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Election Report 2020

November 11, 2020 OVERVIEW OF ELECTION RESULTS 2020 ELECTION REPORT // POLSINELLI

Overview

Table of Contents Polsinelli congratulates President-elect and Vice Overview of Election Results President-elect on their election and takes particular note of the fact that Senator Harris is the first President 3 woman ever elected as Vice President. It was a hard-fought election with President and Vice President Senate 4 retaining strong support from almost half of the American electorate as both tickets received record House 6 numbers of votes. A common refrain from voters before an election is, “I can’t Governors 7 wait for it to be over.” This year, in the midst of the pandemic and non-stop political ads, the process may have seemed Lame Duck Outlook 8 interminable and it is not completely over yet. Election Day voting has been completed, and the winners have been Areas to Watch in the 117th Congress named by major news organizations, but the counting and Economy 10 legal challenges persist. In addition, two special elections will be held in with nationwide consequences as they will Healthcare 12 determine control of the U.S. Senate. In this circumstance, there are many uncertainties. This report examines current Infrastructure 13 election outcomes and will be regularly updated to keep you abreast of important new developments. Energy and Environment 13 In addition to the results, we will report on the agendas and policies of those who will guide our nation for the next four Congressional Procedures 15 years, as it’s not only the policymakers who have important decisions to make. We hope this report will provide a Conclusion 16 framework to understand how Washington will impact you, your community, business, customers, organization,or members. We provide insights on a range of key issues that will occupy Washington with a new administration and Congress, and take a look at what the new policymaking environment means for your priorities. If there are special topics or questions you would like us to address or with which you need our assistance, please contact us. We have a bipartisan Public Policy group in Washington and attorneys who are substantive policy experts in 22 cities devoted to helping you successfully engage Washington’s decision-makers. With our appreciation for your support,

Former Congressman Former Congressman Alan Wheat (D-MO) John Shadegg (R-AZ)

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White House

Democrats hoped that a broad repudiation of President Trump and his policies, including management of the coronavirus pandemic and the economy, would produce landslide victories. Public opinion polls seemed united in suggesting this possible outcome, but the 2020 Presidential race was much closer than polls predicted. While the expected “Blue Wave” failed to materialize on election night, President-elect Joe Biden will be inaugurated as our country’s next President in January. Turning the electorate from red to blue in several states that helped elect President Trump in 2016 propelled the former Vice President to victory.

In 2016, President Trump won the traditionally Democratic states of Wisconsin, Michigan, and Pennsylvania by a total of 77,000 votes. As counting continues, President-elect Biden appears to have won all three states, as well as notching key wins in Minnesota, Nevada, and Nebraska’s 2nd Congressional District. In addition, President-elect Biden appears to have flipped traditionally Republican Arizona and Georgia. His electoral vote count could reach 306 if all these states remain in his column when the vote counts are completed. Although it carries no legal significance, President-elect Biden also won the popular vote by a greater margin than the 2.1% net of former Secretary of State Hillary Clinton four years ago. At age 77, the former Vice President is the oldest President ever elected. America’s 46th President will take the oath of office on January 20 with a goal of bridging the stark divide in the American electorate. Senator Kamala Harris will become the first woman to take office as Vice President. However, assuming Democrats are unable to capture the Senate majority, they may have to scale back their most ambitious plans to fight , expand the (ACA) and Medicare benefits, respond to the pandemic, roll back President Trump’s tax cuts, and institute Senate rules changes.

2020 GENERAL ELECTION ELECTORAL VOTES

(Nov 11, 2020)

279

217

42

UNDECIDED

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Senate/House/Governors

In addition to President-elect Biden’s knowledge of how to move the levers of government in the executive branch, he brings nearly 40 years of legislative experience to the job. The former Vice President often speaks with Senate Minority Leader Chuck Schumer (D-NY) and House Speaker (D-CA). Their staffs are in regular contact and are laying the groundwork to advance the Democratic agenda.

U.S. Senate

The chances of Democrats taking control of the Senate were greatly diminished after several vulnerable Republican incumbents successfully won reelection. Although a handful of Senate races are still too close to call, control of the Senate will not be determined until January, as both Georgia Senate races are heading for a January 5 runoff election. The battle for the Senate was fierce for months because control of the chamber is a crucial factor in advancing the Democratic policy agenda. U.S. Senate Election Results 2020 (Nov 11, 2020)

UNCALLED 48 2 50

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Democrats entered Tuesday with one of the most favorable Senate maps in years. Twelve Democratic-held seats were up for election, while Republicans were defending 23 seats. Democrats needed to flip a net of three Republican-held seats to claim a majority in the Senate, with Vice President Harris providing a tie-breaking vote. Despite the favorable landscape, Democratic challengers fell short in closely watched races in Maine, Iowa, and , and currently trail in and Alaska. Democratic challengers did successfully unseat incumbents in Arizona and Colorado but lost a seat in Alabama. Both of the Georgia Senate seats are headed to a January 5 runoff since no candidate reached 50%. In one race, Republican Senator will face off against Raphael Warnock to fill the remainder of Senator Johnny Isakson’s term. In the second race, incumbent Republican Senator David Perdue will face Jon Ossoff.

