Federal Legislative Update: New Leaders, New Priorities
By Dennis McGrann
Infrastructure, immigration, and taxes are among the top issues that will be taken up in the upcoming 116th Congress. These and other topics of interest to cities will be front and center this year on Capitol Hill, but with a divided federal government, lawmakers may struggle to make progress.
During the 2018 midterm elections, Democrats secured more than the 218 seats needed to win control of the U.S. House of Representatives. Meanwhile, Republicans maintained a majority in the Senate and even increased their numbers.
Members of the new majority in the House have stated that they have a long to-do list, which includes an ambitious infrastructure program, fixes to the Affordable Care Act, and an initiative to reform election law. They also may work to strike early bipartisan deals on trade, prescription drug prices, and immigration.
Minnesota leaders With Democrats now in control of the House, they will take the helm of the 21 House committees. Committee chairs have control over what topics are taken up in hearings and what bills are voted on in the committee. This means that the hearings of the 116th Congress will feature issues that highlight priorities of the House Democratic majority.
Two Minnesotans are among the members expected to assume new leadership positions. Rep. Collin Peterson (D-Minn.) is set to become chair of the House Agriculture Committee, and Rep. Betty McCollum (D-Minn.) is expected to become the chair of the House Appropriations Subcommittee on the Interior and Environment.
Issues to Watch The following topics, which could impact cities, are likely to take up a good deal of lawmakers’ time:
Taxes. Lawmakers in the new House Democratic majority have said that one of their priorities will be middle class tax cuts and overhauling the 2017 tax law. Rep. Richard Neal (D-Mass.), who is expected to chair the Ways and Means Committee, has promised to hold hearings to scrutinize the overhaul. Those hearings could produce legislation to change the law, focusing on raising taxes on upper income levels, repealing the cap on the state and local tax deduction, and ending the tax break for carried interest. House Democrats have also said they plan to propose expanding the earned income tax credit and the child tax credit and establishing new education tax credits. With a divided government, it is unclear whether lawmakers will be able to reach an agreement on any tax proposals.
Infrastructure. Infrastructure proponents are hoping that a new Congress could result in a new start for addressing deficits in highways, roads, bridges, airports, and more. Members from both political parties have said infrastructure legislation remains a top priority, and they want to pursue a transportation and infrastructure package. President Trump, Senate Majority Leader Mitch McConnell (R-Ky.), and Rep. Nancy Pelosi (D-Calif.), who is poised to return as Speaker of the House, have all spoken about the possibility for cooperation on infrastructure in 2019. The major disagreement among lawmakers with infrastructure legislation is over how to fund it. One option is a gas tax increase, which was endorsed by the president.
Spending limit. Efforts to invest in federal programs, boost infrastructure spending, or decrease middle class taxes are set to conflict with a growing federal budget deficit that is likely to hit $1 trillion next year. The deficit and federal debt are likely to be center stage this spring, when congressional leaders will have to start negotiating a new agreement to raise the nation’s borrowing authority. Congress has suspended the debt ceiling until March 1, 2019. At the same time, the two-year budget cap deal (Public Law 115-123) that gave appropriators a generous framework for the fiscal year 2018 and 2019 spending bills is set to expire, requiring lawmakers to negotiate a new budget deal. Without a new budget deal, the battle over military and domestic spending will complicate the outlook for next year’s appropriations bills.
Immigration. Lawmakers are also considering making another attempt to negotiate a bipartisan immigration overhaul package, including a solution for the Deferred Action for Childhood Arrivals program. Complicating any deal, however, are the president’s demands for $25 billion in border wall money and more recent threats to do away with birthright citizenship.
Dennis McGrann is director of federal government relations with the law firm of Lockridge Grindal Nauen (www.locklaw.com). Lockridge Grindal Nauen is a member of the League’s Business Leadership Council (www.lmc.org/sponsors).