Divided Government

Here's what to expect in the 118th Congress.

Divided Government

January 2023   minute read

By: Jon Taets

It wasn’t until eight days after the 2022 midterm elections closed that most media outlets made the call that Republicans had successfully wrested the majority control in the House of Representatives from the Democrats.It was only a few days before that they were able to make the call that the Democrats had retained their majority control in the Senate when they reached the 50-seat threshold, guaranteeing the majority regardless of the outcome of the December 6 runoff in Georgia, thanks to Vice President Harris’ tie-breaking vote. Such was the result of hard-fought midterm elections which saw tight races in both chambers.

Once these final outcomes were in hand, the members of both chambers turned their attention to leadership elections, and Republicans looked forward to taking control of the House and setting the agenda on the floor and in committees. While Republicans did swing control of the House, they fell far short of what many expected to be a red wave. They even lost a seat in the Senate and failed to pick up the Georgia seat, which was retained by Democratic Sen. Raphael Warnock, who defeated Herschel Walker.

The results were particularly discouraging to many Senate Republicans who had hoped to take the majority in that chamber. In the aftermath, some members organized an ill-fated challenge to Republican Leader Mitch McConnell’s (R-Ky.) leadership position. National Republican Congressional Committee Chairman Rick Scott (R-Fla.) stepped up to challenge McConnell for party leader but was defeated easily in a caucus vote. At the same time, Sen. John Thune (R-S.D.) was reelected as Republican Whip, and Sen. John Barrasso (R-Wyo.) was reelected as Republican conference chair. Sen. Joni Ernst (R-Iowa) claimed the vacant Republican Policy Committee chair, and two new members of the caucus joined the leadership table. Sen. Shelley Moore-Capito (R-W.Va.) claimed the vice chair of the conference seat, and Sen. Steve Daines (R-Mont.) will replace Scott at the helm of the NRCC.

Senate Democrats chose to hold their leadership elections after the Georgia runoff in December, and no major changes were expected. Sen. Charles Schumer (D-N.Y.) will remain majority leader. Majority Whip Sen. Dick Durbin (D-Ill.), Assistant Leader Patty Murray (D-Wash.) and Communications Committee Chair Debbie Stabenow (D-Mich.) were not expected to face challenges. The only change to Senate leadership will be president pro tempore. Sen. Patrick Leahy (D-Vt.) holds that position but is retiring. The job, while largely ceremonial, presides over the Senate in the vice president’s absence, and the position is third in the line of presidential succession. Traditionally, the role goes to the most senior member of the majority party. For the 118th Congress, Sen. Schumer has tapped Sen. Murray to be the first woman to hold that role in Senate history.

While NACS has enjoyed positive relationships with most of these members, some of have presented challenges to our industry. Sen. Thune opposed NACS efforts to protect SNAP data, Sens. Murray and Stabenow have both been staunch opponents of certain health initiatives, including menu labeling and SNAP hot foods. On the positive side, Sen. Durbin has long been our industry’s champion on swipe fees, and Sens. Barrasso, Ernst and Moore-Capito have been our allies on energy policy.


On the House side, the fact that Republicans won fewer seats than expected impacted their internal leadership races, most notably for speaker. Rep. Kevin McCarthy has been the Republican leader since 2014, serving as majority leader under speakers John Boehner (R-Ohio) and Paul Ryan (R-Wis.) and minority leader since 2018. He sought the speakership after Boehner’s resignation but was blocked by the party’s right wing, resulting in Ryan’s election to the position. It is that same right flank of the party that challenged him again. In the end McCarthy easily won the internal vote and, as of this writing, is expected to earn the majority vote he needs on the House floor. Rep. Steve Scalise (R-La.) was unopposed in his bid for majority leader. The third-ranking position of majority whip was a spirited three-person race, ultimately won by Rep. Tom Emmer (R-Wis.), who has chaired the Republicans’ campaign arm for the past four years. Rep. Elise Stefanik (R-N.Y.) beat back a challenge to remain conference chair. Wrapping up the elections, Rep. Lisa McClain (R-Mich.) joins the leadership as conference secretary, and Rep. Richard Hudson (R-N.C.) will take the helm of the National Republican Congressional Committee.

