Update 665 — Senate Committees Set
Role of Chamber in Divided Government
We turn to the expected 25 bp rate hike announced today by the Federal Reserve, with more hikes to come, and the jobs report that will inform the Fed’s next monetary policy move, when that report is out on Friday.
In the meantime, we complete our preview of the 118th Congress with a look at the Senate. With committee assignments now complete, we look at what the changes imply for the Senate agenda and likely outcomes, as well as the role of the Senate in a government so badly divided that ordinary functions like budget making and payment of the nation’s debts may be called into question.
Best,
Dana
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Last Thursday, Democratic committee assignments were released for the upper chamber, revealing a few changes for the 118th Congress; Senate Republicans have yet to announce their committee assignments, a move that is expected to come later this week.
We enter this Congress with a sense of urgency and the desire for Senate Democrats to get floor votes on some of their top legislative proposals that percolated to the surface but saw no floor action in the 117th Congress. Below, we take a look at the state of play for Senate Democrats, analyze notable economic committee arrivals and departures, and consider the viability of key issues we would like to see addressed in the 118th Congress.
Experienced Leadership Returns
Senate leadership is largely unchanged from last Congress, with Senators Schumer (D-NY) and McConnell (R-KY) retaining the Majority and Minority leadership posts, respectively. Senator Patty Murray (D-WA) is stepping down as assistant Democratic leader in order to assume the role of president pro tempore, though she will still remain part of Schumer’s broader leadership team. Finally, Senator Debbie Stabenow (D-MI) now occupies the number three spot among Senate Democrats as Chair of the Democratic Policy and Communications Committee. With such little turnover among Senate leadership, the caucus can skip over any learning curves and continue its work with minimal interruption.
The new 51-49 majority means Democrats will be able to take true majority control of committees and lead outright with more staff and higher budgets. This advantage will also allow Senate Democrats to expedite reporting bills and nominations out of committee without Republican support. Last Congress, Democrats needed practically every Democratic Senator and the Vice President to secure a majority vote. Now, they can afford to lose one vote and still use Vice President Harris to break the tie. Still, 2024 is expected to be a tough year for Senate Democrats, as twenty-three Democratic seats are up for reelection. Republicans only have 10.
Three of those twenty-three Democrats are from states that swung heavily in Trump’s favor in 2020– Ohio, Montana, and West Virginia. Democrats will also need to hang onto their seats in key swing states like Arizona, Nevada, Pennsylvania, Wisconsin, Maine and Michigan. The opportunities for Democratic pick-ups on the other hand, are slim. But anything can happen.
Committee Membership Changes
Senate Democratic committee assignments are largely unchanged from the 117th Congress, with only a few freshmen to find committees for. This feat should lend itself well to the party, as it will allow the caucus to continue business as usual within their respective panels.
Senate Committee on Banking, Housing and Urban Affairs
Chair: Sen. Sherrod Brown (D-OH)
Ranking Member: Sen. Tim Scott (R-SC)
Senator Sherrod Brown (D-OH) is set to enter the 118th Congress as Chair of the Senate Committee on Banking, Housing and Urban Affairs. Brown has been on committee leadership since 2015 and played a historic role in passage of Dodd-Frank.
A notable addition to the Committee is newly elected Senator from Pennsylvania John Fetterman (D-PA), who is replacing Senator Jon Ossoff (D-GA). Osoff’s absence will leave the committee yearning for a new systemic risk champion, but Fetterman’s resume proves promising in terms of protecting consumers and taking on corporate greed.
Among the issues that the Committee is expected to address are cryptocurrency regulation and bank fees. Moreover, Sens. Brown and Scott are expected to work together on affordable housing issues, with a State of Housing Hearing expected to be announced as the first Committee hearing of the new Congress, slated for February 9.
Senate Committee on Finance
Chair: Sen. Ron Wyden (D-OR)
Ranking Member: Sen. Mike Crapo (R-ID)
Chairing the Senate Committee on Finance is Senator Ron Wyden (D-OR), an experienced lawmaker with a strong history of fighting for Medicare and protecting retirement security- two hot items that are being highly contested by the GOP.
