Congressional leadership changes foretell policy shifts

The future of infrastructure spending seems to headed towards more emphasis on roads and rail lines according to recent signals sent by the House Transportation and Infrastructure Committee.

"The committee will hit the ground running in 2025," said current and future Chairman Sam Graves, R- Mo.

"Our work will include working with President Trump to advance his infrastructure priorities, developing the next long-term surface transportation reauthorization, and reprioritizing policies that are consistent with the core purpose of infrastructure."

Graves survived a challenge to his leadership from Rep. Rick Crawford, R-Ark., who showed interest in taking the gavel earlier this year.

Graves' term was supposed to end due to term limitations which can be navigated around via a waiver from the Steering Committee.

The House Ways and Means Committee also formalized the status quo in leadership this week by announcing Chair Jason Smith R- Mo., would retain his position.

Smith vaulted over more senior members Reps. Vernon Buchanan of Florida and Adrian Smith of Nebraska and landed in the chair in 2023.

Smith is a vocal critic of the Biden administration and is reaffirming support for keeping the Tax Cuts and Jobs Act in place in its entirety.

"The president was specific about what he wanted to deliver and that is an extension of his successful 2017 Trump tax cuts," said Smith in a Fox Business interview.

"And also, no tax on tips, overtime pay, senior citizens, Social Security tax cuts. We know what President Trump wants and what 76 million American voted for."

The Tax Cut and Jobs Act remains a thorn in the side of the municipal bond market because it eliminated the advance refunding of tax-exempt munis and put a cap on the federal income tax deduction for state and local taxes.

Numerous studies and opinions by budget watchers are warning against the costs of extending the TCJA without finding new revenue streams to pay for it.

Smith jumped on the Bureau of Labor Statistics Consumer Price Index report showing core inflation remained above the Federal Reserve's goal of 2%, attacking Biden's economic policies as the committee released its own findings on what will happen if the TCJA expires.

According to Ways and Means, "The average taxpayer would see a 22% tax hike if the Trump tax cuts expire, 90% of all taxpayers would see their guaranteed deduction slashed in half, and seven million taxpayers would be impacted by the return of the Alternative Minimum Tax."

The Biden administration expressed support for keeping some of the TCJA provisions in place including the changes in standard deductions.

The House Financial Services Committee changed its Chairman from Rep. Patrick McHenry R-N.C., who didn't seek re-election in November. His open Congressional seat was won by Republican Pat Harrigan.

Current committee Vice Chairman French Hill from Arkansas, who is considered a moderate, will assume control in January. Hill currently leads the Digital Assets, Financial Technology & Inclusion Subcommittee.

The debate over cryptocurrency regulation is likely to heat up in the new administration, which is considered crypto-friendly.

"With French Hill at the helm, Republicans will build on our work from this Congress to finally enact a clear regulatory framework and robust consumer protections for the digital asset ecosystem," said McHenry in a statement.

On the Senate side, the Committee on Banking, Housing, and Urban Affairs is saying farewell to current Chair Sherrod Brown D-Ohio. Brown lost his reelection race, and the Senate is now under Republican control.

Senator Tim Scott, R-S.C., is the current ranking member and is expected to take the gavel for the start of 119^thCongress.

Brown led his final committee hearing on Wednesday and took the opportunity to reflect on his own legacy.

"When I took over as chair of this committee nearly four years ago, Washington still called it Senate Banking," he said.

"It was still pretty much a committee dedicated to protecting Wall Street and the financial industry, and fulfilling their lobbyists' wish-lists. We changed that. We put the focus of this committee back where it should be the people who make this country work."