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Home , Bill Sali, Caucus Chair, Don Cazayoux, Illinois Senate, Jack Markell, Jim Douglas

Government Relations Update Election 2008 Special Edition A Look Behind the Numbers

Obama’s win is also notable in that it was truly a national win. In acquir- ing at least 349 electoral votes, the Senator garnered victories in key states in every region of the country—New England, Mid-Atlantic, South, Midwest, Plains, Mountain West, Southwest, and Northwest. As did before him, Senator Obama carried every state in the Northeast. His break- through states, ones he took out of the GOP column from 2004, were , , , New Mexico, Virginia, Nevada, and Iowa. As this is written, Obama holds a small lead in , a state that went to Bush in 2004. Senator McCain maintains a small lead in Missouri, also a “red” state last time.

The 44th President of the SENATOR ’S solid victo- ry in the 2008 presidential election is historic—an African-American has been elected President of the United States. It is also historic in terms of political history in that his campaign appears to have generated the highest voter turnout in recent memory, based on the percentage of registered voters who came to the polls.

Obama 349 McCain 163 Undecided 26

© 2008, BLANK ROME GOVERNMENT RELATIONS LLC. Notice: The purpose of this newsletter is to review the latest developments which are of interest to clients of Blank Rome. The information contained herein is abridged from legislation, court decisions, administrative rulings, and other sources and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel. Watergate • 600 Ave., NW • Washington, DC 20037 • (202) 772-5800 Election 2008: A Look Behind the Numbers

In the end, this election—while campaign in recent weeks and months, it appears likely Obama will claim a hard fought—will likely be viewed mandate to accomplish the following: similar to the way many observers THE ECONOMY—take further steps to create jobs and spur economic growth view the 2004 election. The political through a blend of significant spending and targeted tax breaks. fundamentals were heavily favoring HEALTHCARE—expand government programs for child health care so as to one side and nothing that happened ensure all children have insurance coverage. Enact a health care reform pack- in the general election campaign did age that includes inducements for employers to offer coverage and an expan- anything to reverse that—quite the sive government program to cover other without health insurance. contrary. In 2004, was at war and it was the first Presidential THE WAR IN —reach agreement with the Iraqis for an accelerated timetable election since the September 11 ter- for pulling U.S. forces out of Baghdad first and then out of the country alto- rorist attacks. With the economy gether. growing, the President was able to INFRASTRUCTURE—enact a new investment program to improve the nation’s keep voters focused on national and infrastructure. homeland security issues. His oppo- ENERGY—push for greatly expanded incentives for alternative energy develop- nents stumbled out of the starting ment and reach a compromise on offshore drilling and . blocks and never fully recovered. In 2008, the GOP candidate was sad- dled with a now unpopular war, a Obama Puts Seven 2004 Red States in the Blue President of his own party with dis- approval ratings at historic lows, and an economy that began the campaign Florida – 27 electoral votes Iowa – 7 electoral votes in a weakened state and ended it in crisis. McCain picked a Vice Ohio – 20 electoral votes Nevada – 5 electoral votes Presidential nominee, Alaska Virginia – 13 electoral votes New Mexico – 5 electoral votes Governor , who, accord- Colorado – 9 electoral votes ing to most polls, became a lightning rod for controversy and opposition Total: 86 electoral votes and the campaign never settled on a clear narrative. Key questions now are does The 111th Congress President-elect Obama have a man- U.S. SENATE date and, if so, to do what? Given the There has not been this much of a shift in power to one party in the U.S. decisiveness of his victory and Senate since the 1994 Clinton mid-term election when Republicans gained eight Democratic gains in House and seats. With the public placing a great deal of blame on the Republican party for Senate races, it appears clear that the the state of the economy, it was difficult for Republicans to defend the 23 seats Democrats and the new President will they had to protect, while the Democrats only had to defend 12 seats. have a mandate to act. Based Currently, Republicans and Democrats each hold 49 seats, and two on the con- Independent Senators with the Democrats, giving control of the Senate tent to the Democratic party. As expected, the results from the 2008 elections sig- of nificantly increased the Democrats’ majority in the Senate. In the 111th the Congress, Democrats will hold 54 seats to the 40 for the Republicans—a 5-seat gain for the Democrats. There are currently 4 undecided races in Alaska, , , and Oregon. The Democratic margin could grow with the outcome of the undecided races, plus, the two Independents—if they continue to caucus with the Democrats. This is significant because the Democrats now have a wider voting margin that increases their ability to move their legislative agenda, especially with a Democratic President in the for the first time in eight years.

