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2010 Election Analysis HNA

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					2010 Election Analysis


                   Carol Holladay
            Hurt, Norton, & Assoc.
                    202-543-9398
Table of Contents
 Race Results and Analysis
 Overview
 U.S. Senate
 U.S. House
 Gubernatorial
 Factors Influencing the Election
The 111th Congress
 Accomplishments
 Left Undone
 Remaining Schedule
The 112th Congress
 House Leadership
 House Committees
 Senate Leadership
 Senate Committees
Election Results
 Return to divided government
 Control of the Senate will remain with the Democrats
 Current breakdown: 52 Democrats (including 2 Independents who caucus
  with the
 Democrats), 46 Republicans
 1 too close to call: Senate races in Alaska have yet to be called,
  although Senator Murkowski (R-AK) appears likely to win her write-in bid
  but legal battles will slow final decision.
 The House of Representatives is now controlled by the Republicans
 Current breakdown: 239 Republicans, 186 Democrats
 10 seats yet to be decided
 The majority of state Governorships are now held by Republicans
 Current breakdown: 29 Republicans, 17 Democrats, 1 Independent
 3 races yet to be decided
Election Results – The Senate
 2010 Election Results – U.S. Senate
 Republicans have netted at least 6 Senate seats, reducing the Democrats’
 9 seat majority in the 111th Congress
 1 race yet to be called
 Senator Murkowski’s seat will stay Republican regardless of the outcome of
 her write-in bid—if she does not prevail, the seat will likely go to
  Republican
 Joe Miller (final results could take weeks)
 Incumbent Patty Murray’s (D-WA) race won re-election
PARTY TOTAL GAIN/LOSS
 Democrats 53 -6
 Republicans 46 +6

  Independents: Senators Lieberman (CT) and Sanders (VT) will
caucus with the Democrats, while Senator Murkowski (AK), if
re-elected, will caucus with the Republicans
Election Results – Senate, Con’t.
   The 112th Congress will usher in the largest group of freshman Senators since the
   97th Congress convened with 18 new Senators in 1981
   With the start of the new Congress, at least 42 Senators will be serving their 1st term
    6 of the newly-elected Republican Senators served in the U.S. House of
    Representatives in the 1990s or early 2000s, joining 14 of their Senate colleagues
    who served in the House during that same period
   New: Senators Blunt (MO), Moran (KS), Kirk (IL), Boozman (AR), Toomey
    (PA), Portman (OH)
    Existing: Senators Burr (NC), Chambliss (GA), Coburn (OK), Crapo (ID),
    DeMint (SC), Ensign (NV), Graham (SC), Inhofe (OK), Isakson (GA), Kyl (AZ),
    Roberts (KS), Snowe (ME), Thune (SD), Wicker (MS)
   In addition, Senator-elect Coats (R-IN) served previously in both the House and Senate
   In an historic anomaly, this election is the first since 1930 in which control of the
    House has flipped and control of the Senate has not
   Incumbent Senator Lisa Murkowski (R-AK)—who lost the GOP primary to Joe Miller
    and subsequently launched a write-in bid—appears likely to be the first write-in
    candidate elected to the Senate since Strom Thurmond (R-SC) in 1954
Election Results, Senate, Con’t.
   Defeated Senate Incumbents
           State        Incumbent         New Senator     *Change in party
           Wisconsin* Russ Feingold (D)  Ron Johnson (R)
           Arkansas* Blanche Lincoln (D) John Boozman (R)

