Federal Government Weekly Update: The Elevator Speech Overview

Rebecca TorreyPartner, The Torrey Firm

The Elevator Speech Overview

Congress was in session this week in Washington while President-elect Donald Trump continued through his transition work at Trump tower in New York City. This week, Trump made a number of picks regarding cabinet posts in his administration and a parade of candidates continued to be summoned to his office for consideration.  For secretary of Transportation, Trump picked Elaine Chao, a former Secretary of Labor under George W. Bush and the spouse of GOP Senate Majority Leader Mitch McConnell.  For insiders, Chao was a clever pick not only because of the deft recognition it pays to one of Washington’s most inside of inside power couples, but because Chao is widely recognized as a savvy and capable player who can deliver results.  Her pick was a two-fer – not only does it bond his relationship to the Senate Majority Leader but he gains a steady and experienced hand to work with the Senate on the always tricky aspect of paying for his ambitious infrastructure plans.  Looking ahead to her confirmation, Chao’s presence on the Board of Directors for Wells Fargo could present some difficulties. Any connection to that bank, which has come under intense criticism for urging customers to sign up for new accounts they did not want or need, is a political liability these days, although it is quite likely that Senatorial deference will cause detractors from taking an axe to the Leader’s spouse.  Such things are not easily forgotten.

For Secretary of Health and Human Services, Trump has tapped Congressman Tom Price of Georgia to be his secretary. Price, a leader amongst the tea party faction in Congress and the chairman of the House Budget Committee, is a vocal critic of the Affordable Care Act and has repeatedly called for its complete repeal. Unlike Ms. Chao, whose nomination was greeted with pleasant surprise among Democrats in the Senate, Mr. Price prompted an immediate rebuke from Democratic Leader Chuck Schumer, who likened putting Price in charge of HHS to “asking the fox to guard the hen house.” Congressman Price, unlike many of his colleagues in the House, actually has the beginnings of a plan to replace the ACA with a sort of alternative version. His plan, which unlike most GOP critics of Obamacare, has been introduced in legislative form in the past. It would repeal the Affordable Care Act and offer age-adjusted tax credits for the purchase of individual and family health insurance policies.

In the short term, what Price’s nomination means for the future of Obamacare remains unclear. While Price would, seemingly, be happy to fully repeal the plan and then replace it with something new, that something new is a bit of a sticking point for many Republicans. Now that the GOP holds the White House and Congress, the difficult task of replacing a law that even its critics must concede has led to more than 20 million more people having insurance, discontinued pre-existing condition denials, and lowered the growth rate of health care costs has some members a bit gun-shy. Even if the repeal only took the form of taking away the things Republicans really dislike, like the individual mandate, and keeping the things people like (the pre-existing conditions provisions), they would put the law into an immediate death spiral. An idea that has been banging around congress for the past week or so would be to continue with the full repeal, but make it a hard, future deadline. By having a healthcare cliff, proponents of this plan claim, Congress and the White House will be forced to come up with something or those millions of people will lose coverage. This is a time honored way that Washington gets the immediate thrill of satiating a political desire (repeal Obamacare!) but not actually have to come up with any idea on what to do next.  Conveniently, the most talked about horizon for the replace deadline is three years from now, after the midterm elections, at which time it would be rather easy to simply pass an extension on the deadline for another couple years, until after the next Presidential.  For those in the health care space, I refer you to the SGR process and the annual “doc fix” that it created…what shall we name this future “Obamacare fix” that to my eyes seems almost an inevitability? 

Another big cabinet pick Trump made this week also took people by surprise, as he named Steven Mnuchin as his choice to be Secretary of the Treasury. Mnuchin, a veteran Wall Street banker and hedge-fund manager, has no previous policy experience and spent 17 years at Goldman Sachs, working in mortgage securities before becoming chief information officer. He left in 2002 to set up his own hedge fund, Dune Capital, which helped finance movies like “Avatar.” He later ran the lender OneWest Bank, which has been called a “foreclosure machine.” Their aggressive foreclosure practices, including foreclosing on a 90 year old woman over a $0.27 balance, are sure to be confirmation fodder for Democrats. Finally, Trump nominated billionaire Wilbur Ross to run the Department of Commerce. All in all, Trump’s cabinet is shaping up to be far and away the wealthiest cabinet ever assembled.

In the House this week, Democratic Leader Nancy Pelosi survived a challenge from Ohio Rep. Tim Ryan in the Democratic leadership elections. The final vote count, 134-63 for Pelosi, might not have been particularly close but it signaled a large degree of discontent as Pelosi ends  14 years atop the caucus. The fact that Ryan, a backbencher with minor legislative accomplishments to his name, was able to cleave away a third of the caucus also suggests that measures need to be taken by the Leader to moderate and become more inclusive in her approach to managing the caucus.  It also, however, demonstrated the very strong base of support that Pelosi enjoys as a result of being a Californian, woman, and liberal – three pools of votes within the caucus that when combined will almost always result in a healthy majority of the votes. Ryan’s supporters were, however, able to claim a moral victory, as Pelosi agreed to elevate more junior members to leadership and run a more open and inclusive leadership structure. Behind the 76 year old Pelosi in the leadership structure are 77 year old Steny Hoyer and 76 year old Jim Clyburn. Rep. Joe Crowley moved up the number four spot, caucus chairman, and Linda Sanchez took the vice chairman position.

