Now Republican Party has gained majority in the US Congress that will go into session from January 2023. With the midterm elections, the current Congress has already turned into lame duck. Although, Democrats are trying to portray the majority as “very thin” or “narrow”, there is no doubt that they already have started feeling nervous. Meanwhile, majority of Democrats in the Senate is practically extremely risky, as a slight slip would result in Senate going under Republican Party’s control. Because of majority in the Congress and Senate, Joe Biden’s first two years in the White House was almost smooth, which will now become difficult if not turbulent. With Republicans already getting control of the Congress, experts are asking about the fate of billions of dollars of US aid to Ukraine. They also are asking – will there be a new approach to homeland security and foreign relations? What should we expect from forthcoming fights over appropriations and the debt ceiling? Will there be unlikely areas of cooperation?
John Herbst, senior director of the Eurasia Center and a former US ambassador to Ukraine told the Atlantic Council: Counter to previous expectations, the outcome of the midterm elections does not portend a change in US policy towards Ukraine. Prior to the vote, some analysts predicted that a strong Republican victory with populist candidates in the vanguard would strengthen the hand of those who want to sharply decrease US assistance to Ukraine. While it was never certain that such an election result would have led to those consequences, it appears that the Republican wave never materialized. While the Republicans will hold the majority in the House in January, it will not be a large one; and the Democrats held the Senate. Another factor is the underperformance of the populist or Donald Trump wing of the party; this suggests that their influence in Congress—and possibly against aid to Ukraine—will not increase. Bottom line? Strong support for Ukraine will continue. The outgoing Congress will likely ensure adequate funding for Ukraine through 2023 during the lame-duck session; and the incoming Congress is also likely to maintain that support.
Josh Lipsky, senior director of the GeoEconomics Center and a former International Monetary Fund advisor said: The shift of a few seats in the House could have major real-world global economic repercussions. The most pressing challenge is finding a way to raise the debt ceiling. According to Treasury Secretary Janet Yellen, the United States may reach its limit as soon as the summer of 2023. If the debt ceiling isn’t raised before then, the consequences could be credit downgrades, spiraling interest rates, and shocks in the stock market. Of course, both parties know this, and no one wants to increase pain during an economic slowdown. Instead, a looming default can be used as negotiating leverage on other priorities such as spending cuts. The question is: Will Congress play chicken with the debt limit amid the possibility of a global economic recession? The world will be carefully watching this fight play out over the coming months and hoping cooler heads prevail. One thing to watch out for is an effort by Democrats to pre-empt the battle by raising the debt limit during a lame-duck session before the new Congress is sworn in. Biden may be hoping that they can push the issue past the 2024 election. Markets would breathe a sigh of relief, but there are only a few weeks to pull it off and complicated legislative maneuvers to make it work.
No matter what the final count looks like, the new Congress will be focused on the Federal Reserve. Both parties have given Chairman Jay Powell a fair amount of deference during the pandemic. He was confirmed to a second term just last year. But if inflation stays high or the United States enters a recession, expect tougher hearings and sharper questions directed at the Fed. That may be one rare issue of bipartisan consensus in the new Congress.
Landon Derentz, senior director of the Global Energy Center and a former director for African and Middle Eastern affairs in the US Department of Energy said:
As Congress tilts right, hope remains that new House leadership may actually help to stimulate permitting reform that would further anchor the United States’ status as a major conventional and, increasingly, clean energy superpower. Admittedly, the energy and climate setting that the members of the 118th Congress will inherit in 2023 is bleak. Induced by a pernicious mix of post-pandemic economic pain and Russia’s war in Ukraine, short-term energy market volatility has the world on edge, frustrating an already dire outlook for global efforts to limit warming to 1.5 degrees Celsius. The magnitude of these challenges, however, may be cause for political optimism. After all, there is precedent for energy and climate compromise despite political division between the executive and legislative branches in Washington.
Nearly seven years ago, the Obama administration enabled Republicans to repeal the forty-year-old ban on exporting US crude oil in exchange for extensive renewable energy tax incentives. The conditions prompting progress in 2015 pale in comparison to the alarming outlook today, and the White House and Congress have motivation to act. Without permitting reform, Biden’s signature energy and climate legislation—the Inflation Reduction Act—will fail to achieve its full potential. The same web of environmental reviews constraining construction of oil and gas pipelines and associated infrastructure is hindering development of clean energy infrastructure critical to decarbonizing the world economy.
In this manner, Republicans may be a surprising key to climate progress. Driven by a renewed focus in Western capitals on reducing reliance on Russian and the Organization of the Petroleum Exporting Countries (OPEC) energy supply, Republicans are likely to see the merit in accelerating permitting reform that has previously been stopped by the progressive wing of the Democratic Party. Political posturing, of course, can frustrate reforms, especially as attention shifts to the 2024 presidential election, but the stakes are high for ensuring the United States retains its position as a reliable supplier to the global market in the face of Russian aggression. Accordingly, look for permitting reform to gain renewed attention in the next Congress—and potentially in the lame-duck session.
