What to Expect From Congress in an Election Year

The answer to the query in the headline is “not much,” but that is considered a vast improvement over recent years. Here is the analysis from Bo Harmon, vice president of political affairs for BIPAC.

There are a number of legislative items that members of both parties acknowledge need to be addressed. Implementation of Obamacare. Immigration reform. Tax code and entitlement reform. A long term solution to the debt ceiling crisis. Privacy security. Patent reform. Trade.

With all of these issues, the public increasingly frustrated with gridlock in Washington, and an election coming up where Congress will want to be able to talk about their accomplishments, we should expect to see some major legislative action in 2014, right? Wrong. Well, mostly wrong. There is actually a glimmer of hope that 2014 will produce more than 2013. Though, that’s a bit like saying “we scored zero points last game and expect to do better than that this time.”

The reason that Congress hasn’t accomplished much since 2010 is the same reason we don’t expect to see much more in 2014. With the House in the hands of Republicans and the Senate and White House controlled by Democrats, and each side increasingly responsive to the most ideological polarizing parts of their base, they disagree on how to proceed. Both sides understand the things that need to be addressed, but there is zero consensus on how to do it.

The Obamacare debate is a prime example. Not a single Republican in either chamber voted for original passage though many key features of the legislation were included in previous GOP health care reform bills. Once Republicans took the House in 2010, GOP leadership took the position that repeal of the legislation in total was the only option and have refused to offer or support tweaks or fixes to problems. The Republicans believe “it’s not possible to ‘fix’ something fundamentally incompatible with our ideology.” Politically, they also believe if the legislation fails they will benefit and thus have little political incentive to improve the law. From their perspective, it is BETTER politically to have as many things go wrong with ObamaCare as possible.

This same standoff occurs on issue after issue – taxes, immigration, entitlement reform, etc. But, it is a new year and in our optimistic resolutions, we see some possibility of federal action on a handful of bills. There was a small bright spot in December when a two-year budget compromise passed that would avoid the possibility of a shutdown and eliminated some of the most irrational sequester cuts. This rare bipartisan effort was criticized by many however as small ball for not addressing bigger, long term issues. Even still, it was the best that could be achieved in the current gridlock environment.

The environment is also different than it was in 2013. At that time, Democrats were emboldened by the President’s popularity and felt little need to compromise, believing they had received a mandate from the 2012 elections to do as they wanted. With the President’s approval ratings significantly lower now, the confidence to act as boldly is similarly evaporating. Conversely, Republicans spent 2013 in fear of retribution from the Tea Party. Now, Boehner in the House and McConnell in the Senate have openly broken ranks with the Tea Party and seem almost eager to act in ways that show consensus.   The budget deal and the changed political environment provide the foundation for some compromise legislation to take place on issues that need to be addressed. Small, incremental changes to a handful of issues is possible, likely driven by the middle. We may see some movement on immigration, trade, patent reform, etc; even if more contentious things like tax reform remain unlikely.

While many would like to see more comprehensive solutions and small, incremental changes to immigration or Obamacare implementation may not be at the top of your industry agenda, we are dealing with a situation where NOTHING has been getting done and we need to make an effort to support and reward even baby steps at basic government functionality. Only then will members of Congress have the political courage to attempt larger, more comprehensive changes and take a look at issues that are at the forefront of your industry agenda. It is a shame that we have reached this point where expectations for our Congressional “leaders” is so low but they have demonstrated over the last three years that nothing else can be expected from divided government driven by ideological extremes.


Saying So Long to Senate Seniority

We know about Indiana's changes in Senate seniority — from Richard Lugar and Evan Bayh a few years ago to first-termers Dan Coats and Joe Donnelly. Although Coats served previously, his 12-year gap between terms puts him back in the pack, for the most part, when it comes to seniority.

BIPAC, the Business Industry Political Action Committee in Washington, has some interesting insights on the rapid changes in seniority across the country and some of the impacts.