DEMOCRAT REPUBLICAN Alaska Gross 32.1 Sullivan 62.3 (74%) GOP Hold Alabama Jones 39.6 Tuberville 60.4 (100%) GOP Pickup Arkansas Cotton 66.7 Harrington Lib 33.3 (99%) GOP Hold Arizona Kelly 52.1 McSally 47.9 (83%) Dem Pickup Colorado Hickenlooper 53.5 Gardner 44.3 (89%) Dem Pickup Delaware Coons 59.5 Witzke 37.9 (100%) Dem Hold Georgia Ossoff 47.9 Perdue 49.9 (100%) Runoff Georgia Special Warnock 32.7 Loeffler 26.1 Collins GOP 20.1 (100%) Runoff Iowa Greenfield 45.2 Ernst 51.8 (100%) GOP Hold Idaho Jordan 33.3 Risch 62.6 (99%) GOP Hold Illinois Durbin 52.3 Curran 40.9 (97%) Dem Hold Kansas Bollier 41.4 Marshall 53.6 (100%) GOP Hold Kentucky McGrath 37.8 McConnell 58.2 (95%) GOP Hold Louisiana Perkins 19.0 Cassidy 59.3 (100%) GOP Hold Massachusetts Markey 66.5 O’Connor 33.5 (99%) Dem Hold Maine Gideon 42.3 Collins 51.1 (98%) GOP Hold Michigan Peters 49.9 James 48.2 (100%) Dem Hold Minnesota Smith 48.8 Lewis 43.5 (100%) Dem Hold Mississippi Espy 42.1 Hyde-Smith 56.1 (100%) GOP Hold Montana Bullock 45.0 Daines 55.0 (99%) GOP Hold North Carolina Cunningham 46.9 Tillis 48.7 (100%) GOP Hold Nebraska Janicek 26.0 Sasse 67.7 (99%) GOP Hold Shaheen 56.7 Messner 40.9 (100%) Dem Hold Booker 60.1 Mehta 38.3 (65%) Dem Hold Lujan 51.6 Ronchetti 45.7 (97%) Dem Hold Oklahoma Broyles 32.8 Inhofe 62.9 (100%) GOP Hold Oregon Merkley 57.7 Perkins 38.8 (82%) Dem Hold Rhode Island Reed 66.3 Waters 33.7 (93%) Dem Hold South Carolina Harrison 44.1 Graham 54.6 (100%) GOP Hold South Dakota Ahlers 34.3 Rounds 65.7 (100%) GOP Hold Tennessee Bradshaw 35.1 Hagerty 62.3 (97%) GOP Hold Texas Hegar 43.7 Cornyn 53.6 (94%) GOP Hold Virginia Warner 55.7 Gade 44.3 (99%) Dem Hold West Virginia Swearengin 26.9 Capito 70.4 (100%) GOP Hold Wyoming Ben-David 26.9 Lummis 73.1 (100%) GOP Hold

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House of Representatives

Democrats will retain control of the House, but their majority is projected to narrow, with Republicans gaining a net of five seats as of this writing. Among the Democrats defeated were several elected in the 2018 “Blue Wave” that swept the party into the House majority, as well as some more senior members like Agriculture Committee Chairman Collin Peterson, who has represented his Minnesota district since 1991. Heading into election night, Democrats held 232 seats, while Republicans held 197. A Republican-turned-Libertarian held one seat, and five seats were vacant. A handful of front-line Democratic members — incumbents facing the toughest races — were defeated. Despite hopes of expanding the map with inroads “deep into Trump country,” as of this writing, Democrats have failed to pick off even a single House Republican running for reelection. Democrats did manage to pick up a pair of Republican-held open seats in North Carolina, where redistricting had made the districts lean Democratic, and a third in Georgia after the retirement of vulnerable GOP Representative Rob Woodall. U.S. House Election Results 2020 (Nov 11, 2020)

UNCALLED 218 (-5) 12 205 (+6)

House Republicans picked up seats by female candidates and will have at least five GOP women as part of the freshman class; Republicans had added just one woman in 2018. On November 18 and 19, returning and newly elected House Democrats will meet in Washington to elect leaders for the 117th Congress, which begins in January.

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Governors

There were 11 governorships up for grabs in 2020. Six were held by Republicans, three were held by Democrats, and two were open seats. The incumbents won in all nine races, including in North Carolina where ticket-splitting saw incumbent Democratic reelected with at least 51% of the vote. In the Montana open seat, Republican Congressman won the governor’s mansion. In Utah, won handily.

