Close Close

Financial Planning > Tax Planning

11 Key Congressional Committees for Advisors to Worry About

Your article was successfully shared with the contacts you provided.

As the election approaches on Nov. 6, not just seats in the White House and Congress are in play, but also control of congressional committees important to advisors and others in the financial services sector.

While Democrats currently control the Senate, holding a slim majority of 53-47, including two independents who caucus with them, 23 seats are up for grabs among Democratic members. Only 10 Senate Republicans face re-election battles this fall. However, if control of the Senate should pass from Democrats to Republicans, the influence of six committees over legislation could change drastically.

On the House side, Republicans sit in 242 seats but only need 218 for a majority. While it is unlikely that they would lose so many, according to analysts, stranger things have happened. Be that as it may, all 435 seats come up for re-election this year, and the effects could be profound both on the House itself and on its five committees even if Republicans retain control, thanks to Tea Party influence.

Sen. Daniel Inouye (center) speaking with Sen. Carl Levin, D-Mich. (Photo:AP)


1) Senate Appropriations Committee

Chaired by Daniel Inouye, D-Hawaii, and with Thad Cochran, R-Miss., as vice chairman, the Senate Appropriations Committee can make or break bills. Inouye is not up for re-election until 2016, so he will remain in charge unless control of the Senate falls to Republicans. Cochran, who will face re-election in 2014, is regarded as somewhat moderate in his positions. He lacks a Tea Party endorsement.

Inouye was chosen by Majority Leader Harry Reid, D-Nev., in 2011 to be one of the negotiators in the ill-fated deficit reduction talks that resulted in the second failure of a “grand bargain.” His selection, according to The New York Times, was surprising in part because of Inouye’s hostility to the talks.

Both Inouye and Cochran are noted for their ability to bring home special projects for their districts. In fact, in August both were “honored” with “Porker of the Month” awards by Citizens Against Government Waste for their inclusion of an earmark for the Medium Extended Air Defense System (MEADS) in the Senate Appropriations Subcommittee’s version of the fiscal 2012 Department of Defense spending bill, to the tune of $380 million. They did so after the House Armed Services Committee, the House Defense Appropriations Subcommittee and the Senate Committee on Armed Services all rejected it.

Sen. Tim Johnson (left) and Sen. Richard Shelby at a hearing. (Photo: AP)2) Senate Banking Committee

Chaired by Tim Johnson, D-S.D., who is not up for re-election this year, the balance on this committee could tip if Republicans manage an upset. In that case, as the ranking member, Richard Shelby, R-Ala., would take over.

While Johnson has been called “the banks’ favorite Democrat” by those on the left, as cited in a Huffington Post story, he has proven to be an outspoken supporter of Dodd-Frank—something that has flown in the face of Republican opposition.

Shelby, on the other hand, has been highly critical of the Act both before and after its passage, and has previously spoken out in favor of repeal of the entire law. In particular, he has set himself against the current configuration of the Consumer Financial Protection Bureau (CFPB), saying in July that one of his 2013 priorities would be to replace its single director with a commission.

The makeup of the committee itself could change substantially, with majority members Sherrod Brown, D-Ohio; Robert Menendez, D-N.J.; and Jon Tester, D-Mont., all facing re-election battles. Two other majority members, Daniel Akaka, D-Hawaii, and Herb Kohl, D-Wis., are retiring. Republican member Bob Corker, R-Tenn., is also running for re-election.

Another potential jolt to the committee could be Elizabeth Warren, a Democrat. Should she win her race against Scott Brown, R-Mass., she could find herself on the committee—even though Brown is not. With Warren’s high-profile criticism of Wall Street, it could be a game-changer. Brown, for his part, was one of only three Republicans in the Senate to cast a vote in favor of Dodd-Frank. Despite that, the financial sector supports him—perhaps because he offers such a stark contrast to Warren.

Sen. Kent Conrad (left) and Sen. Chris Van Hollen, D-Md. (Photo: AP)3) Senate Budget Committee

Kent Conrad, D-N.D., who is not seeking re-election, currently chairs the committee. He’s been a fierce advocate for cutting the deficit and balancing the budget. He also sat on the Simpson-Bowles committee and has attempted to advance its recommendations. However, his efforts on both counts have met with obstruction on both sides of the aisle—from fellow Democrats because of their refusal to reform Medicare and Social Security, and from Republicans because of their unwillingness to consider an end to the Bush tax cuts for those in higher brackets.

