Update 505 — The 117th Congress
and Democrats’ Harmonic Majorities
For the first time since 2010, Democrats have full control of Congress and the White House — an opportunity that doesn’t come often but comes at just the right time. Last time around, the Obama Administration was able to pass the Dodd-Frank Act and landmark legislation known as the ACA.
With narrow majorities in both houses of Congress, new developments in terms of the rules, committee assignments, and caucus composition will have material bearing on policy outcomes. Below we survey the chambers, committees, and caucuses and what it all portends for pressing economic policy.
After six years in the minority, Democrats have taken back control of the Senate in two photo finishes in Georgia. Given its ideological diversity, it will take effort to keep the 50-member caucus pulling in the same direction for the next two years. Taking this and the limitations it faces under Senate rules, what can it accomplish, and what can it not?
Rules & Process
Senate party leaders have organized the chamber under a “power-sharing agreement” modeled after the 2001 agreement when the Senate was last tied. Each committee will have an equal number of senators from both parties, but Democrats will control the gavels. In the event of a tied committee vote, the Majority Leader is empowered to discharge the bill or nomination to the floor for a full Senate vote. The minority party is allocated two hours to debate each discharge motion, so the chamber is likely to move slower than in previous years.
In addition to this agreement, Leaders Schumer and McConnell have an accord on procedure. Schumer has pledged to open up the amendment process to the minority by refraining from “filling the amendment tree,” a practice used by the majority to prevent substantial amendments from being considered on the floor. In return, McConnell has promised not to tie up the amendment process by limiting debate on motions to proceed. The issue of the filibuster was sidestepped when Senators Manchin and Sinema publically supported it. It is unclear if these arrangements will weather the partisan tempests likely in the coming months.
- Senate Finance: Chairman Wyden will have jurisdiction over two of the most costly items in President Biden’s $1.9 trillion proposal: direct cash payments and unemployment insurance expansion. Wyden has put forward an ambitious agenda, including sweeping tax reforms to raise the capital gains tax, closing loopholes for the wealthy, and incentivizing investments in clean energy. Sen. Warren is the only new Democrat on the committee, joining a group of pragmatic but left leaning voices.
- Senate Banking: After serving as the committee’s ranking member for six years, Sherrod Brown has finally taken control of the gavel. A working class champion, Chairman Brown will refocus the Committee’s priorities on housing policy and stabilizing the financial system, a welcome refrain after four years of Republicans loosening restrictions on big banks. The Committee will now include both freshman Democrats from Georgia, Jon Ossoff and Raphael Warnock.
Despite losing a dozen seats in the 2020 election, House Leadership stayed largely intact, with Rep. Katherine Clark moving up the line from Vice Chair to Assistant Speaker and Rep. Pete Aguilar replacing her as Vice Chair. With Pelosi, Hoyer, and Clyburn all in their 80’s, there may be a major reshuffling at the end of 2022.
Rules & Process
Progressives scored a handful of wins in this session’s rules package. Though PAYGO remains on the books, the new rules give the Budget Committee Chairman the ability to waive PAYGO restrictions on legislation that addresses the COVID-19 pandemic or climate change. Progressives also scrapped the “motion to recommit with instruction” which allowed the minority to sneak in poison pill amendments as part of procedural votes. The House reinstated temporary changes that enable remote voting by proxy and virtual committee work to ensure safe working conditions during the pandemic.
- House Financial Services: Rep. Maxine Waters will serve another term as chairwoman, but Democratic Committee membership has changed. Second-term members Jennifer Wexton, Dean Phillips, and Katie Porter have been taken off the committee and will be replaced by freshmen members Ritchie Torres from the Bronx, Jake Auchincloss from the Boston suburbs, and Nikena Williams from Atlanta. Porter’s absence from the committee will be especially noticeable given her sharp questioning of industry executives during hearings last session.
Waters refocused the Committee agenda last session on inclusion in financial markets and affordable housing. This session, the committee will play a key role in the Biden stimulus package and will continue to focus on discrimination in housing, fair lending standards, flood insurance reform, and consumer protection. The Committee will be a clearinghouse for progressive priorities on financial reform, including stress test reform, nonbank SIFI designation, public banking, and overdraft protection.
- House Ways & Means: Rep. Richard Neal will retain the Ways and Means gavel this session, and the Democratic side will see only one change to its membership from last year — Del. Stacey Plaskett from the Virgin Islands was given a coveted spot on the Committee. Last session, Neal showed restraint as chairman, in particular slow-walking Democrats’ effort to obtain Donald Trump’s tax returns. This Congress, Neal has already shown signs of supporting a more aggressive policy agenda, leading the push for including a $3,600 child tax credit in the stimulus package.
Ways and Means will play a key role in shaping and enacting Biden’s tax policy agenda: increasing the top income tax rate, raising the corporate rate, reinstituting a fair estate tax, eliminating the carried interest loophole, and repealing the pass-through deduction are policies that the Committee will consider this Congress.
Democratic Caucus Composition
- Congressional Progressive Caucus (92 Members, down 4): The CPC has transformed itself in recent years from a loose collection of progressively-minded representatives into an organized and proactive voting block, holding 14 of 20 committee chairmanships. Last year, the CPC ended its dual-leadership structure in favor of a single chair, currently occupied by Rep. Pramila Jayapal. CPC members are now required to participate in a minimum number of caucus whip counts, with bills that receive two-thirds support becoming its official position. Members of the CPC who break with the caucus’s official position on the House floor more than one-third of the time may be booted from the caucus.
- New Democrat Coalition (93 Members, down 10): The NDC has been the traditional center of political gravity within the Democratic caucus, but has often lacked organizational discipline or a coherent agenda. There are dozens of NDC members who also identify as Progressives or Blue Dogs, and their list of endorsed bills are generally noncontroversial. Rep. Suzan DelBene was elected chair of the NDC this year with a commitment to focus on economic growth and ACA enhancement.
- Blue Dog Coalition (18 Members, down 8): The BDC represents the dwindling moderate-to-conservative faction within the Democratic party. They took a major hit in 2020, losing a third of their members; yet with a razor-thin majority in the House, Blue Dogs remain a formidable force. The coalition has been the driving force in favor of splitting up the COVID relief bill to gain Republican support. Speaker Pelosi has been savvy in keeping the right flank of her caucus placated, successfully avoiding losing a decisive amount of Blue Dogs in major votes last Congress.
Maintaining a unified front in both chambers will be the number one priority for Democratic leadership over the next two years. History suggests that the party in the White House is at a disadvantage in congressional midterm elections. The Democratic leadership in Congress insists it has a mandate to get things done, meaning big, visible, and effective ways to help get people and the economy get back on their feet. It is good policy and good politics — in the best interest of both the country and party that Democrats use these slim majorities to accomplish big popular policies even if this means not working with Republicans in many cases.