Skip to content

Crapo poised for starring role in economic, health care policy

There’s no shortage of difficult tasks ahead for the Idaho Republican

Sen. Mike Crapo, R-Idaho, attends the second day of the confirmation hearing for Supreme Court nominee Amy Coney Barrett on Oct. 13, 2020.
Sen. Mike Crapo, R-Idaho, attends the second day of the confirmation hearing for Supreme Court nominee Amy Coney Barrett on Oct. 13, 2020. (Tom Williams/CQ Roll Call/POOL)

The most powerful committee in Congress hasn’t had a top Republican not named Charles E. Grassley or Orrin G. Hatch in two decades. 

That’s about to change in January when a Harvard Law School-trained attorney from Idaho Falls is expected to take the Senate Finance gavel — or the ranking member slot in an evenly divided Senate, depending on the Georgia runoffs.

Either way, Michael D. Crapo will be at the center of economic and health care policymaking in a pivotal year, as a new administration takes office amid the devastation of COVID-19. 

Senate Finance’s expansive portfolio makes it ground zero for President-elect Joe Biden’s agenda on economic stimulus, infrastructure, climate change, health insurance expansion, drug pricing limits and sifting through the wreckage of President Donald Trump’s trade wars.

Crapo, who declined to be interviewed with his committee status up in the air until January, will be the GOP’s gatekeeper for progressive plans hatched by a Biden administration and House Democrats.

He’s one of the most conservative Republican senators, ranked 11th by the American Conservative Union based on his votes. But like his predecessors Grassley, from Iowa, and the now-retired Hatch, from Utah, Crapo has a record of working across the aisle, including during his tenure as Senate Banking Committee chairman since 2017. 

“He’s got strong views, but he’s always going to reach out,” said Sen. Mark Warner, D-Va., who serves with Crapo on Finance as well as Banking. “In everything I’ve done with him, he is a tough negotiator, but when he gets to ‘yes’ you can count on it.”

Warner’s relationship with Crapo was cemented during their time on the Senate’s bipartisan “gang of six” in 2011, working to turn the Simpson-Bowles fiscal commission’s $4 trillion deficit reduction plan into legislative reality. Crapo was one of five Republicans on the Simpson-Bowles panel to vote for the ultimately unsuccessful proposal, despite 25 percent of the deficit cuts coming from tax increases. 

Crapo also worked with Warner and other Democrats on chipping away at portions of the 2010 financial industry overhaul known as Dodd-Frank that critics said went too far in restricting community banks. The Dodd-Frank rollback legislation was enacted in 2018.

And Crapo and Ron Wyden, D-Ore., the Finance panel’s ranking member, have long worked together on trying to secure long-term funding for two programs that provide federal payments for rural schools, counties and local governments where the growth of federal lands and decline in timber harvests have sapped local revenue.

Crapo, who’s up for reelection in 2022, is likely to want to get things done. Some commentators point to Idaho’s fast-growing economy and population — along with an increase in registered Democrats in recent years — as signs of trouble for his party down the road.  

But Idaho doesn’t yet look like the next red state to go blue. Crapo defeated his Democratic opponent by more than 38 percentage points in 2016, and President Donald Trump carried Idaho twice by more than 30 points. 

[jwp-video n=”1″]

Debt and taxes

Long after Simpson-Bowles and the “gang of six,” Crapo still has a national debt clock streaming at the top of his website, even as that issue has faded in recent years as depressed interest rates lowered federal borrowing costs. 

Despite his onetime acceptance of higher taxes, Crapo was a vocal supporter of the 2017 tax cuts that were projected to cost nearly $2 trillion over a decade. He’s likely to resist Democratic attempts to roll back those provisions, including the tax increases on corporations and high-income individuals Biden wants. 

As befits the chairman of Senate Banking, Crapo’s campaign contributors are heavily weighted toward the industry he has overseen. 

Securities and investment firms, insurers and commercial banks top the list of Crapo’s lifetime donors, according to the Center for Responsive Politics, with employees of private equity titans Carlyle Group and Blackstone Group, investment banker Stephens Inc. and JPMorgan Chase & Co. his top individual contributors. All will have a stake in fending off Biden’s proposed tax increases on capital gains, large banks and more.

Industry officials who’ve observed Crapo say one area where he has found common ground on tax issues is on retirement policy, which is likely to be front and center next year. House Ways and Means Chairman Richard E. Neal, D-Mass., and ranking member Kevin Brady, R-Texas, have a new retirement bill that absorbs several proposals from prior years, including those hatched by Senate Finance members.

