Op-Ed on Donald Trump in Fortune

See the Op-Ed from Mark Alderman and Howard Schweitzer in which they comment on Donald Trump’s shifting policy positions.

“Donald Trump’s Incoherent Positions Are Part of His Master Plan”

Find the Op-Ed here.

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The Daily Caller Op-Ed

See the blog post from Cozen O’Connor Public Strategies’ Howard Schweitzer “Sealing The Deal: Imagining A Trump Transition,” in the Daily Caller here.


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What Hillary Could Learn from Jimmy Carter [The Washington Examiner]

Mark Alderman, chairman of Cozen O’Connor Public Strategies, discusses Hillary’s road to the Democratic National Convention and lessons of note from the bitterly fought 1980 Democratic primary in The Washington Examiner. Mark explains that the 1980 Democratic primary created a schism within the Democratic Party that endured throughout the Ford and Carter administrations. Barring any, “calamity of unforeseeable dimensions,” Hillary is the likely nominee and will need to unify the Democratic Party for the general election. Mark offers three key considerations for Hillary to galvanize Sanders supporters. In sum, he suggests that Hillary make efforts to demonstrate respect for Senator Sanders, adjust her rhetoric, address her record for better or for worse and select a running mate that appeals to Sanders supporters.

To read the full article, click here.

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Medical Marijuana to be Legal in Pennsylvania

The Pennsylvania House of Representatives on April 13, 2016 passed Senate Bill 3, legalizing medical marijuana in the commonwealth of Pennsylvania. The Pennsylvania Senate had approved the bill earlier in the week.

In what will be the final stretch of a two-year legislative roller coaster, the governor announced he will sign the legislation at 1:00 p.m. on Sunday, April 17.

The bill would allow medical marijuana to be used to treat 17 conditions, including seizures, PTSD, chronic pain, HIV/AIDs, glaucoma, Crohn’s disease, multiple sclerosis, autism and additional neurological and gastrointestinal conditions. Pennsylvania would join 23 states and the District of Columbia in offering some form of legal medical marijuana.

Medical marijuana would be regulated by the Pennsylvania Department of Health, but a separate board within the department would devise regulations and be responsible for things such as adjusting the list of conditions that can be treated with medical marijuana, and adjusting consumption methods.

Medical marijuana could be dispensed in forms including pills, creams, oils, liquids and forms that can be vaporized, but smoking of medical marijuana isn’t allowed.

The state would initially license up to 25 growers/processors and 50 dispensaries, with each dispensary allowed to have up to three locations. Medical marijuana would be taxed 5 percent at the wholesale level, and there would be a program to make sure it is affordable for the poor.

These grower/processor and dispensary registrations will be allocated in no less than three to-be-determined regions of the commonwealth based on regional population, the number of patients suffering from serious medical conditions, the types of serious medical conditions, access to public transportation, and any other factor the department deems relevant.

Dispensaries may apply for exceptions to a provision that prevents them from operating within 1,000 feet of a school, with the exception intended to overcome the fact a buffer of that size might not be possible in densely developed urban areas such as Philadelphia.

Medical marijuana will have to be grown within indoor, highly secure facilities.

Patients, after a recommendation from their doctor, would need state-issued cards, as would their caregivers.

Doctors and others in the “prescribing” and dispensing process will have to undergo training.

Full text of the final bill is available here.

Although Pennsylvania will be joining 23 other states to legalize medical marijuana, marijuana is still classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and as such it remains a federal crime to grow, sell and/or use marijuana. Any content contained herein is not intended to provide legal advice to assist with violation of any state or federal law. Although Senate Bill 3 provides for the legalization of medical marijuana in the commonwealth of Pennsylvania, one should obtain legal advice with respect to any such compliance issues.

Please note that this was co-authored by Joe Bedwick, co-chair of Cozen O’Connor’s Cannabis Industry Team.