If Democrats retain control of the Senate, he will probably be replaced by Patty Murray, D-Wash., who is likely to take a harder line with regard to those safety nets than Conrad has. In July, Murray spoke about the automatic cuts set to send the U.S. over the “fiscal cliff” in January if nothing is done, and came down heavily on the side of continuing tax cuts for those individuals making less than $200,000. She also spoke out against the automatic cuts, other than defense, mandated by the sequester.

Should Republicans take over the Senate, ranking minority member Jeff Sessions, R-Ala., would chair the committee instead. Sessions has been outspoken in his support of the budget proposed by Rep. Paul Ryan, R-Wis., the vice-presidential candidate, and has voted against raising taxes on those with high incomes.

Sen. Max Baucus speaking at committee meeting. (Photo: AP)4) Senate Finance Committee

Chairman Max Baucus, D-Mont., does not face re-election till 2014. He has spoken out in favor of reform of the tax code and eliminating a number of tax breaks, but has also suggested lowering overall tax rates—in particular the corporate tax rate.

Orrin Hatch, R-Utah, is the ranking Republican and faces re-election this fall after successfully overcoming a Tea Party primary challenge earlier in the year. While he had said during that campaign that his defeat would pave the way for more moderate Olympia Snowe, R-Maine, to take over the committee in the event of a Republican majority, when Snowe announced her retirement the argument became moot.

Should Hatch lose his bid for re-election and Republicans gain the Senate, Baucus would likely be succeeded by Mike Crapo, R-Idaho. Crapo is regarded as one of the Senate’s most conservative members.

Hatch is an opponent of the Affordable Care Act and has discussed ways to repeal it. In August, Hatch and Baucus together engineered a deal on extending billions in longstanding provisions of the “tax extenders” package, such as the research and development tax credit. These business and personal tax breaks have been the focus of numerous lobbying groups seeking to preserve them.

Sen. Tom Harkin. (Photo: AP)5) Senate Health, Education, Labor and Pensions

Chairman Tom Harkin, D-Iowa, doesn’t face re-election till 2014. In the meantime, he has taken a look at, among other things, the business of buying and selling pensions. Viatical-type arrangements in which veterans and others look to raise immediate cash by selling some of their future pension income to investors offer the potential for abuse, he has said. As previously reported by AdvisorOne, Harkin said that such arrangements “deserve careful scrutiny” and that he would be examining them more closely in an effort to forestall consumer abuse by unscrupulous middlemen.

Another area of concern for the senator has been for-profit colleges, which he blasted in a report issued at the end of July. A number of the institutions, many of them publicly traded, have been blasted by Democrats for capitalizing on student financial aid provided by the government while failing to provide students with either marketable degrees or manageable debt. Republicans generally view them as a free-market alternative to community colleges, which are often overcrowded.

Yet another area Harkin has expressed support for, related not to his service on this committee but rather to his presence on the Joint Select Committee on Deficit Reduction, is the financial transaction tax. AdvisorOne reported that, according to the committee’s analysis, the Wall Street Trading and Speculators Tax Act introduced Nov. 2 of last year would raise $353 billion from January 2013 through 2021.

Mike Enzi, R-Wyo., ranking Republican on the committee, would probably replace Harkin should control of the Senate pass to Republicans. He stands for re-election in 2014. Enzi has attacked the Affordable Care Act and advocates its repeal, saying that, despite the results of a Health and Human Services study that says otherwise, it is causing families to pay more for coverage.

He and Sen. Herb Kohl, D-Wis., as reported by AdvisorOne, also submitted a bill that would reduce the number of loans that participants could take from their 401(k)s. The bill would provide them more time to pay back the loans.

Sen. Mary Landrieu after her re-election in 2008. (Photo: AP)6) Senate Small Business and Entrepreneurship

Mary Landrieu, D-La., chairs this committee, and is not up for re-election till 2014. Among the more conservative of Democrats, she has supported drilling in the Alaska National Wildlife Refuge. She has been outspoken in her disapproval of extending the Bush tax cuts to those with high incomes, although she voted for them the first time out when there was a budget surplus.

