Forecasting 2019: Issues to watch in a divided Congress

  • PR agency FleishmanHillard released a post-election analysis of what businesses can expect from Congress in 2019 as Democrats take control of the House.
  • Expect a slew of investigations into the Trump administration by Congressional Democrats, ranging from Russian ties to EPA deregulation
  • Until then, Senate Majority Leader Mitch McConnell has said that funding the government, judicial confirmations, and passing the farm bill are his top priorities for the lame duck session

Doing business in a divided Congress

It’s a truism in politics that elections have consequences, so what do the results of the 2018 midterms mean for businesses in America? Shortly after the election, FleishmanHillard, a public relations and marketing agency, released a post-election analysis of what businesses can expect in the 116th Congress next year as Democrats take control of the House while Republicans strengthen their grip on the Senate.

The short answer? Not much.

“We can expect Democratic control of the House to result in a slew of investigations focused on President Trump, his political appointees, and the influence corporations and foreign entities have on his administration,” the analysis says. “The big takeaway: businesses should expect to see more oversight and legislative gridlock.”

FleishmanHillard does, however, highlight a number of areas that are likely to see movement. Thanks to a House rule change in 2015, committee chairmen now have authority to issue a subpoenas without consulting the minority party. The result will be a number of investigations launched by House Democrats designed to compel the Trump administration to produce evidence surrounding a variety of issues. This includes Trump’s personal affairs like tax records and his ties to Russia, along with a hard look at the deregulatory efforts of the Environmental Protection Agency under Trump. Specifically, we can expect acting EPA chief Andrew Wheeler to be in the crosshairs, along with businesses that have ties to Wheeler and other Trump appointees.

Perhaps the biggest sector that can expect attacks from Congress is the drug industry as House Democrats fight to lower drug prices. In July presumed House Speaker Nancy Pelosi, D-Calif., threatened pharmaceutical companies with a federal statute that lets the government strip them of exclusive licenses to a number of high-profile medicines.

GOP leaders, including Trump, have also said that drug prices are too high, causing Pelosi to suggest the two parties might be able to find common ground even though they have radically different ideas for how to tackle the problem.

Looking at other potential actions against the industry in 2019, FleishmanHillard highlights “direct negotiating authority for Medicare’s prescription drug benefit and the installation of a Senate-confirmed ‘price-gouging enforcer,’ who would monitor drug companies’ financial models and fine those found to have increased prices unjustifiably.”

If House Democrats are looking for a bipartisan win, they may pursue it through an infrastructure bill, as leaders from both parties have signaled interest in such a package. The challenge, of course, will be deciding how they pay for it, and whether the GOP-led Senate will be wiling to pass it along to the president’s desk.

The two parties are expected to clash hard over Trump’s replacement for NAFTA — the United States’ trade agreement with Mexico and Canada. FleishmanHillard is skeptical that Democrats will support some of Trump’s major policy goals here and push for concessions of their own, potentially complicating the approval process of an updated trade agreement. U.S. dairy farmers, oil companies, and tech firms were set to benefit the most from the deal, so they are most likely to be negatively affected by delays.

In the meantime…

The current Congress has its plate full during the lame duck session. In the Senate, Majority Leader Mitch McConnell, R-Ky., has said that funding the government, judicial confirmations, and passing the farm bill are his top priorities (which may explain why he is reticent to take up criminal justice reform).

The first two of these endeavors, however, have hit roadblocks. To keep the entire government funded, Congress has until Dec. 7 to pass seven appropriations bills (other portions of the government are funded through five previous bills signed by Trump in September). However, proposals to fund a wall along the U.S.-Mexico border, a central talking point during Trump’s presidential campaign and a top priority for the GOP, is causing negotiations over funding the government to snag, The Hill reports. This is Trump’s last chance to secure funding for the wall, and he has threatened to veto any spending bill that doesn’t include such funding.

With the death of former president George H.W. Bush, Congress is looking to postpone the shutdown deadline until Dec. 21 while Washington prepares for a state funeral this Wednesday. Lawmakers typically set aside their differences during such times, so it makes sense to pass a short-term spending bill to delay a budgetary showdown. This only delays the issue, though, and if a shutdown does end up sending government workers home without paychecks during the holidays, the White House and Senate Democrats are standing ready to blame each other for the gridlock.

Appointing conservative judges has been one of the Trump administration’s top priorities during the president’s first term, but progress on that front is being threatened as well. Retiring GOP Senator Jeff Flake, R-Ariz., appears to be holding the line on his promise to block any judicial nominees on the floor and in committee until the Senate brings up his bill to protect special counsel Robert Mueller from being fired by Trump. If Flake refuses to back down, the Senate may have to wait until 2019 to proceed with more than 20 judicial confirmations.

The final major piece of legislation that lawmakers are poised to take up in the lame duck session is a new farm bill, which is expected to authorize around a trillion dollars in spending over the next ten years. A compromise bill announced by senators last week is still being written and sparse on details about key provisions, Politico reported. The actual bill should be released early this week, but that hasn’t stopped some conservative lawmakers from voicing skepticism about expected outcomes for SNAP work requirements and a number of other compromises expected in the bill.

“What I’ve asked my colleagues to do (is) keep your powder dry until you see the full package,” House Ag Chairman Mike Conaway, R-Texas, told reporters. “Taken in isolation, each individual piece may not be something you like. But once they see the package and see what we’ve done altogether, then make the decision.”

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