The second half of the 116th Congress looks like it will be even less productive than the first was, as impeachment politics and the 2020 presidential election jeopardize the already-slim chances that pending financial services legislation will become law.
Passing bills during a presidential election year has historically been challenging, but with a lengthy Senate impeachment trial added to the mix, noncritical measures will almost certainly be pushed aside as parties jockey for political control.
Even bills that garnered broad bipartisan support in 2019 are likely to be derailed by hyper-partisan politics in 2020.
"The window is probably closed [to pass financial services legislation]," Raymond James policy expert Ed Mills said.
A bill creating a regulatory safe harbor for banks and insurance companies offering services to the cannabis industry had the highest chance of passing both chambers in 2020. After Senate Banking Committee Chairman Mike Crapo, R-Idaho, signaled his blessing in late September and the House passed the measure with a strong bipartisan vote, momentum seemed to build.
Sen. Mike Crapo, R-Idaho
But in a surprise move, Crapo criticized the bill on Dec. 18. In a lengthy statement, he outlined a list of concerns about the measure, including its failure to tackle issues pertaining to interstate commerce, money laundering, and general health and safety guardrails, which he said will need to be addressed before he considers it in his committee. Crapo also asked for public ideas to improve the bill, potentially lengthening the time it would take to pass and reducing its chances of reaching the White House.
Crapo's statement dealt the legislation a "body blow," Compass Point policy analyst Isaac Boltansky wrote in a note to clients.
"The legislative calendar was already working against the effort and the only clear legislative vehicle remaining in this Congress will be the funding bill in [the second half of 2020]," Boltansky said. "There is still a viable scenario where a handful of Chairman Crapo's concerns are addressed and the legislative text is included in a broader bill, but so much time has been run off the Congressional clock that the window for action has narrowed considerably."
Crapo disagreed that all legislative momentum would stall during the election year. He said in an interview that, at most, the impeachment trial could slow legislation in the Senate and that once it is over, he will continue trying to build a coalition around bipartisan bills that have gotten wide support.
"The reasons they have been hard to get bipartisan majorities on have been different on each one, and we're working on it," Crapo said.
But even if impeachment does little to dampen legislative efforts and Congress manages to insulate itself from partisan pressures, bills from both chambers still have to cross what has come to be known, to many Democrats, as Senate Majority Leader Mitch McConnell's "legislative graveyard."
The Kentucky Republican has effectively placed a moratorium on most legislation this year, and that is unlikely to change, according to Senate Democrats.
"We're not doing the people's business because [McConnell] has chosen to kill every major bill that's come from the House," Sen. Sherrod Brown, D-Ohio, said in an interview.
Conversely, the House Financial Services Committee, led by Rep. Maxine Waters, D-Calif., has held nearly one markup session a month and passed 69 bills out of committee. In all, 47 committee-originated bills that passed the whole House are awaiting the Senate's consideration.
Another problem for financial services legislation is that massive, must-pass bills to fund government agencies and the Pentagon have cleared both chambers, eliminating a favored method of passing smaller bills. Often, less-consequential bipartisan bills are attached to bigger ones to avoid the amount of floor time a stand-alone piece of legislation would require.
Before breaking for the winter holiday season, lawmakers passed a nearly $1.4 trillion spending bill package that included many smaller-ticket items but left out a host of bipartisan financial services bills unlikely to advance without the legislative vehicle.
"The concern here is that a lot of these financial services bills are interesting, but they probably have to hitch a ride on something else," Raymond James' Mills said. "And with basically the whole deck being cleared this week, it seems less and less likely."