TRP 2016 Congressional Outlook

January 13, 2016

After a turbulent, but ultimately successful 2015, Congress enters an election year on an upswing. Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) have both emphasized their commitment to receiving more input from the rank-and-file members of the party in the shaping of legislative priorities for the upcoming session. As such, specific timelines for legislation may be released following a party retreat in Baltimore this week.

2016 started with Congress sending budget reconciliation legislation that would repeal significant portions of the Affordable Care Act (ACA) to the president’s desk, but that is as far as the bill progressed as President Obama vetoed it on Friday. With 2015 bringing a repeal of the sustainable growth rate and the first significant tweaks to the ACA as a part of the omnibus legislation passed in December, 2016 may not live up to its predecessor in the health policy arena. That being said, Congress may act in a few key areas, notably:

  • Mental Health – On top of the $500 million in funding towards mental health that President Obama announced as part of his executive action on gun control, the House may consider Rep. Tim Murphy’s bill (H.R. 2646) approved by the House Energy and Commerce Health Subcommittee in November at some point in 2016. The House may also act on a bipartisan, Senate-passed effort (S. 1893) that would reauthorize suicide prevention and mental health awareness programs, while the upper chamber works on a more comprehensive mental health reform bill (S. 1945).
  • ‘Innovation,’ Drug Pricing, and User Fees – While the Senate HELP Committee failed to meet their self-imposed November deadline to introduce their own iteration of the House-passed ‘21st Century Cures Act,’ Chairman Lamar Alexander (R-TN) remains committed to making reform of Food and Drug Administration (FDA) approval processes a key priority in 2016. With the politically-charged debate over drug pricing threatening the viability of broad bipartisan legislation to reform FDA processes, attention may likely shift to the reauthorization of the FDA’s ‘user fees’ as a vehicle for measures that were otherwise vetted for inclusion in the ‘Innovation’ package.

Financial Services / Trade
The Dodd-Frank law remained untouched in 2015, despite concerted efforts to amend various provisions, including those dealing with the designation of systemically important financial institutions (SIFIs) and the practices and structure of the Consumer Financial Protection Bureau (CFPB).  It remains unclear whether House Republicans will be able to overcome Democratic opposition and make any changes to the law before a new president takes office next year, though we continue to anticipate legislative efforts on the issue. Whether these will be serious bipartisan efforts, or partisan messaging opportunities is still to be determined. Regardless, among the areas that will continue to receive attention in 2016 are:

  • Fiduciary Rule – Following an unsuccessful attempt to include a rider to December’s omnibus spending bill that would have delayed the implementation of the Department of Labor’s (DOL) upcoming rule creating a fiduciary standard for advisors giving retirement advice, a “simplif[ied] and streamline[d]” final rule is expected to be released in the first half of 2016. With DOL promising changes from the proposed rule, many in Congress are eagerly awaiting to see the Department’s effort, and if it fails to meet the rhetoric expressed by Secretary Perez and others, it could create support for future legislative initiatives. 
  • Trans-Pacific Partnership – While the trade deal between the U.S. and 11 Pacific nations has gained the endorsement of some interest groups, including the National Association of Manufacturers and the U.S. Chamber of Commerce, Leader McConnell has insisted that he does not intend to bring the deal up for consideration on the Senate floor before November. Speaker Ryan has been less critical of the deal, but also has not assured it will be considered this year. Look for proponents of the deal to make it a recurring issue throughout 2016.
  • Consumer Financial Services Bureau – The CFPB is expected to release a series of high profile rulemakings in 2016, including those dealing with arbitration, prepaid cards, debt collection, small business lending and overdraft.  If past precedent is any indicator of future performance, each rule’s announcement will be met with some response from Congress.
  • Data Security – With a long-negotiated cybersecurity bill (S. 754) passed as a part of the omnibus in December, Rep. Randy Neugebauer (R-TX) is looking to push forward a combination of data breach bills early in the year. The combined package seeks to bridge a gap that’s emerged between the House Financial Services and Energy and Commerce Committees, and assuage the concerns of retail groups fearing the additional burden a data security measure may bring to small businesses. 

