The lame-duck session of Congress will likely grapple with the fiscal cliff, but plenty of issues, including elements of the fiscal cliff, will probably roll over onto the plate of the incoming 113th Congress. That means it is going to be a bigtime high-pressure moment for nonprofit lobbyists to work Capitol Hill to protect programs and push new legislation important to the nonprofit sector. The nonprofit issues on the plate of the incoming 113th Congress will be tough and contentious. Nonprofits are going to have to lobby quickly and smartly. That means mobilizing people to influence key legislators on important committees whose positions will dictate what gets considered in 2013 and how.
In this edition of the Cohen Report, we offer something of a roadmap to the changing targets of influence for nonprofit policy advocates in the 113th Congress. Policy is about more than just a numbers count of Democrats leading the Senate (by a count of 53 seats to 45 for the Republicans with two Independents expected to caucus with the Democrats) or Republicans leading the House of Representatives (albeit with a net loss of eight seats in the recent elections). Rather, our focus is on the specific members of the Senate and House in line to run committees and subcommittees of importance to the nonprofit sector.
Nonprofit Housing: Waters and Warren to Shake Things Up
Writing for a housing and community development readership at Shelterforce, Barbara Burnham, the vice president for federal policy at the Local Initiatives Support Corporation (LISC), naturally homes in on the changes at the top of the House Financial Services Committee. The Committee, which will now be headed, in all likelihood, by two opposites like no others: Rep. Jeb Hensarling (R-Texas) as the chair and Rep. Maxine Waters (D-Calif.) as the ranking Democrat (taking over for the retiring Barney Frank). This may be the committee of maximum fireworks for the nonprofit sector, with issues on the table such as protecting and extending the Low Income Housing Tax Credit and the New Markets Tax Credit, getting regulations from Treasury and authorizations from Congress to put the Community Development Financial Institutions (CDFI) bond guarantee program into operation, implementing the Dodd-Frank Wall Street reform legislation (especially its Consumer Financial Protection Bureau), and focusing on any number of housing programs, ranging from mortgage foreclosure relief to veterans housing.
The House Financial Services Committee’s Senate counterpart—Banking, Housing, and Urban Affairs—looks likely to continue under the leadership of Sen. Tim Johnson (D-S.D.), though the ranking Republican, Sen. Richard Shelby (R-Ala.), may move to Appropriations to be replaced by Sen. Mike Crapo (R-Idaho). The excitement is really about filling the slots opened up by the departures of Sen. Herb Kohl (D-Wisc.) and Sen. Daniel Akaka (D-Hawaii).
The newly elected Elizabeth Warren (D-Mass.) is an obvious candidate to take a seat on the Committee, which has the banking sector nearly apoplectic. Warren was President Obama’s original choice to direct the Consumer Financial Protection Bureau (CFPB) and was strenuously opposed by congressional Republicans. To them, her removal from the CFPB (eventually Obama appointed Richard Cordray) was meant as a step toward weakening or even undoing the Bureau and the Dodd-Frank Act itself. Although President Obama’s defense of Dodd-Frank was a bit tepid during the presidential debates, Warren never backed down during her campaign against outgoing Sen. Scott Brown (R-Mass.). Mother Jones cites aides to Senate Banking, Housing, and Urban Affairs Committee members indicating that banking sector lobbyists are going “nuts” to deny Warren a seat.
Nonprofit Accountability and Governance: Look at Ways and Means
Two key focal points for nonprofits are the Ways and Means Committee in the House and the Finance Committee in the Senate. Expect no changes at the top on these committees, as Rep. Dave Camp (R-Mich.) will chair Ways and Means with Rep. Sandy Levin (D-Mich.) as the ranking Democrat, and Sen. Max Baucus (D-Mont.) will continue his long ride at the Senate Finance Committee with Sen. Orrin Hatch (R-Utah) likely continuing on as the ranking minority member there. These committees will be the venues for debating comprehensive tax reform and, underneath that umbrella, the future structure of charitable deductions. They’ll also address tax extenders, the estate tax, and taxes related to the implementation of the Affordable Care Act. Besides tax issues, Ways and Means also handles other issues of significance to nonprofits such as Social Security, Temporary Assistance for Needy Families (TANF), and foster care and adoption programs.
