As we begin the year, many changes are taking place in Congress. While this generally happens every two years, because the House of Representatives majority has switched parties, changes in that chamber are even more profound than usual.

In November 2018, Democrats were successful in flipping a net total of 40 seats in the 2017 midterms election, and they now have a 235–200 seat majority in the House. So, what does this mean for our industry?

House of Representatives

The biggest change is going to be House leadership and individual committees. The agenda for the House will no longer be under the direction of former Speaker of the House Paul Ryan (R-WI), but will be led by the likely new Speaker of the House Nancy Pelosi (D-CA), who at press time, was nominated by her party to lead in the coming year, having survived a challenge by a group of moderate Democrats who sought new leadership.

Also, the floor schedule will now be set by Majority Leader Steny Hoyer (D-MD) rather than Rep. Kevin McCarthy (R-CA), who will now serve as the Republican Minority Leader. In order to overcome the insurgent effort, Speaker Pelosi agreed to a number of rule changes in the House that will ostensibly revert much of the control of major legislation back to the individual committee chairs. Assuming those rules are followed and not regularly waived by the Rules Committee—as often happens in the House—the following members will have an even stronger ability to impact the convenience store industry.

Source: POLITICO Datapoint

House Committee on Energy and Commerce

This committee has jurisdiction over much of the fuels market, environmental and health-care policies, along with significant jurisdiction over data security and is one of the most impactful committees on our industry. Rep. Frank Pallone (D-NJ) has taken the helm of the committee, and with his chairmanship, we can expect a larger focus on policies favored by the environmentalist community. Should those policies become law, they could be problematic for our industry. Last Congress, Pallone openly opposed our efforts to modify the Food and Drug Administration’s (FDA) menu-labeling regulation, as well as our efforts designed to ease the record keeping and paperwork burdens placed on small businesses by the Affordable Care Act, despite educating him on its impact on our stores during a NACS In Store visit last February. He’s also an outspoken advocate for restricting e-cigarette and traditional tobacco products. While Pallone’s chairmanship may make some issues more difficult on our industry, we are hopeful that we can find room to work together.

Data security and data breach legislation may be one area where we could end up with a better bill for consumers and the convenience industry. While some Republican members who had been friendly to the industry will not return for the new Congress, some members with stronger allies will remain top Republicans on certain key subcommittees. Although they won’t control the agenda, they will retain the ability to help shape legislation as it moves through the committee.

Rep. Greg Walden (R-OR) will retain the top GOP slot on the committee as its full committee ranking member. As chairman, Walden has been helpful to our industry’s positions. The House Committee on Energy and Commerce has jurisdiction over many fuel-related issues, including the Renewable Fuel Standard (RFS) program. This issue has been driven primarily by geographic interests rather than by political party, so it’s expected that Rep. John Shimkus (R-IL) and Rep. Mike Tonko (D-NY) will continue to work together on the future of the RFS program and other fuel-related issues. In addition to fuel issues, climate change should be a major issue for the new House majority. It’s expected that a new select committee will be formed specifically to address climate change, but the overall committee will continue to play a key role in many legislative efforts.

House Committee on Agriculture

As valuable retail partners in the Supplemental Nutrition Assistance Program (SNAP), our industry works closely with the House Agriculture Committee, which oversees the program. Taking the gavel is Rep. Collin Peterson (D-MN). As a key Democrat, Peterson has worked closely with our industry and understands the critical role our stores play in providing access to food for SNAP beneficiaries. He was instrumental in helping achieve reasonable stocking requirements in the 2014 Farm Bill, and he was also instrumental in voicing opposition to the 2016 proposed regulations that would have prevented the majority of convenience stores from accepting EBT. His Republican counterpart, Rep. Mike Conaway (R-TX), will stay on as ranking member. Conaway has also worked closely with our stores to protect their role as SNAP retailers, and he participated in a NACS In Store at a Kent Kwik in Midland, Texas.

House Committee on Appropriations

The committee that controls the federal purse strings will continue to be one of the most active groups in the coming Congress. While most expect even more partisan gridlock due to the newly divided government, one thing Congress must do each year is fund the operations of the federal government. This means we will often see several “policy riders” attached to these bills in an effort to move policy priorities on the coattails of must-pass funding measures. Taking over the chairmanship of the Appropriations Committee is Rep. Nita Lowey (D-NY). While she has not been particularly friendly to our industry on certain key votes over the past few Congresses, we are hopeful that we can work with her in this new role if we need appropriations assistance with SNAP and tobacco issues.