Appropriations and Budget
After Congress was forced to use another omnibus to fund the government for the fiscal 2016 year, Speaker Ryan has emphasized returning to “regular order” for fiscal 2017, particularly given the agreement on top-line budget numbers struck between Republicans and the White House late last year. Regular order entails separate funding bills for the various federal agencies, and importantly, will allow for Members to submit a wide range of amendments on the House and Senate floor. With twelve appropriations bills typically required to fund federal agencies, this may prove to be a significant opportunity to include policy riders that would otherwise be left aside in an election year.
Meanwhile, House Budget Chairman Tom Price (R-GA) intends to mark up a fiscal 2017 budget resolution this spring, while the Senate’s plans are unclear. The budget deal reached in 2015 already specifies the discretionary spending limits for 2017, and any budget resolution is sure to stick with those. But if the House and Senate adopt a budget resolution containing reconciliation instructions, Congress could ostensibly use the expedited procedure to push through tax code or entitlement overhauls.
Other Key Priorities
The following issues are either on-tap for consideration or are deadline driven and will need to be handled before the end of the year:

  • Customs Bill – Senate lawmakers will need to consider the conference report for the Customs bill (H.R. 644), potentially as soon as late-January.  The House has already passed the conference report, and so the delay in the Senate is keeping the measure from the President. The insertion of a provision that would permanently ban state and local governments from taxing internet access, an ancillary issue for proponents of an unpopular online sales tax proposal, created enough friction at the end of last year to punt the measure into 2016. 
  • FAA Reauthorization – The Federal Aviation Administration’s (FAA) funding is set to expire March 31, making the agency’s reauthorization a must-pass part of Congress’ agenda this year. Lawmakers are hoping to release a bill this month, but the measure could be in danger of being caught by the political firestorm over President Obama’s recent executive actions on gun control. Because it’s a must-pass measure, Republicans may seek to include language on reversing those actions into the FAA bill, which would put its likelihood to be passed by March in jeopardy. 
  • Criminal Justice Reform – Criminal justice has emerged as a place of potential bipartisan agreement in 2016, bringing together partners as varied as Freedom Caucus members and the White House. A bipartisan bill (S. 2123) supported by both the chairman and ranking member of the Senate Judiciary Committee has garnered support on both sides, but it too is likely to be dragged into the intractable divide on gun control. A comprehensive package remains a possibility, but further executive action, such as pardons for certain convicts, is the more likely course of action in 2016.   
  • Higher Education – The Higher Education Act expired at the end of 2013 and lawmakers will continue to search for a way to reauthorize the law in 2016. Proponents will be encouraged by the enactment of a bill (S. 1177) reauthorizing elementary and secondary school programs last year, and will seek to work through remaining challenges – including the provision of financial aid, regulation of for-profit colleges, and Department of Education rulemaking.

2016 Political Calendar
With 2016 being a presidential election year, Congress will be in Washington for fewer days than the previous session. The House is scheduled to meet for 111 days this year, down from 133 in 2015, while the Senate is set to convene for 149 days. This is largely due to the Democratic and Republican conventions scheduled in late July, and a five-week period before Election Day to allow members to campaign in their respective districts. Below is a digest of important dates for the 2016 congressional year:

  • January 12 – President Obama’s final State of the Union Address
  • February 1 – Iowa Presidential Caucus
  • February 9 – New Hampshire Primary Election
  • March 1 – ‘Super Tuesday’ Primary Elections and Caucuses (AL, AK, AR, CO, GA, MA, MN, ND, OK, TN, TX, VT, VA, WY)
  • March 15 – Primary Elections for FL, IL, MO, NC, and OH
  • March 24 – April 1 – Easter Recess
  • April 19 – New York Primary Election
  • April 26 – Primary Elections for CT, DE, MD, PA, and RI
  • June 7 – Primary Elections for CA, MT, NJ, NM, SD
  • July 18 – September 2 – Convention Recess and Summer Recess
  • July 18 – July 21 – Republican National Convention in Cleveland, Ohio
  • July 25 – July 28 – Democratic National Convention in Philadelphia, Pennsylvania
  • October 11 – November 10Campaign and Election Day Recess
  • November 8 – Election Day
  • December 16 – Last day in session for 114th Congress