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Legislative / Policy Update

Senate Floor. The Senate had planned to be in session all week but will not hold any votes until late Wednesday because of the memorial services for President George H.W. Bush. The change in schedule means the Senate will postpone a cloture vote on the nomination of Bernard McNamee to serve on the Federal Energy Regulatory Commission from this evening until Wednesday afternoon.

House Floor. The House schedule has also changed, and there will be no recorded votes this week. However, Congress needs to pass a continuing resolution to fund the government, as well an extension of the flood insurance program, beyond Dec. 7. This will now be done in the House on a voice vote.

Federal Government. President Trump has issued an executive order declaring Wednesday a National Day of Mourning and closing all government offices for the day. The stock exchanges will also be closed.

Government Funding. Negotiations over funding for the border wall have reportedly not been going well, so it was questionable whether Congress would be able to wrap up work on the remaining FY 2019 appropriations bills before Dec. 7. Now, though, with the President and lawmakers turning their attention to the service for former President Bush, there’s clearly not enough time to forge a spending deal by Friday. An Oval Office meeting between President Trump and Democratic leaders Schumer and Pelosi that was scheduled for tomorrow has been postponed, possibly until next Tuesday.

Since the current continuing resolution expires Friday, lawmakers from both chambers are looking to pass a two-week funding extension, until Dec. 21, for the seven appropriations bills that have not yet been enacted -- Environment, Interior, and Related Agencies; Financial Services; Transportation/HUD; and Agriculture/FDA, as well as Homeland Security; State and Foreign Operations; and Commerce/Justice/Science.

Farm Bill. A deal in principle on a new five-year farm bill has been reached by the “Big Four” negotiators (Senate and House Agriculture Chairmen and Ranking Members Roberts, Conaway, Stabenow, and Peterson), but the details have not yet been released. Chairman Conaway said Nov. 30 that Tuesday was the earliest that legislative language would be released. The expectation now is that the agreement will be released next week.

Tax Bill. House Republican leaders had planned to pass a tax bill on Friday, Nov. 30, but apparently they were short of votes needed for passage and pulled the bill from the schedule. The bill, which Ways and Means Chairman Brady unveiled late Nov. 26, has several parts, including extension of various tax breaks that had expired, a handful of technical corrections to the 2017 tax bill, retirement savings provisions, and IRS reforms. While there is bipartisan support for much of the bill, House Democrats want to have hearings next year on what they view as problems created by the 2017 bill, so they and their Senate counterparts have no interest in passing a bill this year that fixes some of the most egregious problems.

Because leadership needs most Republicans to be on board to pass the bill, each Republican has more leverage to argue for what they think should or should not be in the bill. One provision that is said to be a problem for some Republicans is the extension of taxes that coal companies pay to the Black Lung Disability Trust Fund. The tax is scheduled to be cut in half on January 1, and Brady’s bill would extend it at its current rate through the end of 2019. The National Mining Association strongly objects to the provision, calling it an “ill-advised effort to raise taxes on the industry at a time when it is working to stabilize after years of decline.” Coal miners, on the other hand, support the tax and the benefits available through the black lung trust fund.

With time running out in the lame duck session, it’s unclear whether there will be an agreement to jettison the technical corrections and other controversial provisions and pass a package with tax extenders and possibly the IRS reform/tax administration package and retirement savings incentives.

Trade. On Friday, Nov. 30, President Trump, Canadian Prime Minister Trudeau, and Mexican President Peña Nieto signed the U.S.-Mexico-Canada Agreement. This starts the clock for additional requirements, including the Administration’s list of required changes to U.S. law, due within 60 days, and the International Trade Commission’s report, due within 105 days.

U.S. Trade Representative Robert Lighthizer said the countries will now focus on a resolution to Section 232 tariffs on steel and aluminum. Lighthizer also emphasized his confidence that a high number of Democrats will vote for the implementing legislation. Despite Ambassador Lighthizer’s assertions about bringing most Democrats on board, the road to passage for the USMCA will be long, as Democrats and Republicans are both expected to try to insert provisions into the implementing bill. After the signing ceremony and the G-20 Summit, President Trump told reporters aboard Air Force One that he will be formally terminate the original NAFTA agreement soon, “so Congress will have a choice of the USMCA or pre-NAFTA.” The NAFTA termination clause requires that a party submit a six-month notice of withdrawal and that the agreement will remain in force for the other parties.

Following a meeting between President Trump and Chinese President Xi at the G-20, the White House announced that the U.S. has agreed to suspend the escalation of tariffs on $200 billion in Chinese goods that were set to increase from 10% to 25% on Jan. 1. In return, the U.S. said that China will begin purchasing a substantial amount of agricultural, energy, and industrial products from the U.S. The countries will begin negotiations and if no deal is reached within 90 days, the U.S. tariffs will increase to 25%.

2019 House Schedule. Incoming House Majority Leader Hoyer has released the House calendar for 2019. According to Hoyer, there will be no votes in the House before 1:00 p.m. or after 7:00 p.m., except when considering appropriations bills. If necessary, the House may debate and consider other legislation after 7:00 p.m., but votes will not be held past that point. On the first day of each week, votes will occur at 6:30 p.m. The last votes of the week may be necessary prior to 1:00 p.m., and will not occur after 3:00 p.m.

Elections Update

Big Picture. The House currently stands at 234 Democrats and 198 Republicans, with three races yet to be called. Our big picture from last week noted the count at 233 Democrats to 200 Republicans, but in both the CA-21 and NY-27 officials have gone back and declared the races too close to call as votes are still coming in, while in the NC-9 absentee votes are being examined for fraud.

On Friday, the North Carolina State Board of Elections voted 7-2 to hold a hearing to examine claims of fraud in the district during this election cycle. The hotly contested matchup between Republican Mark Harris and Democrat Dan McCready was originally called in Harris’ favor by 905 votes, giving Republicans a seat that many predicted would go to the Democrats. The issue stems from a number of sworn affidavits involving a woman going door to door to “collect” absentee ballots in Bladen County, which Harris won in both the general election and the Republican primary, where he unseated incumbent Republican Robert Pittenger. The hearing on this matter will take place on or before December 21.

In the other two outstanding races, we expect one Democrat and one Republican to be declared winners. In the CA-21, officials will certify the results by next week. Democrat T.J. Cox currently leads incumbent Republican David Valadao by 623 votes. In the NY-27 district, Republican Rep. Chris Collins leads Democrat Nate McMurray by roughly 1,000 votes, with some absentee ballots yet to be counted. Votes are being certified and this election will likely be called in favor of Rep. Collins in the coming days.

With all Senate races now finalized, there will be 53 Republicans and 47 Democrats in the next Congress. In other Senate news, Louisiana Republican Senator John Kennedy announced this morning he would not be running for Governor in his home state. And Arizona Republican Senator Jon Kyl has yet to confirm if he will stay as the replacement for Senator McCain’s seat through the rest of the late Senator’s term.

For a live tracker of the key races from 2018 please check out PSW’s tracker linked here.

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