Shortly after President Biden took the oath of office, three new senators were sworn-in giving Democrats the majority. While controlling both the House and Senate will give Democrats many advantages, including the ability to set hearings schedules, the slim margins will enable moderates from both parties to have powerful input on legislative outcomes over the next two years.
The Senate finally reached a power-sharing agreement in early February that sets committee membership and staffing at equal levels while Democrats will chair committees. The filibuster was not addressed in the agreement, but to eliminate it, the Democrats would need the support of all their members; Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) currently oppose the move.
The Senate Banking, Housing, and Urban Affairs Committee is now chaired by Sherrod Brown (D-OH). Senator Brown will focus on housing, supporting Community Development Financial Institutions and Minority Depository Institutions, climate change and racial equity. Senator Pat Toomey (R-PA) is the ranking member. Congresswoman Maxine Waters (D-CA) continues to serve as Chair of the House Financial Services Committee and her priorities are similar to Senator Brown.
The legislative agenda for the first 100 days of the Biden Administration will have a split focus on confirming cabinet members, passing additional COVID-19 relief and the impeachment trial. Due to their slim majorities, Democrats are moving forward with budget reconciliation to pass another COVID-19 relief package and will have an opportunity to use the process two more times before the midterm elections. Budget reconciliation later this year could be used to make tax changes, including rolling back some of the 2017 tax cuts implemented through the same process. Reconciliation allows legislation to pass the Senate with a simple majority, but the current Byrd rule limits the types of provisions that can be included.
President Biden’s Executive Orders
President Biden has released numerous executive orders and memorandums since his inauguration and is likely to utilize these and regulatory changes to implement his agenda whenever possible.
Actions so far include:
- Executive order called “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government” and directed each agency to provide a report within 200 days that assess whether underserved communities and their members face systemic barriers in accessing benefits and opportunities available through the agencies policies and programs.
- Memorandum on “Redressing Our Nation’s and the Federal Government’s History of Discriminatory Housing Practices and Policies.” This directed the Department of Housing and Urban Development to examine the impact of the Trump Administration’s rules on compliance with the Fair Housing Act and directed the agency to take any necessary steps permitted under current laws to administer its program in a manner that affirmatively furthers fair housing.
Additional COVID-19 Relief
Prior to his inauguration, President Biden announced a $1.9 trillion COVID-19 relief package called the American Rescue Plan. Moderate Democrats and Republicans expressed concern over the size of the plan and the individual payments of $1,400. A group of moderate Republicans proposed a smaller $618 billion plan that includes payments of $1,000 for those who earn less than $50,000. The Republican plan did not include funding for state and local governments which is a Democratic priority.
Democrats are working to pass their plan through budget reconciliation that requires just 51 votes in the Senate if a compromise with Republicans is not reached quickly.
Housing Groups Letter on American Rescue Plan
Housing groups including the Mortgage Bankers Association, National Association of Home Builders and National Association of REALTORS sent a letter to Congressional leaders expressing the need for increased rental assistance in the American Rescue Plan.
The letter states, “The American Rescue Plan proposes a continuation of previously passed policies that, without change, threaten the stability of the rental housing sector and would worsen the nation’s housing affordability crisis.”
It goes on to say, “We strongly support the inclusion of additional rental assistance in the
Americans Rescue Plan. Without additional robust, direct rental assistance – beyond
the newly proposed $25 billion – housing providers may never fully recover outstanding
debt – whether through the eviction process or otherwise – and the housing affordability
crisis will be exacerbated in the long- and short-term. This could devastate the industry
and hurt America’s most vulnerable renters.”
Treasury and FHFA Update Fannie and Freddie Agreement
The Federal Housing Finance Agency and the U.S. Department of Treasury announced amendments to the Preferred Stock Purchase Agreements. The amendments allow Fannie Mae and Freddie Mac to continue to retain earnings until they satisfy the requirements of the 2020 Enterprise capital rule.
CFPB Moves Forward on New Priorities
While Rohit Chopra is awaiting confirmation to the Consumer Financial Protection Bureau, the new acting director, Dave Uejio, is moving forward with new priorities for the Bureau. This includes relief for consumers facing hardship due to COVID-19 and racial inequity. He has told the Bureau to expedite enforcement investigations relating to COVID-19 in order to send a message to the industry at large. Uejio said this will be done alongside reversing changes made by the Trump Administration that he says, “weakened enforcement and supervision.”
Toomey Requests Proposals to Foster Economic Growth and Capital Formation
U.S. Senate Committee on Banking, Housing, and Urban Affairs incoming Ranking Member Pat Toomey (R-PA) announced requests for legislative proposals to increase economic growth and job creation by facilitating capital formation.