   Additionally, Senator Arlen Specter (D-PA) lost his primary election earlier this year and
    Senator Robert Bennett (R-UT) was defeated at his state’s GOP convention
   Loss of Senate Leadership
    Senator Lincoln chairs the Committee on Agriculture, Nutrition, and Forestry
    Senator Feingold chairs Subcommittees on both the Foreign Relations and Judiciary
    Committees
     Senator Dodd (D-CT) chairs the Committee on Banking, Housing and Urban Affairs and
    Senator Dorgan (D-ND) chairs the Committee on Indian Affairs—neither sought re-
    election
    this year
    Senator Bennett (R-UT) is the Ranking Republican on the Rules Committee
    Senator Gregg (R-NH), the top Republican on the Senate Budget Committee, did not seek
    re-election
Senate – Results
    STATE        SEAT                NEW SENATOR
   Connecticut OPEN-Dodd (D)       Richard Blumenthal (D)
   West Virginia OPEN-Goodwin (D) Joe Manchin (D)
   North Dakota* OPEN-Dorgan (D) John Hoeven (R)
   Ohio          OPEN-Voin. (R)    Rob Portman (R)
   Pennsylvania* OPEN-Specter (D) Pat Toomey (R)
   Utah           OPEN-Bennett (R) Mike Lee (R)
   New Hampshire OPEN-Gregg (R) Kelly Ayotte (R)
   Missouri       OPEN-Bond (R)    Roy Blunt (R)
   Delaware       OPEN-Kaufman (D) Chris Coons (D)
   Florida        OPEN-LeMieux (R) Marco Rubio (R)
   Illinois*      OPEN-Burris (D)   Mark Kirk (R)
   Indiana*       OPEN-Bayh (D)     Dan Coats (R)
   Kansas         OPEN-Brownback (R) Jerry Moran (R)
   Kentucky       OPEN—Bunning (R) Rand Paul (R)
New Senators
AR John Boozman (R) defeated incumbent Senator Blanche Lincoln. Boozman is currently finishing his fifth
   term representing Arkansas’ 3rd district in the U.S. House of Representatives, where he serves as an
   Assistant Whip. Prior to his political career, Boozman practiced as an optometrist and co-founded an eye
   clinic in Arkansas

FL Marco Rubio (R) replaces retiring Republican Senator George LeMieux (who was appointed in 2009 to
   replace retiring Republican Senator Mel Martinez). Rubio served in the Florida House from 2000- 2008 and
   from 2006-2008 was the Speaker of the Florida House.

DE Chris Coons (D) was elected to replace retiring Democratic Senator Ted Kaufman (who was appointed to
   replace now Vice President Joe Biden). Coons has served as New Castle County Executive since 2004
   and for four years prior was County Council President. Prior to serving as county executive, Coons served
   as in-house counsel for W.L. Gore & Associates, Inc (a high-tech materials manufacturing company).

CT Richard Blumenthal (D) replaces retiring Democratic Senator Chris Dodd. Blumenthal has served as
   Connecticut’s Attorney General since 1990. Prior to his service as Attorney General, he served in the
   Connecticut General Assembly (1984-1990).

IL Mark Kirk (R) won the race to replace retiring Democratic Senator Roland Burris (who was appointed to
   President Obama’s Senate seat). Kirk has represented Illinois’ 10th Congressional district in the U.S. House
   of Representatives since his election in 2000. He is a former Congressional staffer and previously worked
   at the World Bank and the U.S. State Department. He is an intelligence officer in the Naval Reserve.
New Senators
KS Jerry Moran (R) won the race to replace retiring Republican Senator Sam Brownback (who was elected to
   serve as the Governor of Kansas). Moran has served in the U.S. House of Representatives since his
   election in 1996, prior to which he served in the Kansas Senate.

IN Dan Coats (R) won the race to replace retiring Democratic Senator Evan Bayh. Coats has served
   previously in the U.S. House of Representatives (1981-1989) and the United States Senate (1989-1999) as
   well as ambassador to Germany (2001-2005).

MO Roy Blunt (R) won the race to replace retiring Republican Senator Kit Bond. Blunt has represented
  Missouri’s 7th district in the U.S. House of Representatives since his election in 1996 and held the position
  of Minority Whip in the 110th Congress. Blunt previously served as Missouri’s Secretary of State.

NH Kelly Ayotte (R) was elected to replace retiring Republican Senator Judd Gregg. Ayotte served as New
  Hampshire’s first female attorney general from 2004-2009.

ND John Hoeven (R) replaces retiring Democratic Senator Byron Dorgan. Hoeven has served as North
   Dakota’s Governor since December 2000. He chairs the Governors’ Biofuels Coalition and has previously
   served as chair of the Interstate Oil and Gas Compact Commission. Prior to his election as governor, he
   served as president and CEO of the Bank of North Dakota.

