sign in sign up
<<
Home , Patrick McHenry, Will Hurd

POST ELECTION LANDSCAPE – POLITICAL LANDSCAPE NOVEMBER 7, 2018

______Overview

The return of divided government in 2019 adds another layer of uncertainty to an already unpredictable political climate in Washington. The dynamics between likely Speaker , a strengthened Senate Majority Leader Mitch McConnell, and a embattled President portend to be epic theatre. The central question is whether there is room for two tracks in Washington – one seeking any common ground on policy and one playing politics around investigations and 2020 positioning – or if it is just a race to political DEFCON 1.

Before getting to 2019, however, the main responsibility of Congress over the next several weeks will be the extension of the current Continuing Resolution or passage of the remaining FY19 Appropriations bills. The four bill package of Financial Services, Agriculture, Transportation-HUD and Interior are nearly entirely done, but have been collateral damage in the immigration debate that has caused the Homeland Security, State-Foreign Operations and Commerce, Justice, Science bills to stall. Border wall funding will hold up serious consideration of Appropriations bills at this point, and now that the election is out of the way, Democratic control of the House could either lead to a quick punting to a CR or White House insistence on getting these bills done now to ensure some priorities are complete before Democrats control the House Appropriations Committee.

Other issues like extending flood insurance, consideration of a disaster aid supplemental, passing a new or extending the current Farm Bill and nominations will all be top of mind for leaders in both parties during the lame duck and heading into the New Year.

Senate With the successful expansion of their majority, Senate Republicans will head into the lame duck and 2019 focused on:

