Tax Cuts, Big Banks Face Scrutiny from House Democratic Majority

House Democrats skeptical of Wall Street and government deregulation are clawing back power in Washington with an agenda that includes oversight of banking and taxes.

Democrats’ ability to enact laws will be tempered by a Senate that remains in Republican hands after the Nov. 6 election and is wedded to President Donald Trump’s agenda. The split could mean setbacks for a trade deal with Canada and Mexico.

Big banks and possibly Trump’s lenders can expect more oversight should Rep. Maxine Waters (D-Calif.) take the helm of the House Financial Services Committee. Committee Democrats also may use their subpoena power to investigate Wells Fargo & Co. and Deutsche Bank AG . Click here to read more.

“The House Financial Services Committee will have an aggressive oversight agenda,” Isaac Boltansky, an analyst with Compass Point Research & Trading LLC, told Bloomberg Law. “We will likely see regulators and big bank executives before the committee a fair amount. Furthermore, we could see more scrutiny of the Trump organization’s banking relationships.”

House Ways and Means Committee Democrats are preparing for a series of hearings on the 2017 tax law. With Rep. Richard E. Neal (D-Mass.) likely to become the new chairman, Democrats are intent on proposing legislation to roll back parts of the law and provide middle-class tax relief. The hearings and votes would help set Democratic messaging for the 2020 elections. Click here to read more.

Other committee chairs are promising to protect Obamacare and lower prescription drug prices.

What is in jeopardy? The Democratic House takeover is likely to delay ratification of a trade deal with Canada and Mexico and force the Trump administration to make changes. Democrats could press Trump to improve the agreement’s labor obligations with a focus on the agreement’s enforcement mechanisms, medicines provisions, and how it addresses outsourcing.

Trump will have to decide whether to reach for bipartisan deals with House Democrats in areas such as infrastructure development, and he may even be willing to buck Republican congressional leadership to do it.

What will House Democrats prioritize? A robust data privacy law that would harmonize a patchwork of state privacy laws and reinstating Obama-era net neutrality rules, setting up a fight with Republicans.

With the election over, Attorney General Jeff Sessions may soon depart the Justice Department. But his friendlier approach to corporate crime enforcement is expected to outlast him.

States Reject Tax Ballot Measures

Voters across the country chose to keep taxes down, except in California. Ballot measures, including proposals to increase taxes on high earners, gasoline, and tobacco fell across the country. Washington State voters defeated a measure that would have put the first voter-approved fee on carbon emissions. Florida and North Carolina amended their constitutions to make it more difficult for lawmakers to enact future tax increases.

California was the outlier. Big companies in the San Francisco Bay area would see higher tax bills thanks to local ballot measures. Golden State voters also rejected a ballot measure that would have rolled back billions in gas tax hikes.

Michigan and Missouri are the latest states that will collect tax on marijuana sales, but legalization may not be a sure-fire path to revenue. Other states have left tax revenue on the table because of overly ambitious rollout plans, lengthy application processes, and unclear implementing legislation.

Los Angeles voters rejected a proposal that would have allowed the city to open the nation’s second public bank.

Voters in Idaho, Nebraska, and Utah approved ballot measures that will make more people eligible for Medicaid, marking an expansion of health coverage after years of opposition to Obamacare by Republican lawmakers.

Arizona’s biggest utility won its fight against new requirements backed by billionaire Democrat Tom Steyer to produce more energy from sources such as wind and solar after the state’s voters rejected a ballot measure. Nevada voters passed a nearly identical measure. Voters sank a handful of environmental ballot initiatives.

In Florida, shorelines got an extra layer of protection from oil and gas drilling as voters approved adding a drilling ban to the state constitution.