KY Rand Paul (R) won the race to replace retiring Republican Senator Jim Bunning. Paul owns an
   ophthalmology practice in Kentucky. He is the son of Congressman and former presidential candidate Ron
   Paul.
New Senators
OH Rob Portman (R) will replace retiring Republican Senator George Voinovich. Prior to entering private
  practice as an attorney in Ohio, Portman served in the U.S. House of Representatives (1993-2005) and as
  U.S. Trade Representative and Director of the Office of Management and Budget under President Bush.

WI Ron Johnson (R) defeated Democratic Senator Russ Feingold. Johnson is the co-founder and president
   of PACUR, a specialty plastics manufacturing company in Wisconsin.

WV Joe Manchin (D) will replace Senator Carte Goodwin, who had been a placeholder since the death of
  Democratic Senator Robert Byrd. Manchin has served as West Virginia’s Governor since his election in
  2004. Previously, he served in the state’s House of Delegates, Senate, and as West Virginia’s Secretary of
  State.

UT Mike Lee (R) will replace Republican Senator Robert Bennett (who was defeated at the state’s GOP
   convention earlier this year). Lee, an attorney in private practice, has previously clerked for Supreme Court
   Justice Alito and served as Utah Governor Huntsman’s General Counsel. His father was solicitor general
   under President Reagan.

PA Pat Toomey (R) won the election to replace Democratic Senator Arlen Specter (who was defeated in the
   state’s primary election). Toomey served 3 terms in the U.S. House of Representatives (1999-2005) and
   most recently has served as the president of the Club for Growth. Prior to his political career, Toomey was
   an investment banker and small business owner.
Election Results – US House
   Republicans have won control of the House
    435 seats at stake, with 218 need for the majority
   Republicans have netted at least 60 seats (39 were
    needed to take control)
   10 races (all in Democratic districts) remain too close to
    call
   The 112th Congress will include the largest Republican
    majority since 1948
   This year’s election marks the largest number of House
    pickups since Democrats picked up 75 seats in 1948
   It is the biggest midterm election pickup for a party
    since 1938 (when Democrats lost 71 House seats)
Election Results – The House
   Notably, of the 48 seats held by Democrats in districts carried by John McCain in the 2008
    presidential election, at least 35 of those were won by Republicans in 2010
   Chandler (KY) and Giffords (AZ) races remain too close to call
   Between retirements (6) and incumbent losses (22), at least half of the Members of the
    conservative Democratic Blue Dog Coalition will not return for the 112th Congress—there
    were 54 Members in the 111th Congress)
     Giffords (D-AZ) race was just called, she held on to her seat
   3 Committee Chairmen and a number of Subcommittee Chairmen lost their re-election bids
   Transportation and Infrastructure Committee Chairman Oberstar (D-MN), Armed Services
    Committee Chairman Skelton (D-MO), and Budget Committee Chairman Spratt (D-SC) were
    defeated
   Additionally, Appropriations Committee Chairman Obey (D-WI) and Science and Technology
    Committee Chairman Gordon (D-TN) did not seek re-election
   A number of other veteran Members with Subcommittee Chairmanships lost their re-election bids,
    including Representatives Boucher (D-VA), Edwards (D-TX), Kanjorski (PA), Pomeroy (ND), and
    Taylor (MS)
   Republicans made large gains in New York (as many as 6 seats), Ohio (5 seats),
   Pennsylvania (5 seats), and Florida (4 seats)
   Out of 37 races, Republicans netted 8 seats and
    gained the majority of Governorships
   Republicans currently control 29 Governorships to
    the Democrats’ 16 (with 1 Independent)
   3 races remain too close to call
   Illinois—incumbent Pat Quinn (D) vs. Bill Brady (R)
   Minnesota (open)—Mark Dayton (D) vs. Tom
    Emmer (R)
   Vermont (open)—Peter Shumlin (D) vs. Brian Dubie
    (R)
   8 incumbent Governors won their bids for re-
    election
Gubernatorial Races
   Results of this year’s Gubernatorial and state legislative contests will impact the
    redistricting process following the 2010 census (official results later this year)
   Election Data Services has predicted the following House of Representatives
    reapportionment changes, which will take effect prior to the 2012 Congressional
    elections
   Ohio and New York could each lose 2 seats, with Illinois, Iowa, Louisiana, Massachusetts,
    Michigan, Missouri, New Jersey, and Pennsylvania each predicted to lose 1 seat
   Texas is expected to gain 4 seats, Florida may gain 2 seats, and Arizona, Georgia, Nevada,
    South Carolina, Utah and Washington are each expected to gain 1 seat
    Notable Results
   Republicans now control the Governorship, the state house, and the state senate in
    Alabama, Wisconsin, Michigan, Ohio, Pennsylvania, and Indiana – Texas Republicans
    retained control of all three as well
   Redistricting reform ballot measures were approved in Florida, California, and
    Minnesota
   ―After 2000, Republicans had full control of the process in Florida, Michigan, Ohio,
    Pennsylvania, and Texas, and netted a 31-seat gain in Congress (+15 GOP, -16 Democrats)
    in those five states in the next election.‖
   Greg Speed, quoted in the Huffington Post
Factors Influencing the Election
   It’s the economy, stupid…
   The economy is the number one issue for the American public in 2010—frustrations with high
    and stagnant unemployment figures, struggling housing markets, and persistently tight credit
    drove voter sentiment
   In a pre-election Gallup poll (10/21-24), 43% of registered voters chose ―economic
    conditions‖ as the important issue in this year’s midterm elections—the next closest issues
    were health care (23%) and the size and power of the federal government (18%)

