WASHINGTON POLICY | PUBLISHED BY RAYMOND JAMES & ASSOCIATES Ed Mills | (202) 872-5933 | [email protected] SEPTEMBER 21, 2020 | 12:01 AM EDT Chris Meekins | (703) 351-5294 | [email protected] Alex Anderson, Sr. Res. Assoc. | (202) 872-5936 | [email protected] Supreme Court After Ruth Bader Ginsburg: Market, Policy, and Political Impact The passing of Supreme Court Justice Ruth Bader Ginsburg leaves a late-presidential election-year Supreme Court vacancy and may significantly shift the electoral landscape 44 days out from the November elections. In the attached slides, we provide an outline of how the process works, a deep-dive outline of the political battle ahead on the nomination/ confirmation of a new justice, the potential timing of the nomination, the impact on the Presidential/key Senate races, the impact on key upcoming cases including the Affordable Care Act case, and the potential future impact on the Supreme Court/Senate. Our view on the near-term confirmation battle. President Trump is likely to nominate someone to fill the seat. We believe the Senate is likely to move forward with confirmation hearings, but will wait to vote until after the election in the “lame-duck” session. However, with the evolving nature of this, these views could change rapidly. Impact on the Presidential race. The impact on the presidential race is unclear at this point and will take time to play out. The eventual Trump Supreme Court nominee, the hearing process, Democrats' response, and wild cards along the way will ultimately shape the political impact. We are within two months of Election Day and some votes have already been cast. Polls have shown a largely stable race, with Biden in the lead. We will be watching to see if this is a catalyst for some lean-Republican undecided voters to break towards Trump, or if this will further energize Democrats in both turn-out and fundraising. A first poll by Reuters shows 62% of Americans believe the seat should be filled by the winner of the presidential election, while 23% say it should be filled now, and 80% of Democrats and 50% of Republicans are in favor of a delay. First take on the battle for the Senate. The immediate aftermath of Justice Ginsburg’s passing is a massive wave of pro-Democratic fundraising for Senate candidates. Arguably, the Senate seats in Republican-leaning states of GA, IA, MT, and SC could benefit from higher Republican turnout, funding advantages, and energized turnout among Democrats could also sway the elections. SC is interesting as Lindsay Graham is the Chairman of the Judiciary Committee and had previously vowed not to confirm a Supreme Court nominee in an election year, but has since said the rules have changed post-Kavanaugh’s process. The Democratic candidates in Colorado and Maine are likely to be beneficiaries of the new political dynamics in the weeks ahead. Conversely, Republican candidates in Texas, Iowa, and Montana could see a boost. Future policy considerations. There are many developments ahead, but Democrats are beginning to outline options for reforms should they make significant gains in November. We view these as early negotiating tactics in a "nuclear option" scenario to impact the direction of President Trump's Supreme Court nominee. Some options floated over the weekend include an expansion of the Supreme Court bench, judicial term limits, a broader elimination of the filibuster, and statehood for DC/Puerto Rico. Please read domestic and foreign disclosure/risk information beginning on page 19 and Analyst Certification on page 19. INTERNATIONAL HEADQUARTERS: THE RAYMOND JAMES FINANCIAL CENTER | 880 CARILLON PARKWAY | ST. PETERSBURG FLORIDA 33716 US RESEARCH WASHINGTON POLICY PREPARED BY: THE SUPREME COURT AFTER RUTH BADER Ed Mills GINSBURG: A DEEP DIVE INTO THE MARKET, [email protected] POLICY, AND POLITICAL IMPACT Chris Meekins Raymond James Equity Research [email protected] September 21, 2020 PAGE 2 OF 23 US RESEARCH WASHINGTON POLICY Supreme Court Historic Impact on the Court Ruth Bader Ginsburg was born in Brooklyn, New York, March 15, 1933. She married Martin D. Ginsburg in 1954, and has a daughter, Jane, and a son, James. She received her B.A. from Cornell University, attended Harvard Law School, and received her LL.B. from Columbia Law School. President Clinton nominated her as an Associate Justice of the Supreme Court, and she took her seat August 10, 1993. Cultural Icon. Ruth Bader Ginsburg was commonly known by her initials – RBG or sometimes as “the notorious RBG” and had a significantly elevated presence in cultural and political life vs. other Supreme Court Justices. This status as cultural icon, especially among Democrats significantly impacts the debate around her replacement on the court, with