After 22 days without a leader in the US House of Representatives, Republicans coalesced around Rep. Mike Johnson (R-LA), who secured enough votes to become the next Speaker of the House.
It was just a month ago that Congress was struggling to pass a government funding bill. To avert a government shutdown, Kevin McCarthy (R-CA), the then-Republican Speaker, joined Democrats to pass a last-minute bill funding the government until November 17, 2023.
Then, in an ironic moment reminiscent of Shakespeare’s Julius Caesar, Rep. Matt Gaetz (R-FL) filed a motion to remove McCarthy. Gaetz was joined by all Democrats and seven other Republicans to remove McCarthy.
”Et tu, Brute?”
Now, after 22 days of debate and negotiations—and four speaker nominees later (RIP Scalise, Jordan, and Emmer)—the House Republican Conference united around Rep. Mike Johnson. After a traditional party line floor vote, (220–209) Rep. Johnson was elected.
Speaker Johnson has his work cut out for him.
Now that the House can get moving again, there are a few pressing items on its plate, notably:
- Funding the Government. The latest Continuing Resolution (CR) to extend funding expires at midnight on November 17, 2023. Johnson will have to work closely with Senate Majority Leader Schumer, Senate Minority Leader McConnell, House Minority Leader Jeffries, and President Biden to solve the government funding standoff or risk another last-second CR.
- Negotiate a spending package that includes—or does not include—aid for Israel, Ukraine, and border security. The last government shutdown partly hinged on foreign aid and defense spending disagreements between both chambers of Congress. Johnson will have his work cut out for him as he looks to find common ground among his caucus and Democrats who hold the majority in the Senate Chamber.
- Set the 2024 legislative agenda. Already, Speaker Johnson has laid out key priorities in his opening speech to Congress. Priorities include aid to Israel (the first bill the Speaker shepherds will reaffirm America’s support for Israel), border security, and tackling the national debt through a bipartisan debt commission. In an election year, however, Johnson will need to leverage his power in a way that can ensure the party wins more seats in November.
Congress' disfunction increasingly impacts our political system.
Over the last two decades, the political parties in the US have become increasingly polarized. While it’s debatable whether Congress reflects the American people or the other way around, the actions and rules in the House reflect this increased polarization and degradation of respect in our legislative bodies.
Consider the following:
- In Rep. McCarthy’s example, one member of the House could file a motion to remove him as speaker with a simple majority vote. In the past, this would be seen as a “nuclear option” and treasonous.
- In the last five decades, there have only been four times Congress has passed all the required appropriations or funding bills on time.
These trends, combined with weaker and more polarized political parties, mean the opportunity for disruption increases. The path forward could make governing and passing major legislative efforts more complex and more difficult. While power is held by the majority party in the US House, progress could be increasingly disrupted by just a few members.
Polarized power swings impact business.
As Congress becomes more polarized and more disrupted, advancing major legislative efforts could be difficult. Politicians may be more interested in spending time on oversight activities—especially in a divided government—or in investigative efforts on the major issues of the day, such as labor, tech, climate, energy. In short, there could be less time spent addressing issues and leading and more time disagreeing and posturing.
In the absence of legislative movement, we would expect to see increased efforts from the executive branch, the judiciary, and regulators—as we saw, for example, with student loan debt forgiveness.
The American people can expect that things won’t improve much in the interim. The 2024 election will be the next bellwether on the state of American politics.
Businesses should expect and plan for disruption. The government operates in an increasingly polarized environment which directly impacts businesses and requires strategic preparation. This means assessing your risks, your growth objectives, and what impact the government—whether Congress, the executive, regulatory bodies, or even the judiciary—could have on you and your industry. Analysis of the competitive landscape is not enough. To succeed, businesses must understand the political landscape and strategically navigate the actions and health of regulatory and legislative bodies and their impact on you and your core audiences.
