President-elect Donald Trump will spar with some Democrats and Republicans over his Cabinet nominees
What could have been a controversial lame duck session ended hastily earlier this month as lawmakers cleared town after passing must-do or long-planned legislation – and little else.
Unlike previous sessions that were down-to-the-wire and prompted Christmas Eve and New Year’s Eve sessions, lawmakers managed to conclude work nearly a week early. They are now gone until Jan. 3, when the 115th Congress gavels in.
The biggest achievement for lawmakers was securing a government funding bill that will keep the lights on until late April. It looked, at times, as if a government shutdown was imminent. Democratic Sen. Joe Manchin of West Virginia – who will face a tough reelection campaign in 2018 – momentarily demanded that his party block the spending bill due to a melee over the extension of health benefits for retired coal miners. That hurdle was cleared, and the final spending measure ultimately passed the chamber on a 61-38 vote.
The April deadline sets up an early funding fight for President-elect Donald Trump, but with Republicans in control of both houses of Congress and the White House, one can assume it will be an easier battle than past years. It would be unwise, however, to discount the challenges both the House Freedom Caucus and Senate Democrats will likely cause for GOP leadership.
Three other critical pieces of legislation passed before Congress shuttered its doors for the year – the Water Resources Development Act, the 21st Century Cures Act, and the National Defense Authorization Act.
The defense bill passed with little ordeal after negotiators stripped the legislation clean of its controversial provisions earlier this year. Defense leaders reached an agreement on the overall funding level by authorizing an additional $9 billion to the top line to address funding shortfalls, which had been a fundamental impediment to reaching an agreement.
A much-needed healthcare innovation bill that directs billions in federal funding for research to combat diseases also passed.
The immense water authorization and reform bill, focused on projects and safety, also passed the chamber after months of wrangling by the Michigan and California delegations (both saw much-needed help for their states in the final measure). Critically, WRDA allocated $170 million to help Flint, Michigan, fix its lead-tainted water system – money that has been delayed for close to a year. That money helped bring Senate Democrats like Sen. Debbie Stabenow of Michigan on board and gave the bill enough lift to pass despite the opposition of Sen. Barbara Boxer of California and other West Coast senators due to the inclusion of California drought provisions. Those measures were supported by House Majority Leader Kevin McCarthy and Sen. Dianne Feinstein, both of California.
The Next Congress
Attention now turns to the upcoming Congress where Republicans plan to chip away at many of the legacies President Barack Obama forged during his eight years in office.
Republicans’ desire to use the Congressional Review Act will be a guiding element of the GOP’s agenda to undo some of the most controversial rulings issued by Obama. This functionary law allows Congress to use a special procedure to repeal any final rule issued within a 60-day window of actual legislative activity in Congress by a federal agency.
The guidelines are bureaucratic, but essentially allow for a review of any regulation finalized after late May 2016.
While Democrats will put up a fight against a Republican rollback of Obama initiatives, the review process allows for a “fast track” parliamentary procedure, meaning these votes will only require a simple majority of both chambers, along with soon-to-be President Trump’s support. The Congressional Research Service lists 48 major rules and regulations that could be reversed at the onset of the 115th Congress if lawmakers use the Congressional Review Act.
There are three major priorities for Republicans: repealing Obamacare, making headway on a tax code overhaul, and passing some sort of infrastructure package. GOP leaders are looking to begin the process early.
“We’re probably going to lead with Obamacare repeal and replace. Then we’ll have a small tax reform package and then a bigger tax reform package at the end of April,” incoming White House Chief of Staff Reince Priebus said this week to talk show host Hugh Hewitt. “It’s going to be a busy year with the first nine months being very much consumed with Obamacare and tax reform.”
Even though Republicans enjoy only a two-seat majority in the Senate, they will be able to move contested legislation due to a process called reconciliation – a component of the 1974 Budget Act.
This allows budget resolutions to include specific directives to committees to report legislation on one or more of the following three items: mandatory spending, debt, or revenue changes, within a 10-year budget window. Congress can deal with each of these topics in a single reconciliation bill or in multiple bills but only once each per budget resolution. For instance, Congress can vote on a reconciliation bill to reduce the debt limit and cut mandatory spending. They then can vote on a reconciliation bill addressing revenue. If multiple committees are tasked with reporting legislation, the budget committees move a combined package to the floor. Importantly, this final legislation requires only a simple majority vote in the Senate – greatly reducing the potential for a filibuster. For the directives to be valid, the budget resolution must be identical and pass both the House and the Senate.
We foresee the calendar going as follows – an early attempt to repeal Obamacare in January and February through the much-delayed fiscal year 2017 budget resolution. Congress will also attempt to finalize the FY17 appropriations process prior to late April when the stop-gap funding measure expires. Once the repeal of Obamacare passes, lawmakers will turn their focus to developing a fiscal year 2018 budget resolution to include a second set of reconciliation instructions addressing other priorities, mainly tax reform and raising the debt ceiling. The summer will be spent on those efforts, along with passing the traditional appropriations bills for fiscal year 2018 and the National Defense Authorization Act.