After losing the majority, the Democrats saw a seismic shift in House leadership. Speaker Nancy Pelosi (D-Calif.), the first woman to hold that position, and Rep. Steny Hoyer (D-Md.) have held the top two positions in House Democratic leadership for the past two decades. In an impassioned floor speech in November, Pelosi reflected on her years as leader and announced her intention to step down from leadership but remain in Congress. Hoyer followed by announcing the same decision. The Democrat caucus elected Rep. Hakeem Jeffries (D-N.Y.) as party leader, and Rep. Katherine Clarke (D-Mass.) was tapped as party whip. Rep. Pete Aguilar (D-Calif.) will be caucus chairman. Beyond that, the other positions may have competitive races, though Rep. James Clyburn (D-S.C.) has served alongside Pelosi, and Hoyer is also expected to seek the assistant Democrat leader position he has held in the past.

NACS has good relationships with many of these members. Reps. Scalise and Emmer have participated in NACS In Store events, and the others have enjoyed a strong relationship with the industry. On the Democrat side, Jeffries and Clarke are members with whom NACS has worked with in the past and will seek to continue to foster those relationships. In both chambers, changes among the key committees will impact legislation brought forward at those panels and then ultimately to the floor. Here is a look at how those changes may impact key industry issues.


The Senate Banking Committee and House Financial Services Committee have jurisdiction over banking and financial services industries, including Federal Reserve oversight. While the issue of swipe fees falls mostly under the jurisdiction of these committees, their leadership has tended to shy away from the issue given the strong views of both the retail and banking industries. In the Senate, Sen. Sherrod Brown (D-Ohio) will remain chairman. In the House, Rep. Patrick McHenry (R-N.C.) will take the gavel. Rep. McHenry participated in a NACS In Store event at a QuikTrip in his district in 2018. He has said he will focus on digital assets and privacy as chairman. NACS and the Merchants Payments Coalition will continue to engage the committees and their members on the need for a competitive payment system.

Last year, the Senate Judiciary, chaired by Sen. Durbin, held a hearing looking at the anticompetitive practices of Visa and Mastercard. Sen. Durbin has long been a champion of the convenience industry on payments policy. He sponsored the Durbin Amendment in 2010 and last year introduced the Credit Card Competition Act. He will remain the Judiciary Committee chairman in the new Congress, which may present opportunities for the committee to analyze and address the monopolistic control of dominant credit card brands.


The main responsibility of both the Senate and House Agriculture committees next year is drafting the Farm Bill, which authorizes the Supplemental Nutrition Assistance Program (SNAP) and is set to expire in 2023. In the Senate, Chairman Stabenow will remain at the top of the committee. With Republicans holding the gavel in the House, Rep. G.T. Thompson (R-Pa.) will become the chairman of the House Agriculture Committee. Rep. Thompson participated in a NACS In Store event in 2018 at a Sheetz in his district and understands the critical role convenience stores play in the program. NACS will work with both parties as the 2023 Farm Bill process begins and will advocate for two changes to the program. First, NACS is asking that Congress remove the restriction on hot foods to give SNAP families needed flexibility with their benefits and to ease administrative burdens within stores. Second, NACS is asking that the ban on processing fees, which expires with the current Farm Bill, be made permanent.


Most tobacco policy in 2023 will come from the Food and Drug Administration, which is expected to introduce a proposed rule on very low nicotine this spring and potentially finalize rulemakings banning menthol cigarettes and flavored cigars. With Republicans at the helm of the Energy and Commerce Committee, it is not expected that they will take up tobacco policy. The Senate Health, Education, Labor and Pensions Committee, which also has jurisdiction over tobacco policy, will be chaired by Sen. Bernie Sanders (I-Vt.), who has supported stronger regulation of the tobacco and vaping industries. It is unclear where tobacco will fall on Senate Democrats’ agenda.


The Senate Environment and Public Works Committee and the House Energy and Commerce Committee have primary jurisdiction over issues relating to the supply, production, refining, distribution, labeling and sale of motor fuels, including the Clean Air Act and Renewable Fuel Standard (RFS) program. They also have oversight authority over the Environmental Protection Agency (EPA), which implements these programs. Both committees regularly hold oversight hearings on the EPA and the RFS program and will continue to do so in the 118th Congress. With the EPA working on the next stage of the RFS program and creating an e-RINs program, both committees will be actively reviewing the agency’s efforts. In the Senate, Sen. Tom Carper (D-Del.) and Sen. Moore Capito will remain as chair and ranking member, respectively.

In the House, Rep. Cathy McMorris Rodgers (R-Wash.) will lead the Energy and Commerce Committee, and Rep. Frank Pallone (D-N.J.) will be the ranking member. Both Reps. McMorris Rodgers and Pallone and Sen. Carper participated in NACS In Store events. One of the top House Republican issues of the 118th Congress is to pass a comprehensive energy bill focused on domestic energy production and encouraging an “all of the above” approach to energy supply. Although there may be attempts to make changes to the RFS program, past efforts to make even minor changes have proved elusive. These past debates have been more of a regional battle between the oil-producing Gulf region and ethanol-producing Midwest region.

