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Bipartisanship has a shot in the new Congress

The midterm elections earlier this month produced a widely predicted shakeup in Washington, with Democrats winning back the U.S. House of Representatives and Republicans retaining control of the Senate. Shannon McGahn, senior vice president of government affairs for the National Association of Realtors, discussed what this new dynamic will mean for the housing industry. Prior to joining NAR last month, McGahn was the staff director for the House Financial Services Committee, a former counselor for Treasury Secretary Steven Mnuchin and has held several other posts on the Hill.

The midterm election went as expected. We’ll have a divided government after January. But is the situation really that much different, given that Republicans over the last two years almost always needed some support from Democrats to get measures through?

shannonmcgahnThe dynamic in the Senate requires a higher threshold of votes that often then requires a bipartisan solution, or at least a number of people across party lines  to support your measure. So a big difference in the next Congress is the inability [for Republicans] to use something like the budget reconciliation process, which was used for the tax bill and also used for the Affordable Care Act, because that would allow for the Senate to get a vote with just 50 plus votes.

So, those aren’t options, but you still would have more interest in working not just in a bipartisan fashion, but also bi-cameraly. [That way] if there are ways to move a measure forward, you are starting those negotiations earlier with House Democrats and with Senate Democrats.

Could there be more deals cut across the aisle?

I think there is always going to be room for a bipartisan cooperation. It is one of the best kept secrets in D.C. that there are dozens and dozens of bills that are signed into law that came through bipartisan support. They usually don’t get as much of the press attention as they deserve. Having come from a committee that was responsible for a number of bipartisan victories, I have seen this work firsthand. I know it can work, and that there is a strong appetite to make it work.

There are some things that could come up in the next Congress that [require bipartisan support], including GSE [government-sponsored enterprise] reform, for instance. House Financial Services Committee Chairman [Jeb Hensarling, R-Texas] and Representative [John Delaney, D-Maryland] have introduced a bipartisan draft [the Bipartisan Housing Finance Reform Act]. Obviously the clock is ticking for this Congress, but there have been a number of legislative proposals [on housing-finance reform] that have had bipartisan support. You had Johnson-Crapo, and Sen. Mark Warner and Sen. Bob Corker had been working on proposals. So, there has been a consistent record of interest working across party lines on that issue. We would expect that to happen in the next Congress as well.

During NAR’s panel discussion on the election results, you mentioned that midterms often produce divided governments, and that typically leads to more oversight, investigations and scrutiny of the administration. How might that affect what can be accomplished there?

One of the more important works that the House does is in the oversight and investigations area, and also in controlling some of the spending bills. I would expect that [since Democrats] control one chamber of one branch, that those are the tools that are usually used to get to certain policy outcomes. Again, having worked for nearly 15-plus years on the House side, including with the Super Committee [the Joint Select Committee on Deficit Reduction] and a number of budget and spending battles, I have seen how that works up close. I would expect that those [oversight and investigations] would continue in the next Congress, but then again, that gives more reason to work proactively and early in the Congress to get compromise on those issues. You have the debt-ceiling battle come up in March. That is another time people are going to focus on this, and also with the budget process.

One other thing I want to mention is the Congressional Review Act, which is when Congress can vote to revoke an administrative rulemaking. That was used quite a bit in the last Congress to repeal decisions that were made in the previous administration. That would require both the House and the Senate, but it is something that is another element to look at, if House Democrats wanted to bring more of those votes up in order to force people to take positions on those issues.

You don’t think that investigations of the president and heightened oversight of the administration might poison the environment?

I am always a glass half-full person. I see a lot of opportunity there, that the administration has a lot of priorities that can be done in a bipartisan fashion, and there would be interest in working across the aisle.

That includes infrastructure reform. That is something that was discussed a great deal in the last Congress, and I could see room for that moving in the next one as well. As I mentioned before, GSE reform. The administration can take action on its own, but there is a requirement for significant legislative action if they want to make bigger changes. I could see there would be an interest in working there. The way that Washington works is that you see somewhat of a divide between the policymaking functions and then the oversight and investigations. Sometimes they can run on dual tracks.  

What are some areas that are important to housing that can realistically get done?

Well, I mentioned GSE reform. We will be looking closely at the next FHFA [Federal Housing Finance Agency] director. Mel Watt is expected to step down early next year [as head of FHFA] when his term ends, and there will be a Senate-confirmation battle for the next head of that agency. That will give a signal as to where the administration wants to go. As I mentioned, I think that infrastructure is another one that I think we can work on in a bipartisan fashion. That is something that makes an impact in every community across the country. Flood insurance is another issue that is coming up in the lame duck. On Nov. 30, the national insurance program authorization expires.

How do you plan to get to know all the new members and get your message heard?

On many levels, we already know them through either involvement in their races or through some of their community connections, or relationships that Realtors or others may have back in their districts. We will be creating an organized approach to how we develop these relationships further, and that includes educating members on the issues related to property ownership and real estate investment.

We are also working on a proactive, positive, policy agenda that members of both parties can get behind. So, when we have our midyear meeting in May, where thousands of Realtors come in and hit the Hill, we are going to have a positive message of policy solutions that we can deliver to our new friends. More than 90 percent of our PAC-supported [political action committee-backed] candidates won. Obviously, some of those seats are still coming in, but it was a very strong number. So, these were folks we have already been supporting and have relationships with.      


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