While the top of the Committee likely remains intact, other Ways and Means slots are going to change. With the smaller Republican majority and the departure of Democratic Ways and Means members Rep. Pete Stark (D-Calif.) and Rep. Shelley Berkley (D-Nev.), we could see the appointment of Rep. Allyson Schwartz (D-Pa.) or Rep. Chris Van Hollen (D-Md.). A big change for nonprofits may involve the House Ways and Means Subcommittee on Health, where the exiting Stark has been the ranking Democrat on the panel and chair Wally Herger (R-Calif.) is retiring. There is still much for the health subcommittee to do in making the Patient Protection and Affordable Care Act truly operational. Nonprofits will have to be attentive in watching who rises to the top of that subcommittee.
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Still to be decided is the chair of the House Ways and Means Subcommittee on Oversight, which this past year held hearings on nonprofits and their regulation. The chair, Rep. Charles Boustany (R-La.), found himself in the unusual situation of running against another Republican, Jeff Landry, in the general election because Louisiana lost a congressional seat. Since Boustany and Landry both failed to reach 50 percent of the popular vote, they will face a runoff. In all likelihood, Boustany will survive the runoff, as he topped Landry in the general election, 45 percent to 30 percent. On the Democratic side, the subcommittee’s ranking member is civil rights icon Rep. John Lewis (D-Ga.), who has been actively engaged in nonprofit and philanthropic issues. Beneath Lewis is Rep. Xavier Becerra (D-Calif.), whose opinions on nonprofits and philanthropy have sparked visceral reactions among foundations concerned that he might require them to devote more of their grant resources to helping the poor and people of color. With the fiscal cliff and tax reform challenging the composition of itemized deductions, the Subcommittee on Oversight could be a mandatory venue for nonprofit lobbyists.
At the Senate Finance Committee, some faces below Baucus and Hatch will change. Sen. Olympia Snowe (R-Maine), Sen. Jon Kyl (R-Ariz.), Sen. Jeff Bingaman (D-N.M.), and Sen. Ken Conrad (D-NPL-N.D.) are all retiring. Long seen as among the most knowledgeable tax experts in government, Conrad is a particularly significant loss. He was, as NPQ readers may remember, the author of the proposal for nonprofit health insurance cooperatives as the “public option” in the Affordable Care Act. How the Affordable Care Act, otherwise known as “Obamacare,” ends up treating nonprofits as small employers and as health services providers could be an important topic at the Senate Finance Committee.
Appropriations: The Fight for Discretionary Domestic Spending
At the Senate Appropriations Committee, Senate Republican Conference rules require a changing of the guard, which will mean that Sen. Thad Cochran (R-Miss.) will give up his ranking position in favor of, it appears, Sen. Richard Shelby (R-Ala.). No one on the committee lost their reelection bids, though Sen. Jon Tester (D-Mont.) and Sen. Sherrod Brown (D-Ohio) faced energetic and well-financed opponents. However, retirement will also send Sen. Herb Kohl (D-Wisc.), Sen. Ben Nelson (D-Neb.), and Sen. Kay Bailey Hutchinson (R-Texas) packing. Senate Appropriations chair Sen. Daniel Inouye (D-Hawaii) is 88 years young, meaning some of the other Democrats on the panel, such as Sen. Diane Feinstein (D-Calif.), Sen. Tom Harkin (D-Iowa), and maybe Brown or Tester, might have new or expanded leadership roles to play. The crucial importance of the committee is that it oversees annual federal discretionary domestic spending. In the fiscal cliff debates so far, commentators and Congress members have pitted tax rates against entitlement reform. There isn’t nearly as much attention being paid to the domestic spending programs on the chopping block. Nonprofits are going to have to get congressional appropriators to step to the plate.
