Nov 16, 2018
2018 Midterm Elections Overview
This year’s midterm gubernatorial elections proved successful for Democrats, gaining seven seats that Republicans had held. This change shifts the margin from 33 Republican, 16 Democratic and 1 Independent governors to 26 Republican and 23 Democratic governors (pending official call in Georgia). Republicans appear to have secured an important hold in the state of Florida, where Republican Ron DeSantis holds a narrow lead over Democrat Andrew Gillum. This was one of the nation’s most watched races. Additionally, while state ballot initiatives ran the gamut, several states had ballot initiatives on a contentious state healthcare issue – Medicaid expansion. Four traditionally Republican states considered ballot initiatives on Medicaid expansion, and three approved these initiatives. Additionally, Maine elected a Democratic governor who has promised to implement a previously approved ballot initiative on Medicaid.
House Democrats can be expected to devote their initial weeks in power to campaign finance reform and other good government measures that featured prominently in their campaigns. This approach is similar to their playbook in 2007, when they last retook the House, and has the advantage of providing some early victories on legislation that has little fiscal or regulatory impact. Over the longer term, House Democrats can be expected to prioritize healthcare and infrastructure, as well as gun safety measures and legislation offering a legal path forward for Dreamers, the children of undocumented immigrants brought into the country unlawfully at a very young age.
The overarching challenge for House Democrats is to temper the high expectations of their base with restored, appropriate executive branch oversight and legislation that advances their broad agenda.
In the House, Rep. Richard Neal (D-MA) has a long history of involvement in Medicare reimbursement issues, and helped craft the Affordable Care Act (ACA). He does not oppose Medicare for all. However, he probably would prefer to spend time on stabilizing the individual market. Rep. Frank Pallone (D-NJ) will chair the House Energy and Commerce Committee. He has already expressed interest in reviewing drug prices, as well as looking at Medicaid to provide more opioid treatment options. In the Senate, Sen. Chuck Grassley (R-IA) may take over the Finance Committee, which he chaired over 10 years ago. He is likely to focus on oversight of the healthcare programs.
Issues the 116th Congress are likely to take up include drug prices and reform to what is known as Stark law – self referral laws that have become difficult to interpret and are preventing alternative payment and delivery systems from flourishing. Congress may have its hand forced to address ACA-related issues because of several court cases that would require Congress to act depending on how they are settled. One case in particular involves the individual mandate, and those who brought the case argue that if the mandate is invalid then so are consumer protections in the law because of its interconnectedness. Look for Congress to consider slowing the rate of growth in Medicare and Medicaid, perhaps using the budget process; however, the House will serve as a block on any sweeping Medicare or Medicaid reforms.
Energy and agriculture will have a couple of overlapping major issues in 2019. The largest will be trade followed by regulatory oversight. Energy policy in the Senate will depend on who is going to be the ranking Democrat member of the Energy and Natural Resources Committee. If Sen. Maria Cantwell (D-WA) moves to Commerce, Sen. Joe Manchin (D-WV) may take the position. If that is the case, we can expect more fossil fuel legislation and hearings about grid reliability. Rep. Frank Pallone (D-NJ) will lead the House Energy and Commerce Committee. It is expected he will spend time trying to promote clean energy and holding oversight hearings on the administration’s attempt to undo Obama-era rules such as the Waters of the U.S. rule and the Methane and Waste Prevention rule. The Farm Bill will be priority number one for Sen. Roberts (R-KS) and Rep. Collin Peterson (D-MN) if it is not completed during the lame duck session.
Michael Drobac on Technology and the Internet
With a few races still too close to call, Republicans expanded their majority in the Senate, while Democrats picked up enough seats to take control of the House. With a divided Congress, compromise will be key to any successful agenda. While there is certain to be continued partisan bickering, Democrats and Republicans alike believe there are opportunities to reach consensus in several areas which might result in legislation in the 116th Congress. Technology presents just such an opportunity.
Despite the political rancor that comes with a divided Congress, there are important and bipartisan issues such as consumer data security and privacy reforms, federal infrastructure programs, workforce realignment and immigration reforms that could receive bipartisan agreement. The internet and technology developments in the “sharing economy” and the “internet of things” movement have fundamentally changed the manner in which consumers have access to goods, services and content leading to necessary changes in law to keep pace.
With new leadership in the Congress and specifically within key committees of jurisdiction, we expect progress on a number of these issues. Most notably, industries reeling from the enactment of the California Consumer Privacy Act (CCPA), effective January 2020, and the current European Union’s General Data Protection Regulation (GDPR), are seeking bipartisan efforts to provide certainty on data security and privacy laws in order to avoid a patchwork of state laws and inconsistent foreign standards. Lawmakers and regulators alike recognize the need for action and believe legislation can be supported that does not overreach nor politicize the issue.
Finally, lawmakers, regulators and the Trump Administration have signaled a willingness to consider whether big technology and internet companies should be regulated and receive greater antitrust scrutiny with a focus on where there is direct harm to consumers that can be identified and quantified.
The new leadership on key House and Senate committees such as both Judiciary committees and Senate Commerce, Science, and Transportation will influence policymaking in technology, telecommunications, innovation, and other key areas.
Rob Wasinger on the Trump Administration
It is likely that the deregulatory framework established in the first two years of the Trump presidency will accelerate. The Office of Information and Regulatory Affairs set a goal of two deregulatory actions for every single regulatory action; and the current ratio is now twelve deregulatory actions for every regulatory action. Given the logjam in Congress that pre-dated the election, the majority of the President's agenda will likely continue to be accomplished through the administrative process and unilateral actions. Also, with an expanded Senate majority and the retirements of Senators Bob Corker (R-TN) and Jeff Flake (R-AZ), we should expect a more aggressive agenda to confirm judges and appointees in less time. With a Senate more in tune with the President, the influence of Sens. Susan Collins (R-ME) and Lisa Murkowski (R-AK) on the overall process will likely diminish. The legislative agenda coming out of the White House will likely be one that focuses on infrastructure, which will present interesting opportunities for bipartisanship.