•   Those concerns were confirmed in exit polls on Tuesday, where over 60% of voters ranked
    the economy as the nation’s top problem and almost 90% expressed concern about the state
    of the economy over the next year (Associated Press)
   Dissatisfaction/perception that government is not tackling the right issues
   In an August NBC/WSJ poll, respondents were closely divided when asked whether the
    economic stimulus bill and the auto bailout made things better or worse, and overwhelmingly
    viewed TARP as having made things worse
   Frustrations augmented by the belief that the government has done more for Wall Street
    than for Main Street during the current economic crisis
   That sentiment, coupled with increasing public concern/skepticism regarding the role of
    government in the private economy and the growing deficit and long-term national debt, has
    resulted in a general perception that lawmakers aren’t listening and are overreaching
   In exit polling, 75% of voters ―expressed negative views about how the federal
    government is working‖ while over half said ―the government should let business and
    individuals handle more things on their own‖ (Associated Press)
Factors Influencing the Election
    In general, the public’s view of the Administration’s ability to handle the economy has decreased since
     the $787 billion American Recovery and Reinvestment Act (the―stimulus‖) was enacted in mid-February
     2009 Of note, while President Obama’s approval rating among independent voters was
     above 60% in early 2009, it has dropped and hovered around 40% for the past few months

                                      February 2009                         October 2010
 President’s Job Approval                       60% Approve                                         45%
    Approve
                                      26% Disapprove                        50% Disapprove

 Direction of the Economy             41% Right Track                       31% Right Track
                                      44% Wrong Track                       60% Wrong Track

 President’s Job Approval—            56% Approve                           42% Approve
 Handling the Economy                 31% Disapprove                        54% Disapprove
                                                                            NBC/WSJ October 2010

 Of note, while President Obama’s approval rating among independent voters was
 above 60% in early 2009, it has dropped and hovered around 40% for the past few
 months
Factors Influencing the Election
   Overall, going into the election, Republicans held the advantage in terms of
    voter confidence in their ability to handle the top issues

    ISSUE          VERY/SOMEWHAT                        VERY/SOMEWHAT
                   CONFIDENT IN                         CONFIDENT IN
                   REPUBLICANS                          DEMOCRATS

