Who will sit on key municipal market-shaping congressional committees?

With all the House of Representative races now called, Republicans will retain a razor-thin majority, sealing their control of the Senate, House and White House, while jockeying has begun for appointments to the House Ways and Means and Senate Finance committees that are important to the municipal bond market.

The Senate, where the GOP won a 53-seat majority on Wednesday, elected South Dakota Sen. John Thune as its new leader. In the first Trump administration, Thune was chair of the Senate Commerce, Science and Transportation Committee and played a key role in the negotiation of the Tax Cuts and Jobs Act. An early version of the TCJA eliminated the tax exemption for private activity bonds, and after the provision was stripped out Thune noted that PABs "had fierce support in both chambers."

As Congress organizes itself into committees and prepares for the "Super Bowl of tax policy" next year, past bills and comments like Thune's on tax-exempt municipal bonds, PABs and advance refunding may indicate future positions of lawmakers.

Current Ways and Means Chair Rep. Jason Smith, R-Mo., is expected to remain at the helm of the committee, which is where tax legislation originates.

Smith in April organized Republicans into 10 tax teams to get a head start on next year's tax debate. The release of those reports will "likely offer the clearest early indication of where House Republicans stand on plans to address the TCJA cliff next year," said Brian Egan, director of government affairs for the National Association of Bond Lawyers in a Nov. 8 blog post.

Rep. Richard Neal, D-Mass, who is considered a friend of public finance, is expected to remain as Ways and Means Ranking Member.

Rep. Rudy Yakym, R-Ind., who in March was named Republican co-chair of the House Municipal Finance Caucus, is reportedly one of a handful of lawmakers looking to join the committee. Reps. Aaron Bean of Florida and Nathaniel Moran of Texas are also vying to join the committee, according to Roll Call. The lack of an Indiana representative now on the committee may support Yakym's bid, Roll Call said.

Bond Dealers of America, in a Nov. 8 Congressional outlook piece, noted that several lawmakers who have sponsored bond-related bills are likely to return to Ways and Means.

That includes Rep. David Kustoff, R-Tenn., who has co-sponsored a bill to restore tax-exempt advance refunding; Rep. Mike Kelly, R-Pa., who chaired the Community Development Tax Writing Team that covered municipal finance; and Reps. Brian Fitzpatrick, R-Pa. and Claudia Tenney, R-N.Y., both of whom were sponsors on Kustoff's advance-refunding bills.

Lawmakers who are leaving the committee that have sponsored municipal market-related bills include Reps. Earl Blumenauer, D-Ore., and Dan Kildee, D-Mich.

All four Republican incumbents who lost their bids on Nov. 6 sat on the House Transportation and Infrastructure Committee. Current Chair Sam Graves, R-Mo., has said he would ask for a term limit waiver to continue his tenure, although Graves is reportedly on Trump's short list for U.S. Transportation Secretary. As chair, Graves has been critical of the Biden administration implementation of the Infrastructure Investment and Jobs Act as well as the law's focus on discretionary grants and non-traditional transportation projects.

The committee will tackle the new surface transportation reauthorization bill. Spending for the Highway Trust Fund will run out on Sept. 30, 2026, as will advance appropriations for the IIJA.

Current Ranking Member Sen. Mike Crapo, R-Idaho, will likely become chairman of the Senate Finance Committee, with all the Republicans currently on the committee staying put.

Sen. Ron Wyden, D-Ore., is expected to become ranking member. During a July committee hearing, Wyden highlighted the importance of the tax exemption for municipal bonds and private activity bonds, saying the TCJA "made it harder for state and local governments to reduce their debt" and there are now "fresh concerns that Republicans are going to try to go after these key financing tools."

BDA notes that Sen. John Cornyn, R-Texas, is expected to remain a senior committee leader and "was the loudest voice in the Senate in defense of PABs." Sen. John Barrasso, R-Wyo., who will also remain on the committee, sponsored the LOCAL Infrastructure Act that would restore tax-exempt advance refunding, BDA noted.

Republican leaders are expected to rely on the budget reconciliation process, which will allow them to pass revenue legislation with a simple majority, to raise the debt limit and address the expiring Tax Cuts and Jobs Act.