In the first month following the end of a unified Republican Congress and presidency, the federal government continues in what is now the longest shutdown in U.S. history. A new Democratic majority in the House is trying to gain traction on major issues like infrastructure, GSE reform, healthcare and technical corrections to the 2017 tax reform bill, but as the shutdown grows longer, will hopes of bipartisan legislation dwindle?
Below is the BDA’s 116th Congressional outlook, including information on committee leadership and new members of the committees of jurisdiction to BDA’s interests – as well as a policy outlook.
You can find a combined House and Senate calendar for 2019 here.
House Committee on Ways and Means
Chairman Richard Neal (D-MA)
Ranking Member Kevin Brady (R-TX)
The House Committee on Ways and Means is now led by former Springfield, Massachusetts Mayor Richard Neal (D-MA). Neal, a long time proponent of tax-exempt financing has placed an early emphases on BDA priorities such as infrastructure and tweaking the Tax Cuts and Jobs Act of 2017.
Neal’s priorities for 2019 include addressing fixes for pre-existing conditions in health care, working to fix portions of the 2017 tax overhaul, addressing retirement savings shortfalls and a push for an infrastructure investment package. Neal also plans hold hearings on the wide-ranging tax overhaul law so that lawmakers can address issues and hear from experts who were unable to testify before the measure moved through Congress.
The committee under Chairman Neal’s leadership has also taken interest in tax-exempt municipal advance refundings and bank-qualified debt – both BDA priorities. It is also widely expected that the committee will evaluate action on the SALT cap, the corporate tax rate and raising the cap threshold for PABs.
House Financial Services Committee
Chairwoman Maxine Waters (D-CA)
Ranking Member Patrick McHenry (R-NC)
The House Financial Services Committee’s new chair, Rep. Maxine Waters, is the first woman and the first African-American to lead the panel. Waters has made it clear that her top priority will be strong regulations to “protect consumers, investors, and the economy.” She has promised to make sure that the CFPB’s role continues to be bringing “accountability and protecting consumers, investors and economy from abusive Wall Street practices,” and has expressed significant concern that the “Trump administration wants to destroy the CFPB.” Water’s first speech as the panels leader is available here.
Waters also wants to make sure regulators address Dodd-Frank reforms like requiring more capital and liquidity and establishing bank resolution and recovery plans. Waters is enthusiastic about fintech, as well as housing and housing finance, which are likely to be key parts of her agenda. She will also add a new subcommittee on diversity and inclusion to the broader panel.
Waters and Ranking Member McHenry have very different political and policy goals but are said to have a good working relationship. They will likely look to work together on certain bipartisan legislative initiatives like flood insurance, reforms to the Export-Import Bank, and housing finance/GSE reform. Notable new members of the committee include outspoken progressives Alexandria Ocasio-Cortez (D-NY), Ayanna Pressley (D-MA) and Rashida Tlaib (D-MI).
Senate Finance Committee
Chairman Chuck Grassley (R-IA)
Ranking Member Ron Wyden (D-OR)
After the retirement of Chairman Orrin Hatch (R-UT), the committee is now led by Sen. Chuck Grassley. Grassley’s agenda reflects similar years for the committee with an emphasis on trade, healthcare and tax.
Top priorities include making tax provisions set to expire after 2025 permanent, including the marginal tax rate cuts for individuals, families, small business owners and farmers, the doubling of the child tax credit from $1,000 to $2,000, the near-doubling of the standard deduction and the innovative 20 percent deduction for pass-through businesses.
Grassley has history of being friendly towards tax-exempt bonds in general, with few exceptions. In 2012, he questioned the use of some tax-exempt financing in the education sector. But most experts agree that Grassley will be a better friend to the muni-market than his predecessor.
Sen. James Lankford (R-OK) left his post as chair of the Senate Appropriations Committee’s Financial Services and General Government Subcommittee for his new spot on the tax-writing committee. He is joined by Sen. Steve Daines (R-MT) and Sen. Todd Young (R-IN) on the majority side. The Democrats added Sen. Catherine Cortez Masto (D-NV) and Sen. Maggie Hassan (D-NH).
Senate Banking Committee
Chairman Mike Crapo (R-ID)
Ranking Member Sherrod Brown (D-OH)
Leadership of the Senate Committee on Banking, Housing and Urban Affairs will remain the same as in the last Congress, with Mike Crapo (R-ID) as chair and Sherrod Brown (D-OH) as ranking member. The full list of committee membership is available here.
Sen. Kyrsten Sinema (D-AZ) and Sen. Tina Smith (D-MN) have joined the committee, filling positions that became open when Sen. Heidi Heitkamp (D-ND) and Sen. Joe Donnelly (D-IN) lost their reelection bids. On the Republican side, Sen. Dean Heller’s (R-NV) election loss and Sen. Bob Corker’s (R-TN) retirement opened up two Republican seats on the committee that will be filled by Sen. Martha McSally of Arizona and Sen. Kevin Cramer of North Dakota.
Chairman Crapo’s agenda will continue his focus on increasing access to capital and implementing the Department of Treasury’s many Trump Administration-driven recommendations for reducing regulatory burdens. While Chairman Crapo has expressed support for housing finance reform, he did not actively pursue such legislation in the last Congress. However, the nomination of Mark Calabria, a strong opponent of the GSE conservatorships, to be the next director of the FHFA, is likely to increase the focus of Republicans on this issue.
Even though the committee’s membership changed only slightly in 2019, there are two Democratic senators on the committee who have expressed interest in seeking their party’s nomination for president in 2020—Ranking Member Sherrod Brown (D-OH) and Elizabeth Warren (D-MA). Brown and Warren could end up engaging in their own battle to win the support of progressives, a fight that could push them even further to the left.
