Mike and Co. —
I hope you are well and had a change to get away during August. With Congress back in session, I’m resuming the daily write-ups of legislative developments in fiscal and financial policy.
Following the write-up is a list of issues I plan to cover in the coming days. As always, thoughts regarding any additional issues of interest or specific questions you may have are welcome.
Congress reconvened today to face a congested calendar for September. Rosh Hashanah is Sept. 14-15, Yom Kippur is Sept. 23, Pope Francis speaks to a joint session of Congress on Sept. 24. That leaves Congress ten legislative days to pass a budget for the new fiscal year starting Oct. 1. Regular order is long forgotten and it is a near-certainty that the CR needed to fund the government for FY16 will not address many outstanding issues — think Ex-Im reauthorization and tax extenders — and will expire before 2015 is over. This means that a second CR may have to deal with the these issues as well as the the debt ceiling and perhaps the Highway Trust Fund bill.
Most of the attention this week will be on the Iranian Nuclear Agreement. Thursday at 10am, House Financial Services will hold a hearing on the DOL fiduciary rule entitled Preserving Social
Security and at the same time, House Budget holds one called Budget Issues Facing Younger Americans.
But soon the CR will be front and center. There may be some initial noise about a shutdown over Planned Parenthood but Senate Majority Leader McConnell is seven votes short of to break a filibuster to defund it, at least as a standalone. He has made clear for months he won’t permit a shutdown. The House Leadership may yield to conference and even presidential campaign pressure is expected to acquiesce in the end. AnAug. 31 Quinnipiac Poll found that 69 percent of Americans – including 53 percent of Republicans – oppose shuttering the government over a dispute over Planned Parenthood funding.
There are several smaller-scale but significant financial regulatory issues that could face crunch time this fall. I’ll be covering the major ones over the next week or so (see list below).
The chief order of business is the Shelby bill, a significant re-writing of Dodd-Frank, which passed Senate Banking on a party-line vote in May. Shelby and his team are in continued discussion with the moderate Democrats on the panel, Sens. Tester, Warner, Donnelly, and Heitkamp.
The latter two have made it clear they want more progress on relaxing certain banking rules. An aide to Heitkamp said next steps to pass “realistic, bipartisan legislation” to help community banks and credit unions has yet to be determined but that “she’s hopeful the Committee can work together to reach some consensus.”
A Donnelly staffer has said he has had “productive and encouraging conversations with many of his colleagues” on the Committee in recent months and that “it is clear that common ground exists.”
One proposal that caught notice in the Senate highway bill was a pay-for that would cut dividends that the Federal Reserve pays to banks. The House ignored the bill so the provision is dead for now. But it came in on cat feet and caught many observers by surprise. In a Congress where lawmakers are always hunting for politically palatable ways to raise revenue or cut costs to cover the expenses of additional legislation, the Fed provision was a novel, and rich, one. The proposal is estimated to raise $17 billion over the next decade, and is by far the richest “pay for” in the bill and is now a midsize item on the shelf to consider to pay for things in other bills in the future.