Since Speaker Boehner’s surprise announcement to step down from his position, Capitol Hill has been buzzing with talk of who will fill his shoes. Speaker Boehner struggled throughout his tenure to cobble together 218 votes to pass legislation or directly challenge President Obama’s policies. The early “shoe-in” was current Majority Leader Kevin McCarthy from California. However, McCarthy’s interview gaffe suggesting the Benghazi special committee was politically based proved unrecoverable. Hard right-wing Republicans began to express concerns that a vote for McCarthy would simply maintain the status quo established under Speaker Boehner. Rep. Jason Chaffetz from Utah, and Rep. Daniel Webster from Florida were also in the mix, but many question whether either could command control of the caucus, let alone the minimum required 218 votes. The Freedom Caucus, a group of about 40 conservative Republicans, has initially backed Daniel Webster. At press-time, there is a very strong undercurrent to draft Ways and Means (Tax) Committee Chairman Paul Ryan. Most House Republicans see Ryan as a potential Speaker who could command a “governing majority” large enough to not have to squeak through every policy or bill with just 218 votes. It is highly likely Ryan will be formally nominated to the position next week, with a confirming vote later in the month. Speaker Boehner postponed the Speaker election for the time being and rescheduled the vote for some time “in the coming weeks.” Boehner will retain his position until the new Speaker is selected.

What Next?

No meaningful work will be done on an FY16 budget while the leadership of the House Majority remains unsettled. Ultimately, a new Speaker must be part of a negotiation of a budget solution that will be agreed among the House, the Senate and the President.

What Is Happening with the NDAA?

The National Defense Authorization Act was approved by Congress last week, and passed the Senate vote on Wednesday 70-27. The bill approves a defense budget of $612B, allocating $38B more than requested to OCO (overseas contingency operations). Recall OCO funds are supposed to be an off-budget contingency for war expenses. The provision was included in the bill to skirt around the budget caps imposed by the 2011 Budget Control Act. The “budget gimmick” is viewed by Republicans as a necessary way to provide the military with the funds they need (and what was requested by the Obama Administration).

To clarify, the NDAA authorizes President Obama the funds requested; however, $38B is included in OCO that President Obama had included in the base budget.

President Obama has said he will veto the bill if the current provision is included as is. What the Obama Administration and most Democrats would like is to see the budget caps raised across all sectors of government, not just defense. Additionally, President Obama’s veto would register his opposition to the bill provisions that would not allow him to close Guantanamo Bay by the end of his presidency, which has been a principal issue for him throughout his two terms. Republicans are forcing the issue of a veto to put President Obama on record as having positioned himself as not supporting deployed troops during a time of significant international strife. Look for a veto. With the ongoing flurry in Congress, the reasons for a veto will be lost in the media noise, the President will claim a moral victory over Congress and the bill will be reviewed and revoted in the coming weeks. Policy bills don’t spend money and can be rewritten.

The Congressional to-do list remains:

– FY 16 appropriations
– Highway Trust Fund Reauthorization
– Export-Import Bank Reauthorization
– Debt Ceiling Relief (approaching $19T in November)