The Archive

IN THIS EDITION

A full plate for Congress before Washington turns red in Jan.

The Senate and House pick their leaders for the 119th

Here’s who could lead the most powerful committees next year

How the NDAA tees up the AI fight for 2025 and beyond

Finserv and trade possibilities for the lame duck

THE TOP

A full plate for Congress before Washington turns red in Jan.

Happy Wednesday and welcome to the lame duck.

From now until Dec. 20, Congress has a full plate of issues to deal with before Washington turns red in January. All the items on the agenda are fraught with varying levels of political risk. Let’s get into the top three we’re watching for this lame-duck special edition.

Government funding: Speaker Mike Johnson has said he wants to pass a short-term stopgap funding bill to keep the government open past the Dec. 20 deadline. Strategically, this could be a risky move for President-elect Donald Trump’s 100-day agenda.

Moving a short-term measure would ensure Congress is wrapped up in a funding debate for the first quarter of 2025, all while Johnson has a bare-bones, 218- or 219-seat majority. On top of that, assembling a three-month CR would be a heavy lift for Congress. The Pentagon hates short-term funding bills. The spending anomalies would make this a huge bill that runs thousands of pages.

Disaster relief and the farm bill: The White House sent Congress a $98.4 billion bill on Monday to help the storm-stricken Southeast. This is exactly in line with what Johnson and other congressional leaders thought the price tag would be. All four corners — Johnson, incoming Senate GOP Leader John Thune, House Minority Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer — want to get disaster relief passed. However, House Republicans will be the squeaky wheel.

The NDAA: For the last six decades, Congress has passed the annual Pentagon policy bill. The Senate is expected to move on the NDAA after Thanksgiving. House Republicans planned to put a number of bills cracking down on China in the legislation, but the chances for that are dimming.

In this edition, we’ll explore other issues you need to know about the lame-duck agenda and what to expect in the new Congress. We’ll dive into the House and Senate leadership roles firming up for the next Congress, the jockeying for top committee roles, as well as what’s in store for tech and financial services in the lame duck.

As always, please email us with questions, comments or suggestions.

– Jake Sherman and John Bresnahan

HOUSE AND SENATE BOSSES

The Senate and House pick their leaders for the 119th

The House and the Senate have selected their new leaders for the 119th Congress. Here’s who will be in charge of key roles in both chambers next year.

The Senate: Sen. John Thune’s (R-S.D.) election as the next GOP leader — and majority leader in the 119th Congress — is a major moment for the Senate Republican Conference.

By all indications, outgoing Republican Leader Mitch McConnell’s iron-fist style of leadership will be a thing of the past. Thune has promised a “democratization” of the conference, a nod to conservatives’ long-running criticisms of McConnell.

Behind Thune, the rest of the GOP hierarchy will be as follows:

— Senate Majority Whip John Barrasso

— Senate GOP Conference Chair Tom Cotton

— Sen. Shelley Moore Capito (R-W.Va.), chair of the Republican Policy Committee

— Sen. James Lankford (R-Okla.), vice chair of the conference

— Sen. Tim Scott (R-S.C.), chair of the NRSC

Thune’s job won’t be easy. He’ll have to deal with President-elect Donald Trump, with whom he’s sparred in the past. He’ll also have to contend with dueling factions of his conference, most importantly the group of hardline conservatives who will be watching closely to ensure that Thune keeps his promises.

We talked about this with Sen. Mike Rounds (R-S.D.), an early supporter of Thune’s leadership bid. Rounds has known his fellow South Dakotan for four decades.

After last week’s leadership election, Rounds told us Republicans “can’t afford to have hard feelings” given the task ahead. Conservatives’ frustrations with McConnell were the driving force behind many of the commitments that Thune and the other candidates made. Yet the next few months will be a “learning experience” for the new leadership team, Rounds said.

“They saw the really good things that Mitch did and they saw the things [where] sometimes the conference would be frustrated with what Mitch did,” Rounds said. “John Thune watched it all.”

One of the central yet unresolved issues at the heart of the leadership debate is whether the party leader should make a decision without having secured the support of a majority of the conference. McConnell routinely did that on appropriations and other bipartisan initiatives, arguing he had no other choice.

That will present a challenge for Thune.

“[Republicans] recognized that Mitch McConnell took a lot of spears for the conference,” Rounds said. “And they recognize that sometimes leadership requires that.”

On the Democratic side, the upper rung of the leadership isn’t changing, with soon-to-be Minority Leader Chuck Schumer and Minority Whip Dick Durbin leading the caucus.

The House: While the Senate leadership got a shake-up, there’s been barely any movement atop the House hierarchy.

House Republicans kept their top leadership positions intact, with Speaker Mike Johnson, Majority Leader Steve Scalise and Whip Tom Emmer all getting reelected with no opposition. That marks a significant win for Johnson, who faced threats from the party’s right flank. However, he still needs to win a speaker vote on the floor in January.