  Economy                57%                                     45%
  Taxes                  52%                                     42%
  Federal Budget Deficit 47%                                     35%
  Creating Good
  Paying Jobs            55%                                     47%
  War in Afghanistan     49%                                     47%
  Health Care            51%                                     46%
CNN/Opinion Research Poll (October 27-30)
Factors Influencing the Election
   Voter intensity—energizing the base
    According to a recent Gallup poll (October 28-31), Republicans held a slight edge in the
    ―generic ballot‖ (48% to the Democrats’ 44%)
   BUT… among ―likely voters,‖ Republicans held a 15 point advantage over Democrats
    (55% to 40%)
   Additionally, just prior to the election, Gallup found that 75% of Republicans and Republican leaning
   Independents were ―absolutely certain‖ they would vote in the midterm elections—
    only 68% of Democrats felt the same
   In 1994 (when the GOP netted 54 seats in the midterms), the final pre-election Gallup
    poll indicated a 67-62% ―enthusiasm lead‖ for Republicans (Politico 11/1)
   Higher Republican turnout in November was presaged by turnout in the primaries
    According to the Center for the Study of the American Electorate at American
   University, participation in GOP primaries exceeded participation in Democratic
    primaries for the first time since the 1930s
   Disillusioned liberal base
   Get Out the Vote—impact of the vast Democratic infrastructure from President Obama’s 2008
    campaign
   According to a Rolling Stone post-election analysis of midterm turnout in 2006 and 2010,
    African American and Hispanic turnout levels were about equal and turnout of voters under
    30 actually decreased: ―In short, it's as though the game-changing 2008 campaign never
    happened‖
Factors Influencing the Election
Money
  Despite the attention being paid to the influx of outside spending this year, candidates and parties accounted for the
   majority of spending in the 2010 midterm elections—the most expensive in history
     ◦   According to the Washington Post, total spending for 2010 could hit $4 billion, with outside expenditures
         accounting for only 10-12% of that total
   In terms of party spending, Democrats hold a clear edge
     ◦   Through the end of October, the Democratic Congressional Campaign Committee (DCCC) reported
         spending over $63M to the National Republican Congressional Committee’s (NRCC’s) $45M
     ◦   On the Senate side, the Democratic Senatorial Campaign Committee has reported $45M in expenditures
         to the National Republican Senatorial Committee’s $26M
   That said, spending by independent groups has increased dramatically and is overwhelmingly
    benefiting conservative candidates
     ◦   Independent groups have spent twice as much on Congressional races in 2010 as they did in 2008 and
         greater than 5 times as much as in 2006 (Washington Post)
     ◦   Top spenders include American Crossroads ($38M), the U.S. Chamber of Commerce ($32M),
         and the American Action Network ($15M)—almost entirely benefiting Republican candidates
     ◦   Top outside spenders on behalf of Democrats include the American Federation of State Count
         and Municipal Employees ($12M) and the Service Employees International Union ($9M)
   Supreme Court's decision in Citizens United likely one factor supporting outside spending
     ◦   The decision at least supported an environment that spurred greater private funding of independent
         expenditures and may have had a specific impact in certain races—that said, much of the spending seen
         was legal prior to the Court's decision and the actual broad electoral impact of Citizens United alone
         remains unclear
The 111th Congress
Highlights
   Jobs and the Economy
     ◦   American Recovery and Reinvestment Act (the ―stimulus‖)
     ◦   Allocated roughly $500B in spending in key areas such as transportation, energy/environment,
