Despite lawmakers’ projections that this year’s post-election lame duck session would be more productive than usual, it is trending in the opposite direction, with little more than the bare minimum likely to get done. Congress is expected to pass the FY25 National Defense Authorization Act sometime in December and to avoid a government shutdown, it will need to reach some sort of a funding agreement before December 20.
With these bills expected to dominate the floor time available in the House and Senate when lawmakers return after Thanksgiving, there will be little time left to pass other stand-alone measures. However, these legislative vehicles, especially the NDAA, offer an opportunity for some members to attach bills that have sufficient support to pass but need a way to advance on the floor of either chamber.
One particular issue in these discussions is whether China-focused measures will be included in the final text. Notable measures under discussion include the BIOSECURE Act and legislation to establish outbound investment restrictions.
Despite its bipartisan support in both chambers, the BIOSECURE Act faces an uncertain future, given opposition from Senate Homeland Security and Governmental Affairs Committee Ranking Member Rand Paul (R-Ky.). Congressional tradition gives committee chairs and ranking members an effective veto over bills to be attached to must-pass legislation under their jurisdiction, and Paul has stuck by his criticism of the bill. Without a change of opinion, including the bill in the NDAA may be difficult, and the limited available floor time may mean the measure does not pass the current Congress, which may be its best chance for at least two years as Paul is in line to become committee chair next year with Republicans controlling the Senate.
Talks on outbound investment restrictions have been in flux for some time. While the Senate has had agreement on a bill since last year, leaders in the House have struggled to reach an agreement. However, Politico reported a deal combining the two approaches was struck between House Foreign Affairs Committee Chair Michael McCaul (R-Texas) and Rep. Andy Barr (R-Ky.). The compromise proposal would restrict investments based on specific technologies rather than industries and provide for some expanded sanctions authorities. The scope of what is restricted is more expansive than the recently finalized Treasury Department regulations, reflecting the hawkish sentiment among House Republicans.
However, two key hurdles still must be cleared before passing this measure. First, House Financial Services Chair Patrick McHenry (R-N.C.) has yet to weigh in. He has previously opposed similar bills, and his pushback could be enough to sink this new effort, similar to Paul’s opposition to the BIOSECURE Act. Secondly, the legislation goes further than the Senate has previously supported, which may mean it runs into opposition in the upper chamber even if it can clear the House. The measures backed in the Senate impose notification requirements in several similar sectors but do not block any transactions. More hawkish bills have failed in the Senate previously, suggesting this new compromise text could be in trouble if it can clear the House.
If this draft of the outbound investment legislation faces too much opposition to make the current NDAA text, the sponsors may prefer to wait until the next Congress, when there will be a Republican majority in both chambers, instead of passing anything in the current session. The provision will likely still need bipartisan support to pass into law. Still, Republican control of the House and Senate will strengthen their negotiating power, assuming that Senate Republicans will support this more hawkish approach. However, even if the bill struggles to pass, the incoming Trump administration could modify the current Treasury Department regulations to be more similar to the House proposal without new legislation, which the China hawks set to be a part of the Trump administration will likely support.