McDonald Hopkins Government Strategies Advisory: This Week in Washington -- January 9, 2015

Boehner beats back conservative opponents

On Tuesday, House conservatives looking to bring down House Speaker John Boehner (R-OH) fell short, showing that leadership, emboldened by a massive majority in the House and compatriots leading the Senate, may have an easier time operating amid fickle and disorganized opposition.

Though 25 Republican members declined to support Boehner in a public display of non-approval (the most to oppose any sitting speaker since 1923 and roughly twice as many as opposed Boehner at the start of last Congress) the hodgepodge nature of the coup alienated even those who were otherwise ideologically supportive.

Many of the candidates whom the dissenting members rallied around were not credible alternatives. Those who so badly wanted an alternative to Boehner didn't seriously organize a campaign against him. Rep. Scott Rigell, who voted against the speaker in a last-minute decision, said he didn't even know that Rep. Daniel Webster was willing to oppose Boehner until he saw Webster's name on the television news ticker shortly before the vote. Allies of Rep. Louie Gohmert, another candidate, were calling Texas Democratic offices asking for support. Dissenting members simply cast votes for a mix of other contenders on the floor, for themselves and even for Sens. Rand Paul and Jeff Sessions.

Still, there was no denying the episode was embarrassing, a departure from the usual show of party unity that is the ceremonial vote for speaker on the House floor. And members who voted for Boehner later made it clear that it does not mean they will blindly support every policy he brings to the floor.

Boehner didn’t simply take incoming threats from his opponents, he also fired back. Late Tuesday, he pulled Webster and Rep. Richard Nugent, who voted for the fellow Floridian, from their seats on the Rules Committee, which is appointed entirely by the speaker. (Both men are keeping their other committee assignments.)

The vote highlights the challenges Republicans will have in governing. Even with a GOP Senate, House Republicans may struggle to pass bills that will find 60 votes in the other chamber. And President Obama still holds final say on turning a bill into a law.
House Republican leaders have routinely lost 40 to 60 votes on many large bills, and if McConnell cannot find a way to shepherd House bills past his body, that will likely remain the case.

Democrats grappling to stay relevant in the body saw their own silver lining in the votes against Boehner Tuesday. The continuing discord, no matter how small, underscored to them how important it was for Boehner to work together with Democrats moving forward. It's a tactic Boehner's been forced to use more than once in the past: to push through the farm bill, the omnibus, and other must-pass legislation.

Keystone moving again

Environmentalists know they will lose Friday's House vote to approve the Keystone XL pipeline, but they're scrambling around Capitol Hill with a humbling new goal: Stop a bipartisan landslide.

Prior to Friday, House Republicans had voted nine times since 2011 in favor of the Keystone XL pipeline. And today they are expected to make it 10 times. The vote is intended to force President Obama’s hand in approving the pipeline that would send heavy crude from Canada to the Gulf Coast.

Before today’s vote, opponents of the pipeline were able to bank on Harry Reid (D-NV) and the Democratic majority in the Senate to block the bill from reaching the President’s desk. Thanks to the 2014 mid-terms, however, environmentalists no longer have that luxury.

One of the biggest fears among the pipeline opponents is that enough Democrats join with the expanded Republican majority and bring the pro-Keystone caucus close to a figure that could withstand Obama's threatened veto. And the more lopsided a House vote is, the more difficult it becomes to keep Senate Democratic moderates and lawmakers viewed as potential fence-sitters, such as Christopher Coons of Delaware, Bill Nelson of Florida, and Amy Klobuchar of Minnesota from supporting the Keystone bill.

Keystone XL has become a flash point in a much broader national debate over climate change and American energy security. Environmental groups have long argued that if the pipeline is built it would accelerate global warming and speed oil-sands development. And opposition has become a powerful rallying cry for the environmental movement as it attempts to flex its muscle in Washington and across the U.S.

Another factor adding to the fray is that environmentalists are working to shore up anti-Keystone votes in the freshman class, a host of lawmakers they have never dealt with before.

