The 2014 midterm elections brought Republicans control of the Senate and the greatest majority the party has enjoyed in the House since the presidency of Herbert Hoover. With Congress and the president on the opposite sides of the political aisle, compromise will be needed to avoid a political gridlock.
Yet rarely in history does bipartisan legislation meet exactly halfway between the stated goals of the two parties. During the 1990s with a triangulating Bill Clinton in the White House, a Republican Congress was able to pass extensive fiscal reforms that fulfilled much of what the party pledged in its “Contract with America” in the 1994 midterm election.
Two decades later, conservatives looking for a replay of the 1990s are in for a disappointment. The center-leaning Republican leadership of the new Congress are likely to render the next two years an inverted image of the 1990s, with a pliant Congress working to maintain the president’s agenda.
“We invite the president to support and sign these bipartisan initiatives into law,” John Boehner (R-Ohio) said in his first speech after being re-elected speaker of the House.
On “Obamacare” and immigration, two paramount issues for the conservative base, the GOP leadership has signaled tepid interest at best. On reform of Wall Street, though, there is a chance Obama and the Republicans might reach a deal.
Keystone XL
One of the first political fights of the year involves legislation to expedite the construction of the Keystone XL pipeline that would transport oil from Canadian tar sands to refineries on the Gulf Coast. The president maintains that the project is still undergoing review by the State Department and has spoken against the project on national television.
“It’s good for Canada. It could create a couple of thousand jobs in the initial construction of the pipeline, but we’ve got to measure that against whether or not it is going to contribute to an overall warming of the planet, that it could be disastrous,” President Obama said on the “Colbert Report” in December.
The White House press secretary recently implied that the president would veto legislation that would approve the construction of the pipeline, which has strong bipartisan support in the House and Senate, but not enough to override a veto. Sen. John Hoeven (R-N.D.) told reporters on Tuesday that 63 senators would vote for the bill, short of the 67 needed for a supermajority.
In many respects, the significance of the Keystone XL pipeline has paled in the past year as oil companies have augmented existing pipelines and built new ones, such as the Flanagan South pipeline, which delivers 600,000 barrels from Illinois to Oklahoma and began operations in December. Before that, crude shipments from Canada to the Gulf Coast had already topped 288,000 barrels a day in October, according to the Department of Energy.
“Keystone is kind of old news,” energy consultant Sandy Fielden told Bloomberg. “Producers have moved on and are looking for new capacity from other pipelines.”
Wall Street Reform
Economic reform and deregulation, especially those concerning Wall Street, are topics where there may be the least amount of friction between the Republican leadership and the president. When Democrats still held the Senate, Majority Leader Harry Reid (D-Nev.) killed countless pieces of legislation passed by the House, among them a litany of bills that would modify the Dodd-Frank Act, the leviathan piece of Wall Street reform passed in 2010 aimed to prevent future financial crises.
Among the modifications that the House passed were reforms that would make it easier to trade cross-border derivatives, exempt advisers from small venture capital funds, and businesses from SEC registration, and other amendments designed to trim regulation that many said unintentionally overburdened small businesses, which are not among the “too big to fail” targets of Dodd-Frank.
With Republicans firmly in control of both chambers, the president can expect to see those bills on his desk in the coming year. In anticipation, bank lobbyists are already gearing up for modifications to Dodd-Frank by hiring additional staff for the new year.
The Consumer Banker’s Association recently hired three new members, drawn from the ranks of ex-staffers of members of Congress, for its congressional affairs team, which now totals at five, according to the Hill.
“The 114th Congress is a fresh opportunity for our nation’s legislators to re-examine the effects of the Dodd-Frank Act on consumer choice and independence,” affairs team President Reagan Anderson said in a statement.
The White House’s actions during the struggle to pass the omnibus spending bill in December showed lukewarm concern for the progressive antipathy against the deregulation of Wall Street. When House Minority Leader Nancy Pelosi (D-Calif.) and Sen. Elizabeth Warren (D-Mass.) rallied Democrats to gut the spending bill because of its provisions to deregulate derivatives, the president reportedly personally called Democrats urging them to vote for the bill.
