CONSISTENTLY DELIVERS

Nov 3, 2010

Mid-Term Election Report: Republicans Make Major Gains in Congress

 

As of this writing, Republicans gained a net minimum 59 seats in the House and won control of that body for the first time since 2006. The House membership will now include at least 241 Republicans (largest since 1946) and at least 184 Democrats. Thirteen seats remain in doubt. Among the notable Democrats who lost were Rick Boucher (VA), Budget Chair John Spratt (SC), Armed Services Chair Ike Skelton (MO), and Transportation & Infrastructure Chair Jim Oberstar (MN). GOP gains were across the board, but were especially noticeable in Pennsylvania, Ohio, New York and throughout the South. Pending ratification by the Caucus, John Boehner from Ohio is slated to become Speaker and Virginia’s own Eric Cantor Majority Leader. A new team of House committee chairs will also begin service in January.
 
On the Democratic side, it is very possible that current Speaker Nancy Pelosi will not seek any leadership post and may even resign from her Congressional seat. Pelosi’s exit from leadership would make current House Majority Leader Steny Hoyer (Maryland) the frontrunner for House Minority Leader.
 
Virtually all of the new Republicans are strong conservatives. Many are replacing moderate Democrats who occupied swing districts previously won by both John McCain in 2008 and George Bush in 2004. This continues a two decade trend of increased conservative dominance of the GOP and liberal dominance of the Democratic Party.
 
In the Senate, Democrats held on to control, but Republicans held all of their seats and gained at least six additional seats. Among the notable new senators: Marco Rubio in Florida, Rand Paul in Kentucky and Mark Kirk who won President Obama’s old seat in Illinois. Three races (Washington, Colorado and Alaska) remain in doubt. 
 
One Democratic bright spot was the strong reelection win of Majority Leader Harry Reid who overcame a well funded challenge from Tea Party favorite Sharron Angle. Reid benefited from a powerful ground game and support from President Obama and Vice President Biden. Other victorious Democrats in hard fought races included: Chris Coons (DE), Barbara Boxer (CA) and Joe Manchin (WV).
 
In the states, Republicans gained the statehouses in the key electoral states of Pennsylvania, Ohio, Wisconsin and Michigan. Democrats rebounded somewhat by winning the Governorship in California and possibly Florida. Hispanic Republicans Brian Sandoval (NV) and Susanna Martinez (NM) also claimed victory in their states.  As many as 23 state legislative chambers switched from Democratic to Republican control. These pickups are important for congressional redistricting, which will unfold next year.   The governorship gains in the large states will also enhance the chances for the Republican nominee in the 2012 presidential race to carry some of those large states.
 
Republicans put together a broad electoral coalition consisting of a high turnout of Republicans, Independents, and seniors. They decisively won among voters who were worried about jobs, the economy, spending and taxes. 
 
With the change of party control, House Republicans will pursue a far different agenda than the current Pelosi-led House. High on the GOP’s list will be the following items:
 
  • Legislation to create jobs, end economic uncertainty, and make America more competitive. This was the core of the House Republicans’ “Pledge to America”, and dovetails with the Tea Party’s focus on economic and fiscal issues. Meaningful progress in this area will be crucial to House Republicans’ success.
  • Permanent extension of all of the Bush tax cuts. Republicans will pursue this even if the lame duck session enacts a temporary extension.
  • Deep reductions in domestic discretionary spending. House Republicans’ “Pledge to America” looks to a baseline of Fiscal Year 2008 for future budget decisions.
  • Stricter oversight of the Executive Branch. Republicans are sure to question the powers of the so called “Czars” that manage policy throughout the federal government.   Republicans also will closely scrutinize existing programs including TARP, the stimulus program, and federal involvement with GM and Chrysler. Subpoenas from some committees will be a part of a number of such investigations.
  • An outright ban on earmarks, though this will be resisted by members of the Appropriations Committee. Leadership will have to settle this question.
  • Opportunities to slow down or roll back the President’s health care legislation. Many in the new Congress will be sure to oppose new rulemakings and appropriations that are necessary to implement the broad outlines of the bill.
  • Defense and border security issues. This umbrella of issues includes defense funding, border security, and immigration (about which more below).
  • Opportunities to significantly change the “Dodd-Frank Act” financial services regulatory reform legislation to eliminate overregulation of the financial services sector.
 
A very closely divided Senate will put a great deal of pressure on party caucuses and party unity. Among Democrats, several nervous moderates face reelection in 2012 and could feel significant pressure to vote across party lines, particularly on spending, fiscal, and regulatory issues. Among Republicans, several hard line conservatives might feel emboldened to challenge their leadership on similar votes.
 
It remains to be seen how the new Congress will work with the Administration. Most commentators focus on the alternative strategies of “cooperation” and “confrontation,” but the practicalities of governing require both sides to make an effort to find some common ground where that is possible. What that common ground might be now is unclear. We see some opportunities for compromise in the following areas:
 
  • Immigration. The President needs to show effort here for his reelection campaign and the business community will be pressuring Republicans to work with the Administration, though opposition among some GOP groups remains strong.
  • Deficit reduction. This is an issue of great interest among American voters. While the parties have radically different approaches, the President’s Commission on Deficit Reduction will release its report in December and its recommendations might provide some cover and common ground for bipartisan cooperation.
  • Trade. The President has a stated goal of doubling exports in the next five years and new trade agreements are imperative to reach that ambitious goal. The President has endorsed a new agreement with South Korea and several other pacts, including one with Columbia, are awaiting congressional action.
  • Energy. Climate change or “cap and trade” legislation is mostly dead, but common areas of pursuit might include enhanced development of nuclear power and strong investment in both domestic natural gas and carbon capture and sequestration technology. This cooperation will surely NOT extend to EPA and its attempts to regulate carbon under the Clean Air Act, which is sure to be opposed by Republicans.
  • Foreign policy. Republicans might be more supportive of Administration policy in Afghanistan and would surely offer support in any confrontation with Iran or North Korea over nuclear weapons proliferation.
We will report on new developments as the intentions of the new leaders on Capitol Hill and the Administration become clearer. For now, please feel free to contact a member of our federal government affairs team if you would like to talk more about political and congressional developments.