The week after Labor Day, members of Congress will return to Washington, DC, to complete their work for this year and this session of Congress. Much remains to be done. Many bills have been voted out of the House of Representatives, only to collect dust in the Senate. This stalemate is the result of a divided Congress, with the House of Representatives being controlled by Republicans, and the Senate being controlled by Democrats. Despite pleas from the public, there is very little that the two parties have agreed on and accomplished across party lines. The public may not even be fully aware of the lack of cooperation, since most in Congress have simply quit talking about it to appease a dissatisfied citizenry.
For the Senate, another reason that legislators have not been dealing with difficult issues is the upcoming election. One-third of the Senate is up for election, and the Democrat majority appears to be in jeopardy. Consequently Senate Majority Leader Harry Reid does not want to force his caucus members, who are standing for re-election, to vote on divisive issues prior to Election Day.
The problem, of course, is that multiple issues need to be addressed. For openers, there still are 15 budget items to be approved. Technically these should be completed by Sept. 30, the end of the current federal government fiscal year. Instead Congress will probably pass a continuing resolution, essentially an agreement to allow the government to function – usually under the old budget – for a specific period of time. This happens frequently and, in the past few years, has been the norm rather than the exception.
There also are the big issues that the press continues to bring forward, such as immigration and tax reform, which have been on this list for a long time. For bankers, several regulatory relief measures voted out of the House of Representatives by large margins on bipartisan votes would help with some of the overkill in the drafting of the rules to implement the Dodd-Frank Act. While we remain hopeful that progress will be made with some of these measures, there are not many days remaining in this Congress. It is likely that Congress will shut down in late September or early October to permit incumbents to focus on their re-election campaigns prior to the Nov. 4 elections.
The likely scenario is that Congress will return following those elections for a lame duck session, giving members of Congress some time in November and December to accomplish the work that they failed to do in the past two years. Election results will be known by then and will factor into how cooperative legislators might be. Frankly, I do not see them accomplishing much in a lame duck session. If the Republicans retain the House of Representatives and gain control of the Senate, they will not compromise with Democrats on divisive issues, knowing that in January they can pass their version of solutions and put pressure on President Obama to either veto bills or sign them. If Democrats retain control of the Senate, nothing changes, and we face two more years of gridlock.
I can assure you that the Indiana Bankers Association will be watching and ready to greet members of Congress upon their return from the August recess. More importantly, we will be urging them to move forward on issues that impact our industry.
– S. Joe DeHaven