Boehner's Resignation — Impact on Fiscal/Financial Legislation (Sep. 25)

Mike & Co. —

Below, an initial look at what Speaker Boehner’s resignation means for the budget process, issues like Ex-Im reauthorization, trade, and GSE reform as well as for the House Financial Services Committee.   We can look at the debt limit, the Highway bill, and other issues as you wish.

Good weekends all,



Washington was surprised by Speaker Boehner’s announcement today that he would leave Congress on Oct. 30, but also surprised that Boehner hadn’t stepped down sooner.   There had been no credible challengers in sight as leadership struggled but now we have a palace coup orchestrated by Boehner.

Boehner’s likely successor is Majority Leader McCarthy, the No. 2 GOP leader who has been in office less than 10 years.  One potential rival to McCarthy is Financial Services Committee Chair Jeb Hensarling who in the past has been urged by conservatives to run for speaker or another top leadership post. He is “considering his options” and will have a decision by early next week.

Ways and Means Chair Paul Ryan said today he didn’t want the job.

  •   FY 2016 Budget/CR

The leadership change means there’s unlikely to be a government shutdown next week.  Following Boehner’s announcement today, House Republicans said there was agreement to pass a clean spending bill to keep the government open though mid-December while broader negotiations on spending levels are held.  Several members of the Freedom Caucus, the conservative group which led the revolt against Boehner’s leadership, said they will now support the spending bill without demands that it include language to cut off funding for Planned Parenthood.

  •   Ex-Im

Democrats in the House say they’d received a “nod” earlier this week from GOP leadership that renewal of the Export-Import Bank would be taken up soon.   Rep. Maxine Waters, ranking on House Financial Services:  “While I did not receive a guarantee I received a nod.”  Democratic Whip Steny Hoyer said he had “drawn the conclusion that in fact there is a sense among some in the leadership on the Republican.  side that this bill needs to pass.”

Boehner said this summer that “there are thousands of jobs on the line that would disappear pretty quickly if the Ex-Im Bank were to disappear” – a prediction that GE and other major beneficiaries of the bank’s financing help are starting to bear out.

But Majority Leader McCarthy and Majority Whip  Scalise oppose the Bank, as do other major party leaders potentially in line for the speakership, including Hensarling.  McCarthy is likely back Boehner’s promise to allow an open amendment process for any bill from the Senate with Ex-Im renewal, which would allow reauthorization to come to the floor while giving opponents a chance to strip it.

  •   Trade

One of Boehner’s crowning achievements came this summer, when he worked with President Obama to win passage of trade promotion authority, setting the stage for the White House to conclude the Trans-Pacific Partnership agreement with Japan and 10 other countries.  Republicans provided 190 of the 218 votes for the legislation, which allows trade deals to got to Congress for simple up-or-down votes, without any amendments.  The so-called “fast-track” authority also could help advance negotiations beginning now on a massive trade deal with the European Union.  The administration may find it harder to strike a modus vivendi on trade with the new GOP House leadership.

  •   GSE Reform

Boehner’s resignation improves the odds that the chamber will move legislation winding down Fannie Mae and Freddie Mac.  Boehner repeatedly blocked Hensarling’s efforts to eliminate the agencies and remove most federal backing for the housing market.

Getting major reform of this order through Congress is difficult enough, so you can’t assume that Hensarling or fellow conservatives could advance anti-GSE legislation, but the new GOP leadership team is at least committed to winding down the enterprises rather than being silent regarding their future.

  •   House Financial Services

Rep. Ed Royce let it be known today that that he would be interested in taking the gavel of House Financial Services should current Chairman Jeb Hensarling make a run at a House leadership position in the wake of  Boehner’s resignation.

Some believe that if Royce becomes the next Comittee Chair, he could be more productive pushing proposals through to law.  Royce has shown an ability to move legislation and cut deals with Democrats.  His proposal in July to reverse pay raises for the chief executives for Fannie Mae and Freddie Mac, for instance, passed the Committee by an almost unanimous vote after Royce huddled with Waters on tweaks to the bill.




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