For Obamacare, this reconciliation means stripping away the revenue generators that pay for the law while leaving many of the policy measures in place. Unless congressional Republicans pass an alternative to Obamacare, this route could create chaos in the insurance industry.
Even though Republicans control both chambers of Congress and the White House, an Obamacare repeal will be tricky. Leaders have already admitted it may take years to see the bill unraveled (as the GOP does not want to be responsible for stripping 20 million people of health insurance).
The problem will be cobbling together a replacement mechanism that appeals to the vast ideological extremes of the caucus. There are many popular provisions of Obamacare that voters will not want to see rolled back, including the inability of insurance companies to deny healthcare plans to individuals with pre-existing conditions, the ability of young adults to stay on their parents’ plans until they reach 26 years of age, and affordable birth control access. Without revenue coming in, there is no way to pay for those provisions, however. Complicating matters is the fact that many conservative Republicans also want to see Planned Parenthood defunded and other right-of-center priorities pushed forward. This all serves to underline the immense problems Senate Majority Leader Mitch McConnell and Speaker Paul Ryan will face coming up with a replacement bill.
The availability of the fiscal year 2018 budget will provide Republicans another opportunity to use the power of reconciliation. Republicans and Democrats agree that the nation’s mammoth web of tax laws is in desperate need of reform. The parties split, however, in their views of how that mess could be rectified. Republicans want to see lower tax rates for companies, corporations, and individuals. But the GOP struggles to articulate a way to pay for those lower rates, as many of the loopholes that would need to close to push the rates down are highly favored by the business world. It’s a quagmire that tripped up Republicans’ last attempt at tax reform under then-Ways and Means Chairman David Camp. He saw his tax plan, which lowered rates while closing many loopholes, roundly dismissed by Republican leaders.
On the other end of the spectrum, Democrats want to raise taxes on the nation’s highest earners, and close many of the loopholes favored by businesses. The party splits on how to spend that bounty, with some looking to increase the money given to the middle class through the tax code, while others want to use any money earned by closing loopholes to pay for infrastructure improvements. But with workers feeling squeezed by their tax bills, it is not a widely popular policy. Nor would it do much to spur economic growth among businesses.
There is also the question of how to deal with companies who have moved operations overseas but would be interested in repatriation – essentially shipping their profits back to the U.S. – if tax rates were lowered. Some Republicans want to grant these companies a tax holiday to incentivize bringing jobs and money back to the American economy. Others in the Democratic party want to tax these profits as they find their way back into U.S. bank accounts. They argue that companies that shipped profits abroad for solely tax purposes shouldn’t get a pass.
It is further complicated by House Republicans’ desire to create a system for border adjustment taxes, including charging a tax on imports and changing the worldwide tax system to one that charges taxes based on where goods are consumed.
Trump will play a critical role here. He was elected as a populist candidate with some ideas leaning more ideologically Democratic. When it comes to taxes, he seems willing to cross political points of view. He’s promised to lower taxes for middle-class and high-income earners, but has also said he will target companies that have moved jobs overseas. His tax plan was deemed by some economists as a deficit raiser – an unpalatable option for congressional Republicans.
Trump said this week he’ll let Ryan take the lead on tax reform, which could be a signal he’ll turn to congressional leaders to funnel through legislative work without much early interference from the White House. How, or if, Trump opts to engage in the tax process will surely be unique and create bedfellows not usually seen in the tax debate.
The lauded campaign proposal by Trump to inject $1 trillion in the country’s failing infrastructure remains a priority but has slipped on the ladder to be either a companion bill to or behind any tax reform effort, largely because there isn’t the money to fund it. While Trump will certainly have political capital to spend during his first 100 days in office, McConnell and Ryan – deficit hawks as they are – are unlikely to give Trump a charge card for that amount without the necessary budget savings to pay for many an infrastructure package.
Trump has maintained a steady drumbeat of Cabinet nominee announcements since Thanksgiving – giving the political stratum in Washington and beyond much to discuss. While there are still major announcements to be made – specifically for senior White House staff – Trump has given us a clear sign of what he’s looking to accomplish during his tenure.
The first round of picks – including Department of Transportation Secretary nominee Elaine Chao (wife of McConnell) and Health and Human Services Secretary nominee Tom Price (Republican congressman) – enjoy close ties with establishment Republicans. These picks show the immense power that Vice President-elect Mike Pence enjoys on the transition team and with the new president.
The second round of selections culled heavily from the ranks of former generals and military brass. Retired Marine Corps General James Mattis and Retired Marine Corps General John Kelly are both respected within the military world, but their selections have raised concern among individuals who question the wisdom of having a recent general leading the Defense Department (as would be the case with Mattis). Still, Trump’s elevation of Mattis and Kelly highlight his enamorment with military leaders. They are sure to be confirmed given their service to the country.