Ranking member Olympia Snowe, R-Maine, is retiring at the end of this year. While Mike Enzi, R-Wyo., is senior after Snowe, he is already the ranking Republican on the Senate Health, Education, Labor and Pensions Committee, so it is unlikely that he would take over her position as either ranking member or chairman in the event of a Republican takeover. A likely successor to Snowe, at least from a seniority viewpoint, would be David Vitter, R-La., who is not up for re-election till 2016.

Vitter has opposed the Affordable Care Act and supported the Ryan budget, as well as advocating that the Bush tax cuts become permanent and favoring a permanent repeal of the estate tax.

Rep. Hal Rogers. (Photo: AP)


7) House Appropriations

Harold (Hal) Rogers, R-Ky., chairman of the committee and 32-year veteran of Congress, faces a re-election battle this year. Running against him is Democrat Kenneth Stepp, who also challenged him in 2006. Rogers was chosen over ranking member and former Appropriations Chair Jerry Lewis, R-Calif., by his colleagues.

Rogers has voted for repeal of the Affordable Care Act, voted for the Ryan budget, and for an audit of the Federal Reserve. He’s been called the King of Pork for his earmarks, and Citizens for Responsibility and Ethics in Washington (CREW) has called for him to be investigated as a result of one of those earmarks, which it says was instrumental in boosting the cost of helicopter parts when Rogers earmarked money for a defense contractor that had contributed to his campaign.

Ranking member Norm Dicks, D-Wash., has announced that he will retire at the end of his term. With his announced exit, jockeying began months ago to fill his position on the committee.

Most senior is Marcy Kaptur, D-Ohio, who is also the most senior woman in the House. Kaptur beat out Dennis Kucinich in a March primary after a redistricting process pitted them against each other. But now she is being challenged, not just at the polls, where she faces Joe Wurzelbacher, better known as Joe the Plumber, but also for the top Democratic slot on the committee, should she defeat Wurzelbacher.

Nita Lowey, D-N.Y., also seeks the position of ranking Democrat. Should control of the House be taken by Democrats in what would admittedly be an upset, the difference between the two could be substantial. While Kaptur introduced a bill in 2011 to restore the Glass-Steagall Act and has opposed both free trade agreements and the bank bailout, she is considered more of a centrist.

Lowey, on the other hand, is seen as further to the left. But she is locked in her own re-election battle against Republican challenger Joe Carvin.

Either woman would be the first female head of this committee from either party. But the door that opened for Kaptur and Lowey has also presented opportunity for both Nancy Pelosi, D-Calif., and Steny Hoyer, D-Md., who have previously served on the committee. Since members of the House retain their seniority from committees on which they’ve served when they move up to leadership positions, both outrank Kaptur and Lowey, and Hoyer would outrank Pelosi. Neither has expressed an interest in returning to committee leadership, however.

Rep. Paul Ryan. (Photo: AP)8) House Budget

Paul Ryan, R-Wis., chairs the Budget Committee. Should Romney win the White House and Ryan become vice president, it is likely, though not certain, that he would be replaced by the committee’s vice chairman, Scott Garrett of New Jersey, a Tea Party favorite.

Garrett, who is running for re-election against Democrat Adam Gussen, is even more conservative than Ryan, having voted against TARP. Garrett has also voted for oil and gas drilling off the coast of New Jersey and against an extension of unemployment benefits.

Ryan is also running for re-election to the House, so if the Romney-Ryan ticket fails to win, he could still remain as chairman. According to a Forbes report earlier this year, however, Ryan could be vulnerable in his quest to keep his seat in Congress. His opponent in the congressional race is Democrat Rob Zerban, who has managed an impressive fundraising haul.

Should Democrats take the House, the ranking member, Chris Van Hollen, D-Md., would step up to chair the committee—if he wins his own re-election race against Republican Ken Timmerman. He is opposed to the Romney-Ryan Medicare plan and has called the Ryan budget “an ideological document” rather than “a serious budget.”

Incidentally, Van Hollen will be playing Ryan in rehearsals for the October vice-presidetial debate opposite Vice President Joe Biden.

Rep. Fred Upton. (Photo: AP)9) House Energy and Commerce

Fred Upton, R-Mich., chairman of this committee, faced a Tea Party challenger in this year’s primary after being criticized by, among others, FreedomWorks and the Southwest Michigan Tea Party Patriots for not being conservative enough. However, he emerged victorious against former State Rep. Jack Hoogendyk, and will be running for re-election this year against Democratic challenger Mike O’Brien. His seat is regarded as “solid” by The New York Times, Roll Call and the Cook Political Report.

