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Repeats Story Initially Transmitted at 20:22 GMT Aug 14/16:22 EST Aug 14
--Group of Three Dozen Conservatives Hold Balance of Power in the House
--Key Group Will Shape Spending, Debt Ceiling, Tax Reform Debates
By John Shaw
     WASHINGTON (MNI) - House Speaker Paul Ryan and Senate Majority Leader Mitch
McConnell face a very challenging autumn. They confront a backlog of daunting
fiscal issues, relatively narrow Republican majorities in their respective
chambers, virtually united Democratic opposition to their plans, and a new
president who is inexperienced, volatile, and erratic.
     Speaker Ryan has an additional problem: the House Freedom Caucus--a group
of about three dozen combative, often contentious, conservatives who seem eager
to ignore and even defy the wishes of the Speaker and other Republican leaders
on critical issues.
     As McConnell and Ryan concoct their fall strategies they must consider the
likely stance of the Freedom Caucus for a practical reason: if this group
decides to oppose high-profile Republican initiatives, they are usually able to
block them.
     Lawmakers, analysts, and pundits have still not decided how to assess the
members of the House Freedom Caucus. Some argue they are committed idealists who
deserve respect. Others believe they are implacable obstructionists who deserve
derision. But virtually everyone agrees they will be a significant force on
Capitol Hill this fall.
     "The Freedom Caucus holds the balance of power in the House. Virtually
every issue that is coming up this fall is something they care about," says Stan
Collender, a budget expert at the Qorvis MSLGROUP. "When they care about
something, they are willing to go the wall for it. They helped bring down the
last Speaker (John Boehner) and they are willing to bring down Speaker Ryan if
he departs from their agenda. And Ryan understands this," Collender adds.
     Congress returns to Washington in September with a lengthy to-do list which
includes basic measures to fund the government and pay its bills, as well as
more ambitious items such as overhauling the tax code, repealing and replacing
the Affordable Care Act, and enacting infrastructure legislation.
     The 2018 fiscal year begins October 1, 2017 and extends until September 30,
2018. None of the 12 annual spending bills for FY 2018 were approved by Congress
before it left for its August recess. These 12 spending bills allocate more than
$1 trillion in discretionary funds that keep the federal government operating.
     Additionally, the statutory debt ceiling, which is now nearly $20 trillion,
must be increased this autumn by Congress to allow the federal government to
honor its obligations and pay its bills. Treasury Secretary Steve Mnuchin sent
congressional leaders a letter on July 28 requesting that Congress pass
legislation to increase the debt ceiling by September 29. The Congressional
Budget Office has said the debt ceiling needs to be raised by mid-October to
avoid serious disruptions.
     Republicans on Capitol Hill remain deeply divided on the fall agenda,
especially in the House where rival factions jostle for ascendancy. The House
Freedom Caucus is a critical part of this unruly mix.
     A study of the Freedom Caucus by the Pew Research Center in 2015 identified
36 members in the group and more than 70% were first elected to the House in
2010 or later. On average they are younger than rest of the House GOP and many
are veterans of the Tea Party movement. They want power shifted out of
leadership to rank-and-file members. Membership to the Freedom Caucus is by
invitation and the group seeks to act as a bloc on major issues.
     According to the group's by-laws, if 80% of Freedom Caucus members agree on
an issue, the entire group will vote as a bloc on the matter. Each member is
given two exemptions per Congress. Many of the Freedom Caucus members are part
of the larger Republican Study Committee which has about 170 members who call
themselves conservatives.
     The Freedom Caucus was heartened by the election of Donald Trump as
president and by the retention of Republican majorities in Congress on November
8, 2016.
     However, the Freedom Caucus has not seen eye-to-eye with Trump and
congressional leaders on several key issues, most notably health care. They
opposed the initial House Republican bill to repeal and replace the ACA in March
of 2017, arguing that it did not go far enough and did not adequately reflect
conservative goals. Ryan was forced withdraw the bill and cobble together an
alternative which eventually passed the House. It has stalled in the Senate.
     The Freedom Caucus's opposition to the first Republican health care bill
infuriated Trump. After the bill was withdrawn, Trump hammered Democrats and the
Freedom Caucus. "The Freedom Caucus will hurt the entire Republican agenda if
they don't get on the team, & fast. We must fight them, & Dems, in 2018," he
said in a tweet.
     So what will happen this fall as Congress tries to fund the government,
raise the debt ceiling, overhaul the tax code and return to health care
legislation?
     No one knows for sure, but most analysts expect plenty of conflict.
     "The Freedom Caucus will be very important. They are more like a gang than
a coalition. They operate in a no-compromise zone. They will probably be very
disruptive this fall," says Collender, the budget expert at the Qorvis MSLGROUP.
     Phil Joyce, a fiscal policy expert at the University of Maryland, believes
the Freedom Caucus will play a large role, especially on debt ceiling
legislation. "The Freedom Caucus seems determined not to have a clean debt
ceiling. They see the debt ceiling as something to use as leverage to push their
agenda not as legislation that must be passed to protect the 'full faith and
credit' of the U.S. government," he says.
     Joyce says the Freedom Caucus will be a powerful force in Congress in the
coming months--and beyond. "As long as bipartisanship is dead, and Democrats
continue to oppose pretty much everything that Republicans do, and Republicans
have a narrow majority in the Congress, the Freedom Caucus will be very
important. They can make a huge difference," he says.
     Joyce believes the Freedom Caucus will ensure there is a contentious fall
on Capitol Hill. "Probably the best we can hope for is to limp along from one
deadline to the next. We will probably have a lot of CRs (stop-gap spending
bills) that keep the government funded."
--MNI Washington Bureau; tel: +1 202-371-2121; email: john.shaw@marketnews.com