The House Ways and Means Committee is poised to have a new chairman in 2023, igniting jockeying amongst Republicans vying for the position that has massive power to write tax laws that enormously influence the municipal market.
Rep. Devin Nunes, R-Calif., was expected to succeed current top Republican on the House Ways and Means Committee Kevin Brady, R-Tex., until last week, when he announced his retirement from Congress in order to helm former President Trump’s new media venture.
Democrats currently control the House with a six-member majority, its thinnest since the 46th Congress in the late 19th century. It has been historical precedent when the President’s own party controls the House for that party to lose seats during midterm elections. In 2018, the Republican Party lost 40 House seats.
If the House is under Republican control following midterm elections in 2022, it may seek to roll back parts of any of the Joe Biden agenda that becomes law between now and then. While it was Brady who piloted Ways and Means to pass the Tax Cuts and Jobs Act that eliminated advance refunding, the muni market generally considers itself non-partisan and muni advocates believe they have Republican support for muni-friendly measures.
“I think we do have a fair amount of Republican support even in the House,” said Emily Brock, director of the federal liaison center at the Government Finance Officers Association.
Those positioned to succeed Brady and become chairman if Republicans take control are Vern Buchanan, R-Fla., who turned his campaign for chairman up a notch following Nunes’ decision to retire, and has been soliciting backers by handing out lists of his accomplishments to his Republican colleagues in the House.
“Best of luck to my friend and colleague, Devin Nunes," Buchanan said in a statement. "He’s a champion for freedom and conservative values and will be greatly missed. As I indicated earlier this year, I will be running for the Ways and Means chairmanship, but my first priority is to help Republicans win back the U.S. House majority in 2022.”
Buchanan has been a member of Congress since 2005. He is one of the wealthiest members of Congress, and his office consistently touts his ability to work across the aisle. He ranks 67th on The Lugar Center’s Bipartisan Index and in 2020 was ranked highest among the 29-member Florida delegation by the U.S. Chamber of Commerce for his record of bipartisanship and creating jobs.
GFOA’s Brock also mentioned that Buchanan has some local government experience, leading the Florida Chamber of Commerce, and has expressed familiarity with muni bonds during the few times that GFOA has met with him, which is an important step, she says.
Adrian Smith, R-Nebraska, is another viable candidate who has served with Buchanan on the Ways and Means Committee for about 12 years and is a strong advocate for farming policy, representing one of the largest agricultural districts in the country.
Smith is also an advocate for trade protections and listed trade as “probably the number one issue,” that brought him to depart the Ways and Means Agriculture Subcommittee, but said he is a strong believer in bipartisan efforts to strengthen trade, listing the success of the United States-Mexico-Canada Agreement as a prime example.
But still, Smith, like Buchanan, is a staunch Republican opposed to President Biden’s agenda, which for a time, included muni provisions such as advanced refunding, and a direct-pay bond program, making his bid for fighting for the muni industry tenuous.
“As Republicans, we have a great story to tell about our work to bring economic opportunity to every American,” Smith said. “I am hopeful we will regain majority in the House in 2022 and am eager to serve as the next Ways and Means Chairman and empower members to work as a team to stop Biden’s economic agenda, bring certainty to our tax code, and reconnect Americans on the sidelines with good-paying jobs.”
Other viable candidates include Mike Kelly, R-Pa., another Republican currently serving on the Ways and Means Committee. He has a few years less experience than that of Buchanan or Smith, but isn’t closing any doors as of now.
“It has been the honor of my life to have the opportunity to serve the people of Pennsylvania’s 16th Congressional District and to represent their interest on the Ways and Means Committee,” Kelly said. “I will continue to consider every option that increases the voices of my constituents and their policy concerns in whatever capacity is available to me. Right now, I’m weighing all options.”
Jason Smith, R-Missouri, is also rumored to be considering his own bid for chairmanship in addition to the possibility of replacing the retiring Roy Blunt, R-Missouri, in the Senate.
Despite all contenders being staunch Republicans loyal to President Trump, Buchanan and Smith have both expressed bipartisan tendencies to varying degrees, which could be a starting point.
“You want to be in a bipartisan position, because muni provisions are bipartisan, without a doubt,” Brock said.
While muni advocates are still focused on re-adding their priorities into the Build Back Better bill, a tax extender this year or an Omnibus Bill early in 2022 could be further places the muni industry places its provisions.
“Those are the two most likely vehicles leaving the station over the next six months that we could jump on and of course, those are two things that are going to have to have bipartisan support,” Brock said.
“We haven't stopped communicating with our Republican champs,” she added.