GOVERNORS SNAPSHOT

STATE PARTY INCUMBENT CHALLENGER WINNER

Delaware D Jr. Julianne Murray John Carney Jr. – (D)

Indiana R Woodrow Myers Eric Holcomb – (R)

Missouri R Mike Parson – (R)

Montana Open /Greg Gianforte Greg Gianforte – (R)

North Carolina D Roy Cooper Roy Cooper – (D)

North Dakota R Shelley Lenz Doug Burgum – (R)

New Hampshire R Chris Sununu – (R)

Utah Open Spencer Cox/Chris Peterson Spencer Cox – (R)

Vermont R David Zuckerman Phil Scott – (R)

Washington D Loren Culp Jay Inslee – (D)

West Virginia R Ben Salango Jim Justice – (R)

The gubernatorial races, as well as elections for down-ballot state legislative seats, were of particular importance because states will begin redrawing their U.S. congressional district maps next year, after completion of the 2020 census.

polsinelli.com | 7 LAME DUCK OUTLOOK 2020 ELECTION REPORT // POLSINELLI

Lame Duck Outlook Before the 117th Congress convenes on January 3, 2021, lawmakers will return for a lame duck session to address a number of outstanding issues that require attention before the end of the year. The Senate will return November 9 and the House will return November 16.

COVID-19 Stimulus services and related budget neutrality requirements. Given the groundswell of bipartisan support for preventing these Congressional leaders and White House officials will reimbursement cuts, Congress may seek to address this need to either continue negotiations on a COVID-19 relief issue in a year-end spending package. package, or push negotiations into the new Congress in Congress also needs to pass the annual National Defense January. Although Senate Majority Leader Mitch McConnell Authorization Act (NDAA) for fiscal 2021. The House and (R-KY) was not participating in the discussions prior to the Senate passed their respective bills this summer, and election, he now wants to pass a COVID-19 aid package committee leaders are working to reconcile differences. before the end of the year. House and Senate Democrats Votes are also still possible on a water resources have prioritized a stimulus package that includes roughly reauthorization bill. In July, the House passed a bill that $2.2 trillion in emergency relief. Although President Trump would authorize almost $9 billion in water projects, and the and White House negotiators have been willing to discuss Senate Environment and Public Works (EPW) Committee spending levels between $1.5 trillion and $2 trillion, Senate approved a package in May. It remains unclear if leaders will Republicans have been reluctant to vote for a legislative be able to reconcile differences before the end of the year. package that would substantially add to the deficit. Instead, Senate Republicans proposed limited scope relief packages, including a $500 billion package that was opposed by Leadership and Presidential Transition Democrats. Even with record increases in COVID-19 cases, House Democrats will hold leadership elections November 18 it remains unclear if the election outcome will shift this and 19. House Democrats will also begin holding committee dynamic that has resulted in nearly five months of stalled chair elections on November 30, which will help solidify the negotiations. Prior to the election, Speaker Pelosi sent a House majority’s 2021 agenda. House Republicans are expected two-page letter to Secretary Steven Mnuchin listing primary to hold their leadership elections on November 17. Senate areas of disagreement, including: state and local assistance, Republicans will hold leadership election on November 10. schools, child care, tax credits for working families, unemployment During the lame duck period, President-elect Biden’s insurance extension, OSHA workplace protections, and transition team will continue developing the incoming liability for health care providers and employers. administration’s policy agenda and building out a strategy with Congressional leaders that will require bipartisan Budget and Reauthorizations compromise. Senior transition officials also will be The federal government is operating under a fiscal 2021 developing federal agency management plans and vetting continuing resolution (CR), which expires December 11. potential political appointees. The transition team will also Congressional leaders would prefer to pass a fiscal 2021 begin coordination with Senate leaders to ensure cabinet omnibus spending package, but another short-term nominees can proceed through the nomination process in spending extension is possible if a bipartisan agreement the weeks and months following the inauguration. is not reached before the current deadline. Additionally, there also will be a significant focus on Lawmakers will also look for opportunities to include any “midnight rulemaking” undertaken by the Trump additional policy riders to extend expiring health programs Administration. There are a number of healthcare and and tax provisions. One area gaining significant attention environmental regulations under review by the White House from lawmakers is the Medicare reimbursement cuts slated Office of Management and Budget (OMB) that could be to impact a host of healthcare provider types in 2021 due to published before the inauguration. The Biden transition Centers for Medicare & Medicaid Services’ (CMS) proposed team will review prior Trump policy executive orders and reimbursement increases for evaluation and management presidential memoranda for repeal or revision.

polsinelli.com | 8 LAME DUCK OUTLOOK 2020 ELECTION REPORT // POLSINELLI Potential Cabinet Nominations and Senior Appointments As former Vice President Biden pivots from candidate to President-elect, he begins the task of assembling his administration. After appointing a coronavirus task force and senior White House staff, the President-elect is expected to begin announcing cabinet positions around Thanksgiving. Below are some of the names that have been reported or rumored to be under consideration for top positions in the Biden Administration.