Several environmentalists said they are focusing their attention on three freshman Democrats in particular: Reps. Brad Ashford of Nebraska, Debbie Dingell of Michigan, and Gwen Graham of Florida, all of whom have yet to indicate how they plan to vote on the pro-Keystone XL bill.

No matter what happens in the House – or in the Senate – President Obama has indicated that he will veto the legislation if it reaches his desk. The President issued a formal veto threat on Wednesday of this week.

While Keystone opponents are scrambling to prevent a veto-proof majority, they're also planning Senate amendments aimed at forcing Republicans to take tough votes en route to passing the bill.

So far, the Senate has not set a date to bring pro-Keystone legislation to the floor, but a vote is expected in the coming weeks. A markup of legislation approving the pipeline that closely resembles an earlier bill sponsored by Republican Sen. John Hoeven of North Dakota and Democrat Joe Manchin of West Virginia will take place in the Senate Energy and Natural Resources Committee on Thursday.

Sens. Chuck Schumer and Debbie Stabenow, who lead the Democratic Policy and Communications Center, have circulated a list of five proposed amendments that are designed to "create a clear contrast with the Republican majority."

It includes measures barring export of any oil that travels through Keystone, and to require that for every job created by the pipeline, "an equal or greater amount of jobs is created through clean energy investments," according to a letter that Schumer and Stabenow circulated among Democrats a few days ago.

McConnell takes charge in Senate

In his first official speech as Senate majority leader, Mitch McConnell (R-KY) finally stepped into his role, laid out his vision, and addressed his upcoming battle against President Obama head on.

"If President Obama is interested in a historic achievement of his own, this can be his time as well," McConnell said on the Senate floor Wednesday. "I appreciate that bipartisan compromise may not come easily for the president. The president's supporters are pressing for militancy these days, not compromise. They're demanding the comforts of purity over the duties of progress."

A day after President Obama threatened to veto legislation for the construction of the Keystone pipeline—the Senate's first effort of the new session—McConnell made it clear that he was not backing down.

"Threatening to veto a jobs and infrastructure bill within minutes of a new Congress taking the oath of office—a bill with strong bipartisan support—is anything but productive," said the new Majority Leader.

While McConnell acknowledged that trade, infrastructure, and tax reform were areas he was willing to work with Obama on, he also made it clear that it was not his job to "protect the president from good ideas."

"A little creative tension between the executive and the legislature can be healthy in a democracy like ours," McConnell said.

McConnell's overarching message was simple, however: It's time to make the Senate work again.

A three-decade veteran of the body, McConnell is fully aware that the Senate can be slow, unwieldy, and stubborn at times. But he made it clear that in his new role, he would try to restore some of the fundamental rules of the body.

"It's time to change the business model," McConnell said, a dig at the way the Senate was run under former Senate Majority Leader Harry Reid. "We need to return to regular order. We need to get committees working again."

Republicans in the 113th Congress often complained that there was not ample opportunity to offer amendments on the floor. McConnell said that would change.

"Sometimes, it's going to mean working more often. Sometimes, it's going to mean working late," McConnell said. "But restoring the Senate is the right thing to do."

The impact of a growing economy

Is it the economy, stupid? As the economy continues to grow, experts are already beginning to ask how economic growth could affect Washington – and in particular the 2016 elections.

A growing economy would improve President Obama's approval rating, putting Hillary Clinton in stronger position for the presidential race. Within the Democratic Party, the populist forces railing against income inequality would have a tougher time getting traction if an economic boom actually raises the fortunes of the middle class. The conservative grassroots will still be a potent force, but prosperity tends to mute voter anger.