Supply constraints and gas prices also have met congressional scrutiny with both the House Energy and Commerce Committee and Senate Commerce Committee holding hearings during the last Congress. If high fuel prices continue, there could be another round of hearings, especially in the Senate. The Senate Commerce Committee, chaired by Sen. Maria Cantwell (D-Wash.), has also been trying to move price-gouging legislation, but efforts stalled last Congress. Sen. Cantwell will continue to chair the Commerce Committee, and Sen. Ted Cruz (R-Texas) will take over from Sen. Roger Wicker (R-Mo.) as ranking member.


While it is unlikely Congress will move legislation on climate in the 118th Congress, the White House will use its executive authority to advance its climate agenda, and agencies will pursue climate-related requirements within their authority. The executive branch will continue to implement the climate, EV and EV charging programs under the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. Republicans in the House are expected to use their oversight authority to review how these multibillion dollar programs are being implemented. The chairs of the House Energy and Commerce, Transportation and Infrastructure and Oversight and Reform committees have indicated they will hold hearings.

Rep. Sam Graves (R-Mo.) will be taking over the House Transportation and Infrastructure Committee from Rep. Peter DeFazio (D-Ore.), who retired. Rep. Rick Larsen (D-Wash.) will be ranking member. Rep. James Comer (R-Ky.) will lead the House Oversight and Reform Committee. Rep. Comer has participated in a NACS In Store event in his district. Following the primary loss of Rep. Carolyn Maloney (D-N.Y.), who chaired the committee last Congress, Rep. Jamie Raskin (D-Md.) will be ranking member.

The Senate Energy and Resources Committee will continue to be led by Sen. Joe Manchin (D-W.Va.) as chair and Sen. Barrasso. The committee has primary jurisdiction over issues related to electricity, the Department of Energy and the Federal Energy Regulatory Commission. In the past, this committee has been able to function in a surprisingly bipartisan basis. Both senators have expressed concerns with the EV-only approach to climate and may provide an opening to inject a more technology-neutral and pro-private sector investment approach to the issue.


The Republican majority in the House will all but assure no dramatic tax policy changes. Divided government means that the Democrats will no longer have the ability to push their favored tax policies through the budget reconciliation process bypassing bipartisan agreement. Senate Finance Committee leadership will remain unchanged. Sens. Sherrod Brown (D-Ohio) and Mike Crapo (R-Idaho) will retain their respective positions of chair and ranking member. The top spot on the House Ways and Committee is vacant with the retirement of Rep. Kevin Brady (R-Texas). As of this writing, his successor atop the GOP side of the committee was undecided. The candidates are Reps. Jason Smith (R-Mo.), Adrian Smith (R-Neb.) and Vern Buchannan (R-Fla.). Rep. Jason Smith is the top Republican on the Budget Committee, so if he is tapped for Ways and Means that will create another chair opening. On the Democrat side, Rep. Richard Neal (D-Mass.) will continue as the panel’s top Democrat.

Much of the committee’s time on the House side will be taken up with oversight of the Internal Revenue Service, which just received a significant boost in funding from the Inflation Reduction Act passed last year, of which the new Republican majority is skeptical. Both committees will begin tackling what to do about the individual tax cuts from the Tax Cuts and Jobs Act passed in 2017 that will begin to expire in the coming years and what to do about the ever-present issue of tax extenders.


At the helm of the Senate Health, Education, Labor and Pensions Committee, Sen. Sanders is likely to pursue an aggressive pro-organized labor agenda, but very few, if any, of the policies he will push in the panel will reach the Senate floor. The Republicans will elevate Sen. Bill Cassidy (R-La.) to be the ranking member. The lack of bipartisan agreement on labor policy is likely to keep the issue muted in terms of actual legislation adopted. On the House side, Rep. Virginia Foxx (R-N.C.) secured a waiver to continue as the top Republican on the Education and Labor Committee and is expected to take the gavel. Rep. Tim Walberg (R-Mich.), though, has announced he also will seek the chairmanship. Rep. Bobby Scott (D-Va.) will continue as the Democrats’ top member of the committee. The Republican majority will likely spend much of its time focused on oversight of the Biden Labor and Education departments as the White House is expected to continue to ramp up rulemaking and executive orders related to labor issues.

Jon Taets

Jon Taets

Jon Taets is NACS director of government relations. He can be reached at jtaets@ convenience.org.

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