REPUBLICAN LEADERSHIP SHUFFLE At this point, it appears likely that the departure of term-limited Majority Whip (R- TX) will allow several junior members to jump one rung – John Thune (R-SD) to Whip, John Barrasso (R-WY) to Conference Chair, and Roy Blunt (R-MO) to Policy Committee Chairman. With elections scheduled for November 14, time will be short for an outsider to mount a challenge. Blunt’s promotion would open up the Conference Vice-Chairman position where several members are considering runs, including Mike Lee (R-UT), Deb Fischer (R-NE), and Joni Ernst (R-IA), and McConnell is prioritizing having a conservative female member on his leadership team. Meanwhile Cornyn has been promised a continued unofficial seat at the leadership table, probably as ‘Counsellor” to Leader McConnell. With Cory Gardner (R-CO) now in his own reelection cycle, the caucus will need a new Senatorial Chair in a cycle that presents a daunting map for the Republicans. The only person who has been working to solidify support is Todd Young (R-IN). The Chair will mount a majority defense in several states where President Trump is unpopular, such as Colorado and Maine, while the cycle also features potentially tight races in Alaska, Georgia, Iowa, and . On the positive side for Senate Republicans, Alabama is a likely pickup with Doug Jones (D-AL) facing somebody other than Roy Moore. APPROPRIATIONS In general, the budget and appropriations process in 2017-18 was marked by bipartisanship and regular order. That calm will come to a screeching halt in December when we expect a major showdown over immigration policy. While the outlines of wall funding for DACA legislation remains a possibility, the emergence of additional hot button issues since the February 2018 immigration-inspired shutdown – particularly the surge of families claiming asylum on our Southern border, but also fights on Temporary Protected Status designations, ICE raids, and perhaps birthright citizenship – means the odds of a deal are remote. Such an outcome would mean either a partial government shutdown or a continuing resolution. The FY20 appropriations process will obviously be complicated by the disparate priorities of the House Democratic majority and Senate Republicans, but Chairman Richard Shelby (D-AL) and Ranking Member Pat Leahy (D-VT) have worked together to keep policy riders off nearly all of their Committee passed legislation. This result has led to common ground on domestic spending, which will also be needed if leaders of the Appropriations Committee as well as the Speaker and Senate Majority Leader work to address the sequester that will go into effect later in 2019. If that happens, with balanced control and few riders, it’s possible that the top line numbers will allow appropriators to have another year of positive outcomes. NOMINATIONS The likely resignations or firings of multiple Cabinet Secretaries will create numerous openings that will require considerable investment by Leader McConnell and his committee chairs to fill. In addition to AG Jeff Sessions resignation today, we expect turnover at many of the following departments: Defense, Homeland Security, Commerce, Interior, and Energy as well as the UN Ambassador and the FCC. With an enhanced majority and no filibuster available to Democrats, Leader McConnell should be able to muscle through any nominee that does not spark resistance from his own party. The mechanics of processing these high-level posts, however, will suck up bandwidth, time, and staff attention and delay legislative activity in affected committees. The shuffle may also delay or uproot lower-level executive branch appointments that have proven problematic for the entire Trump Administration. At the same time, the majority will continue to move judicial confirmations as fast as committee and floor time will allow, and there is always the possibility of another Supreme Court vacancy; as Lindsey Graham put it last night, “the conservative judge train will keep rolling along.” NEW CHAIRMEN AND COMMITTEE RATIOS While the majority is familiar, many of the leading figures will be new, or in new roles. The retirements of Finance Committee Chairman Orrin Hatch (R-UT) and Foreign Relations Committee Chairman Bob Corker (R-TN) will likely allow Chuck Grassley (R-IA) and Jim Risch (R- ID) to assume the chairs, with Judiciary falling to maverick Lindsay Graham (R-SC). Thune’s shift to Majority Whip will necessitate a new Chairman of the Commerce Committee, likely to be Roger Wicker (R-MS). An increased majority will also enable Leader McConnell to negotiate better committee membership ratios either by dropping a seat on the Democratic side or adding a Republican seat, depending on the committee and vacancies. THE DEMOCRATIC MINORITY Given the difficulty of the 2018 Senate map, where Democrats were required to defend 26 of the total 35 seats that were up, including 10 states that Trump won in 2016, the loss of three net seats, while disappointing for party leaders, will unlikely lead to inter-caucus recriminations or major fallout. In the days ahead, Senate Democrats will point to the difficulty of the map while attempting to beat back narratives about their difficulty winning in rural areas. In those rural areas where there were bright spots for Senate Democrats, Senators Joe Manchin (D-WV) and Jon Tester (D-MT) will be credited for building and sustaining a brand and will be looked to for guidance on competing outside of urban and suburban America. There will also be lingering questions, particularly from more moderate caucus members, about whether progressives in the party put too much emphasis on the Kavanaugh vote to the detriment of moderate members in Trump states. Last night’s Senate results are unlikely to provide instructive takeaways going into primary season on issues many Democrats hope to resolve, including their party’s proactive platform on health care (Medicare for all vs. Medicare expansion), immigration (abolish ICE vs. pursuing comprehensive reform efforts), and the broader question of the most effective candidate profile (progressive vs. moderate, young vs. old, male vs. female). Instead, Senate Democrats will likely look to the results in suburban House districts and Midwestern gubernatorial elections as the playbook for 2020 candidate recruitment and messaging. Senate Democrats are unlikely to cooperate on any major pieces of legislation in the upcoming Congress; however, some Democratic Senators have cited infrastructure and drug pricing as opportunities for bipartisan work. Senate Democratic staff point to lower profile bipartisan wins like last Congress’s opioid bill as the model for potential work across the aisle. Of course, all of this will hinge on the President’s willingness to deal with the House Democratic leadership going forward. 