2 Election 2008: A Look Behind the Numbers

Cloture – The Magic of 60 The Balance of Power: U.S. Senate There has been a great deal of recent speculation as to whether or 54 4 2 40 not the Democrats were going to 111th Congress: Democrat+5 Republican -9 Independent 2 Undecided 4 reach the magical number of 60 seats needed under the Senate rules to cut 49 2 49 off floor debate. In theory, reaching 110th Congress 60 seats would enable Democrats to “invoke cloture.” Cloture is the only Open Seats procedure by which the Senate can With the elevation of Senators Obama and Biden to the White House, vote to place a time limit on consid- there are now two vacated seats in the U.S. Senate. Both seats will be appoint- ed by their respective governors, who are also from the same party. eration of a bill or other matter, and thereby overcome a filibuster mount- ILLINOIS Under Illinois law, Governor , Democrat, could ed by the minority party. In reality, choose someone from either party to ride out the rest of Senator Obama’s while obtaining 60 seats would make term, which will conclude in 2010. Names that have surfaced include: it easier to secure the necessary votes • , President of the Illinois Senate; for cloture, success is not guaranteed • Attorney General ; for Democratic initiatives because • , former Iraq veteran and Director of the Illinois most Senate votes are not straight Department of Veterans' Affairs; and party-line votes and Senators often chart an independent course from • Congressman Jesse Jackson, Jr., a current member of the U.S. House of their leadership. In the end, the Representatives. Democrats have only a slight chance Governor Blagojevich, who is up for reelection in 2010, is currently deal- to secure 60 Senators and they need ing with his own political imbroglio and has extremely low approval ratings. In to win all the undecided races and the light of this, there is speculation that the Governor would appoint his closest two Independents to continue to competitor in the gubernatorial race, Attorney General Lisa Madigan, to fill caucus with them. Senator Obama’s vacant spot until 2010. The vacancy in Delaware leaves Governor Surprises (D), with a choice as well. Senator Biden just won his 7th term but will not One might look at the vulnerable serve in the next Congress. It is widely speculated that Senator Biden’s son, Republicans who won their re-elec- Delaware Attorney General Joseph R. “Beau” Biden III, might be a logical tion as the surprise winners in this replacement. However, is a member of the Delaware Army political environment, instead of looking at GOP incumbent losses. It was surprising to see many tradition- New Faces in the Senate ally “red” states, such as North Carolina, Mississippi, Georgia, COLORADO Alaska, and Kentucky, in such hotly contested races. In the end, the incumbents who lost their bid for Jim Risch another term include Senator John Sununu (R-NH) and Elizabeth Dole NEBRASKA Mike Johanns (R-NC). The current fate of Senators NEW Ted Stevens (R-AK), Jeanne Shaheen (R-GA), Gordon Smith (R-OR), and HAMPSHIRE (R-MN) remains NEW MEXICO Tom Udall uncertain—although Stevens, NORTH Chambliss, and Coleman have the Kay Hagan slightest of leads. CAROLINA VIRGINIA

