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Legislative / Policy Update

Senate Floor. The Senate last week confirmed two nominees on 50-49 votes -- Kathy Kraninger as head of the Consumer Financial Protection Bureau and Bernard McNamee as a member of the Federal Energy Regulatory Commission. This week, the Senate plans to vote on the nomination of Justin Muzinich to be Deputy Secretary of Treasury and on a resolution to withdraw U.S. military support for Saudi Arabia’s military intervention in Yemen’s civil war. On Thursday, the Senate could give final approval to a five-year farm bill reauthorization.

House Floor. Like the Senate, the House is expected to pass the farm bill, which could be signed by conferees today and released on Tuesday. The House also plans to vote on a bipartisan bill that would allow the federal government to fine drug companies that knowingly misclassify outpatient drugs sold in the Medicaid program as generics in order to give smaller discounts to the government. The tax bill that was pulled from the schedule last week has been revised and could go to the floor on Thursday.

Tax Bill. House Ways and Means Chairman Kevin Brady unveiled a revised version of his tax bill Monday afternoon. The new version drops the extension of expired tax breaks, which, in general, are supported by Democrats; retains the technical corrections, which Democrats would prefer to address in the next Congress; and adds a host of new provisions, many of which would repeal or delay taxes imposed by the Affordable Care Act. The new bill would extend the moratorium on the medical device excise tax, delay the implementation of the Cadillac tax on certain employer-provided insurance plans, further delay the health insurance tax, and repeal the excise tax on indoor tanning services. Like the earlier version, the bill includes provisions designed to encourage saving for retirement.

Government Funding. On Friday, the President signed a two-week continuing resolution that both chambers had approved Thursday, Dec. 6. The CR provides funding through Dec. 21 for the seven FY 2019 appropriations bills that have not yet been enacted. House and Senate appropriators have reportedly worked out deals on six of the seven, but funding for the border wall in the Homeland Security bill remains the outstanding hang-up. In an attempt to negotiate a deal on the border wall, Democratic leaders Chuck Schumer and Nancy Pelosi will meet Tuesday with President Trump.

Democrats have said they are unwilling to provide more than the $1.6 billion for pedestrian fencing in the Senate Homeland Security bill, while President Trump and Republicans continue to push for at least $5 billion in FY 2019 border wall spending that was included in the House bill. If the President is unwilling to accept the $1.6 billion level, Democrats have suggested that Congress approve six of the seven remaining bills and a continuing resolution for Homeland Security that extends for the rest of the fiscal year. Republicans say that proposal is unacceptable.

Infrastructure. In a Dec. 6 letter to President Trump and a Dec. 7 Washington Post op-ed, Senate Democratic Leader Chuck Schumer said any infrastructure package considered next year must address climate change. Schumer said Democrats will expect an infrastructure bill to make massive investments in renewable energy infrastructure, especially in new technologies such as battery storage. “We also must make our infrastructure more climate-resilient,” he wrote, “particularly the electrical grid and our water and wastewater systems.”

Politics / Process

Committee Assignments. The House Democratic Steering and Policy Committee had planned to meet last week to recommend committee chairmen and committee members, but instead will meet this week because of the schedule changes necessitated by the funeral arrangements for President George H.W. Bush. One of the first items on the agenda is to recommend which returning members should be appointed chairmen of the various House committees and who will be seated on the four exclusive committees: Appropriations, Energy and Commerce, Financial Services, and Ways and Means. While tradition holds that freshmen do not receive these plum committee assignments, with so many freshmen members, this could change for the 116th Congress. As of now, it appears the only real competition for a chairmanship is for the Veterans Affairs Committee. Some have speculated that Rep. Julia Brownley may challenge Rep. Mark Takano for the gavel.

We don’t yet know what the committee ratios will be, but they will be similar to the current margins. The House count now stands at 235 Democrats and 199 Republicans, with a race in North Carolina still to be certified amid charges of voter irregularities. These numbers compare to a margin of 241 Republicans and 194 Democrats when ratios were determined for the current Congress. Since Democrats next year will hold fewer total seats than Republicans did in this Congress, the majority/minority margins could be narrower in the 116th Congress.

On the Ways and Means Committee, for example, there is currently an eight-seat margin, 24 Republicans and 16 Democrats. If those numbers flip, Democrats could add 10 new members to the panel, taking into account that two of their current members are not returning next year. On the Republican side, six members retired and four lost, so we expect all of the remaining 14 to return to the panel next year and one or two new members may be added.

After Democrats took the House majority, there was talk in their ranks of adding a seventh subcommittee to Ways and Means to develop financing options for infrastructure. As with any change in jurisdiction among committees or subcommittees, these decisions are a zero-sum game, so expect some push back from other presumptive chairmen. While nothing has been announced yet, it appears that there may not be a new panel and infrastructure financing will be handled by the Tax Policy Subcommittee. Rep. Lloyd Doggett is the lead Democrat now on that panel, but he is expected to be the new chair of the Health Subcommittee, replacing Ranking Member Sander Levin, who retired. Rep. John Lewis has seniority over Doggett, but he is likely to chair the Oversight Subcommittee. This, then, means that Rep. Mike Thompson is likely to head the Tax Policy Subcommittee. In all this shuffling, there could also be a battle over the chairmanship of the Trade Subcommittee between Rep. Bill Pascrell, who is currently the ranking member of that panel, and Rep. Ron Kind.

2019 House Schedule can be found here.

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