In a surprise development, fiery U.S. Rep. Jason Smith was given the nod to lead the crucial tax policy-writing House Committee on Ways and Means via a secret ballot vote on Monday.
The 42-year-old Republican from rural Missouri emerged the winner in an upset over the more senior Vern Buchanan of Florida and Adrian Smith of Nebraska. The results of the battle portend a focus on strict scrutiny of policy enacted during Democratic House control.
"The committee is going to focus a lot on investigations and oversight," said Brett Bolton, vice president of federal legislative and regulatory policy at Bond Dealers of America. "Smith really sold that to his colleagues in the House."
Smith's track record includes fiery partisan attacks in committee and during floor debates. He's been in Congress since 2013 and also serves on the House Budget Committee. Smith considered taking a run at retiring Senator Roy Blunt's seat but ultimately chose to seek reelection to the House. He was instrumental in helping California Republican Kevin McCarthy finally land the speakership position after a historically lengthy series of votes last week.
While all three men were considered
"Jason was chosen by his colleagues after a lengthy campaign because I think his colleagues believe that he is the right leader at this moment," said Justin Sok, Managing Director for Tax at the Securities Industry and Financial Markets Association. "Though seniority is a key a factor for the steering committee, seniority is often not the top priority for committee members. Jason has a demonstrated track record of being impactful for the conference and his work ethic is outstanding."
There are few clues about Smith's inclinations related to the muni market, but he did trumpet his position on the Internal Revenue Service funding increase during the floor debate of the Family and Small Business Taxpayer Protection Act.
"This bill rescinds the IRS funds in the Inflation Reduction Act, a law that does nothing to combat inflation but everything to empower an agency that has targeted Americans, leaked taxpayer information, and under the Biden Administration, threatened to snoop into the bank accounts of millions of middle-class families," said Smith.
Industry sources give the bill little chance of survival in the Senate and even less under President Biden's veto pen. The expectation is the issue is currently serving as a political football and the fur won't really start flying until debates begin on debt ceilings and budgets.
Many in the industry have been hoping that a bipartisan Congress would take another look at restoring advance refunding for munis which now seems less likely.
"I think this is a challenging issue for any Republican leader of a tax committee, as the need for a tax benefit like advance refunding is an unsettled question," said Sok. "As a reminder, advance refunding was not a provision under consideration by the House in 2017 but was inserted by the Senate."
The industry is also hoping an education program may help win over support for refunding. "The BDA, along with other folks in the muni market advocacy group will be focusing pretty much on education throughout this Congress," said Bolton.
Assuming that Smith is officially ratified by a majority of the House Republican Conference he will become the youngest-ever chairman of Ways and Means.
The committee has jurisdiction over taxation, tariffs, revenue raising, Social Security, unemployment benefits and Medicare. Smith takes the chairmanship from Massachusetts Democrat Richard Neal, who was viewed as very friendly to the muni market. The previous Republican Chairman, Kevin Brady of Texas, has retired.
Smith's to-do list, in addition to defunding the IRS, includes tax code work, reshoring jobs and battling the Biden agenda. "Americans also expect us to hold the Biden administration accountable for the crises it has caused and to once again exercise Congress's oversight authority which has been entirely absent under one-party Democrat rule in Washington," said Smith in a statement. Smith will become the second Ways and Means chairman to represent Missouri in Congress.