3 Election 2008: A Look Behind the Numbers

Leadership and Committee Assignments With the start of a new Congressional session next year, Congressional leadership and committee assignments will be reshuffled. Members of the 111th Congress will be nominating and electing their colleagues for leadership positions. The Democrats are not expected to make any changes to their cur- rent lineup of Majority Leader Harry Reid (NV) and Majority (IL). There is talk that Senator (NY) will stay on to head the Democratic Senatorial Campaign Committee (DSCC) for another cycle, or possibly recruit Senator Bob Menendez from . With the narrow re-election of Minority Leader Mitch McConnell (KY), there is not expected to be a great deal of shift in power with the Republican Senate leadership team. Senator John Kyl of Arizona was not up for re-election and should remain as the Minority Whip. The only major change will be a new head of the National Senatorial Congressional Committee (NRSC) as Senator National Guard and will be serving in John Ensign (NV) steps down. Iraq until October 2009. Some sug- With the new Congress, there will be new committee assignments, as more gest the possibility of appointing a senior Senators get elevated to “A” list committees, such as the Finance and “placeholder” candidate who will Appropriations Committees. There will also be a new chairman of the Foreign promise to resign the seat after Beau Relations Committee, as Senator Biden leaves for the Executive Branch. It is Biden returns from Iraq. difficult to predict who will take over committee chairmanships and exactly There is one more variable to what committees will be vacated by Senators moving to different committee consider in Delaware. Governor assignments and committee leadership positions. Senator Chris Dodd (CT) is Minner’s term in office ends at 9:00 next in line in seniority on the Foreign Relations Committee, but may choose a.m. on January 20th, while Senator to retain his position as Chairman of the Banking Committee because of that Biden will not be sworn in as Vice committee's importance in addressing the financial crisis. If Senator Dodd President until after noon that same declines the Foreign Relations Committee chairmanship, it is expected that day. If Senator Biden wants Minner Senator John Kerry (MA) will readily give up his gavel on the Small Business to make the choice, he may have to Committee to take on the Foreign Relations assignment. The Republicans will relinquish his Senate seat before have a reshuffling of committee assignments but it is widely assumed that their Minner leaves office, or perhaps ratios on each committee will be lowered with the increasing Democratic decline to be sworn in for his new majority. Senate term. There will also be a great deal of reshuffling of committee leadership Although Senator Biden will be assignments with the retirement and defeats of prominent Republicans. With moving into a much loftier position the outcome of Senator Stevens’ (AK) seat unknown, and questions about pos- in the Executive Branch, the State of sible expulsion from the Senate due to his recent conviction if he wins, there Delaware and its many corporations is a possibility of an opening in the Ranking Member position on the will be losing a champion in the Commerce, Science, and Transportation Committee. There are other major Senate. Delaware’s corporate-friendly Republican committee leadership positions being vacated by retirements. For laws have brought more than 60 per- example, Senator Pete Domenici (NM) is the Ranking Member of the Energy cent of the American Fortune 500 and Natural Resources Committee and did not seek re-election. firms to the tiny state, which has been an economic boon. Senator Biden has been very pro-business on bank- ruptcy issues and a staunch protector of Delaware’s corporate interests. A freshman replacement Senator, even with the same pro-business attitudes, will have difficulty providing the same support for Delaware business interests as a powerful, senior legisla- tor like Senator Biden.

4 Election 2008: A Look Behind the Numbers

U.S. HOUSE OF REPRESENTATIVES The Balance of Power: U.S. House of Representatives As expected, Democrats will 11 172 remain in the majority in the House 252 of Representatives for the 111th 111th Congress: Democrat +19 Republican -26 Undecided 11