Victoria Glover, a former tax aide to House Ways and Means Republicans and former Sen. Dean Heller, R-Nev., a Finance panel member, said Crapo’s work on a 2015 bipartisan task force laid the groundwork for the largest retirement savings package in over a decade. It became law last year.

“He has historically worked across the aisle in a bipartisan fashion on a number of issues,” said Glover, now a partner with Deloitte Tax.

The American Benefits Counsel’s Lynn Dudley speculates that given Crapo’s history of deficit consciousness, “maybe he’ll be more of a pay-for guy” on the next retirement bill. That could entail limiting the benefits of tax-advantaged accounts for the wealthy while doing more to help the majority of workers catch up on savings that took a hit during the pandemic-induced recession.

Another area of tax policy Crapo may be able to work with Wyden and other Democrats on is infrastructure and clean energy incentives. 

He has proposed expanding the use of private activity municipal bonds to allow more tax-exempt investment in water infrastructure, for instance. And Crapo touts his role as co-chairman of the Senate Renewable Energy and Energy Efficiency Caucus, from a state that derives about 80 percent of its electricity from hydropower, wind and solar.

He has also backed an expansion of nuclear production tax credits that he helped author in 2005. They benefit work done at the Idaho National Laboratory in Crapo’s hometown of Idaho Falls.

Health care 

The health care sector is also near the top of Crapo’s list of lifetime contributors, including employees of DaVita Inc., a kidney dialysis services provider; Blue Cross Blue Shield insurers; and drugmakers Pfizer Inc. and Amgen Inc. And the St. Luke’s hospital system is a major Idaho employer.

Crapo voted against last year’s bipartisan Grassley-backed bill that would have levied penalties against drugmakers for raising prices faster than inflation, among other things. Biden wants an even more ambitious proposal to cap prices, including giving the government power to negotiate directly with drug firms, in part to pay for an ambitious expansion of the 2010 health care law. 

Crapo instead has introduced legislation to try to limit consumers’ expenses by incentivizing pharmacy benefit managers to pass along drugmaker rebates to Medicare beneficiaries, and to cap seniors’ out-of-pocket drug costs.

But critics say those measures simply deflect attention from the drug industry’s pricing practices, and could result in increased costs — higher insurance premiums for consumers, and higher government spending as Medicare absorbs more of their beneficiaries’ drug costs.

Crapo has worked to loosen consumer protections in the 2010 health care law, including legislation making it easier for businesses to form association health plans that don’t have to meet certain benefit requirements and can vary premiums based on age or gender.

He has also tried to expand state insurance waivers under the health care law — something Wyden, who authored the law’s state waiver provision, takes a dim view of.

Trade

On trade policy, Crapo has a nuanced history.

He voted against two major trade accords: the Clinton administration’s North American Free Trade Agreement in 1993 when he was a freshman House lawmaker, and the Bush administration’s Central America Free Trade Agreement in 2005. Like Wyden, he has taken a tough stance against Canada for its policies backing domestic lumber producers at the expense of suppliers over the border.

And like his predecessor Grassley, Crapo comes from a state reliant on farming. Agriculture accounts for one-fifth of Idaho’s economic output. Potatoes, dairy and wheat are big business in Idaho, as well as sugar beets; among his stated reasons for opposing CAFTA was lack of protections for domestic sugar producers. 

But Crapo was a vocal supporter of Trump’s NAFTA refresh, which became the U.S.-Mexico-Canada pact and cracked open Canada’s tightly-controlled dairy market and lowered barriers to Idaho wheat and wine. That pact became law earlier this year.

Idaho farmers and ranchers are generally dependent on overseas markets, and they’ve been hurt by Trump’s trade wars as Crapo has acknowledged. Similarly, Boise-based semiconductor manufacturer Micron Technology Inc., the state’s largest employer, has seen its business disrupted by tariffs and Trump’s ban on sales to Chinese telecommunications giant Huawei.

Crapo says he’d prefer to see a thaw in China trade relations, but he generally backed Trump’s tough approach.

Crapo initially opposed the reinstatement of so-called Trade Promotion Authority in 2015, which protects negotiated trade pacts from amendment or filibuster. But he supported it after winning concessions including more visibility into the administration’s deliberations and more congressional involvement.

With TPA expiring again on July 1, 2021, Crapo will have substantial leverage to influence the Biden trade agenda.

Recent Stories

Strange things are afoot at the Capitol

Photos of the week ending May 24, 2024

Getting down on the Senate floor — Congressional Hits and Misses

US-China tech race will determine values that shape the future

What’s at stake in Texas runoff elections on Tuesday

Democrats decry ‘very, very harmful’ riders in Legislative Branch bill