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WASHINGTON WATCH: August 24, 2021


THE LONG GAME: Pelosi seeks to appease both wings of caucus; Lawmakers to launch Afghanistan probes

The House is back for an abbreviated interruption of their August recess. Among the first votes will be a rule governing debate over the bipartisan infrastructure bill, a Democratic budget resolution approved by the Senate, and legislation to protect voting rights. However, Speaker Nancy Pelosi (D-CA) is facing friction from both the progressive and moderate wings of her caucus over the order in which bills are to be considered. A group of nine centrist Democrats, led by Rep. Josh Gottheimer (D-NJ), has demanded that the chamber first approve the $1.2 trillion infrastructure package (H.R. 3684) or else they will vote against the budget resolution. Monday did not roll out as leadership had hoped and the planned vote for a procedural vote on the rule never happened. The resolution sets the stage for many Democratic priorities-- on climate change, health care, education and family leave-- to pass through reconciliation. Meanwhile, Rep. Katie Porter (D-CA) said that a majority of the one hundred members of Congressional Progressive Caucus would vote against the infrastructure package if it came before progress on the $3.5 trillion budget package. A successful outcome for Pelosi will depend on some clever legislative maneuvering. After all, if the entire Republican conference opposes the bill, as is expected, Democrats could lose no more than a handful of their members’ votes and still win.

Biden Administration officials will face lawmakers’ questions about the chaotic withdrawal of U.S. forces from Afghanistan. At least four separate House committees are likely to hold hearings, beginning with the House Foreign Affairs Committee, where Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin will be called as witnesses. On the Senate side, Foreign Affairs Committee Chairman, Senator Bob Menendez (D-NJ), was highly critical of Biden’s team, saying that he was “disappointed that the Biden Administration clearly did not accurately assess the implications of a rapid U.S. withdrawal.” The Senate Armed Services and Intelligence committees also plan to hold inquiries.

Washington Watch is published weekly when Congress is in session. Published monthly during extended recess or adjournment.


Spotlight on Puerto Rico

Puerto Rico coronavirus statistics for August 23

According to the Puerto Rico Health Department, 302,021 people are believed to have been infected with COVID-19, an increase of 20,559 since July 26. This points to a continuing increase in the rate of new cases, as the increase in the previous month was 17,966. The rate of deaths dramatically increased this month: the death toll is currently 2,742, with 174 of those registered in the past month. Comparatively, 94 people died from the virus between May 24, and July 26.

On Friday, July 23, 2021, the Health Department once again changed the way it recorded cases. On its new COVID information dashboard, the Department no longer displays suspicious cases (as determined by serological, non-diagnostic testing) which at last count accounted for 137,262 of all recorded COVID cases in Puerto Rico. Still tracked are confirmed cases (as determined by molecular diagnostic testing) and probable cases (as determined by antigen testing); as of today, the cumulative number of confirmed cases since the virus arrived on the Island is 137,806 and the number of probable cases is 26,953. There are currently 502 people hospitalized due to COVID, an increase of 404 since July 26.

According to the Puerto Rico Health Department and its Puerto Rico Electric Immunization System (PREIS) a total of 1.9 million people on the Island have been fully vaccinated, while nearly 2.3 million have received at least one dose. Currently, there are an estimated 2.9 million people in Puerto Rico who are eligible for the vaccine; 79.9% of that amount has been partially vaccinated, while 69% has been fully vaccinated.

The latest reversals in the struggle against COVID have led the Puerto Rico government to enact stricter measures after loosening them earlier in the year. Among these is an executive order mandating that indoors establishments serving food or drink—including restaurants, movie theaters, shopping malls, food courts and bars—require proof of vaccination as a condition for entry.

Of particular interest are schools, where vaccines are required for all of those who can be vaccinated, and everyone is required to be masked. Findings for the first three days have been inconclusive: while at least 34 cases have been detected among students, the virus’ incubation period means that these students were not infected at school.

Minimum wage increase agreement between Fortaleza and Senate

A bill that would progressively increase the Puerto Rico minimum wage to $10.50 per hour, based on proposals by Governor Pedro Pierluisi, was introduced by Rep. Hector Ferrer in the Puerto Rico legislature and passed last week. The Senate is expected to amend it and the final bill should reflect an agreement with Fortaleza. The current bill seeks to increase the minimum wage to $8.50 per hour by January 2022, with subsequent increases tied to particular benchmarks. The minimum wage would be increased to $9.50 per hour by June 2023 and increased to $10.50 by January 2025 if certain conditions tied to Puerto Rico’s Economic Activity Index (IAE, in Spanish) and other factors are met.

However, according to some economists, these benchmarks are not ones Puerto Rico would be able to meet given the state of its current economy. Additionally, the continuing contraction of particular sectors of its economy, such as public administration, could keep Puerto Rico from meeting necessary employment level benchmarks.

Puerto Rico hospitals lose appeal on underpayment case

A panel of the 1st U.S. Circuit Court of Appeals unanimously ruled on August 18 that the U.S. Department of Health and Human Services (DHS) was not wrong in calculating aid using a formula based on share of a hospital’s patients eligible for Medicare and Supplemental Security Income (SSI), even though residents of Puerto Rico are not eligible for the latter. “While we recognize an apparent (and perhaps unintended) unfairness in this situation, we, like the district court, necessarily conclude that the Secretary did not err in implementing the statute,” reads the ruling.

Medicare provides for additional funding for so-called disproportionate share hospitals (DSH) that serve low-income populations—i.e., much of Puerto Rico’s population. This funding is calculated based on a formula using the number of patients eligible for both Medicare and SSI. Puerto Rico residents, however, are not eligible for SSI. The plaintiffs, a group of some 25 Puerto Rican hospitals, argued that the formula short-changed them, and that in order for Puerto Rico to be treated “in the same manner and to the extent” as the states as required by law, HHS would need to use different metrics applicable to the Island. The court disagreed.

Puerto Rico bonds reach five-year high

Standard & Poor’s Municipal Bond Puerto Rico Index reached its highest point in five years last week, closing at 239.94. The index appreciated 5.82% in 2021; five years ago, when Puerto Rico declared bankruptcy under Title III of PROMESA, it was at 176.60. “It’s very surprising, the behavior of Puerto Rico bonds, in spite of all of the negative factors we’re aware of,” said former bankruptcy judge Gerardo Carlo Altieri.

The Index’s rebound comes as the Financial Oversight and Management Board (FOMB) moves forward with negotiations regarding its Adjustment Plan (PDA, in Spanish) for Puerto Rico. However, while this performance has bolstered the arguments for those who wish to see the PDA passed, its ultimate adoption is not yet assured, requiring approval by Judge Laura Tailor Swain, who must conclude that it is economically sustainable.


View From The White House

  • On the anniversary of the poisoning of Russian opposition leader Alexey Navalny, the Treasury Department announced additional sanctions against nine Russian individuals and two entities with ties to the Kremlin’s chemical weapons programs.

  • A federal appeals court ruled against the Biden Administration’s attempt to delay implementation of an order to reinstate the Trump era’s Migrant Protection Protocols (MPP), also known as the “Remain in Mexico” policy.

  • Touting strong job creation numbers, Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh said that enhanced unemployment benefits, which were increased by $300 per week in response to the pandemic, will end on September 6.

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