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What the Next Two Awful Years Will Look Like

The five things to fear about a Republican Congress

foot: Andy Ryan; man: Fotosearch; Harry Reid: Associated Press

I. The Gutting of Dodd-Frank

If Republicans take control of the House and Senate, many of their members will call for the outright repeal of the Dodd-Frank financial reforms. But according to a former congressional aide close to the issue, the more serious threat to the regulations will come in the guise of moderate tweaks—nefarious “nothing to see here” amendments that Republicans will use on complicated or delayed provisions. The regulation of financial institutions that are not banks, for example, was difficult to explain to the public and rally support around, but it was absolutely critical in targeting the likes of AIG. It now appears to be at risk. The Volcker Rule, which outlaws some of the banks’ riskiest behaviors, could also be vulnerable. It has an implementation deadline of July 21, 2015, and Republicans will do whatever they can before then to tweak or delay it.

Also worth watching is the retirement of current Senate Banking Committee Chairman Tim Johnson. He was reluctant to bring any Dodd-Frank-related measures back to the floor, since he fears (quite reasonably) that doing so would give Wall Street an opportunity to defang the legislation. But both of his potential replacements have different plans. Democratic Senator Sherrod Brown, a fiery opponent of the banking industry, would almost certainly introduce additional financial regulation (which is necessary, but would have trouble getting past the House), and Republican Senator Richard Shelby will likely push hard to weaken Dodd-Frank. If what Shelby brings to the floor is sufficiently disguised, says the former congressional aide, the question is what the Republicans will end up “getting by the White House.”

II. A Keystone Showdown—And Possible Shutdown

In terms of environmental policy—and perhaps only in terms of environmental policy—the Obama administration has had an impressive few years. It regulated how much carbon power plants could spew, increased renewable energy, and improved fuel-efficiency standards, putting the nation on track to cut greenhouse-gas emissions 17 percent from 2005 levels by 2020. At the same time, domestic oil production in the United States is higher than it has been since the Reagan administration; our output is approaching levels similar to Saudi Arabia. 

A Republican-controlled Congress next term wouldn’t be content even with producing that much oil and gas. The GOP’s top priority is simple—force President Obama into finally approving, or vetoing, the construction of the Keystone XL pipeline, a project that’s vilified by environmentalists because of the crude oil from Canadian tar sands it would carry to Gulf Coast refineries. After that, Republicans will try to chip away the authority of the Environmental Protection Agency (EPA) to regulate pollution granted by the Clean Air Act. Their first target: the EPA’s new power plants rule, which won’t be finalized until 2015. Mitch McConnell believes he can stall the EPA with his Coal Country Protection Act, which requires an additional review of the rule’s impact on the economy before the agency can proceed.

Of course, Obama will be tempted to veto these attempts to wipe out his signature programs. But he might not have an easy choice. McConnell has suggested that he’d use riders on must-pass appropriations legislation, risking future government shutdowns to get his way. And with James Inhofe—who believes that climate change is “the greatest hoax ever perpetrated”—likely poised to become the chair of the Senate Environment and Public Works Committee, McConnell would have some strong backup. 

III. The Continuance of NSA Snooping

The provisions that justify much of the National Security Agency’s (NSA) controversial collection of bulk telephone metadata will expire on June 1, 2015—unless the White House and Congress strike a deal to replace them. But will they want to? Laura Murphy, a lawyer at the ACLU, believes that Obama is open to modifying the current laws. “I think his closest advisers have told him that these programs have not thwarted any significant terrorist attacks,” said Murphy, “and the cost to rights is greater than the benefit to national security.” But given the continued threat of ISIS and the recent domestic security breaches at the White House, it’s hard to predict where exactly the president will be on surveillance reform next spring. It’s also hard to predict what Congress will have the stomach for. Mike Rogers, the chairman of the House Permanent Select Committee on Intelligence, is set to retire. Mark Udall, a key anti-metadata crusader, is in a reelection contest he may not survive. And if Republicans take over the Senate, Patrick Leahy, an NSA skeptic, will lose his position as chair of the Judiciary Committee. He is likely to be replaced by ranking Republican Chuck Grassley, whose record on surveillance questions is more mixed. (He voted to extend the provisions that allow for bulk metadata collection the last time they were scheduled to sunset, in 2011.) Those are a lot of hits for the anti-surveillance side to take. On the other hand, it’s not as if either party really wants to be seen supporting the NSA these days. What will ultimately happen, then, largely depends on the political mood right around the time of the debate in the spring and early summer.