Republicans elected Rep. Lisa McClain (R-Mich.) to succeed outgoing Conference Chair Elise Stefanik. McClain is the only woman in top elected GOP leadership. The Michigander beat Rep. Kat Cammack (R-Fla.) for the role. NRCC Chair Richard Hudson also is back in his role as top campaign official.

Despite House Democrats staying in the minority, the top three leaders — Minority Leader Hakeem Jeffries, Whip Katherine Clark and Caucus Chair Pete Aguilar — all won reelection without any challenges.

Rep. Debbie Dingell (D-Mich.) also remained atop the DPCC, the messaging arm for House Democrats, when she easily beat back a challenge from Rep. Jasmine Crockett (D-Texas).

While Jeffries hasn’t selected the DCCC chair for the next Congress yet, we wouldn’t be surprised if current Chair Suzan DelBene is asked to continue for another term.

— Andrew Desiderio and Max Cohen

EYES ON COMMITTEES

Here’s who could lead the most powerful committees next year

The race for House committee leadership roles is on as Congress prepares for its 119th session.

We couldn’t fit all the congressional committees here if we tried, but we have our eyes on the key panels that move and shake Washington. These committees will be instrumental in the incoming Trump administration’s agenda.

The process is straightforward in the Senate where lawmakers ascend to leadership roles based on their seniority. No one in the upper chamber has to knock another over to get to the top, so we’ll focus on the House where the contests are competitive.

The contenders jockeying for key roles in each of these powerful committees will make their case to the steering committee the first week of December.

House Energy and Commerce: We’ve extensively reported on the race between Reps. Bob Latta (R-Ohio) and Brett Guthrie (R-Ky.) for the next chair of the powerful Energy and Commerce Committee. Remember: E&C is not only an “A” committee. It will be one of the most critical committees in the next Congress because of its broad jurisdiction that includes tech, trade, energy and health care.

Latta is in part running on his experience and seniority. He currently chairs the subcommittee on communications and technology and has served on all six subcommittees on the panel.

Guthrie, meanwhile, has a fundraising advantage and chairs the panel’s health subcommittee. He’s pitched colleagues on privacy and protecting children. In addition, Guthrie’s has broad support among senior House Republicans.

Both Latta and Guthrie are also running on expanding broadband, artificial intelligence research and cracking down on China.

All signs point to Guthrie winning the role.

House Foreign Affairs: This is a four-way contest between Reps. Ann Wagner (R-Mo.), Darrell Issa (R-Calif.) and Brian Mast (R-Fla.) and Joe Wilson (R-S.C.).

Wagner would be the only woman elected to chair a full committee next Congress. Rep. Virginia Foxx (R-N.C.) is in the running to be appointed to chair the House Rules Committee. Wagner is close to leadership and was ambassador to Luxembourg under former President George W. Bush.

Issa and Mast have been aligning themselves closely with President-elect Donald Trump. Both candidates have been spending time at Mar-a-Lago recently and have asserted that they want to help push Trump’s agenda next year. Wilson, who is co-chair of the Ukraine Caucus, echoed that sentiment. Wilson is the most senior in this quartet.

Of course, the Russia-Ukraine war will be a huge issue next year as Trump says he wants to notch a peace accord between Kyiv and Moscow. Trump has also been opposed to sending more aid to Ukraine.

Wagner is favored to win.

House Financial Services: There is also a four-way race between Reps. Andy Barr (R-Ky.), French Hill (R-Ark.), Bill Huizenga (R-Mich.) and Frank Lucas (R-Okla.). Currently, Barr has the inside track to head the panel.

Hill has the policy chops and fundraising heft. But people are skeptical because of his ties to former Speaker Kevin McCarthy. Huizenga has way more support — and respect — than he is being given credit for by some members of the House Republican Conference and shouldn’t be outright ruled out.

Lucas, a 30-year veteran of Congress, has chaired two full panels already, so the steering committee is somewhat unlikely to give him another term with a gavel.

House Transportation and Infrastructure. Rep. Sam Graves (R-Mo.) is unlikely to get a waiver to serve another two years atop T&I. No one is in favor of waivers right now. The two contenders here are Reps. David Rouzer (R-N.C.) and Rick Crawford (R-Ark.). This is truly a toss-up, although Crawford probably has a slight edge.

House Education and the Workforce. This contest is between Reps. Burgess Owens (R-Utah) and Tim Walberg (R-Mich.). Owens is widely seen as a favorite here. He’d be the only Black man to serve as a full committee chair in the 119th Congress. Walberg is also a senior member of the House Energy and Commerce Committee.

– Mica Soellner and Jake Sherman

LAME-DUCK TECH

How the NDAA tees up the AI fight for 2025 and beyond

Now that the elections are out of the way, lawmakers are turning their attention to the annual defense authorization bill, a must-pass measure that attracts all types of policy riders.

The main priority for the National Defense Authorization Act, from the tech industry’s point of view, is legislation formally authorizing the AI Safety Institute within the Commerce Department. A few other bills would do that, but the Future of AI Innovation Act in the Senate is the main one.

