The midterm elections are (finally) over. With the Republicans taking over the House of Representatives next year and the Democrats keeping control of the Senate, albeit by a smaller margin, the question is what, if anything, will get accomplished in the 112th Congress? Overall, the chance for passage of major legislative initiatives in areas such as energy or immigration are dramatically reduced. However, those elected to Congress, both Republican and Democrat, have promised to deal with the nation's struggling economy, including the too-high unemployment rate. Also, a number of legislative matters must be addressed next year, including the passage of legislation funding the operations of the federal government, as well as legislation needed to raise the national debt. All of this occurs while the White House takes steps to implement the recently passed health care and financial reform laws, and the Republicans in the House of Representatives use their new majority to watch those steps closely.

All of this means a lot of activity next year, which has a lot of potential for progress, or mischief, depending on your point of view. The Reed Smith Public Policy & Infrastructure Practice has the personnel and experience to advise clients with interest in matters pending before Congress or the Executive Branch, and can provide counsel as how to best respond to events.

The Obama Administration is moving forward with implementing the health care and financial regulatory reform laws. Despite the greater number of Republicans in Congress, repeal of either law is unlikely and, instead, one can expect greater oversight and a slew of subpoenas headed to the White House.

Since their passage, the agencies affected by health care and financial regulatory reform, including Health & Human Services ("HHS"), the Securities and Exchange Commission ("SEC"), and the Commodity and Futures Trading Commission ("CFTC"), have moved forward with the grant programs, studies, and regulations authorized by Congress. The numbers to support a full repeal of either law just are not there in Congress, so the options of the Republicans are (1) oversight of the implementation of each law and (2) possible funding restrictions put in place in the spending bills for each agency. Implementation of the first option is already underway: incoming Committee Chairs for the House Oversight and Government Reform, House Energy and Commerce, and House Financial Services Committees have all made statements regarding their intent to closely scrutinize efforts in the Executive Branch. We expect the subpoenas to start coming soon as the 112th Congress convenes next year. Any client with interests affected by either law should by now be working with the Executive Branch, not only in supplying comments in response to any proposed rulemaking by the Executive Branch, but also by making their views known even before official comment periods are opened. In addition, outreach to key congressional staff, both Republican and Democratic, should begin asap. Again, our practice can both provide counsel and identify key personnel for outreach on an effective lobbying strategy.

'Follow the money.' We expect must-pass spending bills to be a battleground over implementation of health care and financial reform.

Both health care and financial reform laws will need appropriations, if for no other reason than to fund the agencies tasked with implementing the laws. Appropriations bills are "must-pass" legislation needed annually to fund the agencies of the Executive Branch. Republicans, if they wish, could write appropriations legislation in the House that deny funds either to the agencies affected or to the programs under health care or financial regulatory reform that require further appropriation. However, with the Senate controlled by the Democrats, any move to broadly attack either the funding of health care or financial reform would face sure opposition. It is not clear how incoming Speaker Boehner (R-OH-8) and Senate Minority Leader McConnell (R-KY), who support full repeal, will proceed on appropriations legislation, but the fact that funding needs to go to affected agencies for the upcoming fiscal year means that a spending battle will be forthcoming.

Other items on deck for the next Congress: Job creation, tax credits, and deficit reduction meets the debt limit.

With economic growth continuing to be anemic, Congress and the White House will feel pressure to come to a consensus on job creation; economic assistance, including possible tax credits for small business; and possible extension of unemployment benefits. The question will be where to find the funds to pay for such efforts. For Republicans committed to reducing the size of government, the key will be to find the offsets to pay for any measures. An early skirmish in the battles over tax and spending policy will be the upcoming vote to increase the current $14 trillion debt limit, needed to allow the government to continue to borrow funds, and likely to be opposed by many newly elected Republicans.


Next year will not be an uneventful one for Congress. Battles from the midterm campaign will continue on health care, financial reform, and overall spending levels.

The Public Policy & Infrastructure Practice is available to help clients navigate the skirmishes and make their views known over the fighting. We will continue to monitor events as well, and provide updates as needed.