            health care, technology, and education; included $288 billion in tax cuts for businesses and
         individuals
   HIRE Act
     •   Provided a tax break for companies that hire unemployed workers; extended highway funding
   Worker, Homeownership & Business Assistance Act
     ◦   Expanded homebuyer tax credit, enhanced small business relief, and extended
          unemployment insurance benefits (UI benefits were subsequently extended again, through
           November 30, 2010)
   Helping Families Save Their Homes Act
     ◦   Provided incentives for lenders, servicers, and homeowners to modify existing loans
   Cash for Clunkers (included in FY2009 supplemental appropriations bill)
     ◦   Provided incentives for consumers to purchase new, more fuel efficient vehicles
   Small Business Jobs and Credit Act
     ◦   Provided tax breaks for small businesses and established a $30B Small Business Lending
         Fund to provide capital investments to small community banks to increase small business
            lending
   Pension relief
     ◦   Used as an offset for the short-term ―doc fix‖
Highlights
   Health Care
    ◦ Patient Protection and Affordable Care Act and the Health Care and Education
      Affordability Reconciliation Act
        Expanded coverage to 32 million uninsured Americans (including an expansion of
         Medicaid), created state-based exchanges and provided subsidies to help individuals
         and families purchase insurance to comply with new mandate, closed the Medicare
         prescription drug ―donut hole,‖ established insurance reforms (e.g., life-time caps,
         preexisting
         conditions, minimum benefit requirements)
          ◦ Paid for by increasing the Medicaid payroll tax; establishing ―annual fees‖ on pharmaceutical
             manufacturers, medical device manufacturers, and health insurance providers; instituting an
             excise tax on high-end insurance plans (effective in 2018)
   State Children’s Health Insurance Program (SCHIP) Reauthorization
    ◦ Preserved and extended health care coverage for children
•   Family Smoking Prevention and Tobacco Control Act
    ◦ Authorized FDA to regulate tobacco
   National Security
    ◦ Supplemental Appropriations Act of 2010
    ◦ Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
Highlights
   Financial Services/Consumer Protection
    ◦ Dodd–Frank Wall Street Reform and Consumer Protection Act
         Established a Bureau of Consumer Financial Protection and a Financial Stability
          Oversight Council, created a process for liquidating failed financial firms, enhanced
          regulation of derivatives and proprietary trading, provided shareholders with a ―say‖ on
          executive pay, strengthened oversight and enforcement
   Credit Cardholders’ Bill of Rights Act
         Provided new protections from certain industry practices and strengthens enforcements
   Fraud Enforcement & Recovery Act
    ◦ Provided tools to prosecute mortgage scams and corporate fraud
   Other
    ◦   Lilly Ledbetter Fair Pay Act
    ◦   Student loan reform
    ◦   Edward M. Kennedy Serve America Act
    ◦   Miscellaneous Tariff Bill (MTB)
    ◦   2 Supreme Court Confirmations (Elena Kagan and Sonia Sotomayor)
111th Congress – Left Undone
   FY11 Appropriations
   Energy/Environment
     ◦   Comprehensive
         energy/climate legislation
     ◦   TSCA (chemical regulatory) reform
   Labor
     ◦   Employee Free Choice Act
   Trade
     ◦   Free Trade Agreements
         with South Korea, Panama,
         and Colombia
     ◦   Trade enforcement (e.g.,
         China currency)
   The Economy
     ◦   Bush tax cuts, estate tax, AMT
     ◦   Expired/expiring tax incentives
     ◦   Additional stimulus
   Highway bill
   Immigration reform
   Patent reform
   FTC reauthorization
   Campaign finance reform –
    addressing Citizens United Supreme Court Case
Factors Influencing the Election
   The independent vote
    • In a reversal from 2008, independent voters are more closely identifying with Republican
    candidates
    • In exit polling, nearly 6 in 10 independent voters supported Republican candidates