2020 MAP The big question is whether yesterday’s results dug Senate Democrats into a hole deep enough that they will be unable to compete for the majority in 2020. The 2020 Senate map is certainly an improvement for Democrats, with Republicans defending more seats, but those seats are nearly all in reliable red states. The obvious pick-up opportunities are in states where won (Maine – Susan Collins (R-ME) and Colorado – Cory Gardner (R-CO)). The reach races will be in (Iowa – Joni Ernst (R-IA)) where Dems did well in the House last night, (North Carolina – (R-NC)), and (Arizona – Jon Kyl (R-AZ) or another appointee). Senate Dems will likely lose Doug Jones (R-AL) in Alabama, especially as it is a presidential election year. House For the first time since 2010, Democrats will soon hold control of the House of Representatives. Democrats did particularly well with suburban women and independents, to go along with an intense activist base that helped swell voter turn-out across the board. Though a number of races remain undecided, Democrats are headed for a gain of more than 30 seats, and they’ve been filled with a record number of diverse candidates. Democrats now are in charge of a body geared almost exclusively to the whims of the majority, and with gavels and subpoenas at their disposal, we expect a very bumpy road for the Administration for the next two years. DEMOCRATIC LEADERSHIP First things first, however, and attention will quickly shift to leadership elections. Democratic Leader Nancy Pelosi (D-CA) has repeatedly discussed her plans to run for Speaker, and while there was much speculation at the beginning of the year regarding her vulnerabilities in taking back the top spot, she and her team feel confident that they have secured the votes needed. Indeed, Rep. Tim Ryan (D-OH), who unsuccessfully challenged Pelosi two years ago, is the only Democrat so far who has publicly toyed with the idea of a run against her this time out –with others remaining quiet and likely only launching a campaign if her support starts to waiver. As with Pelosi, others in the current leadership slate are likely to keep their jobs, with (D-MD) expected to become the Majority Leader and (D-SC) the Majority Whip. Further down the leadership rung – for positions like Assistant to the Speaker, Caucus Chair, Caucus Vice-Chair – is where things get interesting, as a number of younger members, some frustrated with the lack of opportunity for advancement within the caucus, are looking to secure their seats at the table. These include Representatives Linda Sanchez (D-CA), (D-CA), (D-IL), (D-RI), Ben Ray Lujan (D-NM) and others who have stated that they expect to look at the landscape as the dust settle. As of now, Wednesday November 28th and Thursday November 29th are the dates set for leadership elections for Democrats. AGENDA From the Democrats’ perspective, gone are the days where they watch as oversight requests are met with silence. As they ready themselves for the majority, it’s fair to expect multiple investigations by House committees early in the next Congress. Members have already discussed reopening the investigation into Russian interference in the 2016 election, along with issues related to collusion and Trump’s taxes, just to name a few. Departments and agencies within the Administration will have robust oversight placed upon them as well, and Democrats will likely seek additional documents to ongoing cabinet controversies. A challenge for the caucus will be to prioritize their investigative strategy so that it’s focused and effective – drawing attention and scrutiny to the Administration’s missteps – while at the same time, demonstrating that they have a positive policy vision. With that in mind, a Democratic-controlled House will do more than just thwart the president’s legislative agenda and launch investigations – Leader Pelosi and her Committee Chairs have an agenda they also want to push forward. Take health care, for example. In polling, messaging, and on the campaign trail, few issues have had the political potency of this issue – it has animated Democratic voters and candidates alike. Democrats have already proposed a plan aimed at addressing increasing costs of American prescription drugs, including a new regulatory agency and broad new oversight powers, and we expect such proposals to factor heavily into a Democratic 2019 agenda. In terms of taxes, it’s no secret that Democrats have criticized Trump’s tax cuts as only benefitting corporations and the wealthiest Americans, and Republicans weren’t able to successfully message this issue on the campaign trail. With many broader Democratic priorities requiring revenue increases, look for proposals to increase the top individual tax rate, roll back changes on the estate tax, and raise the cap on the state and local tax deduction. Another consistent theme from House Democrats, and Leader Pelosi in particular, has been aimed at addressing the “Culture of Corruption” in Washington. This has been amplified by Democratic candidates around the country who are swearing off any corporate PAC money. At a minimum, we expect Democrats to address election reforms, including efforts to protect voter rights, hardening election infrastructure against cyber-attacks and perhaps even taking on partisan gerrymandering.

