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House GOP considers rule change

House Republicans are considering a change in their rules when it comes to voting for Speaker of the House. The new rule will apparently punish any House GOP member who voted on the floor against the conference’s nominee for Speaker. Specifically, a member who does so would be stripped of all committee assignments for that Congress.

There is a growing concern that a sizeable block of conservative members could vote against Speaker Boehner on the House floor. Some have estimated as many as 30 to 40 members could do so.

Republicans would still be allowed to vote for anyone in those closed-door internal elections, during which members choose their leadership officials for the next Congress. But once a majority of the conference has voted for their candidate as speaker, that decision will be final. When the House holds its chamber-wide vote for speaker on the first day of the new Congress, all Republicans will be expected to support the party's nominee. Next year, barring any surprise development, Boehner will be that nominee.

At the same time, according to sources, conservative lawmakers are discussing something of a counter-proposal. Under their plan, the November leadership elections would be pushed back until after the lame-duck session of Congress ends in December. This idea was described by one House conservative as a preemptive strike to warn leadership not to consider any significant legislation during the 15-day "lame-duck" period between November's midterm elections and the start of the new Congress.

Twelve House Republicans refused to vote for Boehner's reelection in January 2013 at the outset of the 113th Congress. This level of dissent was insufficient to oust Boehner from the speakership, but served to embarrass the speaker and publicly air the party's dirty laundry. The incident infuriated Boehner's allies, who claimed no opposition was voiced privately during the conference elections—an affront to the traditional process of keeping internal campaigns private.

Still, even with plenty of members upset over that 2013 incident, adopting this proposal won't be easy. A majority of House Republicans must vote for any change to the conference rules, and some lawmakers would certainly oppose the change. Such sweeping punitive measures would be difficult to keep under wraps, such as Boehner and the Steering Committee did in late 2012 when three outspoken conservatives were kicked off committees for failing to support party initiatives.

Attorney General Holder to resign

After nearly six years in office, Attorney General Eric Holder is resigning his post. At a press conference at the White House on Thursday, President Obama praised Holder for his service as one of the longest-serving attorneys general in U.S. history. Since being appointed as a federal judge by President Reagan, Holder has served under six presidents of both parties.

"This is bittersweet," Obama said Thursday. "I chose him to serve as attorney general because he believes, as I do, that justice is not just an abstract theory. It's a living, breathing principle."

Among Holder's achievements, Obama credited him with "rooting out" corruption, fighting violent crime, and "reinvigorating" the Justice Department's Civil Rights Division.

The point about Holder's civil-rights work was particularly poignant on Thursday, the same day Michael Brown's parents appeared in Washington to talk about the death of their son. In August, Holder visited Ferguson, MO., to address racial tensions there.

In an emotional farewell speech, Holder called his time as attorney general the "greatest honor of my professional life." He choked up talking about his parents' influence on him, and thanked his wife and family for the "sacrifices" they made during his time in the White House.

But Holder's critics on the right and left felt some vindication. In a statement Thursday, Sen. Ted Cruz took Holder to task over DOJ's handling of the Internal Revenue Service targeting of conservative tea-party groups.

Civil-liberties advocates have also criticized Holder for his handling of the National Security Agency's mass data-collection programs. During his tenure, DOJ filed a lawsuit against Fox News reporter James Rosen, and spied on Associated Press reporters' phone calls.

New regulations aimed at discouraging tax inversions

On Monday, the Obama administration unveiled new rules intended to discourage corporations from moving their headquarters abroad to avoid paying U.S. taxes.

While the new rules will not block the practice, it will make such inversions far less economically profitable for corporations considering such a move.

The Treasury Department is still drafting the new regulations but the agency announced that the new regulations would apply to any corporate inversion deal that occurs from this Tuesday and on.

Under the new rules, companies who move their headquarters abroad in an attempt to avoid paying U.S. taxes will no longer be able to use "hopscotch loans" and would strengthen rules requiring the former owners of the U.S. company to own less than 80 percent of any new, foreign-based entity.

The Treasury Department is considering additional regulations, including regulations intended to prevent companies from shifting their U.S. profits to lower-tax foreign jurisdictions.

Inversions have become a high profile issue after a wave of companies - including Burger King and Chiquita - have announced mergers with foreign companies based in lower tax countries.

Republicans have called on Congress and the White House to push to lower the U.S. corporate tax rate as a way to discourage such inversions, an approach they prefer over the regulation approach of the White House and Congressional Democrats. The U.S. corporate tax rate currently stands at 35 percent.