Seniority in the U.S. Senate has always been viewed as beneficial.  More senior members usually have increased clout in the chamber and higher positions in committees.  However, in a year where almost half of the senators have been serving less than six years, lack of seniority and experience can also be a good thing.  This is a great time to reach out to the newer members and introduce yourself and your issues.
There are currently 45 senators (this includes Senator Kerry's successor) that have served less than six years.  In 11 states – Colorado, Connecticut, Hawaii, Indiana, Massachusetts, North Dakota, Nebraska, New Hampshire, New Mexico, Virginia and Wisconsin – both senators have served less than six years.
Since the 2012 elections, changes in the Hawaii and Massachusetts delegations have drastically altered seniority in both states and the Senate.  When Senator Inouye passed away, the Senate lost its most senior member and Hawaii lost its seniority as a state in the chamber.  Both Sens. Schatz and Hirono have served less than two months, a major change from the long careers of Sens. Inouye and Akaka.  Schatz is considered Hawaii's senior member, since he was sworn in on December 27, 2012 and Hirono was sworn in on January 3, 2013.
Now that Kerry has submitted his resignation to become Secretary of State, Massachusetts lost the seniority it held for decades.  Kerry was the seventh most senior senator and Ted Kennedy, before he passed away, was the second most senior member.  Once Kerry's seat is filled, both senators from Massachusetts will have been in office for less than a year (This will still hold true if Scott Brown is elected to take Kerry's seat.  He lost his seniority when he left office in January 2013 after losing to Elizabeth Warren).
Two states that still hold considerable seniority in the Senate are Iowa and California.  For Iowa, Senator Grassley is the sixth most senior senator, followed by Senator Harkin who is seventh.  Iowa's position will change following the 2014 election now that Harkin has announced his retirement.  California holds the 14th and 15th most senior spots, with Sens. Feinstein and Boxer.   Senator Leahy from Vermont is the Senate's most senior member.

Tuesday Vote; 2012 Consequences

Elections, no matter the year, do make a difference. Sure, some are more important than others. Michael Davis, who led the Indiana Chamber’s political affairs efforts before joining BIPAC in Washington, offers his analysis of what next week’s national votes mean for the states involved and for 2012. Here are some excerpts:

With three states holding gubernatorial contests, four states holding state legislative elections plus numerous special election and ballot initiatives, the 2011 elections may give us an early preview of how upset voters will be throughout next year.

The results for next week’s elections, particularly the fights for control of the Virginia State Senate and the Mississippi House of Representatives, may give us an early indicator of what issues will be top of mind for voters (economy, jobs), which voter base is more motivated (look for turnout numbers of those identified as younger voters, Tea Party supporters, 2008 Obama supporters and independent voters) and if voters will continue to be more than willing to retire incumbent candidates seeking re-election (should be higher than historical averages, but will they be higher than that of the last couple of cycles?).

One of the big stories of the night could be the locking up of the South by Republicans.  If the GOP can gain control of the Virginia Senate and Mississippi House, Republicans will control the State House, State Senate and Governor’s office of every Southern state except Arkansas.

Here is a list of top races to watch on Tuesday, November 8:

Control of the Virginia Senate.  Democrats currently control the State Senate by a 22-18 margin, but Republicans in Richmond are optimistic they will win back control.This would give Republicans control of the Senate, House and Governor’s office at the same for only the second time in state history. Following the election, control over the state’s congressional redistricting process looms large.

Control of the Mississippi House. Democrats currently control the House by a 68-54 margin with Republicans strongly knocking on the door to win control. Like in Virginia, this would give Republicans control of the Senate, House and Governor’s office. The Republican playing field is large enough and there are clearly enough districts with favorable numbers to put Republicans in control.

Ballot measures. Issue 2 in Ohio, an effort to repeal a 2011 act that places limits on collective bargaining for public employees, will likely attract the most national attention.

Iowa State Senate District 18 special election. With Democrats holding a 25 to 24 majority, this special election will result in either Democrats holding a 26 to 24 majority or the State Senate being evenly split 25 to 25 heading into the 2012 legislative session. Anyone who has been through an evenly a legislative session with an evenly split legislative body can give you an excellent definition of "chaos" or "gridlock."   

BIPAC: Can the ‘Super Committee’ Save the Republic?

A few weeks ago we got a short-term debt reduction solution (although solution doesn’t really seem to be the appropriate word here; let’s try compromise) that left few people happy, It basically punted the ball down the road, requiring a new "super committee" of 12 members of Congress to come up with recommendations by November 23.

I’ve read various analyses of what to expect. Greg Casey, president of D.C.-based BIPAC, offers some excellent points in describing the makeup of the group and its prospects:

The Super Committee is a witch’s brew of personalities.  It will be co-chaired by Representative Jeb Hensarling (R-TX), Chairman of the House Republican Conference, and Senator Patty Murray (D-WA), a member of the Senate Democratic Leadership team.  Hensarling is as conservative as Murray is liberal.  Both have the ear of their caucuses but are also charged with being the keeper of their party line.  The key is whether this eclectic group of perspectives, philosophies, and seniority can forge any agreement at all or if their anointing leadership even wants them to. 