Who would lead the Republican side of this committee was one of the most contested decisions facing the Republican Steering Committee—a group of members made up of Republican leaders and others elected to represent different regions and elective classes within the party. Rep. Rodney Frelinghuysen (R-NJ) did not stand for reelection last year after just one term as chairman of the Appropriations committee, leaving the GOP’s top spot up for grabs. Rep. Kay Granger (R-TX) secured the top spot over Reps. Robert Aderholt (R-AL), Tom Graves (R-GA) and Mike Simpson (R-ID). All of whom were expected to be favorable of our industry’s efforts within the committee. At the subcommittee level, many of our recent priorities have fallen under the jurisdiction of the Subcommittee on Agriculture. Fortunately, Rep. Sanford Bishop (D-GA), who has been willing to help our industry, is the new chairman of that panel. It is worth noting that Rep. Rosa DeLauro (D-CT) retains a senior position on the subcommittee and is one of the biggest challengers to some of our priorities.

Senate

There won’t be nearly as much transformation in the Senate, but it certainly won’t be void of impactful changes entirely. Senate Republicans gained a net total of two seats in the Senate, increasing their majority for the 116^th Congress from 53 to 47. Sen. Mitch McConnell (R-KY) will remain the Majority Leader, which means he will continue to set the Senate’s agenda and determine what comes to the floor. The Republican leadership spots beneath McConnell shifted due to party term limit rules on these positions. Sen. John Cornyn (R-TX) was forced to vacate the number two leadership position of Majority Whip, and as a result, Sen. John Thune (R-TX) will presume the position as Majority Whip, while Sen. John Barrasso (R-WY) will take the number three position of Conference Chair. Sen. Joni Ernst (R-IA) became the first female Republican to hold the fourth spot of Conference Vice Chair, and Senator Roy Blunt (R-MO) moves into the role of Policy Chair. Sen. Todd Young (R-IN) rounded out the leadership team by taking over the chairmanship of the Senate Republican’s campaign arm, the National Republican Senatorial Committee (NRSC). Our industry has enjoyed a good relationship with these senators on most of our priority issues.

The next two years are certain to be interesting and full of partisan gridlock.

Senate Committee on Finance

The Senate Finance Committee, which most notably has jurisdiction over federal tax policy, has a new chairman this year. With the retirement of the longest serving Republican, Sen. Orrin Hatch (R-UT), the gavel is now held by Sen. Chuck Grassley (R-IA). This may present a greater challenge to our industry’s efforts to protect the biodiesel blenders tax credit, as Grassley has been a champion of amending the credit to benefit producers of the base product, primarily soybean farmers, rather than the blenders of the final product. Sen. Ron Wyden (D-OR) retains the ranking member position on the committee and will likely continue to remain an obstacle on amendments to the Republican 2016 tax cut law. Our industry has advocated for better treatment of pass-through entities and sought corrections to a drafting error that impacts non-fuel-selling convenience stores’ ability to enjoy the depreciation benefits of the new law.

Senate Committee on Commerce, Science and Transportation

Like the Finance Committee, the Commerce Committee has a new chairman. Sen. Thune gave up the gavel with his elevation to the Majority Whip post, so the gavel now rests with Sen. Roger Wicker (R-MS). The Commerce Committee has expansive jurisdiction that encompasses some key areas for our industry. They have oversight on much of the Federal Trade Commission, the National Institute of Standards and Technology, as well as federal transportation policies. Issues such as data security and privacy and potential infrastructure legislation are major issues that are important to convenience retailers, and this committee will address them. The top Democrat spot on the committee has turned over as well. With Sen. Bill Nelson’s defeat in Florida, the top Democrat position on the committee is now held by Sen. Maria Cantwell (D-WA).

Overall Outlook

The next two years are certain to be interesting and full of partisan gridlock with Democrats holding the majority in the House, Republicans growing their majority in the Senate, and Republican President Trump in the White House. House Democrats will take advantage of their new power as the majority party to conduct rigorous oversight of the Trump Administration, including investigations into alleged improprieties. They will also seek to pass legislation that reflects the priorities of the more progressive caucus on health care and tax policy, among many others.

The Senate will block or significantly modify much of the legislation sent over from the House. We saw much of the same dynamic in previous Congresses during the Obama Administration when Republicans held the House majority, and Democrats had the majority in the Senate. Should make for an exciting year!