DEPARTMENT DEPARTMENT Agriculture Former Sen. Heidi Heitkamp President and CEO of the National Low HUD Agriculture Rep. Marcia Fudge Income Housing Coalition Diane Yentel Agriculture Rep. Cheri Bustos Interior Sen. Attorney General Former AG Sally Yates Interior Sen. Attorney General Sen. Doug Jones Interior Rep. Attorney General Former HUD Secy Julian Castro Labor Sen. Bernie Sanders Attorney General Sen. Amy Klobuchar Labor Former EEOC chair Jenny Yang Attorney General; Secretary of the Labor and CA AG Labor Homeland Security Workforce Development Agency Julie Su Attorney General; Labor DNC chair Tom Perez Labor Rep. Andy Levin Chief of Staff Former Biden Chief of Staff Ron Klain Labor Former Asst. Secy of Labor Bill Spriggs President of the Association of Chief of Staff Former Biden Chief of Staff Steve Ricchetti Labor Climate Chief Former Secy of State John Kerry Flight Attendants Sara Nelson Former Obama Acting Labor Secretary Climate Chief Philanthropist Tom Steyer Labor Seth Harris Climate Chief; EPA Wash. Gov. Jay Inslee National Economic Former Biden Chief Economist and Commerce Business executive Meg Whitman Council Economic Adviser Jared Bernstein Commerce Former VA Gov. Terry McAuliffe Former U.N. ambassador and Obama Former Under Secretary of Defense State Defense National Security Advisor Susan Rice for Policy Michèle Flournoy State Sen. Chris Coons Defense Former Homeland Security Secy Jeh Johnson State Sen. Chris Murphy Defense Sen. Jack Reed State Ambassador William Burns Defense; VA Sen. Tammy Duckworth State; National Former deputy secretary of State and Deputy American Federation of Teachers Education Security Advisor National Security Advisor Tony Blinken President Randi Weingarten Transportation Los Angeles Mayor Eric Garcetti Former National Education Assn Education Transportation Rep. Earl Blumenauer President Lily Eskelsen Garcia Transportation Former Chicago Mayor Rahm Emanuel Learning Policy Institute President Education and CEO Linda Darling-Hammond Treasury Sen. Elizabeth Warren Former Deputy Secretary of the Treasury Energy Former Energy Secy Ernest Moniz Treasury Sarah Bloom Raskin Former Deputy Secy of Energy Energy Former Federal Reserve vice chairman Elizabeth Sherwood-Randall Treasury and Gov. Roger Ferguson Former Acting Under Secretary of Energy Energy Arun Majumdar Treasury; Commerce Businesswoman Mellody Hobson Chair of the California Air Resources Treasury; EPA Atlanta Fed President Raphael Bostic Board Mary Nichols Federal Reserve Former regional administrator EPA’s Treasury; Fed Governor and former under EPA Southeast region Heather McTeer Toney Federal Reserve secretary of the Treasury Lael Brainard HHS Rep. Pramila Jayapal UN Ambassador Ambassador Wendy Sherman Former White House special advisor HHS NM Gov. U.S. Trade on Western Hemisphere affairs Former Obama Economic Advisor Representative HHS Nelson Cunningham Jeffrey Zients U.S. Trade HHS Former Surgeon General Dr. Vivek Murthy Rep. Jimmy Gomez Representative HHS NC Secy of Health Dr. Veterans Community Project VA HHS; HUD Rep. Karen Bass President Jason Kander Former Deputy Homeland Security Homeland Security VA; UN Ambassador South Bend, Ind. Mayor Pete Buttigieg Secretary Alejandro Mayorkas TBD Rep. Cedric Richmond HUD Atlanta Mayor Keisha Lance Bottoms TBD Former CFTC Chairman Gary Gensler HUD Tampa Mayor Jane Castor TBD Bank executive Don Graves HUD Former Jacksonville Mayor Alvin Brown Biden Transition Chief and TBD HUD Former HUD deputy secretary Maurice Jones former Sen. Ted Kaufman

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Areas to Watch in the 117th Congress