Congress. The new breakdown will be 235 199 252 Democrats to 172 Republicans 110th Congress with 11 races still to be decided. The decks were stacked against since the 2000 elections. the Republicans from the start, with Rep. (D-FL-16): Republicans targeted this seat to win back just six Democratic open seats in the almost as soon as Mahoney was elected to his first term in 2006, believing the House, compared to 29 Republican win was a fluke response to ’s resignation in the face of scandal. open seats. That figure included 23 Faced with an already hard race, Mahoney’s campaign was all but doomed Republican retirements—an unprece- when his own personal scandal of an alleged extramarital affair, rumors of legal dented number—compared with just and ethical violations, and potential investigations by both the FBI and a three Democrats retiring. House panel became nationwide front page news in October. In the end, Tom Even though some races are still Rooney, a former Army officer and lawyer whose family owns the Pittsburgh too close to call such as Rep. Dave Steelers, handily won the district by a comfortable margin of 21%. Reichert (R-WA-8) and Rep. Bill Sali In addition to the Mahoney seat, Republicans did flip a few other (R-ID-1), there is no doubt that Democratic seats including (TX-22) and State Senator Democrats have increased their mar- , winning back the seat taken by Democrats in a special election last gin. spring by Rep. Don Cazayoux (D-6). Some states have a whole new Leadership and Committee Assignments makeup, such as . With six Republicans in the 29-member The Democratic leadership is expected to remain constant into the 111th House delegation in the 110th Congress. of the House Nancy Pelosi (CA) will retain her role, with Congress, there are now only three. Steny Hoyer (MD) staying on as Majority Leader, Jim Clyburn (SC) as Connecticut Republican Christopher Majority Whip, and Rahm Emanuel (IL) as Democratic Caucus Chair. The Shays (CT-4) lost his seat, leaving only potential change here will be if Congressman Emanuel decides to accom- New England without a single pany his friend and fellow Chicagoan, Barack Obama, to the White House as Republican seat in Congress. the new President’s Chief of Staff. Other notable races were: Rep. Michele Bachmann (R-MN-6): Defeated House Incumbents Already facing soft support from her constituency in the face of current REPUBLICAN DEMOCRAT economic woes, Bachmann drew national attention—and controversy— to her campaign after she made com- (CO-4th) Nick Lampson (TX-22nd) ments on MSNBC’s Hardball that Rick Keller (FL-8th) Tim Mahoney (FL-16th) she “was very concerned [Barack Joe Knollenberg (MI-9th) Don Cazayoux (LA-6th) Obama] may have anti-American Christopher Shays (CT-4th) (KS-2nd) views.” The Democratic (FL-24th) Congressional Campaign Committee Tim Walberg (MI-7th ) immediately responded by pouring Jon Porter (NV-3rd) $1 million into the contest in support of Democratic candidate, Elwyn Randy Kuhl, Jr. (NY-29th) Tinklenberg. Bachmann may only be Robin Hayes (NC-8th) able to attribute her win to the fact Steve Chabot (OH-1st) that Minnesota’s 6th district has been Phil English (PA-3rd) a reliably Republican stronghold Thelma Drake (VA-2)

5 Election 2008: A Look Behind the Numbers

Maryland Representative Chris With the newly-widened margin, Democrats will have little problem mov- Van Hollen is expected to be an ing their priority bills out of the House, even though Congressional emerging player for the Democrats Republicans can still employ procedural hurdles to slow down the process. In since he spearheaded the Democratic fact, the increased majority may give Speaker Pelosi the flexibility to let her Congressional Campaign Committee more conservative members vote against bills and still get them passed. As was (DCCC) during this election cycle. the case during the 110th Congress, however, the true test for many of these What the results of the election bills often plays out in the Senate. While the results for a few Senate races have not clarified is what will happen remain outstanding, it does not appear that Democrats will hold 60 seats in on the Republican side of the aisle that chamber. with regard to their party leadership. Despite having a comfortable majority, Speaker Pelosi may still not be able Ohio Congressman to push through a completely liberal agenda. As has remained the case since has had a rough year as Minority she rose to power, she will still be hampered on some issues by the Blue Dog Leader, as have the Minority Whip Democrats, the moderate-to-conservative wing of the party. Many of the new Roy Blunt (MO) and Republican Democrats elected yesterday are likely to be closely aligned with the Blue Dog Conference Chairman mindset. (FL). Putnam wasted not time in Another sticking-point that will remain the same next year despite yester- telling his colleagues that he plans to day’s results will be utilizing “pay-as-you-go” financing. The Democrats insti- leave his post, possibly to pursue a run tuted such a rule when the party took the majority in 2006, and it has proven a for governor in his state. an obstacle to getting things done. With the deficit increasing to record num- Conservative Republican bers, finding offsets to pay for President-elect Obama’s priorities will likely Representative (TX) is hamstring both Congress and the new Administration. Extending a series of expected to seek the position. expiring tax incentives focused on renewable energy production, research and It will be tough for Boehner and development, an enhanced child tax credit, and an optional deduction for state Blunt to hang on. In this instance, sales taxes was held up for much of the past year due to a disagreement over even if Boehner tries to retain his whether offsets needed to be used to extend the credits. While an agreement post, there are rumors that was finally reached, most incentives were only extended for two years, mean- Congressman Blunt plans to hand his ing that the same issue is likely to emerge during the 111th Congress since the whip responsibilities over to tax incentives will need to be extended again very soon. Congressman , Virginia, a On some issues, regional concerns have always played a bigger role and we rising star in the Republican party. expect to see that again during the 111th Congress, despite the Democratic The conflict between the conservative gains. For example, support for certain renewable energy initiatives tends to fall and moderate wing of the Republican along regional lines as opposed to being purely partisan. party, which really intensified during the debate surrounding the financial GUBERNATORIAL RACES rescue package, will likely continue There were 11 gubernatorial contests on the ballot this year: 4 Democratic into the 111th Congress. incumbents; 2 Democratic open races; 4 Republican incumbents; and 1 Republican Organizational meetings are open race. planned for the week of November While the outcome was not in any doubt for six of them, the other five 17 so answers will be coming shortly. have been interesting to watch—especially two of the five that early on were resisting the Democratic tide that was moving across the country. After yesterday’s elections, we have Democrats in control of 28 states across the nation compared with the 22 held by Republicans. On the Democratic side, incumbent Governors Brian Schweitzer in , John Lynch in New Hampshire, and in West Virginia all won by a substantial margin. In the open seat contest in Delaware, State Treasurer (D) won by a double digit margin. For Republicans, Governors John Hoeven in North Dakota and Jon Huntsman in Utah also won their respective races. In , Governor won a fourth, two-year term receiving 55% of the vote. If Governor

