Monday, December 29, 2014

The Goals and Priorities of the 114th Congress, the Republican Congress

The 114th Congress, the new Republican Congress, will be sworn in on January 6, 2015. 54 Republicans and 44 Democrats and 2 independents caucusing with the Democrats comprise the new Senate. The new House of Representatives will have 247 Republicans and 188 Democrats. The leadership has a full agenda, and is geared to hit the decks running. Senate Majority Leader Mitch McConnell has scheduled six straight weeks of the Senate in session, including Fridays. Yet, what is the agenda, what are the goals? Here’s what they will not do – shut down the government, except to the extent that the President may veto individual appropriation bills. They will also need to ignore the highly predictable demonization of the Republicans by President Obama, and incessant veto threats.. Much of the Republican program will be reactive – a reaction to the preceding six years and perhaps the next two- reacting to statutes, such as ObamaCare, executive decisions, and agency acts they disapprove of. Some steps will be undertaken through traditional actions such as legislation and some indirectly through riders attached to “must pass” legislation. The Republican leaders recognize the President still retains great power and the Bully Pulpit. They will not underestimate him, but they will test and push him. The Republican agenda will be affected by external circumstances, such as Supreme Court decisions and foreign policy developments. There may be a quick, symbolic vote to repeal ObamaCare, but it will be successful vetoed by the President. Then what are the priorities? They will not be a generic plan to defeat and roll back President Obama’s actions, but what are the specific priorities? They will test the President’s will by seeing how many riders they can attach to the appropriations bills, as with the Cromibus Bill, without a veto. They could actually start out cooperating with President Obama in approving several trade bills the President and Republicans support, but which Senator Harry Reid blocked on behalf of the unions. Having established a spirit of bipartisanship, the partisan politics will begin. The first three are fairly clear. Number one, actually prior to any other act, the Senate must adopt its rules for the upcoming year. Does that mean reinstating the filibuster rules that then Majority Leader Harry Reid abrogated for judicial appointments and bills, or playing political hardball in the image of Senator Reid? Many Republicans would like to reinstate the 60 vote filibuster rule, but the reality is that they realize that the Democrats could rescind it anytime they regain power, which might even be in two years. Senator McConnell says he wants to make the Senate work the way it used to. The practical application would be to bring back the 12 individual appropriations bills, rather than an omnibus spending bull, and allow amendments to proposed bills on the Floor of the Senate. The Senate will accomplish nothing until the Rules are adopted. The second step will be passage of the Keystone Pipeline. The Republicans might be able to corral several Democrats from energy states and the coal-dependent Midwest to achieve a 2/3 veto proof majority in both Houses of Congress. They will be fighting not so much the President, but San Francisco hedge fund billionaire Tom Steyer, who is pouring millions into candidates opposed to carbon based fuels. If not as a direct act of Congress, then as as a rider, Keystone will be passed by Congress. The third action, which is critical, is to pass an appropriations bill for the Department of Homeland Security. The Agency’s current funding expires February 27. The Republicans will have to decide what to include in it. The spotlight is on immigration. The Republicans, the general public and the Republican base oppose the President’s granting of permanent status to those here illegally. They are also appalled at the flood of children into the country last spring. The big battle will be within the Party with the base, especially in the House, opposed to the Chamber of Commerce, which wants amnesty and open borders as a source of cheap labor. The Chamber will have more leverage in the Senate. The Republicans have to learn how to oppose illegal immigration without appearing anti-Hispanic. Here’s what we can predict. The bill will prioritize border security. It may include a rider prohibiting the spending of funds to grant permanent to the undocumented immigrants by securing individual votes through concessions on visas, perhaps 300,000, to high tech workers, also to hundreds of thousands of low tech workers who can fill the needs in specific industries, such as construction, and a program, dear to Democrat Senator Diane Feinstein, for guest workers in the agricultural industry. It will not include a path to citizenship, often labeled “Amnesty.” They will at a minimum prioritize border security and probably visa tracking in the funding bill. The Republicans will, with substantial Democratic support, rescind the medical devices tax in ObamaCare, and probably attach a few other repeals to it. They could also enact meaningful tax reform with the assistance of several Democrats. The major problem is that the President wants “tax reform” to be a guise for raising taxes. The Republicans want it at best to be revenue neutral. Two tax issues face the new Congress: continuation of the ban on states taxing internet sales and raising the gas tax to fund the Highway Trust Fund. The partisan split does not clearly exist on these issues. Republicans do not favor “Green tax” credits. Benefits to solar and wind are hard to justify and sustain when gas prices are plunging. The House Republicans are currently adopting a rule whereby the Congressional Budget Office and the Joint Taxation Committee will switch to dynamic scoring rather than the existing static scoring for tax reductions. Dynamic scoring recognizes the proven economic growth and resulting revenue gains by lowering taxes. Congressman Chris Van Hollen, the ranking Democrat on the House Budget Committee, refers to dynamic scoring as “cooking the books,” that which he did a lot of with the CBO in scoring ObamaCare. A critical issue is the reauthorization of the Export-Import Bank (Ex-Im). The existing authorization expires June 30, 2015. Several critical House Republicans are opposed to Ex-Im, which is sometimes referred to as “The Bank of Boeing.” The question is whether Speaker Boehner will bring it to the House floor if a majority of the Republican Caucus opposes it? Foreign policy divides include Cuba and Iran. President Obama has just moved to reestablish relations with Cuba, which does not play well with the Cuban refugee community in Florida and even some influential Democratic Senators. Options available to the republicans include denying funding for an embassy building in Havana, retain the existing trade barriers with Cuba, and denying Senate confirmation of an United States ambassador to Cuba. Iran is an ongoing boiling point with the President intent on establishing relations with Iran, lifting the trade barriers, and letting Iran obtain the Bomb. He has no Republican Congressional support on Iran. Senate McConnell’s major priority is to curb the “War on Coal.” We can expect legislation and riders curbing the EPA. The odds are that Congress will continue to cut the EPA and IRS’ budgets. This Congress will exercise the power of the purse. “Independent” federal agencies are in the Republican sights. Congress will act, often through riders, against the FCC’s proposed net neutrality rules and the increasing precedent breaking pro-union rulings of the NLRB. Congressional investigations will escalate. The last words on IRS, VA and Benghazi have yet to be heard. Some administrators will be spending more time testifying before Congress than in their offices. Mass tort reform will not be undertaken, but Congress may be pressured to enact asbestos reform, in respond to the vast abuses in asbestos litigation and asbestos trusts. Both the President and the Republicans will have to pick their battles.

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