1. Economy

COVID-19 Stimulus Package The former Vice President’s plan would also increase the capital gains and estate levies for individuals who earned If Congressional leaders and White House officials are more than $1 million annually before death. Under President- unable to reach a bipartisan agreement on a stimulus elect Biden’s proposal, unrealized capital gains would be package in the lame duck session, passing a comprehensive taxed at 43.4% at death — a rate that includes taxing those COVID-19 relief package likely will be an immediate priority gains at the new higher ordinary income tax rates. The plan in the 117th Congress. House Democrats have proposed also includes a 3.8% net investment income tax. Estate taxes multiple stimulus bills ranging up to $3.4 trillion, with are expected to be in the mix as well. President-elect Biden priorities including funding for state and local governments, has promised to raise the estate tax rate to 45% (currently housing assistance, extended unemployment benefits, 40%) and lower the exemption for estates to be taxed to strengthening the Payroll Protection Program to support $3.5 million (currently at about $11.5 million for individuals). small business, employee retention tax credit enhancement, support for essential workers, funding for coronavirus testing Trade & Tariffs and contact tracing, financial assistance for healthcare providers, direct payments to individuals, as well as funding We expect the Biden Administration to cooperate with U.S. to support re-opening of schools. Democrats will continue allies to counter unfair trade practices from countries like China pushing for these policy proposals as an economic stimulus as opposed to the Trump Administration’s “America First” bill is shaped. Meanwhile, Republicans will enjoy new-found approach. Both parties supported the integration of low-wage leverage in negotiations given the outcomes of Tuesday’s developing countries into the global economy for decades congressional elections; and we expect conservative before President Trump took office. President Trump shifted members will continue objecting to the size and scope of a away from Republican free-trade orthodoxy toward nationalist COVID-19 relief package. protectionism to garner working-class votes in industrial swing states. Today, the average U.S. tariff on Chinese products is at Taxes its highest level in at least 40 years. The U.S. has abandoned the Obama Administration’s signature pact, the Trans-Pacific If Republicans maintain control of the U.S. Senate, Partnership and rewritten the North American Free Trade President-elect Biden and congressional Democrats will Agreement. Navigating this landscape will be a challenge. not be able to overturn many of the provisions of the 2017 President-elect Biden has said he will insist on “strong rules Republican tax bill, Tax Cut and Jobs Act (TCJA), notably of origin” in any new trade deal, which would require more the tax rates for corporations and individuals in the highest manufacturing in the U.S. while complicating corporate tax bracket, and the cap on the state and local tax (SALT) planning. He has vowed to crack down on provisions of deduction. The TCJA lowered the top federal individual the tax code that encourage outsourcing. income tax rate from 39.6% to 37%. Biden’s plan calls for returning the tax rate back to 39.6% for individuals making Tariffs (Section 301 and Section 232) more than $400,000 to fund government initiatives. The TCJA also lowered the corporate tax rate to 21% from 35%. The Trump Administration used tariffs under Section 301 While President-elect Biden is not looking to return the and 232 to pressure other countries to eliminate their trade corporate tax rate back to 35%, his plan calls for increasing barriers. For example, as part of its efforts to pressure China the corporate tax rate to 28%. Senate Minority Leader to change unfair practices, the imposed up Schumer will continue to push to remove the $10,000 cap to 25% in Section 301 tariffs on certain U.S. imports from on SALT deductions. China under four separate actions, which led to hundreds of requests for exclusions from U.S. manufacturers. We

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also saw bipartisan legislation to limit the president and Democrats also will want to redirect federal government the United States Trade Representative’s (USTR) ability spending to programs and projects they have traditionally to modify duty rates for steel and aluminum and impose supported. The President is required to submit his budget Section 232 duties for national security reasons. We expect by the first Monday of February, but newly inaugurated a Biden Administration to work alongside U.S. allies to Presidents usually submit their initial budgets later (almost pressure China and some U.S. allies to adopt more market certainly by March). This initial budget proposal will provide friendly trade practices. the first in-depth glimpse of the new administration’s spending priorities. The Federal government closed fiscal Buy American Provisions year 2020 with a deficit in excess of $3 trillion. The outlook The Biden campaign promoted a “Buy American” plan, for fiscal year 2021 is not much better. Finally, the Federal along with a $400 billion Procurement Investment to increase Reserve Board has advocated for greater stimulus to prop demand for American products and services. This plan up the economy during the COVID-19 pandemic. would involve tightening domestic content rules, cracking down on Buy American waivers and false advertising, Education creating a “claw-back provision,” reversing tax policies that Several sessions of Congress have failed to reauthorize support outsourcing — which Biden has said is a Day One the Higher Education Act. Of particular concern is student priority, and updating trade rules to align with this policy. assistance — grants and especially student loans. There will also be pressure concerning elementary and secondary Free Trade Agreements (FTA) education support. There will also be pressure to support We expect the Biden Administration to pursue strong preschool education programs. environmental and labor protection provisions in any new free trade agreements, as seen in the negotiations of the Defense United States-Mexico-Canada Agreement (USMCA). Both Houses have passed their versions of the National There are two notable free trade agreements that may Defense Authorization Act (NDAA), but they have not been come up in the next year: United Kingdom and able to resolve their differences. If the Democrats take Trans-Pacific Partnership (TPP). both Houses of Congress, the struggle will be between more progressive Democrats who want to reduce defense Budget spending and devote more resources to domestic programs A significant change could be coming in the 117th Congress and more moderate Democrats who support higher Defense that will impact government spending. House Democrats spending levels. Military health is the fastest rising spending have been discussing the potential return of earmarks, also program in the Department of Defense (DoD). Other policy/ known as “Congressionally directed funding.” Congressional spending issues are the number of Navy ships (300-500), Republicans banned the use of earmarks in 2011, but a new infantry fighting vehicle, new bomber, more aircraft growing list of lawmakers had been advocating for their carriers, more submarines (attack and missile), and the return. House Democratic leaders testified at a House F-35 Lightning Joint Strike Fighter. The Trump Administration Rules Committee hearing in September telling the panel stood up the Space Command, which will require more that earmarks should be restored in the next Congress with spending if Democrats decide to retain it. The other area enhanced safeguards. House Rules Committee Ranking is defense cyber warfare. Member Tom Cole (R-OK) has also been an advocate for restoring earmarks.