6 Election 2008: A Look Behind the Numbers

2008 Governors Election Results

DELAWARE INDIANA MISSOURI MONTANA

Jack Markell Mitch Daniels Jay Nixon Brian Schweitzer

NEW HAMPSHIRE NORTH CAROLINA NORTH DAKOTA UTAH

John Lynch Bev Perdue John Hoeven Jon Huntsman

VERMONT WASHINGTON WEST VIRGINIA

Jim Douglas Chris Gregoire Joe Manchin

Douglas had not received over 50% challenges in his campaign including not being that well known to Missourians of the vote, the election would have outside of his congressional district. Nixon, by contrast, was running in his gone to the Democratic controlled seventh statewide election after 16 years as Attorney General. Nixon emerged legislature. victorious and gave the Democrats a one seat gain. The only other Republican Democrats had two seats that were considered a toss up; the open seat in incumbent seeking re-election was North Carolina and Governor Chris Gregoire in Washington. In both of these Indiana Governor Mitch Daniels who races, the Republican candidates ran on the theme of “change.” faced former Democratic In North Carolina, Democratic Lt. Governor Bev Perdue was in a tight Representative and former Clinton race with Republican Charlotte Mayor Pat McCrory. McCrory was the change Administration USDA Under candidate in this race since Democrats have held the governorship for 16 years Secretary Jill Long Thompson. and Perdue had been Lieutenant Governor for eight of those. Republicans did Daniels’ approval ratings have been a good job of portraying Perdue as the personification of the status quo while hovering at 50% since 2005 and Perdue struggled to find a message that resonated with voters. However, the despite his close ties and former ser- Obama campaign had registered thousands of new voters and this was Perdue’s vice in the White House he was able saving grace as those voters turned out in record numbers. With 95% of to pull out a victory. With 96% of the precincts reporting, Bev Perdue has won this race with 50% of the vote and is precincts reporting, Governor the state’s first female governor. Daniels won with 58% of the vote, compared to Long Thompson with In Washington, the race was a rematch of the 2004 contest when Governor 40%. While Long Thompson was Chris Gregoire defeated former Republican State Senator Dino Rossi by 133 able to benefit some from the Obama votes. While many Republican candidates for statewide office in blue states campaign’s efforts to win this tradi- were struggling, Rossi managed to portray himself as a candidate of change dur- tionally red state, in the end it was ing this election by contrasting himself to Gregoire, who has served over 39 not enough. Daniels held on to his years in state government, and kept the governor locked in a tight race through- job by emphasizing his efforts to out the campaign. In the end, Senator Obama’s lead in this blue state and an boost the state’s economy. almost ideal political landscape for Democrats allowed Governor Gregoire to eke out a victory with 52% of the vote compared to Rossi’s 48%.  The most problematic seat for Republicans was the open seat in Missouri. Attorney General Jay For More Information, please contact: Nixon (D) handily won the race Peter A. Peyser, Principal against Representative Kenny 202.772.5806 • [email protected] Hulshof (R). Hulshof faced several

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