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2010 Federal Election Analysis

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  • November 03, 2010

Parker Poe Adams & Bernstein LLP provides this analysis of the 2010 federal elections as a service to our clients and friends. Members of the Firm’s Government and Public Policy Practice Group prepared the analysis and are available to answer your questions and offer assistance on issues at the federal level that affect your business.

Republicans Control U.S. House

The day after the election, Republicans have secured 240 House seats, Democrats have 183 House seats, and 12 seats are still undecided. The decided races represent a 61-seat swing in favor of the GOP. Thus, the Republican Party will enjoy a roughly 60-seat margin in the lower chamber. This year marks the first election since 1930 when the House of Representatives changed parties without the Senate doing likewise.

In the Carolinas, several close Congressional battles have been resolved. Incumbent Republicans Walter Jones, Virginia Foxx, Howard Coble, Sue Myrick and Patrick McHenry all won reelection in North Carolina. North Carolina Democratic Representatives G.K. Butterfield, David Price, Mike McIntyre, Larry Kissell, Heath Schuler, Brad Miller and Mel Watt were also able to retain their seats.

Only seven-term Democratic incumbent Bob Etheridge remains vulnerable to being swept out of office by Republican Renee Elmers. With all precincts reporting, Elmers leads by 453 votes. Etheridge has not conceded and a recount is likely. Regardless of the Etheridge/Elmers recount, Democrats will still outnumber Republicans in the North Carolina Congressional delegation.

In South Carolina, Republican Tim Scott won the 1st District race for Congress, making him the first African American Republican elected to Congress from the Deep South since Reconstruction. In South Carolina’s Fifth District contest, Representative John Spratt has been replaced by Republican challenger Mick Mulvaney. This leaves only one Democrat, James Clyburn, in South Carolina’s congressional delegation. One potential consolation prize for Congressman Spratt would be an appointment in the Obama Administration. Spratt’s name had been floated in 2008 as possible director of the White House Office of Management and Budget.

Republican House Leadership

With the House Republican’s new majority, Congressman and current Minority Leader John Boehner of Ohio will ascend to the speaker’s chair currently held by Nancy Pelosi. Representative Boehner has developed a reputation as a skilled negotiator and results-focused strategist. For example, his leadership on the House Education and Labor Committee and his negotiations with the Senate (including the late Senator Ted Kennedy) produced the education reform bill, No Child Left Behind. Recently, however, Boehner has indicated that the Republicans will not compromise with the Democratic Party and President Obama on the Administration’s planned initiatives.

The Republican’s House Majority also means a promotion for Representative Eric Cantor of Virginia. The rising Republican star and current Minority Whip will become the Majority Leader in January.
The Republican takeover of the House also will install new heads of powerful committees. Representative Dave Camp is expected to lead the powerful House Ways and Means Committee, which has jurisdiction over taxation. Representative Jerry Lewis of California is the ranking Republican member on the Appropriations Committee, however, he is term-limited by Republican caucus rules. If he is not permitted to waive the term limit, Representative Hal Rogers from Kentucky will likely emerge as the Appropriations Committee Chair.

Representative Spencer Bachus of Alabama will likely chair the Financial Services Committee and will preside over hearings regarding the implementation of the recently-passed Wall Street reform. Representative Paul Ryan of Wisconsin will be in charge of the Budget Committee. It is expected that Representative Ryan will propose a moratorium on all congressional earmarks.
A Republican-controlled Energy and Commerce Committee will likely focus on the federal health reform bill. Representative Joe Barton of Texas is the current ranking Republican member on the committee. Representative Barton, however, is also term-limited by Republican caucus rules. Unless Speaker-elect Boehner grants a waiver to Barton, the chair of the powerful Energy and Commerce committee is likely to be contested by Representatives John Shimkus of Illinois, Cliff Stearns of Florida, and Fred Upton of Michigan.

Representative Daryl Issa of California is likely to take the helm of the Oversight and Government Reform Committee, giving him the power to issue subpoenas to the Obama Administration.

The House Judiciary Committee is likely to be presided over by Representative Lamar Smith of Texas. Representative John Mica of Florida will likely have the gavel of the Transportation Infrastructure Committee.

