The 114th Congress recently convened against the backdrop of a new Republican majority in the Senate. As the last two years of the Obama Administration also marks the start of the next presidential election cycle, the potential for further changes continues with at least three or four Senators eyeing the White House.
This is the first Republican-controlled Congress since 2006, and the first Republican-controlled Congress under a Democratic president since 2001. In the House, the GOP has the largest majority since 1930. Republicans now control 247 House seats, compared to 188 for Democrats. For the U.S. Senate, the GOP picked up nine Senate seats for a majority of 54 seats compared to 44 Democrats and 2 Independents. With so much change, what's the outlook for the U.S. Government in 2015 and beyond?
Republicans will sprint out of the gate to try to complete action on a significant number of important policy and budget hurdles that must be tackled.
One of the key legislative issues on the table is the reauthorization of the Terrorism Risk Insurance Act (TRIA), which Congress failed to address by the December 31 deadline. And in the Senate, incoming Majority Leader Mitch McConnell (R-KY) has announced that action on the Keystone XL pipeline is expected during the first week of the new Senate term.
On two important vacant cabinet posts, the U.S. Senate will consider President Obama's nominations for Attorney General (Loretta Lynch) and Secretary of Defense (Ashton Carter). The Senate GOP has already announced its intention to use Loretta Lynch's nomination to discuss the President's recent executive order on immigration amnesty.
Several major policy and budgetary cliffs must also be discussed in the first months, including the Homeland Security spending bill in February, patching the Medicare reimbursement rates for doctors (also known as the DocFix), and the expiration of the current surface transportation reauthorization (the Highway Bill) in May.
Congress will also have to resolve the expiring short-term reauthorization of the Export-Import Bank (EXIM) in June and an increase in the federal government's debt ceiling in July. Renewal of the EXIM program continue to face hurdles from some conservatives, including calls for the program to expire permanently.
Before leaving town in December, the last Congress enacted a retroactive extension for corporate tax deductions that expired on December 31. The debate over the tax extender bill will be a priority topic for the incoming Congress, particularly if it is swallowed up in a larger debate around tax reform. In addition, both of the tax writing panels will have new chairmen that are deeply committed to tax reform, and will make it a priority.
Another top priority addressed by the incoming Republican leadership is a return to the regular process of passing a budget and the twelve separate appropriation bills that make up the spending side of the federal budget. In previous years, a continuing resolution (CR) has been relied upon to govern the spending of the federal government. The 114th Congress has until the expiration of the current CR on September 30, the date that also signals the end of the federal fiscal year, to pass a spending package without having to rely on another temporary CR.
The incoming Congress faces many challenges but many opportunities as well. The new dynamics of a Republican-controlled Congress and a lame-duck President should present a unique environment in which it may be possible to pass significant legislation, or it could prove to be a continuation of the political stalemate we have seen over the past four years.
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