An improved economy would also change the political impact of hot-button policy debates. Senate Republicans are bringing up legislation to construct the Keystone XL pipeline this month, and should comfortably have enough votes to send a bill to the president's desk. It's a smart political move on an issue where the president finds himself running against public opinion. But with energy prices at record lows and an improved jobs forecast, the potency of such an issue isn't as intense as it was before the midterms. Liberals might be emboldened to propose a gas tax, which has long been a political nonstarter. Anxiety over immigration often peaks during economic downturns, but subsides when jobs are more plentiful. And if the economy continues to grow, the administration would argue that its controversial lineup of regulations isn't harmful, undermining a major element of the GOP's argument. Meanwhile, Obama's second-term message has evolved from blaming congressional gridlock for the lack of economic growth to taking a victory lap for the suddenly improving economy.

It's no secret that a growing economy is greatly beneficial for the party in power. But if the most encouraging economic signs that haven't been seen in years are lasting, it would be encouraging news for incumbents of both parties, who have spent the last decade witnessing a historic degree of volatility in the electorate. Four of the last five elections since 2006 have been clear wave elections, sweeping one party into power.

It's far from certain, however, that the next campaign will be conducted during an economic boom.

The politician with the most at stake is Hillary Clinton, whose likely presidential candidacy is more dependent on factors out of her control than many past candidates. She's already well-defined to most of the public, and is facing the historic reality that few two-term presidents are able to elect a successor of their own party. Only two such successors prevailed in the 20th century: William Howard Taft in 1908, and George H.W. Bush in 1988. She'd get the biggest boost if Obama's approval rating hit 50 percent in his final year in office. Given the polarization in the country, that would only be possible with sustained economic growth.

The state of the economy will also play a major role in Clinton's still-uncertain campaign message. Will she adopt an agenda centered on income inequality, or promote the economic gains and credit Obama for them?

The uncomfortable truth about politicians is that they have less influence over the economy than they like to claim—and that voters hold them accountable for. It's notable that after two years of gridlock, with little consequential legislation passed through Congress, we're seeing the first signs of a recovery. Equally as uncomfortable is that, before most candidates even announce their presidential plans, the seeds of the outcome may already be planted. The next election won't be held for another 22 months, but the economic trajectory over the next few will go a long way in determining which party holds the advantage in 2016.

House Republicans prepare immigration response

House Republicans are preparing to unveil their much anticipated response to President Obama’s executive action on immigration.

House Appropriations Chairman Harold Rogers (R-KY) said the likeliest scenario is to move a spending bill funding the Department of Homeland Security (DHS) that has already been negotiated among House and Senate appropriators. The bipartisan bill would be released Friday and come to the floor as early as next week, with a separate authorizing amendment that would restrict the agency from using funds to enact the president's action. That amendment could resemble one Rep. Mick Mulvaney (R-SC) offered last year.

But there is a competing school of thought among some members who want to add language to the base text of the DHS spending bill, choking off money to implement Obama's order. Doing so would send a symbolic message that it is an integral part of the bill, avoid the appearance of procedural hijinks, and make the vote quicker by avoiding protracted debate on one or more amendments. There is also trepidation among some Republicans that conservatives would vote for the amendment but leave leadership in the lurch by voting against the underlying bill.

The move would undercut appropriators, who have been asserting since last year that such a maneuver is procedurally impossible.

Whichever path the House takes, passage of the measure would bring Republicans one step closer to a confrontation with President Obama over his immigration order and increase the possibility that DHS will run out of money at the end of February.

Some Republicans want to move cautiously so as not to seem as if they are endangering national security, particularly in the wake of a devastating terrorist attack in Paris on Wednesday.

Rogers and Homeland Security Committee Chairman Michael McCaul (R-TX) have been communicating throughout the process, and they spent much of Wednesday during House votes talking in the chamber.

Despite the assertion by some conservative Republicans that Congress can move without an authorizing bill, McCaul said he is in lockstep with Rogers in the opinion that a law change, not simply an appropriations rider, is needed. Normally an authorizing bill cannot be added to an appropriations bill on the House floor, but the Rules Committee could make the procedure in order.

Adding the measure as an amendment offers Republicans an ancillary benefit: It would force Democrats into an up-or-down vote on whether to uphold the president's executive action, and potentially even peel off some Democrats, making it harder for the president to argue that it is a purely political move if he is faced with a chance to veto the bill.