Where Trump has created the most controversy is with the business moguls he has tapped for key Cabinet posts. “I want people that made a fortune. Because now they’re negotiating with you,” said Trump at a post-election rally this month. “It’s not different than a great baseball player or a great golfer.” His administration is on track to be one of the wealthiest in U.S. history, with nearly a half dozen millionaires and billionaires already announced.
It’s not so much the wealth that has caused concern but the policy positions held by many of the Cabinet picks, along with Trump’s seemingly about-face on “draining the swamp” – his unfulfilled pledge to turn the Washington establishment on its head.
Populists who supported Trump have expressed discontent that he tapped multiple former and current Goldman Sachs executives, while liberals are protesting Trump’s selections for the Environmental Protection Agency and Department of Education.
The biggest battle Trump will face, however, is not from his populist base or Democrats but most likely from his own party. There are already Republican leaders in the Senate who are questioning Trump’s selection for secretary of state, Rex Tillerson, the chief executive officer and chairman of Exxon Mobil Corporation. Florida Sen. Marco Rubio quickly said he has “serious concerns” with Tillerson – an executive known for his relationship with Russian President Vladimir Putin. A contentious nomination battle will bruise Trump early in his administration, but he seems ready for the fight having moved forward with the nomination of Tillerson after hearing of Rubio’s and other Republicans’ concerns.
Still, Tillerson is getting positive reviews from powerful Republicans like Senate Majority Whip John Cornyn of Texas, so he could see major support from leaders.
Environmental Protection Agency nominee Scott Pruitt will also draw a floor fight from Democrats protesting the Oklahoma attorney general’s opposition to climate change.
McConnell has said he wants to hold confirmation hearings before Trump assumes office to clear the decks once the New York Republican moves into the White House. Attorney General nominee Jeff Sessions, currently a sitting senator from Alabama, is the only nominee to be on the schedule (for mid-January) thus far.
WHITE HOUSE SENIOR STAFF
- Jason Miller – Trump campaign senior communications adviser
- Jason Miller – Trump campaign senior communications adviser
- Laura Ingraham – Conservative pundit
- Sean Spicer – Republican National Committee strategist and communications director
National Security Advisor
- Gen. Michael Flynn – Former Defense Intelligence Agency director (Selected)
Department of State
- Rex Tillerson, Exxon Mobil Corporation chief executive officer (Selected)
Department of Treasury
- Steve Mnuchin – Co-chairman and chief executive officer of Dune Capital (Selected)
Department of Defense
- James Mattis – Retired Marine Corps general; former commander of U.S. Central Command (Selected)
Department of Transportation
- Elaine Chao – Former secretary of labor under President George W. Bush (Selected)
- Alabama Sen. Jeff Sessions (Selected)
Department of the Interior
- Montana Rep. Ryan Zinke – Former Navy Seal commandeer (Selected)
Department of Agriculture
- Kansas Gov. Sam Brownback
- Chuck Conner – National Council of Farmer Cooperatives chief executive officer
- Sid Miller – Texas Agriculture commissioner
- Sonny Perdue – Former governor of Georgia
Department of Health and Human Services
- Georgia Rep. Tom Price – Chairman of the House Budget Committee (Selected)
Department of Commerce
- Wilbur Ross – Investor (Selected)
Department of Labor
- Andrew Puzder – Chief executive officer of CKE Restaurants (Selected)
Department of Energy
- Rick Perry – Former governor of Texas (Selected)
Department of Education
- Betsy DeVos – Former chairwoman of the Michigan Republican Party (Selected)
Department of Veterans Affairs
- Florida Rep. Jeff Miller – Veterans’ Affairs Committee chairman
- Scott Brown – Former senator from Massachusetts
- Sarah Palin – Former governor of Alaska and former Republican vice presidential candidate
Department of Homeland Security
- John Kelly – Retired Marine general (Selected)
Department of Housing and Urban Development
- Ben Carson – Former neurosurgeon; former Republican presidential candidate (Selected)
AGENCY HEADS AND OTHER OFFICIALS
Environmental Protection Agency
- Scott Pruitt – Oklahoma attorney general(selected)
U.S. Trade Representative
- Dan DiMicco – Former chief executive officer of Nucor Corporation
- Wayne Berman –Blackstone senior advisor; former chairman of Ogilvy government relations
- David McCormick – Bridgewater president
- Louisiana Rep. Charles Boustany – Influential former member of the Ways and Means Committee
United Nations Ambassador
- South Carolina Gov. Nikki Haley (Selected)
- Kansas Rep. Mark Pompeo – Third-term congressman (Selected)
- Oklahoma Rep. Jim Bridenstine
Director of National Intelligence
- Rudy Giuliani – Former New York City mayor
- Michael S. Rogers – Navy admiral; director of the National Security Agency
- Indiana Sen. Dan Coats
- Carly Fiorina – Former chief executive officer of Hewlett-Packard