Representative Howard P. “Buck” McKeon of California will oversee the Armed Services Committee. Representative Ileana Ros-Lehtinen of Florida is in position to head the Foreign Affairs Committee. Representative John Kline will likely become chair of the House Education and Labor Committee.

Speaker-elect Boehner has promised to devolve power back to these committee chairpersons, a change from Speaker Pelosi’s more centralized bill-writing process.

Democratic Leadership

Time has predicted that the loss of the House majority will trigger the exodus of as many as 20 members of the Democratic House leadership. On the top of this list is Speaker Pelosi. She has no ambitions for future leadership, and her prospects of retaining the #1 spot in the Democratic caucus are uncertain. Current Majority Leader Steny Hoyer of Maryland would be the heir apparent, although Representative John Larson of Connecticut and Democratic Congressional Campaign Committee Chairman Chris Van Hollen of Maryland have been mentioned as potential challengers to Hoyer.
Other members of the Democratic leadership may follow suit, including Education and Labor Committee Chair George Miller of California, Standards Committee Chair Zoe Lofgren of California, Rules Committee Chair Louise Slaughter of New York, and Judiciary Committee Chair John Conyers of Michigan. Two Democratic chairs have already retired – Appropriations Committee Chair David Obey of Wisconsin and Science and Technology Committee Chair Bart Gordon of Tennessee. Another three Democratic chairs lost their elections, including Budget Committee Chair John Spratt of South Carolina, Armed Services Committee Chair Ike Skelton of Missouri, and Transportation Committee Chair Jim Oberstar of Minnesota.

Democrats Retain Senate, But Margin Tightens

In the U.S. Senate elections, the Republicans have picked up six seats so far. The Alaska and Washington Senate races are still too close to call and may not be decided for several days or even weeks. Even if the Republican swept these uncalled races, the Democrats will still retain control over the upper chamber, albeit with a much narrower majority.

The Alaska race is the most intriguing of those three with Senator Linda Murkowski (R) apparently winning a write-in challenge to her party’s nominee, Joe Miller. If Murkowski wins, it will be the first time since 1954 that a write-in candidate has won a seat in the U.S. Senate. Election officials in Alaska say counting the write-ins may not actually start for two weeks, in order to give time to collect absentee ballots mailed in from across the state. So, voters may not know for weeks who won the Senate seat.

In North Carolina, Senator Richard Burr easily won reelection over Secretary of State Elaine Marshall, the first time an incumbent has won reelection in this seat since 1968. Senator Burr will closely watch the results in Alaska as he would become the Ranking Minority Member of the Senate Energy Committee if Senator Murkowski does not return. The Senate Republican Caucus initially removed Murkowski from this post in favor of Burr when she mounted her challenge to Alaska’s GOP nominee. However, a day later, Minority Leader Mitch McConnell backed off and allowed Murkowski to maintain her position. Murkowski has said she will remain a member of the Republican Caucus if she prevails in her race.

In South Carolina, Senator Jim DeMint easily won his second term, trouncing Alvin Greene. Senator DeMint helped fund insurgent Republicans against candidates of his party’s establishment and warned them against the temptation to go along with the ways of Capitol Hill.

Most political pundits were not expecting a Republican takeover of the Senate. Still, the 2010 election results will change the dynamics of how the Senate operates. From a filibuster-proof majority beginning the Obama Administration, the Senate Democrats will now have to work with a narrower margin (as narrow as 52-48). To assure passage of any legislation, Democrats will have no choice but to work with moderate Republican Senators to develop compromise bills.

Majority Leader Harry Reid’s victory in Nevada over Sharon Angle means that Reid will remain at the helm in the Senate. On the Republican side, Minority Leader Mitch McConnell of Kentucky is expected to remain as the Republican leader. There will be few changes, if any, in the leadership roles in both parties.

Impact of Congressional Elections on Federal Policymaking

Beyond just who is in charge in committee hearings, the outcome of the 2010 elections will have a significant impact on federal policymaking. In anticipation of the GOP’s emergence as the majority party in the House, Boehner released a “Pledge to America” several weeks ago, hearkening back to Newt Gingrich’s “Contract with America” (which Boehner also helped write) when Republicans took control of Congress in 1994. Because the House Republicans are powerless to counteract a Democratic Senate majority or an Obama veto, the legislative initiatives in the “Pledge to America” are largely symbolic.