Upton has moved farther right on climate change and environmental issues from a formerly moderate position. He also voted against the Affordable Care Act, but in general is regarded as a moderate for his stance on fiscal issues.

Henry Waxman, D-Calif., ranking Democrat on the committee, faces a re-election fight this fall against Republican Bill Bloomfield after redistricting. He is a member of the Democratic Progressive Caucus. Should control of the House move to the Democrats, he has a number of priorities on which he has always been outspoken.

He supports universal health care, Medicare and Medicaid, and women’s health issues, and has been a strong proponent of environmental issues as well. In addition, he has in the past insisted that witnesses testify before any of his subcommittees under oath, thus facing perjury charges if they provided false information.

Rep. Sam Graves after his re-election in 2008. (Photo: AP)10) House Small Business

Sam Graves, R-Mo., chairman of the committee, is running against Democrat Kyle Yarber this fall after defeating Bob Gough and Christopher Ryan in the Republican primary. If he fails to win re-election, he would likely be succeeded by Tea Party Caucus member Roscoe Bartlett, R-Md.

Graves is considered a moderate Republican and has voted in favor of free trade agreements with countries from Peru to Singapore, as well as for the Ryan budget. He has voted against restricting employer interference in union organizing and an increase in the minimum wage, and for farm price supports. He has also supported a reduction in government regulation; he co-wrote the Regulatory Flexibility Improvements Act and supported the Red Tape Reduction and Small Business Job Creation Act.

Should Democrats win control of the House, Nydia M. Velázquez, D-N.Y., ranking member, could take over the chair. She is running this fall against Conservative Party member James Murray.

She has voted for the JOBS Act and extension of unemployment benefits, but has also been named by the American Small Business League (ASBL) as the most anti-small-business member of the House for votes against the Fairness and Transparency in Contracting Act, among other legislation, that sought to make sure that money earmarked for small businesses actually went to small businesses and not to large corporations.

Some of her top donors in her successful primary run earlier this year were firms such as Goldman Sachs, the American Bankers Association and the Independent Community Bankers of America. Primary opponents have attacked her for such close ties to the banking industry and also for a lack of support for financial transparency and reform.

Rep. Spencer Bachus (left) speaking with Rep. Barney Frank. (Photo: AP)11) House Financial Services

This committee is due for some changes regardless of how the election turns out. Currently chaired by Spencer Bachus, R-Ala., the committee could find itself with a new chairman even if Republicans maintain control of the House, since they have been following a self-imposed limit of six years on holding chairmanship of committees.

That could leave Jeb Hensarling, R-Texas, in the catbird seat, since Peter King, R-N.Y., the second ranking Republican, already chairs another committee. There has, however, also been speculation about Ed Royce, R-Calif., and Scott Garrett, R-N.J.

The committee’s ranking Democrat is Barney Frank of Massachusetts—that’s Frank, as in Dodd-Frank—who is not running for re-election. Maxine Waters, D-Calif., would take over Frank’s spot should seniority decide the matter, and the possibility already has the financial industry grumbling.

However, she could be challenged by Carolyn Maloney, D-N.Y., who is the next-senior Democrat. While Maloney has in the past rejected the notion, she has done some high-visibility work on the committee.

Waters, for her part, introduced a bill, the Investment Adviser Examination Improvement Act of 2012, co-sponsored by Frank and Michael Capuano, D-Mass., which would allow the Securities and Exchange Commission (SEC) to collect user fees from advisors to fund their exams in lieu of a self-regulatory organization (SRO). Waters introduced the measure as an alternative to the Investment Adviser Oversight Act, which would establish one or more SROs that would supplement the SEC’s ability to examine investment advisors. That bill was co-sponsored by Bachus and Rep. Carolyn McCarthy, D-N.Y.


Please check out AdvisorOne’s Election Impact 2012 home page for complete advisor-related election coverage, including:

CORRECTION: An earlier version of this story misidentifies a co-sponsor of the Investment Adviser Oversight Act. It is Rep. Carolyn McCarthy, D-N.Y., not Rep. Carolyn Maloney, D-N.Y.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.