The month of December was extremely slow in the Nation's gilded capitol. Congress wrapped up business a week earlier than expected (on December 9), largely attributable to the GOP's desire to maximize the number of Obama Administration rules to the Congressional Review Act (CRA) in 2017.
As we discussed last month, Congress chose to delay action on an omnibus spending bill until President-Elect Donald Trump took office, increasing their chances for successfully passing a series of policy riders which surely would have drawn a veto under President Obama.
Consequently, Congress passed a continuing resolution (CR) funding the US Federal Government (USG) into the spring of 2017.
Congress returned on January 3rd following nearly a month of holiday recess to swear in the new class and are wasting little time with their long and aggressive to-do list.
Working from a blueprint of the last half-decade, Congress is anxious to enact the conservative policy agenda that a Democratic White House has thwarted, undoing much of President Barack Obama's legacy in the process.
Top priority will be a repeal of the Affordable Care Act, but the list also includes a reversal of environmental regulations they feel has limited energy production as well as financial regulations that they say burdened businesses and employers. Planned Parenthood, will also find itself on the chopping block.
Here's a look at what the GOP Congress has on its docket right in the weeks leading up to President-elect Trump's inauguration:
ACA Repeal
The top legislative priority for House and Senate Republicans is the repeal of the Affordable Care Act. The first step of that two-step process will begin this week in the Senate with the House following suit shortly after.
Republicans are already facing challenges, even in the repeal process. The cost of repeal is high, with the non-partisan Congressional Budget Office estimating that it would cost $137 billion over 10 years. And then there's the political fallout.
Republicans must decide if they will insert components to appeal to their conservative base, like ending funding for Planned Parenthood, which would risk repelling moderate Republicans that they need for it to pass the Senate.
Nominations
The Senate is responsible for confirming - or defeating - incoming President Donald Trump's nominees. The only one scheduled thus far is the confirmation hearing of Sen. Jeff Sessions, R-Alabama, to be attorney general. ExxonMobile CEO Rex Tillerson's confirmation hearing to be secretary of state is tentatively slated for January 11 and Andy Puzder to lead the Labor Department may begin as early as January 12.
Senate Majority Leader Mitch McConnell, pushing for quick confirmations, is using the confirmations of incoming President Barack Obama's nominee as the standard. He notes that seven of Obama's nominees were confirmed on his inauguration day.
Reversing Obama Regulations
House Republicans got to work immediately on rolling back some of President Barack Obama's regulations. They'll use legislative vehicles, including the REINS Act, which allows Congress to undo some recent regulations that cost the economy more than $100 million. The other mechanism is the Midnight Rules Relief Act, which enables Congress to package rules passed by the administration over the last six months into one repeal package, instead of having to undo one regulation at a time.
President Trump's first budget
The president-elect's budget request to Congress will be scrutinized closely for clues to the administration's top priorities as well as whether his agenda would blow up the deficit.
Budget hawks are deeply concerned about the cost of Trump's proposals, including massive tax cuts and new spending on infrastructure and defense, which would add more than $5 trillion to the national debt over a decade, the Committee for a Responsible Federal Budget estimates.
Trump is supposed to submit his budget by the first Monday in February, but a president's first proposal always comes late (as, typically, do subsequent ones).
FY 17 & FY 18 funding
Congress has until April 28 to keep the federal government funded under a continuing resolution passed shortly before lawmakers left town for the holidays.
Senior appropriators in the House and Senate had hoped to finish their work in the lame-duck session, but the Trump team made clear it wanted to put its imprint on the final five months of fiscal 2017 spending.
Debt limit
The debt limit will be reinstated on March 17, though Congress will have a few more months to reach a deal due to the increasingly typical "extraordinary measures" the Trump administration can use to extend the government's borrowing capacity.
Voting for a debt ceiling hike is never fun for lawmakers, but it's necessary to avoid a devastating U.S. default and the global financial crisis that could follow.
Look for GOP leaders to try to pair deficit reduction reforms with a debt limit lift to encourage cooperation from hesitant conservative Republicans.
The sequester returns!
Firm caps on defense and non-defense spending come back into effect for fiscal 2018 under the Budget Control Act absent action from Congress.
