Plurus Strategies November Political Update

A week has passed since the midterm election, and one message continues to dominate all headlines: the so-called “red wave” of GOP seat pickups in the 118th Congress did not materialize. It seems that low presidential approval ratings, inflation, and oil prices were less salient to voters than issues like former President Trump’s long shadow over the Republican Party and abortion, the latter of which saw resounding pro-choice support in a number of state referendums. Although there are still several uncalled midterm races, it is all but certain to be a divided government. Still, the midterm elections will hang over the 21 legislative days left in the 117th Congress.  

Below are some highlights for the weeks ahead, including how we might expect the lame duck to be shaped and negotiations on must-pass items to be shaped by the midterms. Also included as part of this latest analysis are the most recent versions of our “Congressional laundry list,” Senate and House “musical chairs” documents, and a quick slide deck with all the information available on leadership elections. 

Midterms Fallout 

Late Saturday night, Sen. Catherine Cortez Masto (D-NV) narrowly secured her second term, beating her Republican challenger by just over half a percentage point. Meanwhile, Alaska’s Senate race between incumbent Republican Sen. Lisa Murkowski (R-AK) and her intraparty challengers has not been called in part due to the state’s rank-choice voting system. Current voting percentages, which have not been updated since Thursday, have Sen. Murkowski trailing the Trump-backed Kelly Tshibaka by about 1.5 percentage points, though Republicans are expected to hold this seat. Georgia’s Senate race between Democratic incumbent Sen. Raphael Warnock (D-GA) and Republican challenger Herschel Walker is headed for a runoff on December 6. Regardless of what happens in Alaska and Georgia, Democrats have officially retained control of the Senate.  

Control of the House remains undecided, but the GOP is close to securing a majority. As of Tuesday morning, several incumbents are in races that have yet to be called, including Reps. Lauren Boebert (R-CO), David Valadao (R-CA), Mike Levin (D-CA), and Katie Porter (D-CA). Overall, the Associated Press has projected Republicans will ultimately hold at least the 218 seats needed to control the House. Republicans have won 217 seats, meaning they are 1 seat away from winning the majority. Democrats have won 205 seats. There are 13 races left to be called. 5 are considered likely or leaning Republican, 4 are considered leaning or likely Democrat, and 3 remain toss-ups. With history on the side of a few vacancies every session, the margin is small enough that it could be disrupted later in the 118th Congress by departing Members. Still, most political pundits are forecasting that come January, we will have a divided government. 

Leadership Elections 

In the wake of Tuesday, this election has shattered the conventional wisdom around a president’s first midterms into disarray, and the fallout is already taking shape. Although originally scheduled for Wednesday, Senate Republican leadership elections may be delayed, following a letter circulated on Friday by a group of Senate Republicans, including Sens. Ron Johnson (R-WI), Mike Lee (R-UT), and Rick Scott (R-FL). Sen. Scott has reportedly released a plan to run against Minority Leader McConnell (R-KY). Former President Donald Trump, who is expected to announce a 2024 presidential run on Tuesday, has also been quick to blame Republican’s disappointing performance in the midterms on Senate Minority Leader Mitch McConnell (R-KY). On Sunday night, Sen. Lindsey Graham (R-SC) joined other Senate Republicans who have expressed support for delaying leadership elections, even though a delay is unlikely.  

Meanwhile, House Minority Leader Kevin McCarthy (R-CA) was expected to ascend to Speaker, but his future is now shaky as the Freedom Caucus provided him a list of demands that would be tough to swallow. Rep. Andy Biggs (R-AZ) is reportedly considering a run for Speaker to prove Leader McCarthy does not have the 218 votes needed to secure the job. Others are looking to Rep. Jim Jordan (R-OH) as a potential candidate, but Rep. Jordan has said he supports Leader McCarthy’s bid for the post. Leader McCarthy is likely to win the House GOP election Tuesday. It is not until January that he must win a majority of the full House, which gives him just over a month to persuade the GOP conference to back him for the job.  