In President Obama’s press conference, he extended an olive branch to Republicans and called for an era of bipartisanship. This strategy has been tried before, but with limited success. If Republicans decide to obstruct President Obama’s agenda, the President may either work to compromise on issues important to the Republicans or follow President Truman’s tact and label the legislature a “do-nothing Congress.”

Regardless of the initial reactions of the parties to working together in 2011 and onward, President Obama will no longer be able to control the legislative agenda. The Republican House will impede President Obama’s more progressive and as yet unfilled campaign pledges, including comprehensive immigration reform, climate-change legislation with a cap-and-trade mechanism and the Employee Free Choice Act (the union-backed item commonly referred to as “card check”).

Health reform, an already achieved Obama campaign promise, is perhaps the Congressional Republicans’ largest legislative target. The “Pledge to America” specifically calls for the repeal of the legislation. Although a repeal would be impossible given the President’s veto, Republicans will use hearings and oversight investigations to challenge and critique the Administration’s implementation of the legislation. Another tool Republicans will use is to withhold funding for many of the reform initiatives.

Although many legislative issues will end in gridlock, there are several issues that the President and Congress must address. For example, they must address the expiring Bush tax cuts – unless Congress passes a one-year extension in the lame duck session. Even then, Republicans will advocate for a full and permanent extension of the tax cuts, while Obama and Democrats will argue for more targeted tax cuts.

Another unavoidable issue is a mandatory vote to raise the deficit spending ceiling. Factoring into this vote will be the recommendations of the President’s debt commission that has been tasked with reducing the nation’s $13 trillion debt.

During this time, the Obama Administration, Senate Democrats and House Republicans will also have to hash out annual spending bills. House Republicans have proposed slashing $100 billion from the federal budget. Few details have emerged yet as to which federal agencies and which federal program these budget cuts will involve. If the House refuses to pass a budget that the Senate will agree to and Obama will sign, Republicans have the power to shut down government.

This possibility reminds many political observers of the 1994 election and the ensuing two government shutdowns forced by the gridlock between the Republican-controlled Congress and President Clinton. Ultimately, the Republicans took much of the blame for the inability to make government work. After the initial struggle, the parties eventually figured out ways to work together. This moment ushered in a period of bipartisanship where the divided government worked to implement some significant legislative initiatives.

Even if this scenario is not repeated, the prospect of government gridlock is not always a negative. According to a November 1, 2010 Christian Science Monitor analysis: “no political power arrangement correlates better with strong stock market performance than a government divided between two parties.”

Regardless of President Obama’s and Congressional Republicans’ ability to work together, reforms in the “Pledge to America” that are likely to be implemented are ones that change how the House operates. These measures decentralizing the bill-writing process, putting all bills online for a minimum of 72 hours before any vote takes place, and requiring that each section of a House bill contain a provision justifying its constitutionality.

Another challenge for Speaker-elect Boehner will be how to rally the energy of the incoming Republican freshman class – the Congressmen that will have given the Republican Party its majority. According to an Election Day analysis by POLITICO of 70 potential GOP freshmen, two-thirds will come to Washington with political experience on the state or local level. Many also have a background in business and law. The majority-makers will also be younger than the average House member and more diverse in terms of gender, race/ethnicity, and geography.

Many of these newcomers might also have ties to the Tea Party Movement, though only one potential freshman interviewed by POLITICO committed to joining the Tea Party Caucus. Still, how the establishment Republicans and the Tea Party members work together will be an important issue to track as the 112th Congress begins its work in January.

Although elections give the country much insight into its future direction, there are many variables that could dramatically affect the tone in Washington as well as Congress’ priorities. The extent and conditions of the economic recovery will play a large role in determining if – and how – the House Republicans will work with the Democratic-controlled Senate and President Obama in job creation initiatives and reining in large federal deficits.

The specter of 2012 also will loom large over the process. In the next election cycle, more Democratic Senate incumbents will be on the ballot. Many of these incumbents, if they decide to run, will be campaigning in states that President Obama did not carry in 2008. Many of these states were also places where Democrats lost seats in 2010.

Many unknowns lurk in making any predictions about 2012: What effect will President Obama have on the top of the ticket? Who will the Republican presidential nominee be? Will Republicans be able to maintain peace with the Tea Party? How will the economy recover in the next two years? Stay tuned for the answers . . .