If the omnibus spending bill, which funded 11 out of the 12 sectors of government for the rest of the year, had not passed, incoming Republicans would have much more leverage in a possible budget brinksmanship with the president to defund his executive action on immigration, which Republican leaders have, at least in rhetoric, worked to defund.
Immigration
The omnibus spending bill passed in December only funds the Department of Homeland Security through February, when presumably Republicans will use funding to leverage some reversal of the president’s November immigration order, which would shield 5 million illegal immigrants from deportation and give them work permits.
The Republican leadership has already been criticized by the conservative wing of the party for not committing to short-term funding for most of the government so that they would have more leverage in the coming year, and now the party appears to be backing away even from using the DHS funding as a bargaining chip.
“We’re not gonna shut the government down, including the [DHS],” Sen. John Thune (R-S.D.) told Fox News on Sunday, after being asked whether the GOP would force Obama to sign a funding bill that would continue to fund the DHS but defund his immigration order.
Thune said the party would “use the power of the purse” to “challenge the president” where his authority overreaches, but did not specify how.
Moreover, House Republicans most vocal about defunding the president’s immigration order have been marginalized and stripped of their powers after a failed attempt to block Boehner’s re-election as speaker. The anti-Boehner contingent, which gathered 25 votes, failed to reach the requisite votes to force the election into a second round of votes.
Rep. Daniel Webster (R-Fla.) and Rich Nugent (R-Fla.) were swiftly removed from the powerful Rules Committee after their participation in the coup against Boehner.
“Obamacare”
As with the president’s immigration order, the GOP leadership has repeatedly promised to “repeal Obamacare.” The mechanism for a full repeal of the Affordable Care Act involves a budget process called “reconciliation,” which would involve allowing the GOP to send a budget through the Senate with only 51 votes, and not the 60 needed to bypass a filibuster, with a clause that would repeal the entirety of the Affordable Care Act.
The president could still veto the bill and shut down the government, but this would lay the groundwork for a GOP victory in the 2016 elections because of the perceived mandate to repeal “Obamacare.”
A McLaughlin & Associates poll in October found that 60 percent of Americans wanted to repeal “Obamacare,” and 44 percent wanted a conservative alternative, whereas only 32 wanted to keep it.
Yet reconciliation is a rarely used process and would require a tightly unified Republican party. Former Sen. Judd Gregg (R-N.H.) downplayed the possibility of reconciliation in a Wall Street Journal editorial last weekend, saying that “reconciliation is never simple or politically painless.”
“There has never been a reconciliation undertaking that was not highly charged and hyperpartisan,” Gregg wrote, noting that in 2005, with Republican control of “Congress and the White House,” a reconciliation to cut Medicare entitlements “passed because Vice President Dick Cheney cast the tiebreaking vote.”
Senate Majority Leader Mitch McConnell (R-Ky.) has waffled on his goals in repealing “Obamacare.” McConnell said in the 2013 Conservative Political Action Conference that he was committed to repealing “Obamacare” “root and branch,” then retreated two weeks before the midterm election.
“No one thinks we’re going to have 60 Republicans. And it would take a presidential signature. No one thinks we’re going to get that,” McConnell said when asked whether the new Congress will repeal “Obamacare” in its entirety, suggesting instead minor adjustments such as a removal of the unpopular medical device tax.
McConnell backtracked again a few days after the remark, with a spokesman promising once again that the senator will work toward a full repeal of “Obamacare.”
“Leader McConnell is and has always been committed to the full repeal of ‘Obamacare,’” his spokesman Brian McGuire said in a statement on Oct. 30. “He knows it won’t be easy, but he also believes that if Republicans are fortunate enough to take back the majority we'll owe it to the American people to try through votes on full repeal, the bill’s most onerous provisions, and reconciliation.”