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2. Healthcare

Committee, House Energy and Commerce Committee, Healthcare was a primary issue in the 2020 election. While Senate Finance Committee, and Senate Health, Education, Congressional Democrats are expected to work with the Labor, and Pensions Committee are expected to continue Biden Administration to propose a series of healthcare working to develop proposals that will lower drug costs. The proposals, including adding a public option for the Biden Administration is also expected to pursue regulatory Affordable Care Act (ACA). Congressional Republicans are changes that will help address the cost of drugs. Since drug likely to oppose significant reforms. Congress is likely to price reform was a top priority for the Trump Administration, work on supplemental COVID-19 relief, ACA reforms and it’s possible that some of those regulatory proposals could expansion, drug pricing and surprise billing reforms, be updated or changed to meet the Biden Administration’s investments in public health infrastructure and workforce policy agenda. programs, telehealth expansions, and reforms to strengthen medical supply chains. Additionally, it’s expected that President-elect Biden will work with Congress to address surprise medical billing. Affordable Care Act and Healthcare Costs Biden has called for banning healthcare providers from charging patients out-of-network rates which can result in The ACA’s future is uncertain as the law’s constitutionality surprise medical bills for patients. While addressing surprise will once again be considered by the U.S. Supreme Court medical billing has been a bipartisan Congressional priority, in California v. Texas. Oral arguments are scheduled for disagreements over how to set provider payment rates and Tuesday, November 10. Plaintiffs argue that the entire law is resolve billing disputes has slowed progress toward an unconstitutional because the individual mandate provisions agreement. This debate will continue into 2021 as Congress are not severable from the rest of the ACA. A federal district looks for consensus. court has already ruled that the entire law is unconstitutional, and an appellate court upheld that decision, although the COVID-19 appeals court also asked that the district court again review the severability issue. The U.S. Supreme Court is expected The COVID-19 pandemic has also exposed and highlighted to issue a final ruling in spring 2021, which could have a many underlying issues with the U.S. healthcare system, significant impact on the next Congress’ healthcare agenda. including medical supply chain shortages, healthcare access It’s important to note that if the Supreme Court overturns the issues, and significant increases in patients suffering from ACA, preexisting conditions and coverage of adult children mental health issues and substance use disorder. In addition until the age of 26 would be eliminated, along with bringing to providing additional investments to address COVID-19, back the Medicare donut hole for Medicare beneficiaries. President-elect Biden is expected to work with Congress to implement a national testing and vaccine distribution plan, Congressional Democrats and President-elect Biden have address personal protective equipment (PPE) and supply a shared goal of protecting and expanding the ACA. With disruptions, and issue reopening guidance consistent with Senate Republicans unlikely to accept significant changes to public health official recommendations. President-elect the ACA, the Biden Administration may need to work through Biden’s health plan will also include prioritizing investments the regulatory process to overturn many of President Trump’s in the public health infrastructure and health workforce to changes to the law. Senate Republicans may be willing to provide additional resources that will allow for an expansion negotiate health reforms with President-elect Biden if the of health services in underserved communities. Supreme Court strikes down the entire law. The pandemic has also resulted in a significant increase The cost of prescription drugs is expected to be at the in the use of telehealth, which has been aided by both heart of any healthcare debates. While most lawmakers on permanent and temporary telehealth waivers granted both sides of the aisle have raised concerns about drug by Congress and the Department of Health and Human prices, policy disagreements have slowed progress towards Services (HHS). Since many of the temporary telehealth a bipartisan agreement. The House Ways and Means waivers will expire when the public health emergency ends,

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President-elect Biden will need to work with Congress and COVID-19 has also impacted the medical supply chain. stakeholders to identify and select which of these telehealth President-elect Biden is expected to work on strengthening flexibilities to make permanent. Telehealth is broadly the U.S. supply chain by starting a 100-day supply chain supported and could be an area for bipartisan compromise review to determine key vulnerabilities and gaps. President- in the 117th Congress, with a number of proposals already elect Biden has proposed using the Defense Production being introduced in both the House and Senate. Act and Biomedical Advanced Research and Development Authority (BARDA) to ensure critical products are manufactured in America. He has also proposed changing tax and trade policy to incentivize onshore manufacturing that allows for rebuilding critical stockpiles, while reducing dependence on international competitors.

