Democrats win House; vow to fast track agenda

Checking boxesDemocrats in winning the House are vowing to get a fast start on campaign promises that address top voter concerns including health care, immigration and the economy, while serving as a check on President Donald Trump.

Party leaders said in victory speeches across the country this week that key items on their agenda include improving Americans’ health care and investigating what they consider a culture of corruption inside the Trump administration.

“This election was about accountability,” New York Democratic Rep. Jerry Nadler, poised to lead the chamber’s Judiciary Committee, said on CNN, as midterm election voting results continued to show his party would control the House for the first time in roughly eight years.

“Donald Trump may not like hearing it. But for the first time, his administration is going to be held accountable,” Nadler continued. “He’s going to learn that he’s not above the law."

Democrats gained the 23 additional seats they needed to control the House. And as of November 8, 2018, they had a 222-to-199 seat majority with 14 races still undecided.

Senate Republicans added to their 51-seat majority. The chamber makeup as of November 8, stood at 52-46, with two races still in the balance. An estimated $5 billion-plus will be spent on the midterms by both parties, their campaign arms and donors.

In winning the House majority, Democrats will indeed have control over the committees that wield subpoena powers and will be able to initiate impeachment proceedings — while also trying to make good on campaign promises to roll back Republicans’ 2017 tax cuts.

However, such efforts will likely be difficult for Democrats to get through the House, much less the GOP-controlled Senate or past the president’s desk.

An unruly House? Recall how much trouble Republican leaders of the GOP-controlled House had in passing key parts of their agenda with a majority close to what House Democrats will have in January. House Speaker Paul Ryan, for example, had to cancel a final vote just months ago on changes to the Affordable Care Act, upon realizing he didn’t have enough support from his caucus.

“While the political rhetoric suggests that the midterm results did little to narrow the divide between Democrats and Republicans, Congress could find bipartisanship on several issues, particularly infrastructure and immigration.”
Mary Moore Hamrick
National Managing Principal, Public Policy
Grant Thornton LLP
Like House Republican leaders who repeatedly tried to wrangle votes from their most extreme wing, the House Freedom Caucus, House Democratic leaders could face a similar situation. They will likely struggle to strike compromise between the caucus’ moderates and progressives, who have led the calls for impeachment, subpoenaing Trump’s tax records and holding ethics probes on members of his Cabinet.

It is unclear whether such scenarios will have a negative impact on business and economic growth, considering Democrats are also vowing to repeal the 2017 corporate tax cuts. And their calls to impeach the president may add to the overall feeling of uncertainty for business, which will likely result in some companies taking a wait-and-see approach on future investments and hirings.

Climate change is another issue that House Democrats intend to address and that also poses a concern for businesses. Conference members have suggested reinstating regulations that the administration eased on producers of fossil-fuel energy and stopping Trump from proceeding with plans to lower emission standards for cars.

California Democratic Rep. Nancy Pelosi, now the House minority leader, in fact, pledged to resurrect a shuttered select committee on climate change.

“Today is more than about Democrats and Republicans,” she said. “It’s about restoring the Constitution’s checks and balances to the Trump administration. It’s about stopping the GOP and (Senate Majority Leader) Mitch McConnell’s assault on the health care of more than 130 million Americans with pre-existing medical conditions.”

Pelosi, like she has said the entire election cycle, made clear that impeachment is not a top priority, telling PBS “News Hour” that the issue is “not what our caucus is about.” But whether fellow House Democrats in the coming weeks elect her as House speaker is no sure thing. And if elected, Pelosi is still expected to face a lot of pressure from her base and the party’s liberal wing to hold impeachment hearings.

Opportunities for bipartisanship While the political rhetoric suggests that the midterm results – including at least 35 more women elected to the House — did little to narrow the divide between Democrats and Republicans, Congress could find bipartisanship on several issues, particularly infrastructure and immigration.

Trump continues to call for a bipartisan infrastructure deal, as he has since winning the 2016 presidential race.

Just days ago, the president reached out to Senate Democrats about such a plan. And Democrats have made clear, even before the midterms started, that passing a $1 trillion infrastructure package was critical — considering the country’s roads, bridges and ports are in desperate need of repair and hurting potential economic growth.