On the Democratic side, leadership elections are on track for after the Thanksgiving holiday recess. Senate Democrats will hold their leadership election the week of December 5. As of now, they should be uneventful, with Majority Leader Chuck Schumer (D-NY) and the current Senate Democratic leadership team expected to return in the 118th Congress. 

House Democrats are expected to start their leadership elections on November 30. While they had expected to lose their majority, and potentially by significant margins, there is generally a mood of perseverance and optimism given that House Democrats were able to minimize their losses. There is also great speculation surrounding Speaker Nancy Pelosi’s (D-CA) plans, especially if Democrats can maintain their majority or limit Republicans to a single digit-seat majority. House leadership contests could also be impacted by tight races seen this cycle in blue stronghold states. 

Click here for a slide deck with all the information currently available on House and Senate leadership elections. 

Retirements 

So far, eight incumbents have lost their bids for re-election: Reps. Cindy Axne (D-IA), Steve Chabot (R-OH), Mayra Flores (R-TX), Al Lawson (D-FL), Elaine Luria (D-VA), Sean Patrick Maloney (D-NY), Tom Malinowski (D-NJ), and Tom O’Halleran (D-AZ). There are several toss-up races that have yet to be called, so the number could increase. Incumbent races that have to be called are the following: Reps. Mary Peltola (D-AK), Ami Bera (D-CA), Josh Harder (D-CA), Jim Costa (D-CA), David Valadao (R-CA), Mike Garcia (R-CA), Katie Porter (D-CA), Mike Levin (D-CA), Jared Golden (D-ME), and Lauren Boebert (R-CO). 

In case you missed it, Rep. Chuy Garcia (D-IL), who was reelected last week, announced he is running for Mayor of Chicago. Mayoral elections will be held in April, so it is possible he could retire in the winter to focus on campaigning, or instead remain in Congress through his campaign.  

Below are current numbers for members not returning in the 118th Congress: 

  • 1 Senate Democrat: Including one full committee chair (Appropriations) 

  • 7 Senate Republicans: Including six full committee ranking members (Appropriations; Armed Services; Banking; Health Education, Labor and Pensions (HELP); Homeland Security and Governmental Affairs (HSGAC); and Rules) 

  • 45 House Democrats: Including five full committee chairs (Budget; Ethics; Oversight and Government Reform; Science, Space, and Technology; and Transportation and Infrastructure)  

  • 32 House Republicans: Including five full committee ranking members (Ethics; Homeland Security; House Administration; Ways and Means; and Select Committee to Investigate the Jan. 6 Attack on the U.S. Capitol) 

Musical Chairs and Committee Leadership 

Here are links to our most recent Senate and House musical chairs documents: 

As a reminder, these analyses aim to show how retirements, races that have yet to be called, and term limits may impact party leadership, committee leadership, and committee membership. Stay tuned for insights on committee ratios, potential new Members joining committees or Members in jeopardy of losing their seats on committees due to new committee ratios, as well as deeper analysis on subcommittee leadership as we approach the start of the next Congress.  

What to Watch in the Weeks Ahead 

After over a month on recess spent on the campaign trail, the 117th Congress has 21 legislative days scheduled before it adjourns. Tight timelines combined with Republicans possibly wanting to push off dealmaking until the results of the House are decided and Democrats trying to accomplish their priorities in case the House flips will make these final weeks chaotic. Several items remain ripe for lame duck action, including legislation funding the government beyond the December 16 expiration of the continuing resolution (CR), the Fiscal Year 2023 (FY23) National Defense Authorization Act (NDAA), nominees, the Respect for Marriage Act, the Electoral Count Act (ECA), Ukraine aid, the debt ceiling, and a possible trade-related package. In addition, there are dozens of key programs and services set to expire on December 16 and December 31. These are likely to be extended or reauthorized during the lame duck. 