Boehner lays out five-point agenda

This week, Speaker John Boehner (R-OH) laid out a five-point plan for the 114th Congress. Boehner's plan, which he touted as a pathway for creating growth and mobility in America, emphasizes tax reform, reduced spending, and improvements to the legal, regulatory and education systems.

Speaker Boehner criticized the current tax code, saying that not even the Internal Revenue Service, the agency charged with implementing the tax code, understands the current tax code.

On spending cuts, Boehner emphasized the need to reform entitlement programs but avoided explicitly mentioning Social Security and Medicare.

Boehner said tort reform was needed to make litigation a "last resort" and that regulatory reform was needed to make the regulation process more "pragmatic."

The Speaker also advocated for school choice as part of his education reform plan.

Ryan floats using reconciliation for tax reform

This week, House Budget Committee Chairman Paul Ryan (R-WI) floated the idea of using the budget reconciliation process as a vehicle for reducing and reforming the tax code and for cutting spending. The budget reconciliation process requires only a majority vote in the Senate, avoiding the 60-vote threshold that normally applies.

Republicans are hopeful that they will take back the Senate in November, but even if they do, no one thinks they will win enough seats to reach the 60-vote threshold.

While using reconciliation would give Republicans the ability to move high priority items like tax reform, it would still be subject to a veto from President Obama.

Ryan, who will give up his Chairmanship of the House Budget Committee at the end of this Congress, has said he intends to seek the Chairmanship of the powerful House Ways and Means Committee – he will be challenged by Rep. Kevin Brady who announced his intention to seek the gavel of the tax-writing committee.

Transportation in focus

FAA Drone Policy

This week, the Federal Aviation Administration (FAA) announced that it was permitting the use of drones for filming movies under certain circumstances. This is changed from the FAA's largely de facto ban on the use of drones for commercial purposes. Since 2012, the FAA had only approved two permits for companies to use drones - both in remote areas of Alaska.

Under the permits, the approved companies would be able to use drones weighing less than 55 lbs, operating no more than 400 feet from the ground, and with licensed pilot and spotter on hand to ensure safety.

The FAA is currently working on regulations that will eventually legalize and regulate commercial drones of all sizes.


Political bits            


Minnesota 7th Congressional District: Torrey Westrom (R-MN) trails 12-term incumbent Collin Peterson (D-MN) by just 5 points, 45 to 40 percent, according to a Tarrance Group poll.

New York 24th Congressional District: A new Public Opinion Strategies poll shows challenger John Katko (R-NY) trailing Rep. Dan Maffei (D-NY) by just 3 points, 46 to 43 percent.

North Dakota At-Large Congressional District: State Senator George Sinner (D-ND) trails incumbent Rep. Kevin Cramer (R-ND) by just 2 points, 40 to 38 percent, according to a new Mellman Group poll.


Alaska: The National Rifle Association said it will make no endorsement in the Alaska Senate race. Also in Alaska, a new Dittman Research poll shows Dan Sullivan (R-AK) leading Senator Mark Begich (D-AK) by 6 points.

Arkansas: According to a new Suffolk/USA Today poll, Senator Mark Pryor (D-AR) leads Rep. Tom Cotton (R-AR), 45 to 43 percent.

Kansas: Tea Party-supported physician Milton Wolf (R-KS), who lost a primary challenge to Senator Pat Roberts (R-KS) earlier this year, is considering endorsing the independent campaign of businessman Greg Orman (I-KS).

Virginia: A new Quinnipiac poll shows incumbent Senator Mark Warner (D-VA) with just a 9-point lead over former RNC Chairman Ed Gillespie (R-VA), 48 to 39 percent. However, another poll released this week by Roanoke College shows Warner with a much larger lead at 46 to 27 percent.

A look ahead

The House and Senate are in Recess Next Week

Washington by the numbers

$608Hourly earnings of members of the House during their expected eight days in session between Aug. 1 and Nov. 12, assuming 10-hour work days.

$84.50Additional profit per iPhone 6 Plus, which costs $15.50 more to manufacture than the iPhone 6, but retails for $100 more.

They said what?

“He’s regal, almost. And I’m not talking about in the sense of a King Arthur or that type of regal. He’s redneck regal. He really is.” -- Political strategist David “Mudcat” Saunders, on former Sen. Jim Webb, D-Va. (Daily Caller)

Washington humor

"President Obama is facing criticism over an incident yesterday where he was holding a cup of coffee in his hand, and then used that same hand to salute a Marine. Though, with all that's going on in the world, I'm surprised he didn't salute with a bottle of Jack Daniels in one hand and a cigarette in the other." – Jimmy Fallon 



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McDonald Hopkins Government Strategies LLC
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