GOP Senate Could Mean Crawling Start for a Clinton Presidency

(Bloomberg) -- Forget a honeymoon. If Hillary Clinton wins the presidency, her administration could start with a slog unless Democrats win the Senate.

That would leave her to negotiate with Republicans to staff her administration. And the biggest pinch could be felt in regulatory agencies usually far from the spotlight. 

Some agencies that work with key industries could end up without enough confirmed chiefs or commissioners to function at full capacity. Already, the Export-Import Bank can’t approve loans above $10 million. The Federal Communications Commission could see some initiatives hobbled and consideration of mergers slowed. And the Securities and Exchange Commission could stall on enforcement questions if SEC Chair Mary Jo White departs shortly after Clinton takes office.

Republicans won’t outright block most executive branch nominees, says Sarah Binder, a senior fellow at the Brookings Institution, but they could pick certain targets.

“They are going to go after the ones they think they can get away with,” she said. And when they pick fights, “the base will be cheering them on.”

It would be rough for Clinton with Republicans in control, but a second scenario -- Democrats take the Senate but only with the slimmest of margins -- wouldn’t be much easier. Conservative Democrats in states friendly to Donald Trump won’t rubber-stamp liberal Clinton appointees either.

Still, if Republicans take the Senate, it would change Clinton’s transition planning significantly, raising the odds that Clinton would ask many of President Barack Obama’s appointees to stay on indefinitely.

Republican hopes to keep the Senate have improved over the past two weeks after FBI Director James Comey’s letter to Congress about a revived probe of the Clinton e-mail case.

Several Republicans have begun to suggest they may even blockade her Supreme Court appointments. There could be some high-profile skirmishes over particular Cabinet picks, and she could struggle with the impacts of vacancies in less prominent jobs across the administration.

Pen and Phone

If Republican leader Mitch McConnell is running the Senate next year, much of Clinton’s legislative platform would be dead on arrival. Many Republicans have campaigned explicitly on checking her regulatory agenda -- and vetting nominations is the obvious tool.

“It’s critically important, and increasingly so in recent years as President Obama has made popular the phrase ‘the pen and the phone,’ meaning you don’t have to pass legislation any more,” said Josh Holmes, a former chief of staff and campaign manager for McConnell and president of Cavalry LLC, a consulting firm.

Nobody is explicitly threatening any kind of blockade yet. But confirmations of Obama’s nominees slowed on McConnell’s watch, and there have been consequences at agencies like the Export-Import Bank, where even a McConnell-blessed nominee has been stuck for months awaiting confirmation, denying the bank’s board a quorum and crippling its ability to finance big export deals.

Overall, 161 of Obama’s executive nominations are still pending before the Senate -- not including U.S. attorneys, ambassadors or marshals -- and have been waiting on average 376 days for confirmation, according to a White House official.

And when Republicans were in the minority, McConnell helped lead an effort to oppose any nominee for the Consumer Financial Protection Bureau unless Democrats agreed to changes in the law, including giving Congress control over its purse strings.

‘Very Slow’

Dan Holler, spokesman for conservative group Heritage Action, said Republicans should press nominees for promises and threaten to slow-walk other nominees if they aren’t kept.

"You could see and ultimately should see a very slow confirmation process," he said.

Holmes said additional outright blockades like at the CFPB are unlikely, with Republicans more likely to focus on vigorous oversight and extractions of promises on key issues.

McConnell also may be wary of setting precedents that could be used against Republicans if they recapture the White House in 2020.

"There is a sense of what goes around, comes around," said Rohit Kumar, a former policy director for McConnell and now a principal at PricewaterhouseCoopers. 

Even so, Clinton would likely find her efforts to staff her administration slow-going. Some of the agencies that could be most affected by added Republican scrutiny include:

Department of Labor 

Labor might be the toughest Cabinet spot for Clinton to fill under a GOP Senate. Obama’s labor secretary, Thomas Perez, is said to be in line for a higher profile spot in a Clinton administration, although he would face a tough fight for any post, since he didn’t receive a single GOP vote at his 2013 Senate confirmation. Getting his replacement at Labor confirmed in a gridlocked Congress would also be tricky as Republicans have opposed what they see as an increasingly overreaching department under Perez and will likely seek a new labor secretary who would curb several controversial regulations finalized this year.

