Yes and no.
APPEAL - To be clear, he cannot appeal his conviction or sentence as he plead guilty and agreed to the sentence. So just rule out an appeal reduction of his sentence. So I guess you are off-base in your logic.
"Once you have entered a guilty plea, the judge will convict you based
on your own admissions, and you will ordinarily have no grounds to
undo that conviction in a court of appeals. You may, however, be able
to appeal your sentence, as long as you have not given up that right
in any plea deal with the prosecution." Link
Congress does have a path (technical) to release him. They would have to change the sentence of the crimes he committed to non-custodial and do this retroactively. It would have to pass the senate and be signed by the president and would likely face a legal challenge.
Congress has the power to retroactivity reduce the sentence for a
crime for which someone has been sentenced. This was done most
recently in the Fair Sentencing Act of 2010 that reduced excessive
penalties for crack cocaine relative to powder cocaine. Link
PARDON - Nobody but the president can commute his sentence or pardon him for a federal crime for which he has been convicted.
The power to grant pardons is vested in the President alone. Link.
Other Paths to Reduce or Increase.
Numerous paths to decrease or increase his time served exist. This is not the same as his sentence though. Sentence and time-served are often very different in the USA.
Paths to a reduced sentence
No, on reduce. He has already been sentenced. It is a done deal. He cannot be
retried or resentenced for the old crime at this point no matter what he did
or said at his current hearing.
Maybe, on reduce, on a technicality. His parole board may look
favorably on his testimony when he is up for parole and release him
earlier. His post-sentencing cooperation and telling of the truth could be
viewed as an example of him being reformed.
Yes, on reduce or no sentence or prison-time. He could say something that gets him a pardon
(or a fully or partially commuted sentence) from the President. Again, highly
unlikely based on Cohen's statements and Trump's statements but not
impossible. A pardon or reduced or commuted sentence can be declined.
Paths to an increased sentence
Likely not, on increase (technically a new sentence). As the severity of the
current suggested lie is minor (soliciting for a job in the new administration) in its wider implications this time and he is
already doing prison time. I doubt a prosecutor would take this up, and
even if they did, I doubt even if convicted it would result in an additional
custodial sentence, but it could.
Possibly, on increase, on a technicality. His parole board may not
look favorably on his testimony if he lied again when already under
sentencing for lying to congress. This may count against him for
early release. It could be perceived as showing a lack of reform.
Yes, on increase, if he lied again to congress as this is a new crime. Maybe his current testimony is found to contain more meaningful and important lies over the next few months (more than soliciting for a job in the new administration). Lets say for example he did go to Prague. It would be a new crime and hence a new trial and a new sentence if found guilty. It could not increase his old sentence but could result in a new one.