Posted in Cannabis, health

The Role of Cyber Insurance in Risk Management

The House Homeland Security Committee’s Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies recently held a hearing on The Role of Cyber Insurance in Risk Management. The witnesses were Matthew McCabe, a Senior Advisory Specialist for cyber insurance at Marsh FINPRO, Adam Hamm, North Dakota Insurance Commissioner, Daniel Nutkis, CEO at Health Information Trust Alliance, and Tom Finan, CSO at Ark Network Security Solutions. The goal of the hearing was to evaluate the current state of the cyber insurance market and its potential for growth, as well as examining ways to promote the adoption of cyber best practices and the use of cyber insurance to more effectively manage risk.

In his opening statement, Subcommittee Chairman Rep. John Ratcliffe (R-TX) outlined the goals of the hearing and the importance of cybersecurity in an increasingly interconnected world. The potential for cyber insurance to encourage companies to improve risk management has been an important topic recently, which Mr. Ratcliffe underscored by pointing to a string of high profile breaches including Home Depot, Target, and JPMorgan Chase, which impacted everyday Americans. While noting that the cyber insurance market is still in its infancy, he conveyed optimism for the market’s future potential. Mr. Ratcliffe believes that cyber insurance may be one solution to improving the security of companies that store data online. In a premise that was reiterated throughout the hearing, he noted how the process of considering, applying for, and maintaining a cyber insurance policy forces companies to examine their own cyber security weaknesses and vulnerabilities. He also mentioned the work of the Department of Homeland Security’s Cyber Incident Data and Analysis Working Group, which is facilitating discussions with key stakeholders on mitigating risks, examining the potential value of a cyber incident data repository, developing new cyber risk scenarios and models, and seeking to help organizations to evaluate and improve cyber risk management. Ranking Member Rep. Cedric Richmond (D-LA) echoed these sentiments and raised the question of what a cyber insurance policy would look like in certain scenarios, such as if a company was already hacked, malware was dormant, but it still wanted to mitigate its subsequent risk. This brought up some of the challenges that are unique to cyber insurance compared to other types, such as homeowners insurance.

In the witnesses’ opening statements, they discussed the state of the cyber insurance market from an industry and regulatory perspective, as well as ways that it might grow. Mr. McCabe discussed cyber insurance as a product, how it helps improve resiliency against threats, and the use of data analysis to support and improve the industry. He also discussed Marsh’s role in helping clients assess their own risk exposure and helping them deal with the financial impact of a cyber incident.  He argued for the importance of cybersecurity and risk management for the private sector, as well as to protect U.S. critical infrastructure that is increasingly connected to the internet and therefore increasingly vulnerable to cyber attacks.

Mr. Hamm’s opening statement focused on cyber insurance from a regulatory perspective, and how the system compares to other types of insurance. He reiterated the evolving nature of cyber threats, especially as society becomes increasingly reliant on electronic communication and businesses collect and store more “granular” information about their customers. He pointed out that contrary to what many businesses may believe, commercial insurance policies do not cover many cyber risks, which require a cybersecurity policy. Because cyber insurance is so new, he urged caution in using the term “cybersecurity policy,” which can mean different things depending on the specifics for the purchaser and insurer. He then outlined the structure and benefits of the state-based insurance regulation system. Mr. Hamm stated that though cyber insurance policies are relatively new, the policies are scrutinized just as rigorously as other insurance policies.

Mr. Nutkis discussed the role of cybersecurity in risk management and the work done by HITRUST and the health care industry to enhance this role. He underlined the importance of cyber insurance in increasing the health care industry’s cyber awareness, improving its cyber preparedness, and strengthening its risk management posture. He then detailed the work HITRUST does to provide a risk-based information privacy and security control framework, compliance assessment and reporting for regulatory requirements, and best practices frameworks specifically for the health care industry, among other services.