This Week’s Top Stories
Here’s a look at some of the top political stories of the week:

  • She is a woman and an immigrant, a fixture of the Republican establishment for two decades. She is a savvy and professional practitioner of the capital’s inside game. And now she is going to work for President-elect Donald J. Trump. Mr. Trump named Elaine L. Chao on Tuesday as his choice to be the next secretary of transportation, elevating someone whose background and experience are in many respects completely at odds with the brash and disruptive tenor of his anti-Washington campaign. (New York Times)
  • President-elect Donald Trump has chosen top officials for health-care policy, picking House Budget Committee Chairman Tom Price (R., Ga.) as secretary of the Health and Human Services Department, the sprawling agency that will likely dismantle Democrats’ 2010 health-care overhaul. Mr. Trump on Tuesday also named Seema Verma, a consultant who helped Vice president elect Mike Pence negotiate a groundbreaking Medicaid deal with the Obama administration, as the head of the Centers for Medicare and Medicaid Services. Mr. Price, a 62-year-old former orthopedic surgeon, is one of several GOP physicians who sought to carve out a leading role in shaping the party’s health policy and, in particular, the party’s alternative vision to Democrats’ Affordable Care Act. (Wall Street Journal)
  • Prepare for the Obamacare cliff. Congressional Republicans are setting up their own, self-imposed deadline to make good on their vow to replace the Affordable Care Act. With buy-in from Donald Trump’s transition team, GOP leaders on both sides of the Capitol are coalescing around a plan to vote to repeal the law in early 2017 — but delay the effective date for that repeal for as long as three years. They’re crossing their fingers that the delay will help them get their own house in order, as well as pressure a handful of Senate Democrats — who would likely be needed to pass replacement legislation — to come onboard before the clock runs out and 20 million Americans lose their health insurance. (Politico)
  • President-elect Donald Trump is planning to name investor and former Goldman Sachs executive Steven Mnuchin as treasury secretary, opting for an industry insider with no government experience to helm the agency in charge of the nation’s finances, according to people familiar with the matter. Mnuchin (pronounced mah-NEW-chin) joined Trump’s whirlwind campaign in May as finance chairman, despite the fact that he had never worked in politics and that he had donated to Democrats in the past. He quickly earned Trump’s trust as he worked closely with the Republican National Committee to raise substantial amounts of money in a short period. On policy issues, he was instrumental in crafting the details of Trump’s proposal to overhaul the tax code. (Washington Post)
  • House Democrats on Wednesday rejected appeals that they need new leaders to win back disaffected voters, re-electing Representative Nancy Pelosi of California to an eighth term as House leader over a Rust Belt congressman who said the party had lost its connection to the American working class. Ms. Pelosi’s victory over Representative Tim Ryan, a 43-year-old congressman from a blue-collar district anchored in Youngstown, Ohio, ensures that the party will be led in the next Congress by the established “coastal” Democrats who have increasingly defined it — Ms. Pelosi, 76, who represents San Francisco, and Senator Chuck Schumer of New York, 66, who has held various leadership posts since 2005. (Washington Post)

The Week Ahead

Both the House and Senate will in session next week.

  • Weekly schedules:
    • Although not yet released at the time of publication, the weekly legislative schedule for the House will be posted.
    • Although not yet released at the time of publication, the weekly Senate schedule will be available.
    • Although not yet released at the time of publication, the President’s daily schedule will be posted.  

Jobs Report

  • The government reported on Friday that employers added 178,000 workers in November, a solid gain that clears the way for the Federal Reserve to raise the benchmark interest rate when it meets later this month.
  • The official unemployment rate dropped to its lowest level in more than nine years, at 4.6 percent, from 4.9 percent the month before. But average hourly earnings ticked down 0.1 percent.
  • Revisions to the September and October data removed 2,000 jobs from the employment gains for those months. Over the last three months, increases have averaged 176,000.


  • In Donald Trump’s wild, real-life audition for his secretary of state, there’s been no shortage of warning flags for the senators who’d have to confirm his eventual pick — whether it’s Rudy Giuliani’s business dealings with foreign governments, David Petraeus’ fumble with classified information, or John Bolton’s ultra-hawkish views. But there’s one choice that could put an end to Trump’s made-for-TV drama and ultimately breeze through the Senate: Tennessee Sen. Bob Corker, whose fans include not just fellow Republicans, but Democrats who’d happily vote to confirm him.
  • The $7 million incentive package Carrier Corp. will receive as part of a deal the company reached with President-elect Donald Trump and Vice President-elect Mike Pence represents a departure from how tax credits are typically used in Indiana. It’s also the kind of agreement Trump slammed on the campaign trail.
  • With an early morning tweet, President-elect Donald Trump revived an issue that hasn’t been front and center in American politics for more than a quarter-century. Flag burning.
  • President-elect Donald J. Trump said on Wednesday that he would separate himself from his businesses before he enters the White House. More details about the arrangement will be announced in mid-December, but it sounds as if he plans to step away from only the management of his business, which presumably will be turned over to his children, while retaining ownership.
  • President-elect Donald Trump said Thursday he has chosen retired Marine Gen. James N. Mattis, who has said that responding to “political Islam” is the major security issue facing the United States, to be secretary of defense. “We are going to appoint Mad Dog Mattis as our secretary of defense,” Trump told a rally in Cincinnati, the first stop on a post-election “thank-you tour.”


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