None of the Senate appointees were part of the Senate Gang of Six, who labored for months on a bipartisan "grand bargain."  However, four of the twelve, Hensarling, Congressman Xavier Becerra (D-CA), Congressman Dave Camp (R-MI) and Senator Max Baucus (D-MT), did in fact serve on the original National Commission on Fiscal Responsibility and Reform (Simpson/Bowles) that spawned the Gang’s efforts.  Even though all four of them voted against the Fiscal Commission’s recommendations, their opposition seemed conditional.  Becerra came to the final meeting of the commission with two speeches, one for it and one against it.  Both Congressmen Camp and Hensarling were inclined to support the Commission report had it been offered under different circumstances.  The circumstances are certainly different now.  But is it enough?

The Super Committee has the gravitas.  If inclined to act, they have some of the critical players in critical positions.  Senator Max Baucus chairs the Senate Finance Committee and Representative Dave Camp chairs the House Ways and Means Committee.  These are the Congressional committees charged with writing tax law.  Both of these Chairmen served on the Fiscal Commission and know the extent of the problem.  Congressman Fred Upton (R-MI) chairs the powerful House Energy and Commerce Committee.  Representative Xavier Becerra is the ranking Democrat on the House Ways and Means Subcommittee on Social Security.  Senator Jon Kyl (R-AZ) is the number two GOP Senator and James Clyburn (D-SC) is the number three House Democrat.  Congressman Chris Van Hollen, (D-MD) is a very close ally of House Democratic leader Nancy Pelosi and the ranking Democrat on the House Budget Committee.  Although Senator Rob Portman(R-OH) may be a freshman in the Senate, he was the budget director for President George W. Bush and may know more about the numbers than any other member of the Super Committee.

The other two members of the Super Committee have slightly murkier portfolios.  Senator John Kerry (D-MA) chairs the Senate Foreign Relations committee and was one of the first to label the credit downgrade the "tea party downgrade."  Conversely, freshman Republican Senator Pat Toomey (R-PA) is as close to the tea party movement as any U.S. Senator except Rand Paul (R-KY).  These last two players may be the bookends within which the others will operate.  It is unlikely that any agreement would get them both and any likely agreement will not get either.  It will take seven votes to make the deal so at least one member of twelve will have to cross the party line.  Both Congressman Camp and Senator Toomey have indicated they are willing to consider changes in taxes, a necessary first step on the right if a grand bargain is to be struck.  To create real hope for a grand bargain, one or more Democrats need to signal a willingness to consider entitlement reform.   

The cynic in me is pessimistic a majority of this group could agree on anything.  The optimist in me, however, sees a bit of the deal maker in each one of them.  Is it possible the concept of saving the Republic is sufficient motivation for twelve good men to do the right thing?  We shall see.

Supreme Court Rules in Favor of Business Freedom

In a major victory for Hoosier and American business, the United States Supreme Court handed down a much anticipated ruling today in Citizens United v. Federal Election Commission. This ruling removes the ban placed on corporate dollars spent on independent expenditures and will give the job creators and innovators of this country the freedom to talk about issues, candidates and elections.

“The Supreme Court’s ruling frees American business from the yoke of second class citizenship.  It returns the right of American business to talk about workplace issues and hold candidates accountable,” said Gregory Casey, President and CEO of the Business and Industry Political Action Committee (BIPAC), the nation’s oldest business political action committee. The Court’s action is “certain to increase the discussion on economic issues in the 2010 elections, which is a very good outcome.” 

The Court’s 5-4 ruling also involved two much older cases, Austin v. Michigan Chamber of Commerce and McConnell v. Federal Election Commission.  In Citizens United v. FEC, a small non-profit organization, Citizens United wanted to release a documentary that was critical of Hillary Clinton during the 2008 presidential election on cable TV that would have been available through video-on-demand. Several lower court decisions ruled against the organization from airing the documentary.

Contributions made by corporations will be disclosed and essentially treated the same as an individual contribution currently is by the FEC. Transparency and freedom of speech are both important and both won in this ruling.

By the way, the loud moan you are hearing is coming from labor union leaders who fear business leaders talking directly with voters about an agenda centered on job creation, economic development and education reform.

Please feel free to add to the conversation and post your comments or questions.