The final witness, Mr. Finan, described the role that DHS has played in identifying and overcoming obstacles to a more robust cybersecurity insurance market, as well as the role of the private-public engagement model, especially as it relates to small and mid-sized businesses. Like the other witnesses, he underlined the importance of cyber insurance in cyber risk management, because it encourages critical infrastructure owners to better manage their cyber risk in return for better and cheaper policies. He then outlined some of the major obstacles preventing insurers from providing more cyber insurance coverage, including the ongoing lack of actuarial data, the absence of common cybersecurity standards, the lack of understanding about critical infrastructure dependencies and interdependencies, and the failure of businesses to incorporate cyber risk into their traditional enterprise risk management programs.

Many of the members’ questions focused on the link between cyber insurance and improved risk management and cyber security measures, the details of a potential data repository, and the role of government in the growing cyber insurance market. Rep. Ratcliffe asked Mr. Nutkis if they had found that applying for cyber insurance caused organizations to bolster their security, to which he replied that this is usually the case, since making good decisions on cyber controls and lowering residual risk result in lower premiums.

Rep. Richmond asked witnesses about the impact of the “risk culture” and whether cyber insurance changes the conversation on cyber risk, which is usually low on businesses’ list of priorities. Mr. Finan replied that cyber risk is usually relegated to IT departments because it isn’t understood in business terms. Insurance, however, could play a bridging role because executives understand how it fits into an enterprise risk management framework.

Members asked about the specifics of cyber insurance policies and what they look like. Mr. McCabe discussed how different companies’ policies would differ based on factors such as sector, revenue, and current risk management practices, meaning that they could be tailored to companies of all sizes. Mr. Hamm talked about the importance of gathering and sharing data in order to better understand cyber risk and come up with better products that can respond to the evolving nature of cyber threats. The question that followed was who should develop the standards and maintain and protect the data repository. Mr. Hamm did not have a specific answer, saying that his only concern was that the data be useful and available to state insurance commissioners. When prompted by Rep. Scott Perry (R-PA), however, he did concede that he didn’t wish to see another federal program.

This concern came up with other members as well, as they and the witnesses talked about the role of the federal government in cybersecurity and the cyber insurance market. Rep. Curtis Clawson (R-FL) said he wanted to see the market sort things out on its own, since the government would take an overly-simplified approach that could hamper the market in its early stages. While the witnesses generally agreed that the federal government shouldn’t be completely involved in the market, they agreed on the importance of a limited role, such as private-public partnerships and other initiatives. One witness discussed the “ghost of Edward Snowden,” which has led to discomfort with the federal government housing a potential data repository, while also recognizing it has an important role to play.

This hearing underscored the constantly evolving nature of cyber threats and the potentially devastating impact of cyber breaches, and thus the importance of addressing and better understanding cybersecurity. Cyber insurance is just one of many tools an organization can use to address these threats and manage its risk, and the witness testimonies indicate that demand will only continue to increase.

Posted in Cyber, cybersecurity, Washington, D.C.

Paul Ryan’s Plan to Expand Opportunities

One of the ways in which Speaker Ryan’s agenda has differed from conventional Republican legislative priorities is in his focus on fighting poverty and expanding opportunity. He believes that conservative policies can help the poor and middle class, and he sees this platform as an important way to broaden the appeal of the Republican Party. Mr. Ryan also recognizes the balance between seeking to reform agencies such as the Consumer Financial Protection Bureau (CFPB) and pursuing reform in areas important to consumers such as student loan debt, mortgage lending, and “the disappearing middle class.”

In July 2014, then-Chairman Ryan and his staff released a document entitled “Expanding Opportunity in America,” in which they lay out a summary of legislative initiatives intended to expand income opportunities, especially for the poor.  Although a main tenet of the paper is to encourage work and lessen the size and scope federal benefits programs such as the Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program, there is also a focus on reforming current student loan and higher education policies.  In this paper, Mr. Ryan targets federal aid programs as the reason for high tuition and massive student loan debt.  Under initiatives set forth in the document, the federal government would reduce its federal student aid programs so that it is no longer “supporting failing schools or stoking tuition inflation.”  Student loans and the cost of higher education have been salient topics in the presidential campaigns, and the issue has resonated with young voters who support Senator Sanders. It is likely that Speaker Ryan will help move education policy discussions in this reform direction.

