Newly elected House Speaker Mike Johnson, R-La., has scant connection with the public finance world, but his election after three chaotic weeks in which the House’s top post was vacant opens the possibility that Congress may be able to avert a government shutdown looming next month, an important goal for the municipal market.
“He’s a bit of an unknown,” said Brett Bolton, vice president of federal legislative and regulatory policy at the Bond Dealers of America. “We are going to be looking at how the negotiations go with the budget and the reauthorizations that happen later this year to learn in real time what his priorities will be.”
House Republicans unanimously elected Johnson as the 56th House Speaker on Wednesday, 22 days after ousting former Speaker Kevin McCarthy, R-Calif., who angered the party’s far-right contingent for, among other things, passing a short-term measure to keep the government funded through Nov. 17.
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Elected to Congress in 2016, the Louisiana congressman is known as a fiscal conservative with a focus on social issues and as a close ally of former President Donald Trump who contested the results of the 2020 election. Johnson, an attorney by background, led an amicus brief backing a Texas lawsuit that sought to overturn vote results in Georgia, Michigan, Pennsylvania, and Wisconsin.
Johnson, 51, has some state-level experience, having served in the Louisiana Legislature 2015 to 2017. Prior to that he worked as a lawyer, conservative radio talk show host and columnist and a media spokesperson for the religious liberty group Alliance Defending Freedom.
In the House, he sits on the House Judiciary Committee, where he chairs the Subcommittee on Constitution and Limited Government, and on the Armed Services Committee. He is in several caucuses, including the Republican Study Committee, the Natural Gas Caucus and Historically Black Colleges and Universities Caucus.
Recent measures he sponsored that relate to public finance range from seeking to overturn the EPA’s revised Waters of the United States rule and the Department of Labor rule relating to environmental, social and governance investments — which was President Biden’s first veto — to rescinding funding for the Internal Revenue Service, prohibiting federal agencies from banning gas-burning stoves and a bill to claw back unobligated money from the American Rescue Plan Act of 2021.
His father was a Shreveport firefighter who was disabled in the line of a duty.
His home state of Louisiana is a large state with plenty of urban and rural areas that receive federal support and has significant conduit participation, said Emily Brock, federal liaison for the Government Finance Officers Association.
While Johnson was not on any tax-writing committees, the Judiciary Committee oversees intergovernmental tax and interstate tax issues, Brock said.
For the muni market, the most immediate impact of his election will be getting the ball moving on fiscal 2024 government funding, Brock said.
“This steps the funding conversations up into high gear, and that’s of interest to municipal governments because credit implications roll off of that,” Brock said. “We’re going to be focused on all of the major appropriation bills to see if there are any places to rally the House Municipal Finance Caucus to include muni agenda items.”
The farm bill, which expired on Sept. 30, offers the potential for tax items important to rural communities such as lifting the cap on bank-qualified debt, she said.
With the looming Nov. 17 deadline for government to run out of money, Johnson has proposed an ambitious legislative calendar that includes trying to pass 2024 appropriation bills quickly.
On Wednesday, the chamber began consideration of the Energy-Water bill. Johnson has proposed taking up the Transportation and Housing and Urban Development bill next week as well as appropriations for the legislative branch and Interior-Environment.
In an Oct. 23 “Dear Colleague” letter, Johnson said the only way to “negotiate from a position of strength” is to have passed all 12 of the appropriations measures. The House so far has passed four.
“I am confident we can work together to accomplish that objective quickly, in a manner that delivers on our principled commitments to rein in wasteful spending and put our country back on a path to fiscal responsibility,” he said.
Johnson also said he would support a stopgap funding measure through January or next April “to ensure the Senate cannot jam the House with a Christmas omnibus.”
Under his calendar, the House in October and November will begin negotiations on the Federal Aviation Administration reauthorization bill, which is currently operating under a three-month extension that will expire on Dec. 31. In December he wants to take up the National Defense Authorization Act and the farm bill and early next year begin to build consensus on fiscal 2025 budget levels.
“It’s an aggressive calendar,” Bolton said. “It will be interesting to see how the House proceeds and how they negotiate with the president and the Senate,” he said. “That’s where we will really learn what will happen in the short term.”
Issuer group the National Association of Counties said the key is avoiding a government shutdown.
”As always, we look forward to working with our bipartisan congressional partners, with a particular focus in the coming days towards avoiding government closure and ensuring a continuous, reliable federal partnership,” said NACo’s chief government affairs officer Mark Ritacco in an email.
In a tweet Wednesday, the National League of Cities congratulated Johnson. “We look forward to working with you to build on past successes and pursue bipartisan solutions to strengthen cities, towns and villages across the country,” the NLC said.