Little of AISI’s work is regulatory, but its studies of how to measure AI systems’ safety and efficacy would be key to any future policies in the field.

Take it AISI: Nothing is ever guaranteed to make it into the NDAA. AISI authorization does share a few points with measures that tend to move: It’s bipartisan, a priority for industry and has powerful backers, including Senate Commerce Committee Chair Maria Cantwell (D-Wash.).

Senate Majority Leader Chuck Schumer has also said he’d like to start securing U.S. leadership on AI as part of the NDAA. Plus, Schumer has a reason to push the bill this year: President-elect Donald Trump is likely to undo the Biden administration’s AI approach, including AISI, which already exists due to a White House directive.

Not so fast: The Republican sweep gives GOP leaders confidence they can resist whatever they don’t like and put their own stamp on issues later. And House GOP leaders famously don’t love AI initiatives at the moment, or undermining Trump. Sen. Ted Cruz (R-Texas), the incoming chair of the Commerce panel, is an opponent of AISI too.

China competition: Cantwell’s AISI bill passed the committee as part of a package. Other pieces of that bundle of bills, and their House companions, might tempt leadership, particularly because the measures are about pushing back on China. That’s a rationale that will lie behind much of what happens in AI in the next Congress.

Cantwell’s committee advanced bipartisan bills that would direct the National Science Foundation to award more grants and scholarships to study AI and quantum computing. Another bill would establish public computing resources to facilitate AI research.

Both of the latter bills were key to talks between Cantwell’s committee and the Republican-controlled House Science Committee in October. They’re trying to decide what they want to advance in the lame-duck period. An agreement between the panel chairs doesn’t necessarily mean leadership will take up the bills, however.

What’s already in: There are also a series of AI provisions that made it into the House and Senate NDAA versions. The Senate bill would establish “a pilot program for the development of near-term use cases and demonstrations of AI for national security biotechnology applications.”

Some proposals came close in 2024 but don’t seem NDAA-ready. The Kids Online Safety Act passed the Senate overwhelmingly, but its coalition collapsed in the House. Various approaches to dealing with AI-generated nonconsensual nudes also got traction in the Senate but have lagged in the other chamber.

— Ben Brody

VAULT CORNER

Finserv and trade possibilities for the lame duck

The lame-duck dealmaking math has shifted now that the elections are over and Republicans are preparing to take full control of Washington next year.

We’re particularly tracking four financial services, trade and tax areas that have been floated around for potential action before year’s end.

Republicans’ coming trifecta means the GOP can wait to dictate how it wants to handle these issues in 2025. Democrats, who will have little power may be in no mood to cut a deal.

Let’s jump into the lame-duck outlook for these issues and who wins or loses depending on how things go.

Outbound investment overhaul: There’s bipartisan interest in restricting the flow of U.S. capital into sensitive sectors of China’s economy. But Republicans have been butting heads on the best approach for over a year. That could change this month.

Wall Street allies led by Rep. Patrick McHenry (R-N.C.) want to limit any new sanctions regime to focus on specific actors, while the different bills sponsored by Reps. Michael McCaul (R-Texas) and Sen. Bob Casey (D-Pa.) would target broader sectors of the Chinese economy. Ultimately, banks take the lead on a lot of sanctions enforcement, and they’d prefer the system didn’t change in a big way.

De minimis crackdown: House Ways and Means Committee aides have been negotiating for weeks to try to find a deal cracking down on de minimis rules that allow low-value packages to enter the United States without facing as much duties, fees or scrutiny.

Tightening de minimis rules has buy-in on both sides of the aisle. Lawmakers view it as a win to block Chinese companies they believe are abusing the rules and bad actors from getting fentanyl or other illicit goods into the United States.

It would be a loss for China-based online sellers like Shein and Temu and big shipping companies like UPS or FedEx.

Crypto talks: We’re not expecting much activity in digital asset policy before January. Trump campaigned on crypto, and his team wants legislators to wait until he returns to the White House to make big moves. Regulators will also have work to do on crypto policy. Several lawmakers have told us they want to work hand-in-glove with those folks.

All things tax: A widely-backed measure to extend tax treaty-like benefits to Taiwan is in the mix for a ride on the annual defense authorization bill, as we reported. However, it’s still unclear whether lawmakers would let the NDAA carry a tax or trade measure, which would be unusual.

Advocates for disaster tax relief are also pushing to get that done. That’s no slam dunk, especially if any lawmaker tries to add their own tax priority to the mix.

Disaster relief would be big for states like Florida, North Carolina and California, which have been hard hit by hurricanes, wildfires and other natural disasters lately. The Taiwan bill would be a boost for the U.S. ally and also for Taiwanese chipmakers who may want to invest here.

Overall though, there’s little oxygen for a tax deal right now with the GOP already forging ahead to tee up a big measure in the early months of the new Trump administration.

— Laura Weiss and Brendan Pedersen