During his time as House Ways and Means Committee Chairman, Mr. Ryan held numerous hearings in which he highlighted his anti-poverty proposals.  However, Speaker Ryan still has some reputational damage to repair after he made some public statements about individuals receiving public assistance that were seen by anti-poverty advocates as less than sympathetic.  Mr. Ryan has continued to push for the reforms he laid out in “Expanding Opportunity in America,” and may use discussions around student loan debt and the high cost of college to lay the foundation for some of those policy initiatives.  It is clear that any public assistance related legislation that he will allow to come to the House floor will need to follow the path and theme set forth in Mr. Ryan’s anti-poverty plans.  Common themes like encouraging work programs for those receiving assistance and supporting private charities to work with communities will need to be at the forefront of the discussion to be included in Speaker Ryan’s House floor agenda.

In January, Speaker Ryan moderated the Kemp Forum on Expanding Opportunity in South Carolina along with South Carolina Senator Tim Scott. The forum gathered Republican presidential candidates (notably, missing from the group were Donald Trump and Ted Cruz) to discuss ways to address poverty in America. The policy-heavy discussion featured varying approaches by different candidates, but repeatedly came back to the failure of existing federal programs to address the root causes of poverty. Among the ideas discussed were improving treatment of nonviolent drug offenders, expanding federal Pell grant access, giving states more control over poverty and welfare programs, and increasing work incentives. Mr. Ryan and many in the GOP want to challenge the notion that combatting poverty is only a Democratic issue.

Most recently, Speaker Ryan met with members of the Congressional Black Caucus in early February as he considers adopting a broad anti-poverty plan supported by black Democrats in the Capitol. The plan includes shifting more federal money to parts of the country with persistent and high rates of poverty. With the support of some on the Republican side, Mr. Ryan says he will discuss targeted poverty funding with Democratic Rep. James Clyburn, an influential CBC member. During his time in Congress, Mr. Ryan has met with CBC members to try to find common ground on poverty alleviation policies. While there has generally been substantive disagreements, targeted funding, especially the 10-20-30 strategy in which at least 10 percent of federal funding for poverty programs goes to districts in which 20 percent of the population has lives below the poverty line for at least 30 years, has been an area of agreement. Presidential politics will make sweeping anti-poverty reform difficult, but Mr. Ryan has shown a significant openness to exploring areas of possible reform.

Speaker Ryan’s strategy of addressing poverty and his willingness to find common ground across the political spectrum fit into his broader vision of a more inclusive Republican Party. It remains to be seen how much ideological purity the GOP conservative wing will demand, especially in an election year, and how a highly partisan electorate will respond. But it seems clear that Ryan is looking much farther ahead to well-being of the party and his own political ambitions.

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Mark Alderman on Fox Business

Watch the Chairman of Cozen O’Connor Public Strategies, Mark Alderman, talk about the two Democratic front-runners for the Presidential nomination.

Should Clinton be concerned about an indictment? What does Sanders have that Clinton doesn’t? See what Mark has to say here.

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Join Our Next Presidential Prognostication Call – March 17!

2016 Presidential Prognostications and Insights

Mark Alderman, Howard Schweitzer, and Blake Rutherford host our next 2016 Presidential Prognostications and Insights call and will discuss the March 15 primaries and the state of the election, as well as some key senate races.

Mark, Howard and Blake will be discussing the latest on the presidential race, and will bring together pundits and advocates to update our clients on its ever evolving dynamics.

