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A Commitment to…Oversight?

The polls suggest the GOP will take a majority in the House – and possibly the Senate – next year. What would a Republican Congress do?

It’s hard to believe that the midterm elections are just five weeks away. With the polls indicating that the GOP is likely to retake a majority in the House of Representatives in November, Republicans in Congress outlined their public policy agenda for the 118th Congress last week. Since President Joe Biden will still be in control of the chief executive’s veto pen next year and the year after (and perhaps longer), most of what the GOP outlined will not make it into law anytime soon.

In other words: the contents of the plan, along with some other recent Republican maneuvers, make it clear just how difficult it will be to get anything done in an era of divided government.

Let’s take a look at what Republicans want.

A Commitment To America

At a campaign event in Pennsylvania, House Minority Leader Kevin McCarthy (R-Calif.) offered the party’s “Commitment to America,” which outlines the broad categories on which Republicans plan to focus if they take over the lower chamber of Congress this November. As is typically the case during the final sprint to the polls, the document is short on specifics, but offers a good glimpse of where a Republican majority would spend most of its time in the 118th Congress.

If “Commitment to America” sounds familiar, you are probably remembering the Republicans’ 1994, “Contract with America,” which was unveiled just six weeks before President Bill Clinton’s disastrous first midterm election. In that campaign the GOP picked up 54 seats in the U.S. House and eight in the U.S. Senate. The “Contract with America” was largely credited with solidifying Republicans’ big win that November.

The “Contact with America” had 10 pillars, ranging from congressional term limits, to key budget and tax reforms, to welfare reform. The “Commitment with America” is more focused, containing just four pillars:

  • An Economy That’s Strong

  • A Nation That’s Safe

  • A Future That’s Built on Freedom

  • A Government That’s Accountable

Unsurprisingly, the economic pillar focuses largely on inflation and how the party proposes to combat high energy prices. Like their “Contract with America” predecessors, Republicans in 2022 are also focused on what they see as government overspending. The Commitment notes, for example, that federal spending has increased by $9 trillion since just February 2021.

As this column noted last week, inflation is still top of mind for voters, and there was fresh evidence of that focus this week. A survey by Bank of America found that 71 percent of American employees say the cost of living is outpacing the growth in their incomes. That number was up 13 points from February.

And how do voters feel about government spending? Again, Republicans are right on the money (pun intended) when it comes to focusing on this issue. According to the most recent Gallup poll, which was conducted this spring, three-quarters of Americans are at least somewhat concerned about the federal budget deficit. Arguments that government overspending fuels inflation also resonate with voters.

When it comes to energy prices, after Senate Republicans predictably helped sink Sen. Joe Manchin’s (D-W.Va.) permitting reform plan this week, House Republicans have promised to “maximize production of reliable, American-made energy” in part by cutting “the permitting process time in half.” Sen. Shelley Moore Capito (D-W.Va.) offered a permitting proposal well before Sen. Manchin did — and hers would spur even more reforms — so Republicans already have a plan for how they would proceed on this matter next year if they take control of both the House and Senate.

When it comes to lowering prices more generally, the “Commitment to America” offers commits Republicans to moving manufacturing back from China to the United States, and it blames the Biden administration for not doing more to address supply chain hiccups. The outline argues, for example, that “the Biden administration knew last year that a nationwide shortage of baby formula could happen but failed to prevent it.”

When it comes to tax and regulatory policy, the Commitment says Republicans will “bring stability to the economy through pro-growth tax and deregulatory policies.”

One Potential Area For Agreement Between Republicans And Democrats?

House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.), who will lead that panel if the GOP wins a majority in the House, put some more meat on the economic pillar bones this week when he released an agenda for capital formation.

Among Rep. McHenry’s priorities are plans to lighten the U.S. Securities and Exchange Commission’s (SEC) reporting rules, creating “a burden free regulatory regime for small equity offerings without the threat of SEC litigation,” and expanding exemption opportunities for venture capital funds by raising the threshold for capital contributions and increasing the number of allowable investors.

The White House, of course, will oppose most of these measures and the U.S. Senate will too if it remains in Democrats’ hands.

The “Commitment to America” does have something to say about tech companies — and this area is one potential area for agreement between the two parties. Under “A Future That’s Built on Freedom,” Republicans pledge to “confront big tech and demand fairness” by providing “greater privacy and data security protections, equip parents with more tools to keep their kids safe online, and stop companies from putting politics ahead of people.”

In a sign of just how close the two parties actually are on these issues, this week the Democratic-led House could potentially vote on a package of three bills that would increase merger filing fees for large firms, allow state attorneys general to select their venue when enforcing antitrust laws, and use the merger notification process to require parties to disclose subsidies they have received from countries that pose a risk to the United States, including China.

As The Hill makes clear, several Republicans support these measures. In fact, three Senate Republicans urged their House GOP colleagues to vote for the measures, arguing, “This package represents a strong, bipartisan consensus approach to strengthening enforcement of the federal antitrust laws, against both Big Tech and other bad actors.”

Another bipartisan bill, the American Innovation and Choice Online Act, has been introduced by Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa). This legislation would stop tech firms from promoting their own private-label products and services over those of competitors, a practice known as self-preferencing. If this legislation does not make it to the finish line, and if Sen. Grassley wins his reelection bid, the two senators could continue this effort next year if their bill does not make it to President Biden’s desk by the end of the 117th Congress.

Rodell Mollineau, who used to be a top staff member for the late Senate Majority Leader Harry Reid (D-Nev.), told S&P Global Insights that while he is skeptical a Republican Congress would pass tough anti-tech measures, “It’s not as though Republicans are going to say ‘Big Tech is our friend.’”

“A Government That’s Accountable”

The fourth pillar of the “Commitment to America” promises to hold federal policymakers accountable. One way Republicans plan to do this is by ending proxy voting, the practice the House has been using since the beginning of the COVID-19 pandemic that does not require lawmakers to actually be on the House floor, or even in Washington, to cast a vote on legislation.

This pillar, of course, also has a lot to do with the Biden administration. And this is where we expect Republicans to spend most of their time: oversight.

In its Commitment, Republicans pledge to “conduct rigorous oversight to rein in government abuse of power and corruption, provide real transparency, and require the White House to answer for its incompetence at home and abroad.” As evidenced by a letter sent by GOP lawmakers last week, the Consumer Financial Protection Bureau (CFPB) will be one of the top agencies on the oversight hit list.

Last week, two key House Republicans formally requested that the CFPB defend the legality of measures the regulators. The request comes after the Supreme Court’s decision in West Virginia v. EPA, which stated a federal agency must have explicit approval from Congress to undertake major rulemakings.

Rep. McHenry, who, as noted above will lead the House Financial Services Committee if Republicans take the House, and Rep. James Comer (R-Ky.), the ranking member of the House Oversight Committee, sent letters to Chopra that asserted the CFPB has undertaken initiatives that “circumvent not only congressional intent, but the Administrative Procedures Act.” They specifically pointed to a pair of interpretive rules about state powers to enforce consumer laws and two advisory opinions about the Equal Credit Opportunity Act and the Fair Credit Reporting Act.

The lawmakers gave Chopra until September 30 to cite the specific congressional authority the CFPB has at its disposal to undertake the various rules, guidance, and initiatives they have already put forth over the last year, as well as those they plan to forge ahead with over the next several months and beyond.

While the “Commitment to America” will not result in a lot of enacted legislation, you can bet this pillar is just a preview of the type of letters federal financial regulatory agencies will be receiving next year if the GOP takes the House and/or the Senate.

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