Weekly Legislative Update - January 7, 2019
What promises to be an interesting year is already off to an eventful start as we mark the 17th day of the partial-government shutdown that began on December 22. As we previously reported, before the end of 2018, Congress did manage to pass five appropriation bills, meaning some of the agencies already have set funding through September 30, 2019 (the end of federal fiscal year 2019). However, nine of the fifteen federal agencies - the Departments of Agriculture, Interior, Transportation, Housing and Urban Development, Treasury, State, Commerce, Justice and Homeland Security - remain unfunded and subject to the current shutdown. The big sticking point remains the President's demand for $5 billion in funding for a border wall and the Democrat's refusal to approve any budget bill which includes such funding.
The new Congress has convened with Democrats taking control of the House. Last week, House Democrats announced their plan to immediately vote on two bills, the first to fund all of the unfunded agencies but Homeland Security through the end of fiscal year 2019 and the second (in the form of a continuing resolution) to fund Homeland Security through February 8 and further stall the fight over the border wall funding.
Senate Majority Leader Mitch McConnell (R-KY) has made it clear that he will not bring any budget bill to a vote in the Senate unless it is something that the President will sign if it is passed. While the President had refused to support any bill that did not include his $5 billion, hence the partial-shutdown, there has been some indication that he may be looking to negotiate on that position. House and Senate leaders will be meeting with the President at the White House to discuss border security which will likely include efforts to strike a deal.
Looking ahead more generally, this year is almost guaranteed to be a tumultuous one in Congress. In addition to the split in the party control between the House and Senate, the Democratic caucus in the House will be getting a number of new progressive freshman. If history tells us anything, as a general rule these members will be less inclined toward moderate compromises and make the caucus itself more difficult to manage (not unlike the challenges House Republican leadership has experienced over the past few year with the Freedom Caucus). The House Democratic leadership will also have to reconcile varying views in the party as to how far to take their investigation and oversight of the Trump Administration, including addressing any potential basis for impeachment that might arise.
With control of the House majority, a major priority for the Democrats will be trying to shore up key provisions the Affordable Health Care Act (ACA). To this end, the House Democratic leadership recently released a new proposed rules package for the House to debate and vote on. The new rules would, among other things, authorize the Speaker, Nancy Pelosi (D-CA) to intervene in pending federal cases. This would mean that the new Speaker could intervene in the Texas v. U.S. and join in appealing the U.S. District Court for the Norther District of Texas's December 2018 ruling that the ACA is unconstitutional.
On the tax front, incoming Ways and Means Committee Chairman, Richard Neal (D-MA) has promised to hold hearings on the 2017 Tax Cuts and Jobs Act on the grounds that interested parties (including Congressional Democrats) did not have sufficient opportunity to weigh in on the bill before it was passed.
On the other side of the Hill, Republicans will be growing their majority in the Senate, providing Majority Leader McConnell and the Republican leadership with a bigger margin of error when it comes to passing controversial bills. However, this will only take them so far when faced with the Democratic majority in the House.
With the parties, as well as certain individual members, trying to define their message and make a name for themselves ahead of the 2020 presidential elections, we can expect to see quite a few face-offs and fireworks this year. However, with the split in party control, we are not holding our breath for any major comprehensive legislation. That said, we are hopeful that this could leave room for compromise on less controversial items, including retirement reforms (which, as we previously reported, were the subject of a number of bi-partisan proposals in 2018 that got sidelined amidst focus on the budget and other more controversial items).
2019 Legislative Priorities
Last month, the government affairs efforts of TIA were shared at the SBLC (Small Business Legislative Council) retreat.
To recap, the SBLC with TIA developed their top legislative priorities for 2019. These included:
1. Labor Shortage/Flow
-529 Plans and Student Loan Forgiveness
-Drug Testing and Opioid Crisis
-Online Sales/ Interstate, post Wayfair Decision
-Permanence/ Curing uncertainty
3. Infrastructure and Rural Development
-Transportation/ driver shortages
4. Tariffs and Trade
5. Association Health Plans
6. Cyber Security
7. Debt and Deficit
These issues will be shared with other small business groups, members of congress, and the administration. We anticipate a busy 2019 legislative year on both the state and federal levels.