3. Infrastructure

and would invest in electric vehicle (EV) charging stations We expect previously introduced House legislation will serve along U.S. highways. House and Senate Democrats have as the starting point for discussions surrounding transportation introduced several bills this Congress aimed at expanding investment. President-elect Biden’s infrastructure plan and the EV tax credit as well as expanding EV charging H.R. 2, the Moving Forward Act, call for increased investments infrastructure. We anticipate Republican control of the in the public transportation sector. House Transportation Senate will make wholesale changes on fuel economy and Infrastructure Committee Chairman Peter DeFazio standards more difficult. (D-OR) has said a bill like H.R. 2 could move early in the new Congress. Democrats recognize that the transportation Broadband sector is a leading contributor of carbon emissions. We can Improving access to broadband will be an early priority given expect the Environmental Protection Agency (EPA) under a the rise in telehealth and remote schooling. Any recovery/ Biden Administration to reverse course on several rules stimulus in the 117th Congress will address the “digital established during the Trump Administration, such as the divide.” President-elect Biden’s agenda includes $20 billion Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule. for rural broadband investment. He also shares security President-elect Biden’s plan includes a provision that would concerns over Chinese tech firms like Huawei and supports develop new fuel economy standards that would be more growth and investment in 5G development and deployment. ambitious than those set during the Obama Administration

4. Energy and Environment

as much as $1.7 trillion over that same ten-year period into a President-elect Biden has put forth the most ambitious plan to boost renewable power and speed introduction of climate plan of any presidential candidate in history — electric vehicles, through tax credits, boosted R&D into promising, among other things, to get the country to 100% technologies including large-scale battery power storage, clean electricity generation by 2035 and to invest $400 carbon capture, and modernizing infrastructure — billion in clean energy innovation and technology over ten including the nation’s electricity grid and a nationwide years. More specifically, President-elect Biden aims to push network of public charging stations for EVs.

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A Biden Administration will likely take aim at the Trump Reducing carbon emissions by 50% Administration’s rollbacks of many major environmental by 2035 for new buildings; protections as well. Due to the complex and detailed Directing HUD to make low-income rulemaking process — along with structural changes housing more efficient; implemented by the Trump Administration—undoing even just Restoring the full electric vehicle tax credit; some of Trump’s environmental rollbacks could still take years.

The top of Biden’s Administrative actions include reinstating Ending federal subsidies for fossil fuel methane emissions limits from oil and gas exploration and companies; and increasing corporate average fuel economy (CAFE) standards Investing in coal communities as they for automobiles. President-elect Biden has also proposed transition to clean energy. banning new oil and gas permitting on public lands and House Democrats have already proposed significant waters, and permanently protecting the Arctic National Wildlife climate-related legislation in the 116th Congress, which Refuge (ANWR). Additionally, President-elect Biden backs will serve as a starting point for Congressional action “aggressive” new efficiency standards on buildings and home in the next Congress. appliances, as well as requiring public companies to disclose The House Energy and Commerce Committee offered climate risks and aiming to conserve 30% of federal lands and a lengthy draft climate bill that would establish a federal waters by 2030. clean energy standard, form a national climate bank and Globally, President-elect Biden has promised to rejoin the boost funding authorizations for a variety of programs. Paris Agreement. That would only require the U.S. to notify The House Natural Resources Committee has the United Nations, with reentry active 30 days later. The advanced legislation that would temporarily halt U.S. also would need to submit a specific pledge to reduce new fossil fuel leases on public lands and reach emissions, known as a Nationally Determined Contribution. net-zero carbon emissions from public lands A Biden Administration could also use trade agreements to and waters by 2040. combat climate change. The move would add financial teeth to The House Select Committee on Climate Change international pacts to reduce carbon emissions, which until now released a report focusing on a clean energy standard have relied on voluntary participation by the countries signing to decarbonize the power sector by 2040, along with a them. President-elect Biden’s trade agenda calls for a global zero-emissions vehicle standard to ensure all light-duty ban on fossil-fuel subsidies, tariffs on imports that produce cars and trucks sold are zero-carbon vehicles by 2035. a lot of carbon, and trade deals that include commitments to House Democrats are already talking about how to put reduce emissions. together a green COVID-19 recovery bill once President- elect Biden is sworn in. Earlier this year, the House E&E Legislation passed a massive $1.5 trillion infrastructure bill (H.R. Beyond regulations and executive orders, Congress will 2) that includes big investments in clean energy and be needed to enact any significant environmental policy. drinking water. The centerpiece of that package was the President-elect Biden has laid out several objectives he Investing in a New Vision for the Environment and Surface would need Congress to help enact, including: Transportation (INVEST) in America Act, a $494 billion surface transportation bill that the House Transportation Accelerating development of carbon capture technology; and Infrastructure Committee approved over the summer. Chairman DeFazio has stated that H.R. 2 will serve as the Incentivizing development of cleaner centerpiece for a green infrastructure package in 2021. air travel technology;

