The War for the Soul of the Republican Party Continues

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Apartment Industry Colleagues,

All of us at one time or another had a job that was, let’s say, less than fulfilling and that we dreamed of quitting. Hand-in-hand with that of course is how we would quit, thus inspiring many fantasies about telling off the boss, co-workers or interminable clients. Hollywood has provided great fodder for this – Jennifer Aniston in Office Space, Bill Murray in Stripes or Tom Cruise in Jerry McGuire. One wonders if Speaker of the House John Boehner (R-Ohio-8) had similar whimsies last month as he announced his resignation both as Speaker and from his seat in Congress effective at the end of October. Likely not, as his announcement was characteristic of his usual professionalism and desire to put the institution he loves in front of his own needs. He seemed more inspired by the visit of Pope Francis than by visions of verbal comeuppance for those who made his life so difficult for the past several years.

As expected, Mr. Boehner’s resignation has created a chaotic environment as Republicans seek to fill the vacuum he will leave. The words had barely escaped the Speaker’s mouth when the jockeying began in earnest. (There were some signs it had begun even before). As expected, nearly all of those currently in GOP leadership positions want to move up the ladder. Kevin McCarthy (R-Calif.-23), the current Majority Leader is running for Speaker; Steve Scalise (R-La.-01), the current Whip is running for Majority Leader, and Patrick McHenry (R-N.C.-10), the current Deputy Whip is running for Whip. Cathy McMorris Rodgers (R-Wash.-05), the current GOP Conference Chair, is staying put after a brief but quickly abandoned pursuit of Majority Leader. As well, Luke Messer (R-Ind.-06) will remain Policy Committee Chairman.

These elections are yet another battle in the “war for the soul of the Republican party” as the ultra-conservative wing challenges the establishment for control of, or at the very least influence, on the party’s leadership in the House. They are dissatisfied with how things have been managed under this leadership team and want to see more aggressive legislative tactics with the President and the Senate. It’s up to Mr. McCarthy, Mr. Scalise and Mr. McHenry to convince them that they can do the job.

There are other candidates vying for GOP leadership positions whose views are more closely aligned to conservative groups within the GOP membership like the House Freedom Caucus. The election process itself will also impact the outcome. While the caucus will nominate a Speaker candidate on October 8, the actual floor vote takes place on October 29 and the votes on other leadership positions occur after that. This move along with a proposed rule change to punish any member who votes against the nominated Speaker candidate on the floor help Mr. McCarthy and it seems like his race to lose. Mr. Scalise and Mr. McHenry must spend the next four weeks fending off candidates from their right.

Mr. Boehner’s departure has serious implications for the legislative calendar this fall. In his last month on the job, he pledged to “clean out the barn” for his successor. And since he no longer has to care about reelection to Congress or the Speakership, he can make deals with whomever he wants. In fact, negotiations are already underway on a two-year budget deal that could eliminate the prospect of government shutdowns until 2017. Further, the Treasury Department updated its forecast for the debt limit, now reaching it in early November which means a deal could and probably should be made while Mr. Boehner still holds the gavel and can negotiate with Democrats and the Administration more freely. Look for deals on both of those items before the end of the month.

Other outstanding legislative items remain but will not be solved this month. A highway bill and tax extenders are two at the top of the list and must see some kind of action before Congress adjourns for the year. As usual, these will come down to dollars and cents. The least common denominator is likely in both cases.

One legislative issue high on NAA’s priority list is nearly complete – negotiations over the National Defense Authorization Act and specifically the funding for the Basic Allowance for Housing (BAH). Recall that this subsidy for the housing costs of military personnel is critical to those NAA members who are partners in the Military Housing Privatization Initiative. The BAH is the maximum rent partners can charge and thus is critical to the financial sustainability of an apartment community that serves military personnel. Once again we managed to stave off deep cuts to the BAH and instead will see only a modest 1 percent reduction. This is not a perfect outcome but at least minimizes the damage. This issue will not go away as Congress continues to struggle with defense spending, but we live to fight another day bruised but not beaten. Once again all credit goes to members of the NAA Privatized Military Housing Committee who worked tirelessly and aggressively to convey our message to members of Congress.

That’s all for now. Stay warm. Winter is coming.

Regards,

Greg

 

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