Our next call will be held on Thursday March 17, at 12:00 (noon) ET. To participate please dial in toll-free: 1-800-769-9015

Future Calls:

April 25

May 10

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Global Tax Environment in 2016 and Implications for International Tax Reform

International corporate tax reform has become a salient issue recently due in part to numerous high-profile corporate inversions, most recently the merger between Johnson Controls and Ireland-based Tyco International. Inversions occur when a corporation relocates to a lower-tax nation by having a foreign company buy its current operations while retaining its material operations in the country of origin (in this case, the U.S.). While just one of many challenges related to the U.S. corporate tax code, inversions have triggered widespread pressure to reform the international tax system. Broad tax reform is high on Speaker Paul Ryan’s (R-WI) agenda, and has been since his time on the House Ways and Means Committee. Though there is bipartisan agreement that an international tax overhaul is important, last year’s negotiations failed to produce any agreements, and there is little indication that this year will be any different. Election-year politics will make comprehensive reform even more difficult, since politicians on both sides of the aisle will be reluctant to make compromises that could hurt their party at the polls. However, the House Ways and Means Tax Policy Subcommittee Chairman Charles Boustany (R-LA) said last week that House Republicans are trying to produce a draft proposal on international tax reform by the end of March, and many lawmakers are eager to do something.

The House Ways and Means Committee held a hearing on Wednesday, February 24, called Global Tax Environment in 2016 and Implications for International Tax Reform that looked at the international repercussions of the U.S. corporate tax system and some of the implications for the American economy and opportunity. Testifying as witnesses were: Michelle Hanlon, Professor of Accounting at the MIT Sloan School of Business, Raymond Wiacek, a Partner at Jones Day Law Firm working on international tax issues, Itai Grinberg, an Associate Professor of Law at the Georgetown University Law Center, and Edward Kleinbard, a Law Professor at the USC Gould School of Law and a Fellow at the Century Foundation.

Chairman Kevin Brady (R-TX) opened with a statement setting the stage for the hearing: Americans are increasingly seeing companies move overseas, and the Committee wants to better understand why and what can be done. He introduced a few elements of the international tax environment that would be discussed at length during the hearing. The first is the OECD’s Base Erosion and Profit Sharing (BEPS) Action Plan, which was agreed upon by G20 countries in 2013 to address perceived flaws in international tax rules; BEPS refers specifically to tax planning strategies that exploit differences between countries’ tax rules to move profits to location with little or no economic activity in order to avoid paying corporate taxes. The second is the European Commission’s “State aid” investigations, being held to assess whether certain tax rulings by Member States constitute illegal State aid. In his remarks, Brady called for a bipartisan effort for pro-growth tax reform. Ranking Member Sander Levin (D-MI), in his opening statement, called for a long-term, full, bipartisan overhaul, while noting that smaller pieces such as inversions shouldn’t be overlooked in the meantime.
In their statements, most of the witnesses agreed that the fact that the U.S. corporate tax rate is one of the highest in the world and is a global tax system puts it out of step with the rest of the world, and everyone agreed that the corporate rate needs to be lowered to remain competitive in an increasingly international corporate environment. Hanlon made the point, which was echoed by others, that inversions, which have garnered so much media attention in the last couple of years, are only a symptom of our deeply flawed tax system and one small piece of the larger problem. It was later noted that acquisitions continue to occur that have nothing to do with inversions but nevertheless result in companies leaving the U.S. Wiacek discussed how the fate of multinational corporations affects the health of the entire American economy. When companies move overseas, he said, the surrounding economies that support those companies also suffer. Many of the Committee members returned to this point during questioning and saw it as a way to impress upon the public the importance of international tax reform. The only somewhat dissenting opinion was by Kleinbard, who cautioned against confusing world-wide macro-economic trends with tax policy, saying that it is more important to think about competitiveness from the perspective of the U.S. business environment rather than from solely an international tax perspective.

Much of the questioning centered on trying to better understand the underlying reasons why companies, especially multinational corporations, are relocating overseas and inverting. Wiacek pointed out that tax policy is not the only factor in competition, but that it does ultimately have an important impact on a company’s bottom line. Members also tried to get a sense of the international environment and what BEPS and EC state aid investigations mean for American tax policy. One impact is that the global environment makes reform in the U.S. more crucial and more pressing; as other countries move ahead with developing competitive tax systems, the United States will be left behind while an increasing number of corporations move overseas. Another possible outcome mentioned was that as part of the state aid investigations, U.S. companies could become pawns in European tax disputes between high-tax countries such as France and low-tax countries such as Luxembourg.