GOP leaders and the Obama administration twice reached deals to provide more breathing room for agencies across the federal government, and some relief is likely.
Trump repeatedly promised to eliminate the sequester for defense on the campaign trail. Democrats, however, are deeply concerned that Republicans will try to give only the Pentagon a budget boost and neglect domestic programs.
Ryan and McConnell have said they again want to try to return to "regular order" next year, where Congress passes a budget and the 12 appropriations bills without resorting to a continuing resolution or an omnibus. That's always a heavy lift, but it will be even more difficult if Senate Democrats filibuster spending bills they believe short-change their domestic priorities.
Tax Reform
The most clearly delineated agenda item thus far is tax reform, with blueprints already having been announced. Speaker of the House Paul Ryan announced that tax reform in 2017 is his highest priority -- the starting point of which is likely to be the Tax Reform Blueprint issued by Speaker Ryan and Chairman Brady in early 2016. The Blueprint was the product of extensive work by a Republican congressional task force and represents a major re-write of the tax code; far beyond changes in rates.
The Trump tax reform plan is similar in many respects to the Blueprint, and Trump and his team thus far have indicated support for Speaker Ryan's plan to start with his own bill in the House. In the Senate, Republican Majority Leader Mitch McConnell and Senate Finance Committee Chairman Hatch have also indicated strong support for moving tax reform.
Ryan/Brady Blueprint:
*20 percent corporate tax rate
*25 percent rate for pass-through business income
*A cash-flow consumption tax structure for business -
oFull expensing for capital investments
oNo deductibility of interest expense beyond interest income
oTerritorial tax system with one-time tax on accumulated foreign E&P (8.75 percent cash/3.75 percent non-cash rates)
oBorder adjustment mechanism: tax imports and deduct exports
*Industry-specific tax preferences and other unspecified tax preferences would be repealed
*Individual income tax rates lowered to 12 percent, 25 percent, 33 percent
*Individual investment income (taxed at half of earned income rates)
Trump Tax Reform Plan:
*15 percent corporate tax rate
*15 percent rate for pass-through business income
oManufacturers have option to fully expense capital investments if they opt to waive deduction of interest expense
oCampaign expressed support for a one-time tax on accumulated foreign E&P, but the plan appears to retain the U.S. extraterritorial system
oRepeal most corporate tax expenditures, except R&D credit
*Individual tax rates lowered to 12 percent, 25 percent, 33 percent
oCaps itemized deductions at US$100k, US$200k
While Congress will focus heavily on tax reform right out of the gate, numerous complexities (including budget rules, and who become winners/losers) mean in all likelihood that comprehensive reform could take a couple years.
Cyber Agenda
Like previous years, NCISS has had concerns about being inadvertently wrapped-up in cyber security provisions dealing with data brokers, breach notification, and encryption. This year, we will have to watch such developments more closely.
The Trump transition team and congressional leaders have repeatedly vowed to make cybersecurity a priority in 2017. The following are digital issues to look out for that don't involve the supposed Russian hack.
ENCRYPTION
Encryption is expected to come roaring back in the 115th Congress.
FBI Director James Comey has signaled that he plans to renew his push to get law enforcement guaranteed access to secure devices, a crusade that may receive a boost with hawkish Sen. Jeff Sessions (R-Ala.) at the helm of the Justice Department.
But the tech industry and digital privacy advocates continue to dig in their heels, insisting such a move would be disastrous for global security, perhaps even violating a constitutional right to privacy.
For the time being, Congress has backed away from efforts to move on an encryption-piercing bill that would force tech firms to help investigators unlock secure devices when served with a warrant.
Last month, a joint working group formed by the House Judiciary and Energy and Commerce panels released a year-end report that called encryption a "vital technology" that Congress "should not weaken."
One compromise legislative option that may be gaining steam is a bill from Sen. Mark Warner (D-Va.) and House Homeland Security Chairman Michael McCaul (R-Texas) that would form an independent commission to look at the issue.
The legislation, mired in jurisdictional disputes, stalled in the House in 2016. But it could return next year in a stronger position now that Warner is the top Democrat on the Senate Intelligence Committee.
Warner said he typically thought commissions were basically a punt. But he thought this one would be different.