IV. Strategic Slashes to Obamacare

Republicans know that they can’t repeal the Affordable Care Act so long as Obama has the veto pen. That’s why Senate Republicans are more likely to focus on Obamacare’s most politically vulnerable pieces. Two quickly come to mind: a tax on medical devices and the so-called “risk corridors” program, which insulates insurers from large losses and which Republicans say is a taxpayer bailout of the insurance industry. And if they seek tooverturn these provisions, they may attract some Democratic support from unlikely places. Progressive stalwarts like Massachusetts’s Elizabeth Warren and Minnesota’s Al Franken and Amy Klobuchar have spoken out against the device tax—perhaps because their states are home to major device makers. But taking a run at either one of these provisions would present complications, too. The device tax will raise about $30 billion in revenue over the next decade. Strip it out and there’s a new hole in the deficit. Striking risk corridors from the law, meanwhile, would alienate the insurance industry (which has been counting on the subsidies) and potentially a lot of voters (who would end up paying higher premiums).

If Republicans are willing to risk such consequences, they’ll have an opportunity to force the issue. As Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities points out, Congress must raise the debt ceiling again sometime in 2015. That’s an opportunity for budget extortion. But if Republicans decide they don’t want another standoff with the White House, they might train their sights on another vulnerable Obamacare provision—one they could probably kill in the regular course of legislative business. Namely the “employer mandate,” the requirement that medium and large businesses provide insurance to full-time employees (or pay a fine if they don’t). The requirement has no friends on the right, and it doesn’t even have that many on the left or among mainstream economists. The one catch is that the employer mandate raises even more money than the device tax—anywhere from $46 to $149 billion over ten years. If Republicans voted to nix the mandate without replacing the revenue it generates, Obama would have an easy excuse for vetoing it—and he almost certainly would.

V. Confirmation Chaos

In the history of the United States, there have been 168 filibusters of presidential nominees. Eighty-two of them—nearly half—have occurred during Obama’s presidency. And now he’s facing the possibility of a Republican Senate for the first time. Which means that many of the more than 200 (and counting) nominees awaiting confirmation in the next Senate session could be put in a state of permanent limbo. These aren’t just for piddling back-office jobs, either. We currently don’t have a surgeon general, though we do have Ebola and Enterovirus. (The nominee, Dr. Vivek Murthy, has been languishing since November 2013 due to his support for gun control.) The country is still waiting for the Senate to confirm an ambassador to Argentina, a chief financial officer of Veterans Affairs, a Social Security Administration commissioner, and a National Transportation Safety Board chairman.

Then there’s the judicial system: Obama has 53 district judgeships to fill and seven positions on the Court of Appeals. Currently, the ideological balance is even: 533 of all sitting district court judges were nominated by a Democratic president, compared to 530 by a Republican. Obama has the chance to tilt the balance strongly in the Democrats’ favor, but don’t count on that happening. During his first term, Obama’s district court nominees endured longer confirmation times and lower confirmation rates than those under George W. Bush or Bill Clinton. According to the Brookings Institution’s Russell Wheeler, 68 percent of Obama’s appointees to the district court had to wait more than 180 days, whereas under Clinton it was only 8 percent. And that was with a Democratic Senate. It’ll be hard for the president—who “has already been nominating middle-of-the road candidates,” says Wheeler—to confirm anyone who so much as looks like a liberal.