There’s a lot of politics to discuss at the Thanksgiving table, whether the family is grateful or not.
After weeks of tabulations, the results of the midterm elections are widely known. While some individual races have yet to be called, the power shift in Congress has been confirmed: Republicans will take control of the House of Representatives while Democrats will retain control of the Senate. The upcoming Congress and how it interacts with the Biden administration will create new challenges and demand new strategies for how the business community approaches Washington.
House of Representatives
The narrow Republican takeover of the House was made possible by GOP victories in New York and California. Although the specter of President Trump and his recently announced 2024 presidential campaign looms over much of the Republican Conference, the less controversial new members of the ribs will have an outsized influence in the chamber. Minority Leader Kevin McCarthy (R-Calif.), who was nominated last week by a majority of his fellow Republicans but still needs 218 votes on the House floor in January to win the title, hopes lead as a speaker. Given his narrow margin of control, McCarthy cannot afford to lose the support of more than a few Republicans when it comes to electing the next speaker – and his margin of government in the next Congress to pass legislation will be slim and collaboration bipartisanship will likely be needed to move most measures. This will be McCarthy’s second bid for the job, having dropped out of the race to replace John Boehner in 2015.
For the first time in 20 years, the other side of the aisle will see a change in direction. In a speech on the floor last Thursday, Speaker Nancy Pelosi (D-California) announced her decision to step down as caucus leader. Following the announcement, Majority Leader Steny Hoyer (D-Md.) announced that he too would step down from his leadership role. Current Majority Whip James Clyburn (DS.C.) has announced his candidacy to become the fourth House Democrat. That paves the way for a new slate of Democrats to take on leadership roles: Representatives Hakeem Jeffries (DN.Y.), Katherine Clark (D-Mass.) and Pete Aguilar (D-Calif.) will be elected to the top. three posts next week.
Republican committee chairs will likely focus on aggressive scrutiny of the Biden administration and industry. The new committee leaders have expressed interest in investigating pandemic relief funding, including that which has boosted health care providers, as well as programs and provisions included in the bipartisan Infrastructure Act, the Inflation Reduction Act and the US bailout, such as the Department of Energy loan guarantee. Desk. Some Republicans have also pledged to examine ESG investing, putting leaders in business and financial sectors in the hot seat.
The slim majority will also pass must-have annual legislation, like bills funding the federal government and authorizing the Department of Defense, grueling exercises that will require at least some bipartisan collaboration. Although there have been posturing on the repeal of certain provisions of the main laws adopted since 2021, there will not be a serious opportunity to do so. Instead, we can expect Republicans to use the power of the wallet to scale back some of the Biden administration’s priorities. Additionally, McCarthy has publicly stated that he does not plan to vote to raise the debt ceiling without securing cuts to benefit programs.
The industry would be well served to step up its engagement in 2023. In addition to the new Republican majority and the new Democratic leadership, the chamber will have at least 77 new members. Proactive strategies for introducing sectors, policies, and issues are especially critical during times of significant change in Washington. For new members and staff, now is the time to help form opinions on many issues.
With one Senate race remaining — Georgia’s runoff — control of the upper house has already been decided. After securing a seat in Pennsylvania, Democrats retain control of the Senate regardless of the re-election of Sen. Raphael Warnock (D-Ga.). Majority Leader Chuck Schumer (DN.Y.) will continue to lead Senate Democrats and Minority Leader Mitch McConnell (R-Ky.) has taken up the challenge to stay in his post.
The Democratic majority will allow President Biden to continue to make federal judicial and office appointments throughout his administration. Without 60 votes, however, meaningful legislation will require bipartisan agreement. For the past two years, Democrats in Congress have used a special procedure called budget reconciliation to pass major legislation with only a simple majority in the Senate. With Republicans in control of the House, this tactic is no longer available.
So far, there are seven new members in the Senate. Georgia’s runoff and Alaska’s ranked picks election could bring the number up to nine. Only two of these new senators previously sat in the House. With making deals in the Senate more important than ever, efforts are already underway to meet and build relationships with these new senators.