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Closing Out 2017: Difficult Legislative Battles Brewing in Final Months

IT WAS NOT supposed to be like this. When voters went to the polls in November of 2016, they placed Republicans in control of the executive branch and both houses of Congress for the first time since 2005. By so doing, they expected Washington would start to get some things done. To date, that just has not happened.

The number one issue for the majorities in Congress and for the president—the repeal and replacement of the Affordable Care Act—consumed most of the legislative year. Multiple attempts failed, resulting in the president publicly blaming the Senate for its demise.

This growing discord between Congress and the White House could have a significant impact on the number of legislative successes for our industry during the rest of this year. Not only will it be difficult to pass measures important to private clubs, but it will also mean “must pass” bills will take longer (if at all) thus delaying action on club-oriented bills even further.

With about 30 legislative days between October and the end of the year, two major legislative battles to be fought in this final quarter of 2017 could turn into a knockdown, drag-out a!air in Washington—and leave us in tenuous shape for 2018.

Keeping the Lights On
For decades, Congress has failed to pass all 12 government appropriations (funding) bills before the end of the fiscal year. There have been only four years since 1975 when the appropriations process was completed before October 1: 1976, 1988, 1994 and 1996.

While passing these bills can be a grueling task, there is no doubt they are important. After all, they provide each governmental agency the funds necessary to function during the year. When these bills are not passed on time, the government shuts down. The last time that happened was in 2013.

With Republicans controlling both chambers of Congress and the White House, the expectation was that all might change. Regrettably, no appropriations bills made it to the president’s desk before the October 1 deadline.

Before the start of the new fiscal year, members of the House and Senate spent their time right after the August recess scrambling to keep the government’s lights on. To that end, both chambers passed a joint resolution to fund the government. This “Continuing Resolution” (CR) funds the government for a limited amount of time at the same levels found in the FY17’s funding bills.

In the final legislative days remaining in the year, Congress will work to combine the 12 appropriations bills into one all-encompassing bill: an omnibus appropriations bill. One aspect of this omnibus bill is the funding of the president’s southern border wall.

The president has made funding that wall a priority for FY18. At the same time, Democratic leaders in the House and Senate have indicated that they will not accept any funding for the border wall. Thus, expect a significant battle when it comes to passing this omnibus bill. Simply put, without Democratic support the bill cannot pass the Senate.

If the negotiations on the omnibus bill are stuck on border wall funding, Congress could pass additional CRs to provide more time to hash out a deal. Of course, the president could decide to veto any future CRs to spur Democrats into accepting money for the wall. Unfortunately, that is not likely to work. The result would be a government shutdown.

If that happens, Republicans will have to decide whether it is in their best interests to side with the president. Should they feel the shutdown is detrimental to their upcoming re-election chances, they might join Democrats, override his veto and reopen the government. Such a direct move against the president could lead to an intraparty war.

Usually, there would be no chance such a result could happen—either a government shutdown or an intraparty war. However, these are not usual times.

There is little doubt that the president believes the border wall must be built, and many on Capitol Hill are taking him at his word that he will shut down the government if it is not funded in FY18. Many Republicans in Congress are beginning to ponder just how to respond to that. For some, breaking with the president is becoming the preferred response.

While this is all speculation, these issues are being discussed in Washington right now, and that means no other legislative issues are being brought to a vote. In the end, what should be an easy process of keeping the government funded could actually cause bigger problems between Congress and the White House and that will undoubtedly impact the legislative calendar for the remainder of the year.

Preparing for Tax Reform
Republicans in the House and Senate are hoping that tax reform can be their political lifesaver. Such legislation is supported in the House, but the concern is whether the Senate can pass a bill. Under the Senate’s current rules, that is very unlikely.

Though Republicans have a 52-48 Senate majority, they would need to overcome a Democratic filibuster of any tax reform bill. To do so, they would need 60 total votes—meaning eight Democrats would need to join all of them to defeat a filibuster. This will not happen. However, Republicans do not need to worry about a filibuster if they use the reconciliation process.

The reconciliation process was established in the Congressional Budget Act of 1974. It allows Congress to change existing tax and spending laws to match new tax and spending levels set in a budget resolution. Most importantly, it may not be filibustered.

Simply put, the use of reconciliation means Republicans would only need 50 votes in the Senate to pass a tax reform bill (with the vice president casting the deciding 51st vote). However, for Republicans to use reconciliation it must be included in Congress’ budget resolution for FY18.

In July, the House Budget Committee approved the FY18 budget resolution, which included reconciliation language for tax reform. That measure now awaits a vote by the full House. In theory, such a bill should easily pass the House. In reality though, that may be a more difficult than first thought.

Speaker of the House Paul Ryan (R-Wis.) has been trying to get the budget resolution bill through since July, but his main obstacles have been some of his own fellow Republicans. Their problem is with the total budget for the government—not the reconciliation language. For political reasons, many of them do not want to be associated with a high FY18 budget number.

So, the budget resolution bill could be scuttled by those who ardently support tax reform. If it fails, then the reconciliation language is gone and there is no way to get a tax reform bill through the Senate.

Needless to say, this problem has been vexing Speaker Ryan for some time and will likely continue to do so for the rest of the year. Even if the budget resolution does finally pass the House, there is no guarantee the Senate can pass a tax reform bill with just 50 votes (see the reconciliation effort to repeal Obamacare). If that were to happen again, the White House would have a very difficult time working with the Senate on any future legislative efforts—including measures that support our industry.

Can Normalcy Return in 2018?
The final three months of 2017 will be hectic, unpredictable and very telling. For most politicians (and lobbyists) in Washington, we are in uncharted water with a president who has strong beliefs and a vocal constituency providing him encouragement. How he will react to Congress if his priorities are not realized is just now becoming clear and it does not bode well for those who fail to follow his lead.

The real question will be whether there is any chance for some sense of normalcy to return to Washington when the year ends. If the answer is no, Congress will likely be done with legislating and move on to campaigning. Starting the new year focused on campaign events and the election rather than implementing a pro-growth, pro-club agenda will definitely not be the way to spend the early part of 2018. Stay tuned because this fall and early winter will be nothing short of fascinating.

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