FY23 Appropriations: Congress has 21 legislative days until federal government funding runs out. In anticipation of losing seats in the midterms, Democratic leaders had floated the idea of combining the omnibus and the NDAA, but this approach now seems unlikely. The prospect of razor thin margins may be an incentive to clear the decks before the next Congress, but post-election dynamics could complicate matters as Republicans may dig their heels in to hold on setting topline figures until the midterm results are determined. That being said, aides for appropriators on both sides of the aisle are insisting that the current environment will not affect their progress on meeting the December 16 deadline. However, we would not be surprised if another short-term extension is needed and Congress remains in town negotiating on appropriations, and potentially other priorities, through the winter holidays. 

NDAA: The Senate is expected to take up its version of the $847 billion defense authorization bill this week. It is unclear how long the Senate might stay on the bill, especially if Republicans attempt to force votes on controversial amendments; however, estimates are that preconference negotiations between the House and Senate could wrap up as soon as the first week of December. With Democratic Senate leadership now feeling less pressure to move nominees given that Democrats will maintain their majority next year, there might be more flexibility to utilize precious floor time on the NDAA. To the contrary, Leader Schumer might want to pull the bill so that Sen. Warnock can avoid votes on tough amendments before the December 6 runoff in Georgia. If the latter comes to be true, the Senate might take a similar path as last year where it never voted on its bill and ultimately passed a version of the NDAA that was pre-conferenced with the House. 

Bipartisan Measures: Both the Respect for Marriage Act and ECA have gained bipartisan support and are likely to be voted on as separate measures. We could also see bipartisan action to waive billions of dollars in Medicare cuts that are set to take effect in 2023 due to a measure in the American Rescue Plan (ARP). 

Ukraine Aid: Last Thursday, the administration announced an additional $400 million in military aid for Ukraine, adding to the tens of billions in weapons, emergency, and humanitarian assistance pledged since February. On Saturday, Ukrainian soldiers liberated the port city of Kherson, the only provincial capital captured by Russia. Although the victory is significant, analysts say that Russia’s retreat has given them a geographical defensive line where they can regroup. Ukrainian President Volodymyr Zelensky has indicated he intends to retake Crimea as well, which was annexed by Russia in 2014, meaning that the war is likely to drag on and continued financial support will be needed. The administration seemed to be angling for diplomatic talks as the country heads into the winter, but this recent advance will likely push the possibility of negotiations further into the future. While GOP leaders and some ultra-conservative Members of the party had stated they would not support a “blank check” for Ukraine, Sens. Tom Cotton (R-AR) and Rick Scott (R-FL) have said in interviews that the GOP’s support for Ukraine is resolute. Democratic leaders have already pledged additional aid in the end-of-year government funding bill and given its largely bipartisan support, Ukraine is likely to retain strong American support for the foreseeable future. 

Debt Ceiling: Leader Schumer and Speaker Nancy Pelosi stated over the weekend that Congress will address the debt ceiling while Democrats still control both chambers. Senate Democratic leaders are scheduled to meet this week to negotiate a path forward. Progressives in the party, notably Sen. Elizabeth Warren (D-MA), are backing a plan to eliminate the debt limit. Democrats are unlikely to find 10 Republicans to support this proposal. There are number of ways the debt ceiling could be eliminated through reconciliation, which would only require a majority, but it is uncertain that even following their good fortunes in the midterms that Democrats would have the time to pull off another reconciliation vote, just given the calendar and competing priorities. Meanwhile, some moderates and administration officials, like Treasury Secretary Janet Yellen, are advocating for a debt limit hike beyond the 2024 election.  