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5. Congressional Procedures and Administrative Mechanisms

priorities. Under the rules of budget reconciliation, the In the event Democrats are able to gain the Senate majority, Senate is able to avoid the filibuster’s 60-vote threshold and they can use a number of procedures to advance their agenda pass legislation with a simple majority. Since the 1980s, with simple majority votes to avoid significant compromises Congress has successfully used the reconciliation process with Republicans. Senate rules currently require a 60-vote to pass 21 bills that were signed into law. Since 1990, all threshold to invoke cloture to terminate filibusters and major tax legislation was enacted through the reconciliation advance legislation. Extended debate (filibuster) is a long- process. This included the Bush tax cuts in 2001, the 2009 rule in the Senate that gives a determined minority Obama stimulus program, and the Trump tax bill in 2017. the ability to slow and/or stop legislation. There are several The Affordable Care Act consists of two laws. The second mechanisms that Congressional Democrats could use in the law was a reconciliation bill. While budget reconciliation has next Congress to expedite their policy agenda. Although been used by both parties to pass legislation, the process these procedural options would be available to help expedite has limitations. Budget Act point of orders in the Senate legislation in a Democratic Senate, a narrow majority would require 60-vote waivers. make it more difficult for leaders to implement successfully. The projected 2020 election results make it clear that The most aggressive change that a Democratic majority bipartisanship will still be necessary to advance legislative Senate could consider to expedite the legislative process priorities the 117th Congress. would be the eliminating the Senate filibuster that currently requires 60 votes to end debate on motions to proceed and Congressional Review Act final passage of legislation. Senate Democrats could choose to eliminate this 60-vote requirement by implementing a The Congressional Review Act (CRA) gives Congress the procedural mechanism known as the “nuclear option” that ability to review and repeal new federal regulations using would allow the Senate to take up and pass legislation with an expedited legislative process. After a regulation is a simple majority vote. This procedural mechanism was finalized, the CRA gives Congress 60 legislative days to first used in 2013 by Senate Majority Leader Harry Reid pass a joint resolution of disapproval which must be signed (D-NV) to confirm a number of President Obama’s executive by the President. Since Congress was out of session for and judicial nominees who were being blocked by Senate an extended period of time in 2020, it’s anticipated that the Republicans. Once Republicans won back the majority and next Congress will be able to review regulations finalized as White House in 2016, Majority Leader Mitch McConnell far back as June 2020. Senate debate on these resolutions again used the “nuclear option” to confirm all of President is limited to ten hours, meaning they are not subject to a Trump’s executive and judicial nominees, including three filibuster. Passage in the Senate is by a simple majority. U.S. Supreme Court justices. Once a joint resolution is passed by both chambers, it must be signed by the President. If a rule is repealed, the CRA The “nuclear option” has not yet been used to advance prohibits the agencies from reissuing a substantially similar legislation in the Senate, but a growing number of rule, unless legislation is passed by Congress. Democrats have advocated for, or are willing to consider, using this procedural option to advance their policy agenda Overall, the CRA has been used to overturn a total of 17 free of Republican objections under a Biden Administration. rules. In 2017, Congressional Republicans and President To date, only Senator Joe Manchin (D-WV) has expressed Trump overturned 16 rules that were issued in the final opposition to terminating the filibuster using the “nuclear months of the Obama Administration. Prior to 2017, only one option.” Senate Minority Leader Schumer has said that rule was overturned in the 107th Congress (2001-2002). “nothing is off the table,” however, with the size of a possible Democratic majority undetermined, it is unclear, if leaders Budget Reconciliation & Senate Filibuster would have enough support to successfully execute this A Democratic majority House and Senate could use the consequential rules change. budget reconciliation process to advance their top legislative

polsinelli.com | 15 Conclusion

In the 117th Congress, policymakers will push major proposals in the areas of healthcare, economic stimulus, energy and environmental reform, infrastructure, amongst others. Importantly, we also expect social justice, voting rights, and policing reforms to play a major role as key policy proposals are shaped and debated. With Democrats securing control of the White House and House of Representatives and Republicans well-positioned to maintain control of the Senate, securing bipartisan support for priority issues will be key to their advancement. Polsinelli looks forward to helping you navigate this new policymaking landscape and ensure your seat at the table.

Public Policy Team

Alan D. Wheat John Shadegg Senior Policy Advisor Shareholder Practice Chair Vice-Practice Chair [email protected] [email protected]

James H. Davidson Michael M. Gaba Rodney D. Gray Shareholder Shareholder Shareholder [email protected] [email protected] [email protected]

Tracy Hammond Julius W. Hobson, Jr. Susan Henderson Moore Senior Policy Advisor Senior Policy Advisor Shareholder [email protected] [email protected] [email protected]

Cybil G. Roehrenbeck Julie E. Shroyer, Harry Sporidis Shareholder Senior Policy Advisor Senior Policy Advisor [email protected] [email protected] [email protected]

Steven K. Stranne Mark W. Weller Sylvia Kornegay Shareholder Shareholder Policy Advisor [email protected] [email protected] [email protected]

Timothy Perrin Cara Alexander Robert J. Daley Policy Advisor Legislative Director Legislative Director [email protected] [email protected] [email protected]

James F. Fleischmann Michael T. Flood Meredith Check Associate Associate Legislative Specialist [email protected] [email protected] [email protected]

Brent Jordan Legislative Specialist [email protected]

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