As with the Senate side, the House Appropriations Committee will feature the same chair but a new ranking minority member. Rep. Hal Rogers (R-Ky.) remains the head of the committee, but the retirement of Rep. Norm Dicks (D-Wash.) opens up the coveted ranking member position to a competition among a number of influential Democrats. Among them are Rep. Marcie Kaptur (D-Ohio) and Rep. Nita Lowey (D-N.Y.), both energetic and high-profile party leaders with solid legislative resumes. Both know the nonprofit sector well and should be key players in determining which federal programs get the breath of life in the otherwise tumultuous budget-cutting environment facing the nation. One influential Democrat who won’t be in the mix despite his overwhelming reelection is Rep. Jesse Jackson, Jr. (D-Ill.). After months of invisibility due to reports of exhaustion and bipolar disease, Jackson just recently announced his resignation in the wake of a very serious federal corruption probe. On the Republican side, two of the more powerful members are also leaving. Outgoing Rep. Denny Rehberg (R-Mont.) left his House seat to run against Tester for the Senate (and lost) while Rep. Jeff Flake (R-Ariz.) did the same in his state (and won). Both will need to be replaced, along with other missing Republicans.
Campaign Finance: The Battle to DISCLOSE
We must also turn our attention to an issue that affects all nonprofits: not the charitable deduction, but campaign finance and the disclosure or nondisclosure of contributions to ostensibly independent super PACs, 501(c)(4)social welfare organizations , and 501(c)(6) business trade associations. The congressional venues for consideration of campaign finance reform and a potential reversal of the Supreme Court’s controversial Citizens United decision are the Senate Rules and Administration Committee and the more simply named House Administration Committee.
At Senate Rules, Sen. Chuck Schumer (D-N.Y.) still chairs and Sen. Lamar Alexander (R-Tenn.) likely retains the ranking minority member’s slot. Schumer was an advocate of the DISCLOSE Act legislation that would have added a donor disclosure element to 501(c)(4) and 501(c)(6) political expenditures, but Alexander was a steadfast opponent of such a measure, along with Senate Minority Leader Mitch McConnell (R-Ky.). As such, it would seem that campaign finance reform will be stuck between a rock and a hard place.
The stability on the Senate side doesn’t translate to the House, where the chair of the House Administration Committee, Rep. Dan Lungren (R-Calif.), lost a razor-thin election. Rep. Gregg Harper (R-Miss.) may replace Lungren. Regardless of who takes the top slot, the central issue may be how the parties will interpret the uses and abuses of more than $2 billion in campaign spending by the parties and by purportedly independent entities. If nonprofits care about the diversion of $2 billion into dumbing attack ads instead of into programs advancing the social welfare that social welfare organizations are supposed to do, these committees will be important stops for nonprofit lobbyists. Already, there are indications that the historic ardor of Democrats for campaign finance reform, particularly addressing 501(c)(4)s and Super PACs, may be waning. If nonprofits really care about big money using 501(c) organizations to launder and camouflage political contributions, they will have to be talking to the Senate and House Administration committees, reminding them that their action or inaction will speak volumes about the state of democracy in our nation.
No Tickets Needed for the Wild Congressional Ride
The opinions of these committee and subcommittee chairs will be critical to nonprofits’ advocacy agendas. Regardless of what they said in their reelection campaigns for consumption by local constituencies, the 113th Congress is a new ballgame. The composition of key congressional committees is important intelligence for nonprofit activists. You have to know how to play the game on Capitol Hill, which begins with understanding who you’re playing with in terms of committees, subcommittees, chairpersons, and personalities.
LISC’s Burnham advises her Shelterforce readers, “Get ready. Know your congressperson, know your senators. Keep your ear to the ground” and prepare for “a wild ride on both sides of the Hill.” She might also add that nonprofits must be smart and strategic. This is no time to sit back and bask in the results on November 6th—not with the fiscal cliff, sequestration, and tax reform debates on tap to begin almost immediately.