Permitting Reform: Sen. Joe Manchin (D-WV) stated in October that he is working on getting environmental permitting reform included in the NDAA. The effort failed to ride on the CR as progressives came out against measures that would streamline environmental reviews while Republicans said the package did not go far enough to alleviate regulatory burdens. The GOP also did not want to give Sen. Manchin, and by extension Democrats, a win ahead of the midterm elections. Lawmakers on both sides said at the time they would be willing to negotiate permitting reform with more time, but movement is likely dependent on the outcomes of races yet to be called. While Democratic leaders may be motivated to address the issue this year, some Democrats remain opposed and Republicans may prefer to wait until next Congress. 

Trade Package: In recent weeks, trade has gained more attention. It is possible that a number of measures could be included in the omnibus or NDAA. This could include key expired tariff exemption programs, such as the Miscellaneous Tariff Bill and Generalized System of Preferences program reauthorization, as well as outbound investment review, and other measures that did not make it into the final version of the CHIPS and Science Act passed in July. That being said, there are many disagreements, so it is difficult to see these being included in must-pass legislation.

Wild Cards: Beyond these must-pass measures or bills that are highly likely to see action, there are several wildcards, including legislation on retirement security, behavioral health, privacy, and antitrust. Several of these items are priorities for Members of Congress who are not returning in January, and they could make a push for these provisions as legacy pieces. Other issues, such as a fix for Deferred Action for Childhood Arrivals (DACA) and protections for the Department of Justice’s (DOJ) investigations into the January 6 attack could see heightened discussion in the lame duck, especially given the prospects of a potential 118th Congress GOP House majority that includes more extreme Republicans like Rep. Marjorie Taylor Green (R-NC). Issues that are not addressed by the time the 117th Congress adjourns might provide a preview of priorities for the 118th Congress.  

Congressional Laundry List 

Below is the current version of our “Congressional laundry list,” which outlines a list of priorities with high possibility of action, legislation filed as amendments to the NDAA, candidates for short-term extensions, and agenda items being worked on but less likely to see action during the lame duck 

Congressional Countdown (as of November 15) 

  • 21 Days until the Georgia Senate runoff (December 6) 

  • 18 Legislative days until government funding expires (12:00AM on December 16) 

  • 21 Legislative days scheduled until the end of 2022 (the current calendar has Congress adjourning on December 21) 

  • 49 Days until the beginning of the 118th Congress (January 3) 

HIGH-POSSIBILITY OF ACTION (likely to be advanced separately or attached to the omnibus or NDAA)

  • Nominations: 107 nominations pending; 30 of which are judicial 

NDAA: Over 960 amendments were filed to the Senate NDAA. 75 amendments were incorporated in manager’s package in mid-October. This includes authorizations for the State Department, Maritime Administration, Coast Guard, intelligence agencies, Water Resources Development Act (WRDA), as well as stand-alone measures. The Senate is expected to take up the NDAA this week.

Debt Ceiling Increase: The debt ceiling increase being attached to the omnibus is a Democratic desire, particularly for Democrats who will be in cycle in 2024. However, Republicans may not want to lose a leverage point. Increasing the debt ceiling during the lame duck would likely involve a budget resolution with two vote-a-ramas (budget resolution and then reconciliation).

SERIOUS CANDIDATES FOR AT LEAST SHORT TERM EXTENSIONS (Could be attached to the omnibus)

Extended to December 16 under the CR 

  • Federal Communications Commission (FCC) Spectrum Authorization Authority 

  • Spectrum Innovation Act: This House-passed bill would extend spectrum auction authority for 18 months. Sens. Maria Cantwell (D-WA) and Roger Wicker (R-MS) are working on a longer-term bill.  

  • National Flood Insurance Program Authorization 

  • Justice Department: Unmanned Aircraft protection authority; Domestic Trafficking Victim’s Fund special assessment; U.S. Parole Commission. 

  • Commodity Futures Trading Commission Customer Protection Fund 

  • USAID Funds 

  • USDA Livestock Mandatory Reporting Program 

  • Authorization of Temporary Assistance for Needy Families (TANF)   

  • Certain FDA User Fee-Related Policies: Authorities have been extended through FY27, but policies related to drug and device regulation were only extended until December 16. 

