WASHINGTON — Financial Services Committee Chairman
Rep. McHenry, a North Carolinian who initially came to Congress as a partisan firebrand, has mellowed in his nearly two decades on the Hill into a lawmaker known for his dealmaking prowess and
"Even if you disagree with him, and goodness knows Democrats disagreed with him, there is no one who would argue that Chair McHenry has been anything but a steady and thoughtful member of Congress," said Isaac Boltansky, managing director and director of policy research at BTIG.
McHenry's pending departure, given his reputation as the "adult in the room" during the GOP's leadership crisis, immediately raised questions about the political dynamics in the House. He moved to quell fears about the chamber's future in a statement.
"There has been a great deal of hand-wringing and ink spilled about the future of this institution because some — like me — have decided to leave," said McHenry, who gave no reason for his decision not to run again. "Those concerns are exaggerated. I've seen a lot of change over 20 years. I truly feel this institution is on the verge of the next great turn. Whether it's 1974, 1994 or 2010, we've seen the House evolve over time. Evolutions are often lumpy and disjointed, but at each stage, new leaders emerge. There are many smart and capable members who remain, and others are on their way. I'm confident the House is in good hands."
GOP caucus rules normally would have barred McHenry from seeking another term as chairman of the Financial Services Committee if he remained in Congress. House Republicans are limited to no more than six consecutive years as a chairman or ranking minority member of a committee, and he has been one or the other since 2019. He could have sought an exception from the rule, but his odds of success would be hard to predict.
McHenry was well known for trying to pass legislation with the support of the committee's ranking Democrat, Rep. Maxine Waters of California.
"It's entirely possible that McHenry would really want to get the stablecoin bill across the finish line," said Todd Phillips, an assistant professor at Georgia State University. "And if he's not running for reelection, he doesn't have to fly back to North Carolina, so it may give him more time to fight for that."
But McHenry's departure could be a long-term setback for the digital-assets industry, which has lobbied aggressively for favorable attention on Capitol Hill.
"From an industry perspective, this is a clear headwind for digital assets as he has elevated those issues," Boltansky said.
McHenry's retirement could also have other effects, including a slowdown in the amount of policymaking that passes through the financial services panel, Boltansky said.
"I also think him leaving the stage is net negative for market stability as he was a strong voice for not using the debt ceiling as a catalyst for negotiation," he said. "My sense is that he also has a relatively stable relationship with Democrats, which can't be said about all of his potential replacements."
The most senior members of the committee who could be its top Republican in the next Congress are Rep. Frank Lucas of Oklahoma and Rep. Pete Sessions of Texas. Both are seen as more right-wing hardliners and would make dealmaking more difficult on the committee.
"It could get even tougher to forge compromises with the Democrats," said Ian Katz, a managing partner at Capital Alpha Partners. "McHenry showed willingness to work with them at times, and it's not at all clear his successor would be as willing."
Lucas formerly served as the House Agriculture Committee chairman, which could make it easier for him to work on digital-assets legislation, as the agriculture panel shares jurisdiction over that issue with the finance services committee. Sessions is known for working on technical financial issues, including sponsorship of a recent bill passed by the full House that would give broker-dealers relief from investment advisory rules.
That said, Republican House committee chairs and ranking members are chosen by a steering committee, so seniority might not be the deciding factor in who next leads the committee.