The department has already fulfilled most of its big-ticket regulatory objectives in the last few years, however, so having an acting labor secretary might not hamper Clinton’s agenda significantly.

Federal Communications Commission 

The FCC could endure months of deadlock following the election. Democrat Jessica Rosenworcel’s term has expired, and she must leave office when Congress adjourns unless confirmed by the Senate for a new term before then. Her departure would leave the agency, riven by partisan rivalry, deadlocked with a 2-to-2 split under Chairman Tom Wheeler, also a Democrat.

Wheeler’s term extends to 2018, and although FCC leaders typically leave when a new president arrives, he may stay. Wheeler said on Oct. 27 he’d abide by the wishes of the new administration.

A moribund FCC couldn’t move forward on initiatives such as a proposal, opposed by the cable industry, to open the way for new devices to compete with set-top boxes. New steps to expand broadband could founder. If a deadlock persists long enough, reviews of proposed mergers could be slowed.

Securities and Exchange Commission

The SEC is among agencies that could run into problems if the Senate won’t confirm senior officials. Wall Street’s top regulator currently has a chairman and two commissioners, with two commissioner seats vacant. If SEC Chair Mary Jo White leaves at the same time as Obama, the agency will be left with one Republican and one Democrat who often disagree on policy and enforcement cases.

Nominees for the two open slots at the SEC have languished for months, with Democratic senators blocking the candidates over concerns that they won’t support a rule that would force public companies to disclose more information about their political spending. 

Commodity Futures Trading Commission

The five-member CFTC is another financial regulator at risk of paralysis if nominees aren’t confirmed. Like the SEC, it now has a chairman and just two commissioners. The Senate Agriculture Committee did approve two Obama nominees in September, but they haven’t received a full Senate vote. CFTC Chairman Tim Massad has been coy about his plans for the end of the Obama administration. Should Massad leave, the main U.S. regulator of derivatives valued in trillions of dollars could be gridlocked.

Federal Energy Regulatory Commission

Long delays in filling vacancies at the five-member FERC could thwart some of its work regulating power lines and pipelines that cross state borders. The independent agency is down to just three commissioners, all Democrats, limiting its ability to make difficult decisions or tackle some subjects altogether.

FERC rules require at least three members to form a quorum -- so any recusals or prolonged absences could tip the commission below that threshold. For instance, Commissioner Colette Honorable generally steps away from issues that she was involved with during her tenure at the Arkansas Public Service Commission.

The next clear-cut instance where a recusal could affect FERC’s business could come in the spring, when the commission might decide whether to cut rates for a central U.S. transmission system managed by Midcontinent Independent System Operator Inc. When a similar matter came before FERC in September, Honorable recused herself. The commission’s workaround -- having individual members vote "present" instead of a formal recusal -- isn’t ideal, but it solves the quorum problem as long as the remaining two members don’t split, said Christi Tezak, a managing director at Washington-based research firm ClearView Energy Partners LLC.

Federal Trade Commission

Two seats at the FTC are now vacant and chairwoman Edith Ramirez is serving beyond her term. She had been renominated by Obama, but the Senate didn’t confirm her. The FTC says she can stay on past Jan. 20 until a new chairman is in place, but officials won’t comment on her plans. If she does leave early, the FTC commissioners can still vote on matters, but there is a higher risk of a split vote.

A newly elected president has never had the opportunity to appoint three FTC commissioners, according to agency spokesman Justin Cole. But it wouldn’t be easy for Clinton to get three nominations through a Republican Senate.

National Labor Relations Board

Republicans have long battled over Democratic aims for the NLRB, an independent agency charged with enforcing U.S. labor laws relating to collective bargaining and unfair labor practices. The NLRB has a five-member Board, with two vacant seats. One member, Republican Philip Miscimarra, has a term expiring Dec. 16, 2017. If no members are confirmed by the Senate, Miscimarra’s departure would take the board to two members and it would lack a quorum to issue final agency decisions, although regional directors supervising field offices would retain authority to conduct most other operations.

--With assistance from Benjamin Penn Jennifer A. Dlouhy Todd Shields Mike Dorning David McLaughlin Ben Bain , Lawrence E. Dubé, Alexei Alexis and Elizabeth Dexheimer To contact the reporter on this story: Steven T. Dennis in Washington at sdennis17@bloomberg.net. To contact the editor responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net.