They have also argued such a package would create more than 15 million good-paying jobs, at least temporarily.

The major roadblocks include how to fund such a large spending package, whether Republicans would sign a deal that would increase the deficit and if Democrats would be willing to give Trump a win heading into the 2020 presidential election cycle.

Democrats have suggested such funding mechanisms as increasing the corporate tax rate. Republicans have proposed public-private partnerships. And Democrats, as well as some Republicans, could be open to increasing the federal gas tax. Congressional Republicans could be more inclined to agree to such a bipartisan spending deal, with tax increases, if pressured by Trump.

Democrats and Republicans acknowledged that the country’s immigration policies need reform, though their most extreme wings have made compromise challenging. Among the most contentious points are what to do about those living illegally in the United States, including the roughly 3.6 million so-called DREAMers, brought to the U.S. illegally by their parents.

Following the midterm election, Trump said he welcomed bipartisanship, including his recently suggested 10-percent, middle-class tax cut, even if that requires “adjustments” to tax rates for corporations and the country’s highest wage-earners.

“I really believe there’s going to be much less gridlock,” he said. “If Democrats come up with an idea for tax cuts … I would absolutely pursue something because I’m a big believer in tax cuts.”

Trade and tariffs While the election results have indeed given voters a clearer picture of America’s future, business leaders and others must continue to wait for more clarity from Washington on tariffs and trade.

The president has since the start of his presidency eschewed the country’s free trade policy — withdrawing from the Obama-era Trans Pacific Partnership, then the roughly 24-year-old North American Free Trade Agreement with Canada and Mexico, arguing both are unfair to the U.S.

Trump has also threatened to impose billions of dollars’ worth of tariffs on imports from such trading nations as China, Japan, South Korea and the European Union, in addition to those on Canada and Mexico.

The president has essentially been imposing the tariffs — include those on steel and aluminum — under the umbrella of national security concerns, which effectively sidesteps congressional oversight.

Congress, in turn, has expressed a desire for more oversight to curtail the international trade war in which the U.S. has been hit with retaliatory tariffs. And further efforts in the upcoming 116th Congress could be welcomed by businesses seeking more market certainty.

Businesses are also waiting on the final outcome of the deal Trump struck earlier this year with Mexico, then Canada to replace NAFTA.

The new deal — known as the United States Mexico Canada Agreement — is expected to be signed by November 30, the last day the current Mexican president can agree to the pact before leaving office.

USMCA is expected to be ratified by Congress next year. But the process, especially now with a divided Congress, will still be challenging and likely take the better part of 2019 to get the required votes for congressional approval.

Kavanaugh factor The contentious confirmation process for Supreme Court nominee Brett Kavanaugh appears to have had a more significant impact on the Senate races, compared to those in the House.

Four of the most vulnerable Senate Democratic incumbents who also voted against Kavanaugh’s confirmation lost reelection. They are Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Claire McCaskill of Missouri and Bill Nelson of Florida.

West Virginia Democratic Sen. Joe Manchin voted for Kavanaugh but won his reelection bid. Trump soundly won all five of those states in 2016.

What’s next in the Senate? McConnell will continue to focus in the lame duck session and in the next Congress on getting as many Trump nominees as possible confirmed and appointed to top administration posts and federal benches.

Following the midterm election, he downplayed the idea that House Democrats’ “aggressive” oversight efforts could hurt any bipartisan deals with Pelosi.

“I don’t think so,” he said.

The Kentucky Republican’s efforts to work with Senate Minority Leader Chuck Schumer will likely face opposition from several key members of the Democratic caucus including Sens. Corey Booker of New Jersey, Kamala Harris of California, and Elizabeth Warren of Massachusetts, each considered a top 2020 presidential prospect.

The coming weeks will bring even more clarity, with leadership and committee posts being decided. But policy agendas are still evolving, and more changes are expected at the top level of the administration. So stay tuned.

Contact: Mary Moore Hamrick
National Managing Principal, Public Policy
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