House speaker election highlights Republican divisions

What’s happened?

On January 3rd the Republican speaker of the House of Representatives (the lower house), Mike Johnson, was re-elected to his position for the new two-year congressional term, which also began that day. Although Mr Johnson won re-election in the first voting round, his victory was exceedingly narrow (he secured no more than the minimum 218 votes required) and followed initial opposition by a handful of Republican lawmakers. The episode highlights significant obstacles that the incoming Republican president, Donald Trump, who supported Mr Johnson, will face in passing his legislative priorities, despite Republicans controlling both houses of Congress.

Why does it matter?

Mr Johnson’s re-election was far from straightforward, revealing lingering divisions among Republican lawmakers. This will be a liability for Mr Trump’s legislative agenda given his party’s extremely thin congressional majorities, particularly in the House. Mr Johnson required near-unanimous support from his party, with only one vote to spare; Democrats unanimously opposed his re-election, backing their own House party leader, Hakeem Jeffries, for the post instead. Although Mr Johnson ultimately managed to avoid the multiple rounds of voting that characterised his party’s contentious speaker elections in the previous Congress, his path to victory had several stumbling blocks. Three Republicans initially voted against him, with two finally reversing their stance after a pause in voting and side-conversations with Mr Johnson. Separately, a group of 11 ultra-conservative Republicans stated that they supported Mr Johnson only to avoid delaying Congress’s certification of the presidential election results scheduled for January 6th, emphasising their reservations with his holding the post.

Mr Johnson’s difficulties securing support suggest that he will have only limited control over House Republicans, especially given that just nine Republican votes are needed to force a motion to oust him from the speakership under current House rules. The episode also signals the limitations of Mr Trump’s influence over the Republican Party. The incoming president had backed Mr Johnson, stressing party unity ahead of the vote. That several Republicans still risked delaying Mr Johnson’s election and voiced opposition to him, with one member voting against him until the very end, implies that Mr Trump will not be able to rely on the Republican-controlled Congress to simply rubber stamp his priorities. Republicans similarly broke with Mr Trump in late December to pass a bipartisan plan to avoid a government shutdown.

The recent disagreements among Republicans reinforce our assumption that Mr Trump will struggle to pass the most controversial aspects of his agenda in Congress. We continue to believe that an extension to Mr Trump’s 2017 tax cuts is most likely to pass this year, given that they expire by end-2025 and enjoy wide Republican support. However, efforts to bundle this with additional provisions could jeopardise the bill’s trajectory, especially if Mr Trump refuses to compromise in other areas. His plans for sweeping immigration restrictions will face opposition, not least from fiscal conservatives nervous about the related need for higher government spending. Other measures putting pressure on the deficit, such as new tax exemptions on tips and an increase in state and local tax deductions, will encounter similar obstacles. Mr Trump has said that he will use steep tariff increases to pay for these reforms, but his plans are still unclear and will unnerve establishment Republicans. His recent call to eliminate the debt ceiling, a long-standing red line for the party, will remain a non-starter. Plans to roll back the previous Democratic administration’s green energy investments, which have benefited Republican districts, will also face pushback.

What next?

The new Congress certified Mr Trump’s presidential election victory on January 6th without any complications. Republican lawmakers now have to agree on how and when to pass Mr Trump’s policy priorities. Mr Trump has stated his preference for a large single bill to be passed through Congress’s “reconciliation” process; this would allow him to sidestep opposition by Democrats if Republicans leverage their simple majorities and vote in unison. Mr Johnson and hardliners in the House have endorsed this strategy. However, Republicans in the Senate (the upper house), including the party’s new Senate majority leader, John Thune, believe that a two-bill approach is more feasible.

Other challenges will include Senate procedural restrictions, which limit reconciliation bills to narrow budget provisions; Mr Thune says that he will respect these requirements, setting up a potential clash with Mr Trump. Dwindling congressional majorities will present additional complications for Republicans this year, at least until seats vacated by a handful of Mr Trump’s cabinet picks are filled.

The analysis and forecasts presented in this article are drawn from EIU’s Country Analysis service. This comprehensive solution offers essential insights into the political and economic outlook of nearly 200 countries, empowering businesses to manage risks and develop effective strategies.