Elections Outlook Report - Flipbook - Page 22
How Does the 2024 Election Change the Political Dynamics and
Legislative Outlook for the 119th Congress?
A Republican trifecta will unlock Budget Reconciliation and CRA tools
leading to significant policy changes
A Republican-controlled House, Senate, and White House will allow the
GOP to enact its major policy priorities quickly and potentially with fewer
compromises. Without the need to negotiate extensively with Democrats,
Republicans could push forward major bills on priority issues like tax reform,
deregulation, budgetary restraint, judiciary appointments, border security,
and healthcare. Furthermore, a trifecta will allow Republicans to use budget
reconciliation, a prized procedural tool, to effectively move fiscal policies
in the Senate with a simple majority, bypassing the Senate’s usual 60-vote
threshold and need to work with the minority party. Historically, this method
has been used for deficit reduction and enables targeted tax cuts and
spending increases. Having these advantages of unified control will allow
Republicans to reshape federal policy in line with conservative principles and
make lasting changes to the legislative and regulatory landscape.
Republicans are also expected to use the Congressional Review Act (CRA) to
overturn recent Biden-era regulations, particularly those finalized after August
1, 2024, falling within the CRA’s “lookback” period. Members must introduce
a joint resolution of disapproval, and Congress must take action on it within
certain time periods to take advantage of the fast track procedures. After
being passed in both chambers, it is sent to the President, who can choose
to sign the joint resolution or veto it. Congress can override that veto with a
two-thirds vote.
The 119th Congress will face duel fiscal cliffs that will lead to intense debates
and lobbying efforts
In 2025 the United States faces two major fiscal challenges: the expiration of
key provisions in the 2017 Tax Cuts and Jobs Act (TCJA) and the need to raise
the debt ceiling. If Congress and the President do not act, the expiration of
TCJA provisions will result in significant tax increases for many Americans,
affecting lower individual tax rates, the increased standard deduction, child
tax credits, and small business income deductions, among others.
Simultaneously, the federal debt limit, suspended until January 2, 2025,
under the Fiscal Responsibility Act, will be reinstated. The government can
temporarily operate through “extraordinary measures” to avoid default, but
a long-term solution will be needed by mid-2025. These combined issues
present an opportunity for comprehensive tax reform and potential changes
in federal spending but will likely lead to intense debates and economic
uncertainty as policymakers negotiate and stakeholders across many sectors
engage in efforts to influence the legislation.
Republicans’ modest majorities have their pros and cons
Republicans’ 4-seat margin in the Senate will provide a significant advantage
in advancing their legislative agenda and shaping the Senate’s operation.
While this is still a modest majority, it still provides significant advantages that
weren’t afforded the two previous Senate leaders who dealt with the greater
challenges of having tied or razor-thin majorities. The new majority leader and
the caucus will have greater flexibility with larger majority committees and
will not always be reliant on every single member when navigating intra-party
divisions or absentee senators. This will pad the Senate majority in situations
that might arise when more moderate Republicans, such as Senators Susan
Collins (R-ME) or Lisa Murkowski (R-AK), choose to hold up legislation in
exchange for significant modifications or concessions.
Conversely, the slim margins in the House will require Republicans to
maintain unity within the party, which would be essential, as narrow margins
or internal disagreements could still hinder progress on certain initiatives. It
is especially important for GOP leaders to maintain near-total unity in both
chambers to pass a reconciliation bill. Slimmer margins also make majorities
