Quick Hit – January 18, 2017

With the Presidential Inauguration just days away, Senate confirmation hearings have dominated Hill activity in preparation for the start of the new administration.

Cabinet Hearings  

The confirmation hearing for General James Mattis, up for Defense Secretary, was held last Thursday morning. His hearing went quite well. The Senate voted 81-17 to pass a required waiver that would allow General Mattis to take the position despite legislation that states that retired military officers cannot serve as civilian head of military within seven years of active duty. The House passed the waiver on Friday with a vote of 268-151, with only 36 Democrats supporting the bill. Democratic resistance in the House can be attributed to a last-minute reversal by the Trump transition team of a plan for Mattis to testify before the HASC last week. Waiver legislation will now move to the President’s desk to await his signature after he is inaugurated on Friday. Today, SASC voted 26-1 that the full Senate should approve General Mattis for this position once the President signs off on it after taking office, meaning it will not have to go through committee after the President’s signature.

Hearings for Rex Tillerson, nominee for Secretary of State, and Mike Pompeo, nominee for CIA Director, were completed last week. Jeff Sessions, nominee for Attorney General, faced two days of questioning during his confirmation hearing. President-elect Trump surprised some with his nominee for the Secretary of the US Department of Veterans Affairs, Dr. David Shulkin, who presently serves as Under Secretary of Health at the VA in the Obama administration.

Interior Secretary potential Ryan Zinke and Education secretary nominee Betsy DeVos had their respective hearings Tuesday afternoon. The hearing for President-elect Trump’s pick for UN Ambassador, Nikki Haley, and Treasury secretary, Steven Mnuchin, will take place today. Senator Elizabeth Warren has expressed her opposition to Trump’s nominee for this position, and will continue to do so leading up to the hearing. Tom Price, nominee for Department of Health and Human Services, faces confirmation today as well.

The hearing for Mick Mulvaney, Trump’s pick for the leader of the Office of Management and Budget, will occur on January 24th.

Early battles taking shape

Defense

Senator McCain, SASC Chairman, staked out his terrain in releasing a plan to increase the Pentagon’s base budget and spending on nuclear weapons by $430 billion over a span of five years. The bill would produce a total defense spending proposal of over $700 billion, which is almost $100 billion more than what was authorized for this year. The bill would bring in multiple changes, such as increased troop posture in the Army to over 500,000 active duty troops, increasing the size of the Marine Corps to 200,000 by FY22, newer warships and more fighter jets. This move will require overturning the spending caps put in place by the 2011 Budget Control Act. While some may argue the fine points of the plan, the defense industry overwhelmingly supports the plan’s fundamental concepts – remove sequestration; investment in readiness, and, smart investment in capability – reversing a multi-year decline in defense spending.

Health Care Reform

The Obamacare debate continues, with Republicans pushing to repeal the Affordable Care Act that is said to cause 32 million people to lose their health insurance and double the price of premiums over the next ten years. The analysts at the Congressional Budget Office will play a critical role in the development of this legislation, especially as they bring to light the difficult compromises and sacrifices that arise with health care reform. During this process, Republicans have discussed funding up to $9 billion in health care subsidies to avoid wreaking havoc on the insurance market for the American people. It is still unclear whether this move would require an appropriations bill or a repeal and replacement bill.

Tax Reform

Most Republicans believe the window is open to finally move on a significant streamlining of the tax code, including notable reductions in all tax rates. Some have been surprised to learn of the linkages between the Health Care Reform debate and the Tax Reform dialogue. Managing these federal revenue streams will require uncommon Congressional leadership to implement complimentary legislative changes.

Inauguration

Attendance and participation in the Presidential inauguration Friday is anticipated to be lighter than is typically the case; fewer than one million are expected to fill the National Mall. Many Democratic lawmakers have indicated they will “boycott” the inauguration. Regardless, the peaceful transition of power moves forward.

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