Suddenly, a Flurry of Activity in Washington
Since almost the very beginning of the Trump administration, most pundits focused most of our analysis on what the White House and the Republican-led Congress could be doing under more traditional circumstances. That this line of thinking was so prevalent among the political class was no surprise; despite President Trump’s election on a platform built almost entirely on promises of largescale policy changes in Washington, and with Republican majorities in the House and Senate to boot, the relative lack of meaningful policy activity on Capitol Hill and across the executive agencies for the first ten months of the Trump era was unexpected. Within the last several weeks, however, that logjam has started to break, and significantly. The last several days have marked perhaps the most frenzied period of activity in Washington since Inauguration Day, and what happens over the next 10 days will likely define President Trump’s first year in office.
Rather than wait until the end of the week to provide some analysis or a summary of the week that was after the fact, we thought that a note from within the midst of the fog of war, with a particular focus on what to watch over the next several days as key decisions are made might be of interest.
We start at the Consumer Financial Protection Bureau (CFPB), the agency created by the Dodd-Frank Act with a mandate to be the protector of consumers within the financial services industry. Richard Cordray, the only director the Bureau has known since its inception, resigned on Friday. Though his intention to leave the agency – reportedly to pursue a run for governor in Ohio – had been long telegraphed, his decision to do so on Friday was abrupt. As one of his last acts before leaving Washington, Cordray appointed Leandra English, his chief of staff, as deputy director. Under the Dodd-Frank Act, the deputy director assumes the role of acting director in the event of the “absence or unavailability of the director.” Cordray’s last-minute promotion of English, therefore, was meant to ensure the CFPB continued to be led by an Obama-era acting director. One not-so-small problem: The Trump administration has an entirely different legal view and appointed their own acting director.
Shortly after Cordray formally left the Bureau on Friday, President Trump announced that he had appointed OMB Director Mick Mulvaney, a former member of the House of Representatives who has referred to the CFPB as “a sad, sick joke” to be the acting director of the CFPB until the White House nominates a permanent replacement who is ultimately confirmed by the Senate. The West Wing argued that Cordray’s departure didn’t create an “absence or unavailability” at the helm of the CFPB – it created a vacancy. Under the Federal Vacancy Reform Act of 1998, the President is given the authority to name acting directors at federal agencies when that role is left unfilled.
And so, since Friday evening, the CFPB has bizarrely had two acting directors with very different ideologies. English sued Mulvaney and President Trump on Sunday night, seeking a temporary restraining order barring Mulvaney from serving as the acting director of the agency. Shortly before this writing, the judge assigned to the case sided with the Trump administration and rejected English’s request to block Mulvaney from leading the agency. Even before the ruling, Mulvaney had functionally taken hold at the agency. He has been using the director’s office, has issued 30-day hiring and rulemaking freezes, and has directed the CFPB staff to disregard any instructions they receive from English. But the fate of the leadership of the CFPB currently rests in a potential appeal of the judge’s decision by Leandra English.
As the drama at the CFPB has played out at its offices on 17th Street, Senate Republicans have been racing towards a vote on their tax reform package. The Senate Budget Committee this afternoon approved, in a 12-11 party-line vote, sending the package to the Senate floor, setting up the potential for a dramatic floor vote on what would be the largest tax reform package the United States will have seen since 1986. Despite the advancement out of committee, key hurdles still remain. In the Senate, Majority Leader McConnell (R-KY) still must find the 50 votes needed to pass the bill on the Senate floor. (Vice President Pence would serve as the tiebreaking “yes” 51st vote in the event of a 50-50 tie.) Leader McConnell is still hunting for votes this evening as several members of his own Republican conference, including Senators McCain (R-AZ), Corker (R-TN), Flake (R-AZ), Collins (R-ME), and Johnson (R-WI) have expressed skepticism about the current draft. Though GOP leadership could conceivably make changes to the bill before it is considered on the Senate floor, any tweaks made to win the favor of a senator on the fence very well could result in another senator who is currently a “yes” vote becoming a “no” vote, particularly if that tweak increases the bill’s impact to the deficit.
Even presuming the Senate is able to pass a tax reform bill – be it this week or at any point thereafter – it would still have to reconcile the differences between its bill and the tax reform bill that was recently passed out of the House of Representatives before President Trump could sign anything into law. There remain significant differences between the two bills, and it is not clear that the House would be willing to accept the Senate’s version. To the extent that the House refuses to accept the Senate bill and insists on Leader McConnell making additional changes before the bill could be sent to the White House, it is doubtful that Republicans would be able to find sufficient votes in the Senate to get the bill across the finish line. President Trump’s self-imposed year-end deadline therefore still feels extremely ambitious.
Lastly, the resolution that has kept the federal government funded and open since the end of the fiscal year on September 31 will expire one week from Friday, on December 8. Barring Congressional action, the federal government will shut down on December 9. Democrats, on whose votes Republican Congressional leaders have historically relied to keep the government open for the last several years, have signaled that they will not vote for any funding resolution that does not address the status of so-called “dreamers” – the undocumented immigrants who came to the United States as children and who were given temporary protection under the Deferred Action for Childhood Arrivals (DACA) program in 2012 under President Obama. President Trump announced his intention in September to end the DACA program and Democrats, sensing political leverage since there votes are crucial to enact funding bills, almost immediately tied their votes for a funding resolution to a “fix” of the DACA issue. Republican and Democratic Congressional leaders were scheduled to meet at the White House this afternoon with the President to negotiate a spending deal that would avert a shutdown. And then President Trump send out this tweet this morning:
Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) announced shortly after the tweet was sent that they no longer intended to participate in the White House meeting. So, amidst a leadership kerfuffle at the CFPB and a frantic push towards comprehensive tax reform in the Senate, the odds of a federal government shutdown during the first year of President Trump’s administration – and while the President’s party controls both chambers of Congress – increased substantially today.
Oh -- and unless Congress acts in the next several weeks, the United States will default on its debt for the first time in its history sometime in January.