Fall Forecast for Congress

• By: admin
• On: 09/01/2024 18:45:53
• In: Politics
• Comments: 0

By: Tony Roda, Williams & Jensen

In order to talk about the near-term Congressional agenda, it is important first to discuss the November elections. Much of what the House Republican and Senate Democratic majorities choose to do over the next few weeks will reflect the broader national political picture.

You've seen the pendulum swings before in election seasons and this year is no exception. Donald Trump was poised to have some degree of momentum and a honeymoon period following the Republican National Convention, except all of that was snuffed out by President Biden's withdrawal from the race and the rapid coalescing of the Democratic Party around Vice President Kamala Harris. Biden's announcement came on the Sunday afternoon following the Thursday night close of the GOP Convention. Excellent timing from the Democrats' perspective, resulting in a complete change in the political narrative.

Attempting to return the favor on the day after the close of the Democratic National Convention, Donald Trump made a joint campaign appearance with Robert Kennedy, Jr., who announced the suspension of his campaign and his endorsement of Trump earlier that day. Will this snuff out Vice President Harris's post-Convention honeymoon and momentum?  Only time will tell. One thing is clear, however, the pendulum swings are likely to continue.

From Congress's vantage point, the legislative maneuvering in September and October leading up to Election Day will need to be calibrated to give their party the best chance of holding the majority. We expect the House Republicans to largely continue on the path they've charted, which is to vigorously attack the perceived political vulnerabilities of the Biden-Harris Administration. Border security, crime, and the economy will take center stage. In addition, leading up to the August recess the House Judiciary Committee issued 130 letters to financial-related entities, including several public pension plans, asking for information on environmental, social, and governance (ESG) investing. The letters also request that relevant documents be preserved. The argument that the House Judiciary Committee Republicans make is that violations of antitrust law have occurred. I expect anti-ESG-related actions by the House to continue this fall.

Meanwhile, Senate Democrats, hoping to retain their majority, will attack Donald Trump on reproductive health, tax cuts for the wealthy, the January 6^th assault on the Capitol, and being soft on Russia and too cozy with other authoritarian leaders. This list of issues and the items expected to be raised by House Republicans can be categorized under the umbrella of political messaging, and none of them will lead to new laws being enacted.

The one issue that the disparate Congressional voices must address is how to extend funding for the federal government's cabinet agencies and programs. Thus far not a single appropriations bill for fiscal year 2025, which begins on October 1, has been signed into law. Prospects are that none of the 12 individual appropriations bills will be finalized by the deadline, making a short-term extension (Continuing Resolution) necessary. The current thinking is that a Continuing Resolution running into November can be achieved, but political mischief could make this difficult. In the recent past, reluctance by many House Republicans to support a funding extension has been overcome by votes from House Democrats. In a few short weeks, we'll see if this trend continues.

Following the election, Congress will return for an undefined period of time for a lame-duck session. Depending on the outcome of the elections, the lame-duck session could be of considerable length or simply a one- or two-day session to further extend the Continuing Resolution. However, we do not expect that the lame-duck Congress will make serious strides to tackle any significant legislative items, thus leaving the public policy playing field a blank canvass for the new president and next Congress.

Bear in mind that post-presidential-election Congresses typically tend to be frenetic and productive. For our purposes, the expiration of the 2017 tax act (most provisions expire by the end of 2025) will spur a great deal of activity on the federal tax front. Depending on the outcome of the November elections, that means public pension plans could have an opportunity to advance significant legislation or may have to hunker down and play defense. Even though the 2017 tax act was not geared toward retirement policy, its reconsideration by the next Congress could include tax-related retirement issues. These are certain to be topics discussed at NCPERS 2025 Legislative Conference & Policy Day.

Please be aware that NCPERS will pay close attention to developments in the September-October timeframe, lame-duck session, and the next Congress. We will apprise our members of significant items that they may wish to weigh in on.

Tony Roda is a partner at the Washington, D.C. law and lobbying firm Williams & Jensen, where he specializes in legislative, regulatory, and fiduciary matters affecting state and local pension plans. He represents the National Conference on Public Employee Retirement Systems and state-wide, county, and municipal pension plans in California, Colorado, Georgia, Kentucky, Ohio, Tennessee, and Texas. Tony has an undergraduate degree in government and politics from the University of Maryland, J.D. from the Catholic University of America, and LL.M (tax law) from the Georgetown University Law Center.