When discussing their views on how to reform the system, all of the witnesses agreed that the corporate tax rate needs to be lowered. All except Kleinbard believed that the international corporate tax rate did not have to be revenue-neutral, a view that was disputed by several members of the Committee. Another idea that witnesses brought up repeatedly was moving toward a consumption-based tax. Grinberg discussed specifically moving toward a dividend exemption system in addition to a lower corporate rate. He argued that the U.S. should move from a worldwide system to a source-based system, such as a territorial system that taxes based on where income is earned rather than the place of corporate residence. One question that came up a few times was whether, despite knowing that inversions are only a symptom of a larger problem, they should be addressed through legislation without broader reform. Witnesses cautioned that prohibiting inversions without lowering the statutory tax rate would do little to solve the problem, since companies could still move overseas or find other ways to lower their effective tax rates. Another possible reform mentioned was the so-called “innovation box,” which is a lower tax rate for income derived from intellectual property. Most of the witnesses thought it was an idea that should be considered, although Grinberg argued that such a tool tends to reward companies for work done years ago.

From a political standpoint, the hearing included numerous calls for bipartisanship and balanced, thoughtful, and pro-growth reform. Rep. Charles Rangel (D-NY) believed that informal discussions would be the most productive approach, rather than formal hearings, given the level of partisanship in Congress. Rep. Jim McDermott, in a more negative statement, called the hearing a “sham,” saying that nothing could be solved in the hearing format and cautioning against trying another failed “repatriation holiday.” Other members discussed the need to effectively communicate to constituents the importance of international tax policy on the everyday lives of American people and the American economy at national and local levels.


Note: Many of the themes that came up in the hearing were echoed in last week’s Brookings Institute conference on tax reform called “Tax policy in 2016: What’s new and what’s next”. The conference, which included two panel discussions and keynote addresses by Rep. Kevin Brady and Sen. Ron Wyden (D-OR), focused the tax policy proposals of the presidential candidates and tax reform proposals circulating in Congress. In the first keynote address, Brady spoke at length about the importance of international tax reform and making American corporations more competitive on an international scale. He criticized the BEPS proposals and EC state aid investigations as unfair to American corporations. Brady affirmed that he would like to see international tax reform happen this year and believed that voters understand the importance of international tax policy on their own livelihoods. In his address to conclude the conference, Wyden, while trying to take an optimistic tone overall, questioned whether comprehensive tax reform would be possible in such a contentious election year. He did, however, call on Congress to “triage the inversion virus” and address other M&A activities to the extent possible. Unlike the Democratic presidential candidates, Wyden called for a version of a territorial system that better encourages companies to develop, innovate, and manufacture in the U.S. He ended his address by calling for “principled bipartisanship” in tax reform proposals in which parties find common ground and borrow the best ideas from each side of the aisle.

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House Politics and the Paul Ryan Speakership

Congressman Paul Ryan (R-WI) was recently elected to be the youngest Speaker of the House in 150 years. Although young, he has had significant leadership experience, including chairing the powerful Budget and Ways and Means Committees. He is well-liked across the Republican Caucus, but faces challenges in uniting the Caucus to advance a legislative agenda. While he has long sought an opportunity to overhaul both entitlements and the tax system, he will need a consensus among his Republican colleagues on how to do so in order to move forward. He will also have to contend with presidential politics; Congress will act conservatively until the November elections and avoid controversial legislation that could jeopardize either party’s chances at winning the White House.

