New Year, New Congress

The 116th Congress convened on January 3, 2019 with a dynamic shift in power, with Democrats now holding a 235-199 majority in the House and electing Nancy Pelosi as Speaker, the first Member in over 60 years to regain the Speakership after losing a majority. In the Senate, Republicans increased their majority to 53-47.  Predictions of gridlock were unfortunately accurate, as even before Democrats took control in the House, a dispute over funding a border wall resulted in the failure to pass a government funding bill.  Large parts of the government continue to be shut down as of this writing.  Both sides continue to be entrenched in their positions.  Today (January 11) is a significant day as many federal workers will miss their first paycheck.  This includes a wide variety of employees, including, just to name a few, FBI Agents, customs officials, meat inspectors, TSA officers and Commerce Department officials who review steel tariff exclusions.  The result is that many important agencies in the government are now shut down or barely functioning.

When the dispute over government funding is resolved, Congress will take on a variety of important issues, including passage of the new NAFTA – the USMCA (United States-Mexico-Canada Agreement).  USCMA will require approval by both the House and Senate.  The treaty has an uphill climb as many Democrats in the House have expressed reservations about the new deal.  In addition, Congress is considering several bills to reign in the President’s power to impose tariffs on national security grounds (Section 232).  Unfortunately, the bills introduced to date deal with future 232 tariffs, so legislation would not immediately impact the Section 232 steel and aluminum tariffs imposed in 2018.

House Democrats are expected to use their new subpoena power to investigate a variety of issues in the Trump Administration.  Look for many more public hearings on various controversies now that House Committees are chaired by the Democrats.

Most Congressional observers believe that the best chance for bipartisanship is on a bill to invest in and improve the country’s infrastructure.  However, differences in how to fund an infrastructure package may doom any legislation.

Support for manufacturing will continue to be found in both the House and the Senate, but actual legislation that would help manufacturers, including addressing health care costs, regulatory reform and ending damaging tariffs will be very difficult to pass through a divided Congress. 
PMA will continue to provide updates on the new Congress and the policy debates in Washington, D.C. that directly impact your business. 

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