Predictions are hard, especially about the future. This old saying has never been truer. A Hollywood screenwriter could never imagine the series of dramatic situations and surprises in Washington over the past 20 months: fiscal cliffs, government shutdown showdowns, the removal of House Speaker Kevin McCarthy, R-Calif., the struggle to elect (and keep) Rep. Mike Johnson, R-La., as the new speaker, and President Joe Biden’s belated decision to not seek a second term.
Now, the 2024 elections are looming. Republicans have a slim majority in the House and Democrats have a slim majority in the Senate. Roughly a third of senators are up for reelection. This election, Democrats are defending 23 seats, whereas Republicans are defending only 10. Moreover, Democrats are defending more highly competitive seats, namely in Nevada, Montana, and Ohio. Given these dynamics, Republicans have the wind at their backs to win control of the Senate. The House is more of a toss-up. We cannot predict the future, but we can be prepared.
New Faces on Key Committees
Even if every incumbent were to win reelection, there will still be a lot of change in Congress. Thus far, eight senators and 45 representatives have announced that they aren’t running for reelection. This includes key energy policy players like Sen. Joe Manchin, I-W.Va., chair of the Energy and Natural Resources Committee, and Rep. Cathy McMorris Rodgers, R-Wash., chair of the Energy and Commerce Committee. Almost half of the House Energy and Commerce Committee's Energy Subcommittee members are not running for reelection.
We will have our work cut out for us educating all the new members of Congress, as well as those new to key committees with jurisdiction over issues important to the electric industry. With your help, especially if new committee members and leaders represent your area, we can share how public power is important to their constituents and how certain policies and provisions can help or hinder these operations.
A Focus on Finance
Regardless of which party wins control of Congress and the White House, legislators will likely pursue at least one reconciliation bill. Reconciliation is a special process that allows for expedited consideration of certain tax, spending, and debt limit legislation. In the Senate, reconciliation bills require only a simple majority vote for passage and cannot be filibustered (subject to a 60-vote threshold). Given the slim majorities in both the House and the Senate, both parties have used reconciliation in recent years to pass key legislative priorities — Republicans used reconciliation to pass the Tax Cuts and Jobs Act in 2017, while Democrats used reconciliation in 2021 and 2023 to pass the American Rescue Plan and the Inflation Reduction Act, respectively.
Tax issues will be at the top of the agenda in the next Congress. Key provisions of the Tax Cuts and Jobs Act are set to expire at the end of 2025. Generally speaking, Republicans are keen to extend and expand many of these tax cuts, whereas Democrats are interested in letting many of these cuts expire. The American Public Power Association is already laying the groundwork to protect municipal bonds from taxation and to protect and enhance elective pay (also known as direct payment), which was enacted as part of the Inflation Reduction Act.
On the more traditional energy and environmental policy front, we can expect the preferences of each party — broadly speaking — to continue: Republicans are most interested in expanding energy production as a means to ensure electric reliability, whereas Democrats are most interested in policies to reduce greenhouse gas emissions and in expanding transmission development to connect more renewable energy resources to the grid.
No matter the outcome of the elections, APPA is prepared to advocate on behalf of public power utilities and the communities they serve. We encourage our members to join us in using this fall to prepare to hit the ground running in the new year.