The committee spent much of last Congress working diligently on the Inflation Reduction Act and SECURE 2.0, both of which were successfully passed under seasoned leadership in the Senate. This committee experienced no change in membership which will allow members to continue business as usual, but with new legislative priorities at the forefront of their agenda. Specifically, members will find themselves busy with the debt limit, as well as Medicare/Medicaid and tax reform, among others.
Other Notable Changes:
- Joint Economic Committee —Senator Martin Heinrich (D-NM) will assume the role of Chair of the Joint Economic Committee. Another notable addition to the Senate Democrat’s roster is John Fetterman (D-PA), who will replace Senator Raphael Warnock (D-GA).
- Senate Committee on Health, Education, Labor and Pensions (HELP) — Senator Patty Murray (D-WA) is leaving her role as Chairwoman of the HELP Committee to take over the powerful role of Appropriations Chair. Subsequently, Senator Bernie Sanders (D-VT) will take over chairmanship of the HELP Committee, leaving his post on the Budget Committee. Sanders is set to focus on universal health care, lowering the cost of prescription drugs, increasing access to higher education, and protecting workers rights.
- Senate Committee on Appropriations — In addition to Murray’s chairmanship, Senator Gary Peters (D-MI) will join the Senate Appropriations committee with a focus on bolstering economic competitiveness in the U.S. and encouraging job creation in the U.S.
Raising Legislative Prospects
Although action may be hard to come by in the House, there are a number of items that we hope to see reintroduced in the Senate that deserve time and attention over the next two years.
- Crypto Regulation
Following a period of rapid volatility, digital asset regulation is at the top of mind for Senate Democrats and Republicans alike. The 117th Congress showed some progress toward instilling comprehensive guardrails, but all of the notable proposals were inherently flawed and ultimately placed the industry above consumers.
We expect this issue to be a top legislative priority for the Senate and there is plenty of reason to believe that proven leaders like Sherrod Brown and Elizabeth Warren will step up and lead the charge to responsible, investor-protection based regulation.
- Child Tax Credit
The Child Tax Credit (CTC) will once again be a major issue for Democrats this Congress. While Republicans have blocked Democrats’ attempts at renewing the CTC expansion, there is support for at least some kind of reform among the GOP. Senator Mitt Romney’s Family Security 2.0– which offers a potential framework for Republicans’ demands on CTC– would increase maximum per child benefits and alter the phase-in structure to ramp up benefits faster. However, it would also pay for these increased benefits through cuts to the Earned Income Tax Credit and elimination of head of household filing status, impose additional social security number requirements on beneficiaries, and actually leave about 10 million children worse off. Finding a bipartisan compromise that can pass both chambers this Congress would take significant time and effort.
- Antitrust: Big Tech
Broad regulation of the tech industry has continued to be a focus of the Biden Administration. In his January op-ed calling for Republicans and Democrats to unite against abuses by big tech, President Biden cited the need to protect “the next generation of great American companies” from being “smothered by the dominant incumbents before they have a chance to get off the ground.”
The Administration’s increased funding to antitrust enforcement coupled with Congressional Republicans’ focus on alleged uneven content moderation by social media platforms presents momentum early in the 118th Congress. Senator Lindsey Graham (R-SC), the new ranking member of the Senate Judiciary Committee, opened the committee’s first hearing by suggesting his willingness to work with committee Democrats to rein in social media giants and this hearing revitalized discussion around antitrust legislation, including Senator Klobuchar’s (D-MN) Competition and Antitrust Law Enforcement Reform Act.
The Big Picture
With limited turnover in committee assignments, Senate Democrats can find solace in their experienced leadership and plus-one advantage over the minority party. House Republicans may try to hinder substantial economic progress in the 118th Congress overall, but Senate D’s must come together to find unique vehicles for their legislative agenda.
On perennial issues like the budget and the debt limit, the two chambers will have to work in tandem, but there is also a chance for Democrats to highlight the bills they’ll bring to the floor. With 23 of these lawmakers up for reelection in 2024, it is critical that these players show their constituents they are dedicated to making real change and passing meaningful legislation even in a somewhat isolated chamber.