Washington Look Forward:

March 21-25, 2022

Spring is finally in the air in Washington, and the famed Cherry Blossoms are starting to pop on the Tidal Basin in D.C.  But it is going to be another busy week in Washington and internationally. Here is a quick run-down of what we are watching:

• Ukraine and the Meeting of Western Leaders in Brussels and then Visit Poland: Ukraine continues to dominate Washington’s focus, particularly President Biden’s. We will see President Biden travel to Brussels for meetings Thursday and Friday with fellow NATO heads of state. He will begin Thursday with a NATO Extraordinary Summit to discuss the Russia-Ukraine conflict. In particular, the focus will be to reassess the Alliance’s long-term strategy and also take the opportunity to show strong support for the Baltic nations who are feeling increasingly at risk from Russia.  

  Biden will then join a meeting of the European Council Thursday and again on Friday to further discuss diplomatic efforts and the US-EU alliance.  Watch for the NATO meeting and E.C. meetings to result in further sizeable commitments for increased defense and security spending by all member states.

  Biden will then travel on Saturday to Poland to show solidarity with Poland, who, like the Baltic states, are feeling the risk of Russia on their border. There has been chatter of Biden then making a surprise visit to Kyiv, Ukraine, to meet with Ukraine President Zelensky – something British Prime Minister Boris Johnson apparently expected to do later this week. We note the Prime Ministers of Poland, the Czech Republic, and Slovakia made such a trip to Kyiv last week. However, the White House has said the President “has no plans” to make such a dangerous trip, but we will closely watch if this changes.

• Is Congress Getting Closer to Passing the CHIPS Act?: We have written previously about this critical piece of investment legislation and how it has struggled for focus and passage in both the House and Senate. To briefly recap, the bill has seen four previous iterations but has languished in Congress for a variety of odd reasons. 

  However, Senate Majority Leader Chuck Schumer (D-NY) filed motions late Friday for the Senate to take up the House version of the bill (H.R. 4521) this week. The bill would shower tens of billions of dollars on the semiconductor industry to encourage re-shoring of semiconductor chip manufacturing to the U.S. as well as pouring tens of billions of more money on R&D efforts to grow and expand the U.S. technology base. The legislation is seen by both Democrats and Republicans as a means of competing more strongly versus China, and we expect the final product will garner considerable bi-partisan support.  

  But, with all things Congress, there is one potential sticking point: Several Democratic senators want to include a provision that would give the Federal Maritime Commission more power to regulate large container ships to help “fix” the supply chain challenges out there.  There will likely be considerable push-back on this provision from those who do not see the container shipping industry as the culprit to supply chain issues and growing inflation.

  The big question we have is around timing. Whatever the Senate ends up passing this week after amendments are added will be different than what the House passed last month, meaning the two chambers will have to iron the differences in a conference session in the coming weeks and maybe months. We believe they are much closer to an agreement than further apart, thus the conference negotiations will likely be short.  We will keep you updated.

• Russia is about to Lose Normal Trade Relations with the U.S.: Late last week, the House passed legislation revoking Russia’s Normal Trade Relations with the U.S. What does that mean with all the heavy sanctions already in place on Russia? Not much. President Biden would be empowered to bring hefty tariffs on Russian goods and services. But considering the fact Biden has already banned the import of Russian energy, seafood, alcohol, and luxury goods, this may be less impactful than meets the eye.

• Supreme Court Confirmation Hearings: This week, Congress will be primarily focused on the confirmation hearing of Judge Ketanji Brown Jackson for the Supreme Court. The hearings kick off today (Monday). Unlike the last few Supreme Court nominations, we do not expect this one to be very controversial. By and large, Republicans seem much more at ease with Judge Jackson’s nomination for two reasons 1) she is clearly qualified, and; 2) she is replacing a liberal justice, not a conservative one. Therefore the balance of the Court is not being altered. Our guess is the full Senate confirms her in the next two to three weeks – and three or four Republican senators will vote for her confirmation.

 We hope this helps you get a general perspective of what is going on in Washington this week.  Please let us know if you have any questions.