some yet-to-be Source: United States Supreme Court determined political and policy ramifications. Reliable Liberal Vote. RBG was a reliable liberal vote on the court, frequently joining Justices Breyer, Kagan, and Sotomayor. Landmark cases were swayed with the ability of convincing just one additional justice to join their side. Source: Raymond James Research PAGE 3 OF 23 US RESEARCH WASHINGTON POLICY Timing Confirmation Fight Timing of Confirmation Fight Pres. Trump Timing of Nomination Our Take • 22 of the previous 44 presidents have put forward a President Trump is likely to nominate someone to fill the nominee in a presidential election year for a vacancy on the seat. We believe the Senate is likely to move forward Supreme Court – 29 times in total. None have failed to put with confirmation hearings, but will wait to vote until forward a nominee. after the election in the “lame-duck” session. However, • President Trump has stated he will put forward a nominee with the evolving nature of this, these views could before the election – likely within the next 10 days. change rapidly. Will the Senate Vote on Nomination Before the Election? Majority Leader McConnell has a tough decision to make regarding whether to push for a vote on the nomination before the election. He could move forward with a confirmation vote, but that likely negatively impacts the campaigns of Susan Collins and Cory Gardner. If he waits and Democrats sweep to power, it may be more difficult to confirm in the “lame-duck” session. Arguments For Arguments Against • Republicans could cement a conservative majority on the Supreme Court • Senators in tough reelections, like Susan Collins and Cory Gardner, are put for years if they fill the seat. in difficult positions and it could increase the likelihood they lose. • The justice will be in place before arguments in important cases like the • Republicans may not have the votes and if you lose the vote, the base is Affordable Care Act case. demoralized leading into the election. • The justice will be in place if the election is contested and the Supreme • If you confirm before the election, it could take away one of the reasons Court needs to weigh in. some voters would support President Trump. • If you wait on the nomination, it could discourage conservative voters. • If Democrats sweep the upcoming election, they could kill the filibuster and • If Democrats sweep to power, it may be more difficult to get Republican expand the size of the Court has retribution. votes to confirm in the lame-duck session. • If Mark Kelly wins the Arizona senate seat, he likely will be seated in November making it more difficult to get the votes. PAGE 4 OF 23 US RESEARCH WASHINGTON POLICY Who Are The Four? Who Are the Four? Senators to Watch • Based on the current 53-47 makeup of the Senate, GOP Senators Opposed to Moving Forward Before the Election Republicans can lose the support of three Republicans for the nominee and with the Vice President breaking the tie, confirm Sen. Susan Collins the nominee to the Supreme Court. “Given the proximity of the presidential election, • Two senators, Collins and Murkoski have both stated they however, I do not believe that the Senate should vote on oppose moving forward with a nomination before the the nominee prior to the election…the decision on a election and believe the next President should get to pick the lifetime appointment to the Supreme Court should be nominee. made by the President who is election on November 3.” • Finding two other GOP senators to oppose the nomination Sen. Lisa Murkowski could prove difficult for Democrats. “I did not support taking up a nomination before the 2016 • If the vote on the nomination does not happen before the election to fill the vacancy created by the passing of election and Democrats sweep to power; it is possible some Justice Scalia, we are now even closer to the 2020 Republicans may oppose the nomination out of fear that election — less than two months out and I believe the Democrats could expand the Supreme Court. same standard must apply.” Source: United States Senate GOP Senators To Watch Sen. Cory Gardner Sen. Mitt Romney Sen. Chuck Grassley Sen. Pat Roberts Sen. Shelley Moore Capito Sen. Pat Toomey Source: United States Senate PAGE 5 OF 23 US RESEARCH WASHINGTON POLICY Potential Nominees Leading Candidates to be Nominated by President Trump Judge Barbara Lagoa Judge Amy Coney Barrett Other Potential Nominees • Age: 52 • Age: 48 President Trump stated he would nominate a • Family: Married, 3 kids • Family: Married, 7 kids woman for the seat, so here are other • Education: Florida • Education: Rhodes College, International University, B.A.; B.A.; Notre Dame Law School, potential female nominees. Columbia