In the energy and the environment space, we expect Democrats to message against things like the withdrawal from the Paris Climate Accord, but also to proactively support clean energy and climate change initiatives through the appropriations process and other legislative vehicles like the National Defense Authorization Act and the transportation reauthorization, among others. Finally, an issue that everyone seemingly loves, but always gets pushed off – infrastructure – may finally get its day. Traditional infrastructure – roads, bridges and transit – combined with other priorities like updating water systems, deploying more clean energy and tackling rural broadband have been priorities for virtually all Democrats. In fact, it was the first item mentioned in the most recent Progressive Caucus budget. If Democrats want to find an area of bipartisan agreement as part of their 2019 agenda, they wouldn’t have to look much further than an infrastructure package Leading the way on much of this, or course, will be the committee chairs, and we expect all current full committee Ranking Members to continue to lead their respective panels. INTERESTING TIDBITS ON SPENDING

• Over 70% of Dems running in Republican seats for the House did NOT take corporate PAC money (for reference, only 6% made the same pledge in 2016). Pelosi has signaled that H.R.1, which will include a larger rules package to make the legislative process more open and transparent, would be led by a bill to change campaign finance laws designed to reduce the influence of money in politics. • GOP committees outraised their Dem counterparts by $47 million this cycle. THE REPUBLICAN MINORITY The day after the election in 2016, many heads were spinning at the election of Donald Trump. There was a certain optimism, however, among Republicans, that after a decade’s worth of opposition and stalemate in Washington, this would be their opportunity to move forward as they finally controlled the White House and Congress. Now, two years later, with mainly tax reform and two new Supreme Court justices (one of whom left many scars) to show for it, Republicans are once again, are out of power in the House. WHY DID THIS HAPPEN? To put it simply: a toxic environment. Traditionally, midterm elections tend to favor the party not occupying the White House, so in that regard, this isn’t overly shocking. Since WWII, the president’s party has lost an average of 25 seats in midterm elections, and that same stat worsens to 40 seats when the President has a less than 50% approval rating, as does Trump currently. The current projections of a 27+ seat Democrat pickup is right in line with historical trends. Watch for Republicans, starting with the President, to blame the losses on retirements. But, while the economy is doing well, and Trump does have big wins on tax reform and the Supreme Court, he continued to have a message of division and anger that ultimately separated Americans rather than united them. This is especially true among suburban female voters who voted for Democrats more so than ever before. This shift left little support for Republicans in competitive seats. Some welcomed the President’s endorsement, while others ran from it. But running on a record of little accomplishment over the past two years is tough. Likewise, when the majority of Americans think Congress is dysfunctional, it’s even harder to break through with a positive record of results that earn you reelection. In addition to these factors, polls showed a 25% enthusiasm gap favoring Democrats this cycle. This development was a factor in them picking up double digit seats when early estimates were in the single digits. WHAT’S NEXT? Trade, oversight, investigations, tech and health care will be leading issues for at least the first year of the new Congress. This agenda will most likely put Republicans in a position to defend big business – furthering the ‘us vs. them’ chasm. Also unhelpful will be Democratic candidates gearing up for 2020 and attacking Trump and Republicans as a whole. The GOP will be taking hits from all sides. The Democrats will take lots of votes on the above issues, forcing Republicans to also weigh in on the record, but the result will be just that – a vote. It will not make it to the Senate and certainly not the White House. They will be messaging votes at the most. The reality in the House is that the party in the minority has little influence and weight on the conversation and progress legislatively. The communications strategy will be in defense mode and much of the messaging that breaks through will be reactive. There is space, but it is small, for Republicans to come through with a cohesive and constructive message that shows progress and unity. The one opportunity for Republicans to lead, and a potential show of bipartisanship, is around an infrastructure package that the majority of Americans see as needed in order to fix crumbling roads, bridges, water services, and broadband. Among other issues most important to Americans are rising health care costs (including lowering drug prices) and immigration (resulting in a partisan shift: Dreamers vs. a wall) REPUBLICAN LEADERSHIP Freedom Caucus Chairman Jim Jordan (R-OH) already announced his bid to unseat the Republican Leader, Kevin McCarthy (R-CA), who also announced he would run for his party’s top spot in the House. This fight will shake out on November 14th when the House Republicans will hold their leadership elections, but there will likely be bruises and even greater fractions within the party. Since McCarthy is no longer running for Speaker, he only has to secure a majority of the conference for Minority Leader, which is an easier road to plow. As of now, we are predicting that McCarthy will be elected Leader and (R-LA) will be elected Minority Whip. In this scenario, it’s possible that current Chief Deputy Whip Patrick McHenry (R-NC) will choose to move over and be the top Republican on the Financial Services Committee, leaving an opening for Scalise’s #2. Another race to watch is the chair of the House Republican Conference currently help by Rep. Cathy McMorris Rodgers (R-WA). Rep. (R-WY) has already announced a challenge, and this will be a race to watch.

REPUBLICAN RANKING MEMBERS Nine House Republicans are vacating their committee chairmanships leaving a lot of ‘new blood’ at the committee level. Ranking Members will be determined by the Steering Committee and ratified by the Conference after Thanksgiving. Our predictions are as follows: Administration: Rodney Davis (R-IL) Appropriations: (R-TX) OR Tom Graves (R-GA) Financial Services: (R-MO) OR Patrick McHenry (R-NC) Foreign Affairs: Mike McCaul (R-TX) OR Joe Wilson (R-SC) OR Chris Smith (R-NJ) Homeland Security: Mike Rogers (R-AL) OR (R-NY) OR Will Hurd (R-TX) Judiciary: (R-OH) OR Doug Collins (R-GA) Oversight & Gov Reform: Jim Jordan (R-OH) Science, Space & Tech: Dana Rohrabacher (R-CA) if he somehow returns, Frank Lucas (R-OK) Small Business: Steve Chabot OR Steve King (R-IA) (Judiciary committee dependent)

Transportation & Infrastructure: (R-MO) or Jeff Denham (R-CA)