  • Maternal, Infant, & Early Childhood Home Visiting 

  • Medicaid Assistance for Territories (FMAP): Without action by December 13, FMAP will revert to 55 percent. This issue would be addressed by an amendment filed to the Senate NDAA. 

  • Low Volume Hospital (LVH) Program   

  • Medicare-Dependent, Small Rural Hospital (MDH) Program 

Expires December 31  

  • Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act/Alternative Payment Models (MACRA/APM) Bonus (2022 last performance year, 2024 payment year)   

  • Health Care Extenders: Medicare Radiation Oncology Rules Delay; Medicare Physician Bonus Payments.   

  • Temporary Order for Fentanyl-Related Substances (FRS): Submitted as amendment to the Senate NDAA.    

  • Tax Extenders: Full Deduction for Restaurant Meal Expenses; Railroad Track Maintenance Credit (50 percent); and Temporary delay of designation of multiemployer plans as in endangered, critical, or critical and declining status. Democrats also want to revive the Child Tax Credit, which expired previously. 

  • Other Tax Cuts and Jobs Act (TCJA)-Related Tax Phase-Outs: Three notable provisions are scheduled to expire/change but could be considered at end of the year: (1) 100 percent bonus depreciation; (2) R&E expensing; and (3) Net interest deduction limit. 

Other 

  • Pay-As-You-Go (PAYGO) Sequester Relief: Cuts to certain mandatory spending, which Congress had deferred waiving at the end of last year, could potentially be added to the NDAA. Cuts would otherwise take effect in in early winter.  

  • Public Health Emergency (PHE)-Related: The PHE is effective through January 11. Telehealth services extension are set to expire then, but could be included in the year-end appropriations deal. 

  • Medicare Sequester Relief: Moratorium on Medicare provider payments sequestration, which had its 2 percent cuts restored on July 1, 2022. 

AGENDA ITEMS BEING WORKED, BUT LESS LIKELY ACTION

Banking & Financial Services 

Cyber & Technology 

Energy & Environment 

Health, Education, Labor, & Pensions 

  • Child Nutrition Reauthorization: There has been no update since 2010. The Healthy Meals, Healthy Kids Act passed the House in July. 

  • Pandemic-Related: Could include the PREVENT Pandemics Act, legislation aimed at preventing fraud in CARES Act programs, or the potential revival of $10 billion proposal that failed in the spring due to debate around immigration reform.   

  • Dialysis Patients Protection: This bill has been introduced in House and Senate and could be attached to the omnibus. 

  • INSULIN Act: One of bill’s provisions capping Medicare copays was included in the Inflation Reduction Act (IRA). This issue could be addressed in lame duck, but action is more likely in the spring. 

  • Pioneering Antimicrobial Subscriptions To End Up Surging Resistance (PASTEUR) Act: This legislation has been introduced in the House and Senate. 

  • Social Security Fairness Act: Sponsors have filed a discharge petition to force a floor vote. 

  • Labor Protections: Protecting Right to Organize (PRO) Act 

Judiciary 

Small Business 

  • Restaurant Relief: Replenish Restaurant Revitalization Fund (RRF) 

Ways & Means 

  • Trade-Related Measures: Could include Miscellaneous Tariff Bill extensions; Generalized System of Preferences program reauthorization; outbound investment review; Trade Adjustment Assistance funding; repeal of the “de minimis rule” for Chinese imports; reinstatement of the section 301 tariff exclusion process; antidumping/countervailing duty successive investigations authority; and enhanced Customs Intellectual Property theft enforcement authority. 

Amelia ClearyPlurus Strategiescongress, democrat, republicans, 117th congress, 118th congress, speaker, whip, majority, minority, republican, GOP, ndaa, lame duck, nominations, respect for marriage act, electoral count reform, appropriations fy23, fy23, ukraine aid, debt ceiling, permitting reform