With the election results in, one group of Americans will undeniably experience a bleak future: hardy television station owners who will now have to live life without all that lucrative political ad revenue. Ads for consumer gadgets like the Pocket Fisherman and The Clapper just do not have the same budget.
The executive branch in Washington will now undergo a rapid transformation with the entry of president-elect Donald Trump, whose victory stunned all the so-called "experts." His political roots are found in neither party, and his life's experience has involved almost no politics or governing. He offered change, above all else, and a series of dramatic promises that may or may not be achieved. While experienced Washington hands always tailor their assessment of the "mandate" from an election to conveniently line up with their long-standing policy goals, there is consensus that this mandate can best be expressed in that one word: change.
Several intense deadlines now confront the President-elect, who has had barely a week to recover from an exhausting sprint to the election finish line. By mid-December, he must nominate key members of his cabinet in a process that will involve intense vetting to avoid any embarrassing post-announcement blow-ups. These names should be delivered to the Congress by mid- to late December so that the next Congress, which is sworn in on Jan. 3, can hold hearings and confirm these selections by the president inauguration on Jan. 20.
In addition to the cabinet positions, more than 4,000 additional political appointments must be made. While this process can take many months, these positions are critically important, as these people will drive the day-to-day work of all the government agencies.
Lame Duck Session to Address Government Funding
With Congress back in session, the most immediate issue is funding government beyond Dec. 9. If government is funded only through early 2017, and not through the end of the fiscal year (Sept. 30), a major new task will have been added to the work of the next Congress and the new administration. There is a major disagreement within the ranks of the majority party as to whether to pass short- or longer-term funding.
Additionally, on March 15, the public debt ceiling will be reached and the new Treasury Secretary must begin using "extraordinary measures" to avoid defaulting on public debt. If this is not addressed and dealt with without drama, markets may get nervous. The last time this happened, the U.S. sovereign debt was downgraded by S&P. If the lame duck Congress passes a longer-term debt ceiling extension, to later in 2017, it will give the new administration a little more breathing room to pass what has been an increasingly heavier lift.
The Next Congress
While the White House has switched parties, Congress remains under Republican control, although the margins of the majority have shrunk on both sides of Capitol Hill. This will make legislating more challenging. Even with one party controlling all
three major arms of government, the public's expectations for results in an election of big promises may be difficult to meet.
House Republicans will still have a strong 242-member conference. Only 24 Republicans will be able to oppose bills that the leadership wants to pass without any Democratic votes. House Speaker Paul Ryan has retained his position for the next Congress, but his task will continue to be a challenging one as he balances the demands of his most conservative members and the wishes of the new administration, while still passing essential legislation. Jeb Hensarling (R-Texas) will return as Chairman of the House Financial Services Committee.
Senate Republicans will lose two seats, bringing their majority to 52. For most bills, the Senate will still need 60 votes to pass (unless the Senate changes its filibuster rules, which is unlikely). Senator Mike Crapo (R-Idaho) will chair the Senate Banking Committee and Senator Sherrod Brown (D-Ohio) will be the ranking Democrat.
With control of the House and Senate, the Republicans will use a budget measure known as "reconciliation" to allow major legislation, enunciated in House and Senate budget resolutions, to pass the Senate with only 51 votes. This process was used to enact the Bush 2001 tax cuts and the 2009 Affordable Care Act (often called "Obamacare"). It is unclear whether this process will be used to enact a major tax cut, repeal Dodd-Frank or repeal Obamacare, actions which would otherwise be blocked by Senate Democrats.
Hensarling Lays Out Regulatory Relief, GSE Reform Plan for 2017
On Nov. 16, House Financial Services Chairman Jeb Hensarling (R-Texas), rumored to be on the Treasury Secretary short list, laid out his plans for the House Financial Services Committee's work next year.
Regulatory Relief
: Chairman Hensarling said he will be working with the Administration and other key policy players to revamp the Choice Act, which makes major changes to the Dodd-Frank Act. The legislation was voted out of the Committee on a party-line vote in September. The legislation would replace the liquidation process for large institutions established in Dodd-Frank with a new chapter in the bankruptcy code, allow large institutions to build capital to higher levels in exchange for relief from DFA and Basel III requirements, and include a range of regulatory relief for smaller institutions. The Committee will work to restructure all agencies led by a single director - the Consumer Finance Protection Bureau, the Federal Housing Finance Agency and the Office of the Comptroller of the Currency - into bipartisan commissions and require them to do a cost-benefit analysis on any new proposals. While passage out of the Committee in the spring is virtually certain, House passage may be a challenge, depending on how broad the legislation is drafted.
Government-Sponsored Enterprise Reform
: Last year, Chairman Hensarling got legislation out of his Committee to end Fannie Mae and Freddie Mac and most federal credit support of mortgage finance. The Chairman said he is once again going to tackle this complex issue. It is likely that his legislation, known as the PATH Act, will undergo revisions before it is unveiled.
Payday Lending
: The Committee will look at preventing the Consumer Finance Protection Bureau from withdrawing new rules constricting small-dollar loans.
