What to Expect from a GOP House
Getting anything done will be a tall order in a bitterly divided government.
Next year will be tailor-made for fans of gridlock. There’ll be an even larger wrench in the machinery of Washington as Republicans gain leverage in next month’s midterm, probably taking control of the House and coming close in the Senate.
Compromise will be hard to find as incumbents on both sides shun the center. They’ll work to keep their respective bases happy, fearing another round of primary knockouts in the 2012 presidential election cycle.
Republicans aim to stop President Obama in his tracks. Big administration initiatives are doomed to fail. But Democrats will stop the GOP as well. Both sides will have enough power to block a big bill, but neither will have enough to push one through.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A GOP House will appear like a busy legislative construction crew for months, drafting and passing one big bill after another, but knowing major bills will have difficulty in the Senate or face a presidential veto that won’t be overridden. They’ll have to know many of their largest efforts may end up being symbolic until another election or two when the GOP may have a better shot of actually enacting large conservative reforms.
That’ll be just fine politically for Republicans. They’ll have little choice but to take a very ambitious, hard-hitting course in any event next year -- delivering an assault on Democratic power, big government as they see it, deficit spending and a center-left ideology that guides much of Obama’s White House. They’ll need to show the Republican Party base, Tea Party supporters, business backers and independents who have grown weary or cautious of Obama that the GOP is determined to change direction.
What will the gridlock mean for business issues? Climate control legislation is dead. Ditto, a comprehensive immigration law. Labor’s priorities won’t have a chance, including its biggest goal, union card check elections that may make it easier for labor organizers to score wins.
Figure on no movement to overhaul entitlements, namely Social Security, Medicare, Medicaid and veterans’ benefits. Reform will be central in the report later this year from the bipartisan debt and deficit reduction commission, but getting Congress to hold hands on painful fixes to popular automatic benefit programs will prove too much.
And no chance for significantly reforming the tax code, a bear of a project, even in less partisan times. The lame-duck session must deal with the Bush tax cuts that are set to expire Jan. 1, but the likely outcome -- a temporary extension -- will only delay an unpredictable fight. A compromise on estate taxes will finally win approval, either in December or early 2011.
The GOP will try but fail to repeal the health care law. That can’t succeed as long as Obama is president. Republicans will then try to chip away by withholding funds for implementing various provisions, but that won’t work, either. The health industry backs several big parts of the law and believes reopening it now would create many more problems than it would solve. Still, some tinkering is likely. There’s bipartisan agreement, for example, on rolling back some reporting regulations that threaten to burden small businesses and that was included to help finance health care changes.
On government spending, expect something close to a freeze for most domestic programs in the wake of a year of budget battles. The GOP is determined to show that it’s serious about shrinking the government, even if no landmark reduction is possible, such as eliminating an entire federal agency or two.
Congressional earmarks won’t be eliminated. Despite much rhetoric about out-of-control unauthorized earmarks slipped into spending bills, the practice will remain. There may be some curbing of the practice, but large trimming is not in the picture. Even if House GOP leaders tout efforts to cut pork projects, Senate appropriators in each party vigorously defend the right of Congress to steer funding where members see fit for projects in their states.
Big fights, too, over regulations. The GOP will try to block dozens of rules the administration plans on the environment, labor issues and financial services. At best, Republicans will slow some rules and force a few compromises, but that will only add to the uncertainty that is already frustrating many businesses.
Also ahead: A slew of partisan-fired investigations of the administration that’ll tie up officials who must produce reports and testify under subpoena on issues such as the industry bailouts and whether politics influenced decisions or how stimulus funds were spent. In the Senate, meanwhile, a smaller Democratic majority will find it even harder to confirm Obama appointees, especially any controversial judicial picks.
A few bills will pass. A six-year surface transportation spending bill green-lighting projects in every state and district is very likely, after much work over priorities and particulars. A free trade agreement with South Korea looks good to be ratified, also.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Holiday Office Party Taxes: Know Before You Go
Tax Tips The IRS could tax your gifts from Christmas raffles, Secret Santa, and White Elephant. Here’s how.
By Kate Schubel Published
-
2025 Tax Reform: Will the SALT Deduction Cap Be Repealed?
Tax Deductions Some lawmakers say it’s time to end the $10,000 cap on state and local tax deductions.
By Kelley R. Taylor Published
-
AI Regulation is Looming: Kiplinger Economic Forecasts
Economic Forecasts Find out what Washington and regulators have planned for artificial intelligence.
By John Miley Published
-
The Biden Tax Plan: How the Build Back Better Act Could Affect Your Tax Bill
Politics Depending on your income, the Build Back Better Act recently passed by the House could boost or cut your future tax bills.
By Rocky Mengle Published
-
Kiplinger's 2020 Election Forecast
Politics For nearly a century, The Kiplinger Letter has forecasted the outcome of presidential elections to keep readers informed of what's coming and what it means for them. Here's our call for 2020.
By The Kiplinger Washington Editors Published
-
The 2020 Election and Your Money
Politics We’ve assessed how the presidential candidates’ stances on financial issues will affect your wallet.
By the editors of Kiplinger's Personal Finance Published
-
5 HEROES Act Provisions with a Good Chance of Becoming Law
Politics The massive federal stimulus bill just passed by the House of Representatives is "dead on arrival" in the Senate. But a few proposals in the bill have enough bipartisan support to eventually become law.
By Rocky Mengle Published
-
Vote by Mail: A State-by-State Guide to Absentee Ballot Voting
Politics With health authorities recommending people continue to social distance, the idea of voting by mail is becoming an increasingly hot topic.
By Rivan V. Stinson Published
-
9 Ways COVID-19 Will Change the 2020 Elections
Politics The 2020 election will be like no other in history, as the COVID-19 pandemic will upend the business of politics as usual.
By Sean Lengell Published
-
How to Run for Local Office
Politics If you’ve ever thought that you could do a better job than the elected officials currently in office, here’s how to launch a campaign—and win.
By Kaitlin Pitsker Published