MAG Insights

Announcements from the MAG & Featured Articles

What's Up in Washington: As Congressional Retirement Announcements Continue, Election Season Kicks Off (MAG Quarterly- Volume Six, Issue Two)

Provenzano_Beth

By Beth Provenzano, Vice President, Public Affairs, MAG 

June 7, 2018

The mid-term elections are looming. It’s too early to tell how it will shake out, but one thing is clear.  The House will have a new Speaker.  

Election Update
Election season is underway, with primaries taking place from the beginning of May through the end of August. In the fall, voters around the country will go to the polls for the mid-term elections. Historically, the President’s party has lost, on average, 32 House seats and two Senate seats during mid-term elections. To make things more interesting in 2018, Democrats only need 24 House seats to take the majority and over 40 House Republicans, including Speaker Paul Ryan (R-WI) have announced they are retiring. No matter how many seats Democrats pick up in the House, there will be a new Speaker. This transition to a new Speaker, Republican or Democrat, will undoubtedly reshape the policy agenda as well as impact the relationship Congress has with the President on his priorities.

Many Washington insiders expect Democrats to make significant gains in the House of Representatives, although it is unclear just how strong the blue wave will be. Democrats face a tougher climb to the majority in the Senate. Senators are elected for six-year terms, with one third of the Senate up every two years. There are 35 Senate races in 2018; 33 in the class, along with two special elections in Mississippi and Minnesota due to resignations. Democrats hold 24 of those seats as well as two Independents who caucus with the Democrats, compared to the Republicans’ nine seats. Democrats need to maintain their current seats and pick up two more to gain control of the Senate.

Before we get to the general election, though, candidates within their own parties must face off in primaries. Primary season can be long and sometimes bruising, as candidates tend to move toward his/her respective party base to win the nomination prior to the general election.  These shifts in the primary can affect a candidate’s ability to triumph in the general election, which tends to draw a more moderate electorate, making races that were once a sure thing now a toss-up.  

As time winds down to the general election, policy priorities and legislative victories are harder to accomplish. There is limited House and Senate floor time, and the time that is available is used for “must pass” legislation, such as appropriations and reauthorization legislation to keep the government and programs functioning. This doesn’t mean all hope is lost to make an impact on lawmakers, however. The months leading up to an election, and subsequent new Congress, are ripe for laying the educational foundation on new and emerging issues that we’d like to see action on in 2019. It is critical that Members don’t first hear about an issue in the heat of battle. Consistent messaging and delivery of information is critical in the long-term goals of the MAG and our merchant members. We will use this time to continue educating lawmakers and regulators about payments issues and merchants’ role in the ecosystem. 

Federal Reserve Activity
Meanwhile, officials at the Federal Reserve have been busy with their faster and secure efforts.  The Governance Framework Formation Team (GFFT), a group of payments industry stakeholders that was established by the former Faster Payments Task Force, drafted a proposed framework for a faster payments governance organization to be called the U.S. Faster Payments Council. The GFFT is seeking feedback to the proposed framework governance structure and fees by June 22, 2018. The MAG is drafting comments in response to the proposal.

In March, the Fed disbanded the Secure Payments Task Force and will focus on a new study to measure fraud and associated costs to the U.S. payments system as well as identify fraud’s causes and contributing factors. The Fed contracted with Boston Consulting Group to conduct the study, and BCG began outreach this spring with merchants and other stakeholders to get their perspective. The MAG will participate in this study to ensure merchants’ voices are represented on this important topic.