The Republicans have won back the House of Representatives. Buckle up for some turbulence ahead.
The GOP is pledging to rein in spending, extend former President Donald Trump’s tax cuts and investigate the Biden administration, putting Republicans on a potentially nasty collision course with the Democratic president and the Democratic-controlled Senate.
Read: Republicans clinch slim majority in House, likely signaling gridlock ahead
Republicans clinched the House on Wednesday night, according to the Associated Press, more than a week after the midterm elections. Biden said in a statement that he “will work with anyone — Republican or Democrat — willing to work with me to deliver results.”
With student loan forgiveness stuck in courts, here's how feds are still erasing debt
With the president's student debt relief plan on hold, the Education Department is simplifying other debt relief programs that include forgivenessThe price of that postponement, however, at least until now, was that interest kept growing on that debt. The feds then capitalize the unpaid interest, that is, they add it to borrowers’ principal balance. At that point, the loan is often larger than what a borrower first took out. The federal government also has capitalized interest after borrowers paused their loan payments.
Several challenges await when the next Congress opens. Here’s a brief guide about what to expect from a Republican-run House — including some possible areas of compromise.
Washington analysts have warned for months about a fight between Republicans and the Biden White House over the U.S.’s borrowing limit, and have sounded the alarm about what default would mean. Should default occur, “the effects would be devastating for the economy and capital markets,” budget expert Maya MacGuineas told MarketWatch a few weeks ago.
Market Extra: Debt-ceiling showdown could shake up markets after midterm-election results, analysts say
MacGuineas is hoping for a “drama-free debt-ceiling increase,” but comments by would-be Speaker Kevin McCarthy — and pushback from Biden — suggest a tense fight. The U.S. is expected to hit the borrowing limit next year. Democrats in Congress are considering trying to raise the debt limit before year’s end. However, the Biden White House has largely given up hope of Congress raising the nation’s debt limit during the lame-duck session, according a Politico report on Wednesday.
Top Democrats Warming Up To Denying GOP A Chance To Leverage Debt Limit
Raising the limit on government borrowing in the lame duck would help Biden but could risk other priorities.Dealing with the debt limit now instead of only a few weeks or days before the Treasury Department is projected to run out of borrowing room would be a break from Congress’ past pattern. But it also would let Democrats deprive Republicans of the chance to leverage it in the next two years if they win the House by holding an increase hostage for GOP priorities.
Opinion: Why won’t Republicans rule out attacking Social Security? Extending the Trump tax cuts
Any tax increases are almost certainly a dead letter in a Republican House. But the GOP’s plans go bigger: Even faced with a Democratic Senate and president bound to resist extending them, Republican lawmakers are pushing to continue some of the Trump-era tax cuts.
Henrietta Treyz, director of economic policy research at Veda Partners, recently called making the 2017 tax cuts permanent “the crux” of the GOP’s economic argument against Biden and his fellow Democrats. But Treyz and other observers have warned that doing so could be counterproductive to fighting inflation, which is at a 40-year high.
Read more inflation coverage from MarketWatch.
Still, expect to hear plenty about “pro-growth tax and deregulatory policies,” as the House Republicans’ “Commitment to America,” a collection of campaign proposals, states.
House Republicans plan investigations and possible impeachments with new majority
House Republicans' majority will be smaller than anticipated but they have big plans to use their oversight powers to investigate President Joe Biden's administration.In this moment of divided government and fierce partisanship, it’s perhaps appropriate that the GOP conference is expected to be led by Reps. Kevin McCarthy of California and Steve Scalise of Louisiana, veteran lawmakers known more for their skills in political combat than for their policy acumen.
Also read: IRS should brace for ‘broad and deep’ scrutiny if Republicans win the midterms Biden investigations, and possible impeachment
Republican House members like Marjorie Taylor Greene of Georgia and Bob Good of Virginia have introduced impeachment articles against Biden in the current Congress. But with Republicans having won the House, those same moves could take on extra weight.
The question is, does House leadership go along? McCarthy has distanced himself from the impeach-Biden drive, last month telling Punchbowl News: “I think the country doesn’t like impeachment used for political purposes at all.” The California Republican didn’t rule out impeachment “if anyone ever rises to that occasion,” but focused his reply on national healing and a system “that actually works.”
See: Kevin McCarthy vows to restore Marjorie Taylor Greene’s committee assignments, secure border if he becomes House speaker
Short of a full-on move to impeach Biden over his southern-border or other policies, House Republicans could instead hone in on Alejandro Mayorkas, who heads Biden’s Department of Homeland Security, or another official.
Biden will ask the Supreme Court to allow his student-loan forgiveness plan to move forward after lower courts blocked the relief
The fate of Biden's student-debt relief plan rests with the Supreme Court after two federal courts ruled it illegal and blocked it.On Thursday, Politico first reported that the Justice Department is planning to ask the Supreme Court to allow Biden's debt relief plan to move forward. It request comes after the 8th Circuit Court of Appeals on Monday ruled that the temporary stay it previously placed on the loan forgiveness will remain in effect indefinitely. That decision was in response to a lawsuit filed by six Republican-led states who argued the relief would hurt their states' tax revenues.
The GOP House is also poised to probe Biden’s withdrawal from Afghanistan and how COVID-19 spread from China, as well as Hunter Biden’s business affairs.
The Commitment to America promises that Republicans will “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.”Energy push
As MarketWatch’s Rachel Koning Beals has reported, observers expect a previously advanced GOP energy platform to get another look in a new Congress. Republicans in that platform sought to keep alive U.S. natural gas production, among other measures, as they cast themselves as champions of domestic production.
Read: Republicans’ energy and climate plan targets rising gas prices ahead of midterms
While Republicans’ wins will translate into tougher roadblocks for future green energy and climate-change legislation, they likely won’t mean a wholesale reversal of tax-friendly incentives targeting home solar, electric vehicles and other items in the newly enacted Inflation Reduction Act, MarketWatch has reported.
See: Will midterm-election results kill the EV and home-energy tax breaks just approved?Defense spending could provide common ground
Washington isn’t exclusively in for two years of clashes, says Kim Wallace of 22V Research.
Pelosi, dominant figure for the ages, leaves lasting imprint
WASHINGTON (AP) — There are two searing scenes of Nancy Pelosi confronting the violent extremism that spilled into the open late in her storied political career. In one, she's uncharacteristically shaken in a TV interview as she recounts the brutal attack on her husband. In the other, the House speaker rips open a package of beef jerky with her teeth during the Jan. 6, 2021, Capitol insurrection, while on the phone with Mike Pence, firmly instructing the Republican vice president how to stay safe from the mob that came for them both. "Don’t let anybody know where you are,” she said.
“We think that for political reasons and geopolitical reasons, defense spending is likely to continue to bounce,” Wallace said during a recent Barron’s Roundtable, citing research and development spending as well as procurement.
What’s more, members of both parties are keenly interested in the implosion of cryptocurrency exchange FTX. On Wednesday, the Democratic chairwoman and top Republican on the House Financial Services Committee announced a December hearing on “the collapse of FTX and the broader consequences for the digital-asset ecosystem.”
Also Wednesday, Treasury Secretary Janet Yellen said Congress and the federal government must “move quickly to fill the regulatory gaps the Biden administration has identified” where existing rules don’t offer enough protection to crypto investors.
Read on: A GOP takeover of the House could be a boon for crypto legislation