Republicans believe that because the underlying DHS bill was negotiated in a bipartisan manner, it will make it more difficult for Democrats to object, even with the amendment targeting the president. In short, they can say the Democrats are risking national security to protect an action the GOP sees as unconstitutional.

In the last Congress, rank-and-file members called for the House to immediately move to halt Obama's unilateral action, which provides temporary work permits and deportation deferrals to millions of undocumented immigrants. But because U.S. Citizenship and Immigration Services (USCIS) is funded by user fees it collects, rather than direct appropriations by Congress, appropriators said they could not direct how the agency spends its money. Leadership decided on a consolation prize: funding DHS through February 27, giving Congress time to revisit the issue this year.

If political wrangling leads to a department-wide shutdown, it's likely the majority of DHS employees would still go to work. During the October 2013 shutdown, an estimated 85 percent of the department's 231,000-plus workers continued their jobs. And fee-funded USCIS would be largely unaffected.

TRIA goes to president's desk

This week, the House and Senate – in a rare show of overwhelming bipartisanship – passed legislation to reauthorize the Terrorism Risk Insurance Act (TRIA).

The Senate voted 93 to 4 on the heels of a 416 to 5 vote in the House.

The six-year TRIA extension includes a provision to amend the Dodd-Frank Act to exempt agricultural and energy companies from having to post collateral for swaps traded directly with banks.

Only five members in the House, all Republicans, voted against the extension of TRIA. They were Reps. Justin Amash (R-MI), Walter Jones (R-NC), Thomas Massie (R-KY), Tom McClintock (R-CA), and James Sensenbrenner (R-WI).

In the Senate, only four senators voted against the bill: Sens. Maria Cantwell (D-WA), Marco Rubi (R-FL), Bernie Sanders (I-VT), and Elizabeth Warren (D-MA).

The bipartisan reauthorization legislation raises the trigger amount needed in total losses before the TRIA program kicks in from the current $100 million to $200 million, over five years, beginning in calendar year 2016. Also over five years, starting January 1, 2016, the mandatory recoupment rises from $27.5 billion to $37.5 billion, increasing by $2 billion each year. For all events, the bill raises the private industry recoupment total from the current 133 percent of covered losses to 140 percent of covered losses.

Transportation in focus

Gas tax getting new consideration

As gas prices fall at the pump all across the country, an old proposal is getting new traction. Increasing the gas tax to keep the Highway Trust Fund solvent has always been the easiest practical fix, but it’s also been the most politically poisonous – particularly when gas prices were hovering at $4 a gallon. The national average, however, has fallen to $2.20 a gallon and many consumers are finding gas at below $2 a gallon.

With gas prices in free fall, the political calculus around raising the gas tax appears to be changing and even Republicans are at least leaving the door open to a potential increase.

The incoming chairman of the Senate Commerce, Science and Transportation Committee, Senator John Thune (R-SD), says raising the federal fuel taxes is among the options under consideration to replenish the dwindling Highway Trust Fund.

Senator Jim Inhofe (R-OK), the new chairman of the Senate Environment and Public Works Committee, has also signaled that a potential gas tax – or “user fee” as he called – increase was at least “on the table” in his committee.

The current highway patch expires in May, and gas and diesel taxes haven’t risen since 1993, resulting in perennial shortfalls in the fund that pays for most road projects.

The current federal gas tax is 18.4 cents per gallon and the diesel tax is 24.4 cents per gallon.

While lawmakers on both sides appear to be more open to at least considering a gas tax increase, the chances of such an increase making it through a Republican controlled House and Senate seem daunting.

Speaker of the House John Boehner (R-OH) said on Thursday he doubted there were enough votes in the new Republican-majority Congress to raise gasoline taxes, reminding reporters that he has never voted to increase the gas tax and that even when Democrats controlled both chambers by wide margins the votes were never there to increase the tax.

 

 

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