ukraine, however, Republicans will demand a deal on border security. Potentially, negotiations for the emergency supplemental foreign aid and border security could be merged with discussions on topline spending to fund government operations and avoid a shutdown.

In this analysis, we preview what to expect for each industry during the second session of the 118th Congress.

n summary, some of the major highlights to expect this year:

  • Congress still needs to try to pass all 12 appropriations bills, with two separate deadlines under the current continuing resolution (CR) funding government operations.
  • Negotiations continue over border security that could pave the way for Congress to provide $110.5 billion supplemental package to provide aid to Ukraine and Israel.
  • While the House and Senate Defense appropriations bills currently under debate in Congress are about as different as the chambers from which they originate, expect Congress to rally around one guiding principle...no cuts – and perhaps, an increase – to this year's defense spending.
  • Funding for higher education programs remains uncertain in the midst of the Israel-Hamas war as Congress may also explore policies aimed at changing the operations and governance of higher education, while increasing federal oversight and accountability through the threat of budget cuts.
  • Passage of major energy reform legislation is unlikely as Republicans are focused on permitting reform for oil and gas projects, while Democrats are focused on permitting reform for renewable energy projects and transmission projects.
  • Speaker Johnson's record on healthcare issues, while as a rank-and-file member, was limited to issues around abortion and gender-affirming care, and as a result, he will rely on Committee chairmen to drive the House healthcare agenda.
  • The prognosis for tax legislation in 2024 remains uncertain at best as Republicans are interested in reinstating full deductibility for research & development (R&D) investments, which was part of the 2017 Tax Cuts and Jobs Act (TCJA) – while Democrats want to expand the child tax credit (CTC) that was only temporarily expanded as part of the 2021 American Rescue Plan Act (ARPA).
  • Cybersecurity, data privacy, and artificial intelligence have had lawmakers and regulators abuzz throughout 2023, resulting in a patchwork of expanding regulations as well as providing additional legislative opportunities for the year ahead.
  • A path forward for Transportation-Housing and Urban Development (HUD) Appropriations Bill remains uncertain over impasse to proposed funding cuts to Amtrak, while the Biden Administration will continue to dole out funding to rail programs available through the 2021 Bipartisan Infrastructure Law.

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