Speaker Ryan has been tasked with leading a historically divisive Congress in a Presidential election cycle. This challenge is so great that few even sought the gavel and Mr. Ryan did so with reluctance. That said, Speaker Ryan began his Speakership on the right track. He has agreed to give rank and file Members more say, including a pledge to obey the ‘Hastert rule,’ only bringing to the floor legislation supported by a majority of Republicans. He also has said that the legislative process should return to the Committees. These plans have led to initial praise from colleagues who had criticized Boehner’s top down style. However, they also handicap Speaker Ryan by removing the very tools that productive Speakers have used to move forward on a legislative agenda. In addition, Mr. Ryan finds himself in the odd position of courting the right-wing Freedom Caucus while trying to maintain his seat in a moderate Midwestern District.

Helping him get off on the right foot, Boehner negotiated a budget deal and debt-limit increase with Democrats before handing over the gavel. Then, presumably reacting to criticism from the right that Mr. Ryan is not conservative enough, Mr. Ryan publicly announced that he would not work with the President on immigration, saying the President had proven he could not be trusted in this area. For now, even the Freedom Caucus is optimistic about what the House can do under Speaker Ryan.

However, they once felt the same way about Boehner, and Mr. Ryan, in many ways is more of a policy wonk than a politician, could end up getting mired in the details of determining a policy vision for the Caucus. In one appearance on Fox News Sunday, Mr. Ryan explained the importance of putting forward a bold policy vision to show Americans that the Republican Party can lead effectively. “We’ve been too timid for too long and the key is to offer the country a bold alternative and a very bold agenda for how we can solve this country’s problems. That is how we unify.” Mr. Ryan consistently emphasizes his goal to transform the GOP party into a proposition party who can put forward concrete initiatives to improve the country.

This focus on bold policy initiatives presents two separate challenges for Speaker Ryan. First, he will have to see if Republicans in the House can unify not just behind broad messaging but also behind specific policy provisions. Second, he must find a way to work with the more moderate Senate if anything the House passes is to have a chance of becoming law. The reality is that Senate Majority Leader Mitch McConnell cannot pass legislation out of the Senate without attending to the concerns of at least some Moderates.

There is some indication that Mr. Ryan may have trouble bridging the conservative divide. Earlier in February, the Speaker met with the ultra-conservative House Freedom Caucus to convince its members to support the 2017 spending bill. There was, however, significant push-back from members who think Mr. Ryan should fight for a budget that more significantly brings the deficit under control. Freedom Caucus members haven’t accepted the argument that the GOP is out of options while Obama is still in the White House, which is what Mr. Ryan has been saying to temper expectations.

Shortly thereafter, Mr. Ryan spoke at the Heritage Action Policy Summit with a message to unite the GOP ahead of the 2016 elections, saying that Republicans needed to “unite the clans.” He talked about the need to avoid being sidetracked by President Obama’s attempt to distract the GOP from its legislative and policy agenda with hot-button issues like gun control. However some at Heritage responded with skepticism, saying they could not simply ignore the President for the next 11 months but needed to move ahead with shaping a conservative policy agenda.

Signaling his understanding that he will need to work with the President to move any legislative priorities, Mr. Ryan and President Obama met for a private lunch the same day as his Freedom Caucus meeting. They discussed common goals such as addressing the financial crisis in Puerto Rico, criminal justice reform, and fighting the growing heroin epidemic. This was their first official meeting since Ryan became Speaker last year. However their relationship will likely remain cordial but frosty. Mr. Ryan will have to toe the line between advancing legislative priorities with the White House and Democrats’ help and showing that he can stand up to the President. Getting too cozy with President Obama would likely be looked down on as a betrayal by the conservative wing of the GOP. In order to be effective as a Speaker and not fall into the same trap as John Boehner, Mr. Ryan will have to delicately manage his relationships with moderate and conservative Republicans while using discretion when he reaches across the aisle.

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About The Hot Button Blog
For many businesses, nothing seems more remote than the maneuvering of Beltway insiders. But what happens in Washington and in state and local government is critically important to your company and your industry. With government more involved in business than at any time since the 1930s, organizations that can negotiate the government labyrinth of politics, policy, and process will come out on top.
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