   Referendum on President Obama

    ◦ In a recent Politico/GWU Battleground poll, only 38% of respondents said the President
    deserves to be re-elected, with that number mostly driven by policy concerns (namely
    health care and the economy)—though a majority of respondents held a favorable view of
    him personally
    • Of note, that 38% is identical to President Clinton’s re-elect number in 1994—the year
    Republicans took control of Congress
    • President Obama’s approval rating stands at 45% (October Gallup poll)
    • Since 1946, presidents whose approval ratings have been below 50% prior to a midterm election have
      lost an average of 36 House seats
    • Additionally, a full two thirds of respondents in the Battleground poll indicated that they think
       it is better if different parties control Congress and the presidency
Remaining Schedule for the 111th
   Both chambers adjourned September 30 following passage of a continuing resolution
    (―CR‖) to
    temporarily fund the government through December 3
    ◦ Of note, not since 1996 have all individual annual spending bills been enacted by the start of
      the fiscal year (October 1)
   Post-Election ―Lame Duck‖ Session
    ◦ Both chambers are expected to reconvene the week of November 15 before adjourning
      again for Thanksgiving week
    ◦ Week of November 15: Leadership elections and New Member orientation
         November 16: Senate Democratic and Republican leadership elections
         November 17: House Republican leadership elections
         November 18: House Democratic leadership elections
    ◦ Congress is expected to reconvene the week of November 29, but the date for adjournment
      sine die is unclear
   112th Congress will begin on January 3; swearing-in will likely take place on January 4 or 5
    Of note, newly-elected Senators Coons (D-DE) and Manchin (D-WV) will be sworn in as
    soon as their elections are certified and will likely be seated for the lame duck
   Senator-elect Kirk (R-IL) will be sworn in as soon as he is confirmed by the Illinois State
    Board of Elections (which could take up to a month)—he will reduce the Democrats’
    current majority by one vote for the remainder of the 111th Congress
Remaining Schedule for the 111th
   While most are predicting a relatively short lame duck—with a CR or omnibus
    appropriations bill to fund the government as the only true ―must pass‖ item—several
    other issue areas could see action
     ◦   Taxes: Will Congress enact a short-term extension of all of the Bush tax cuts or punt the
         issue to the next Congress? And will lawmakers take up an extension of the dozens of
         expired/expiring tax breaks?
     ◦   Food safety: Negotiators are close—will the recent salmonella scandal push the bill over
         the finish line?
     ◦   Doc fix: Congress most recently extended the doc fix through the end of November, leaving
         open the possibility of action in a lame duck—or will legislators wait to address the issue
         retroactively in January?
     ◦   Trade: Legislation to renew expiring preference programs and another miscellaneous tariff
         bill (MTB) are possible, and other trade legislation could be wrapped up with those in a
         broader trade package. Will the Senate follow the House and take up legislation to address
         China’s currency manipulation?
     ◦   Defense authorization bill: Senate failed to get cloture on the bill in September, mainly due
         to ―Don’t Ask, Don’t Tell‖ and immigration provisions. How will those issues be resolved?
     ◦   Energy: While comprehensive legislation is unlikely, there is pressure for scaled-down
         energy legislation (e.g., energy tax provisions, a Renewable Energy Standard, a natural
         gas/e-vehicle bill). Can any proposal attract 60 votes in the Senate? And is there an appetite in the House?
112th Congress Leadership & Issues
House Leadership Changes
Position                      112th Potential
Speaker                       John Boehner (R-OH)
Majority Leader               Eric Cantor (R-VA)
Majority Whip                 Kevin McCarthy (R-CA)
Chief Deputy Whip             Pete Roskam (R-IL)
Republican Conf. Chr          Jen Hensarling (R-TX) &
                              Michelle Bachman (MN)
                              running
Republican Policy Cmtee Chr   Tom Price (R-GA)
RNCC Chair                    Pete Sessions (R-TX)
Minority Leader               Nancy Pelosi (D-CA) Challengers?
Minority Whip                 Steny Hoyer (D-MD) & Jim Clyburn (D-SC) running
Democratic Caucus Chair       John Larson (D-CT)
DCCC                          Chris Van Hollen (D-MD) – will he serve another
                              term?
112th Congress – Committee
Leadership
Committee                Potential Chair (R)                    Potential Ranking (D)
Agriculture              Frank Lucas(OK)                        Colin Peterson (MN)
Appropriations           Jerry Lewis (CA) or Hal Rogers (KY)    Norm Dicks (WA)
Armed Services           Buck McKeon (CA)                       Solomon Ortiz (TX)
Budget                   Paul Ryan (WI)                         Allyson Schwartz (PA)
Education & Labor        John Kline (MN)                        George Miller (CA)
Energy and Commerce      Joe Barton (TX), Fred Upton (MI or     Henry Waxman (CA)
                         Cliff Stearns (FL)
Financial Services       Spencer Bachus (AL) or Ed Royce (CA)   Barney Frank (MA)
Foreign Affairs          Ileana Ros- Lehtinen (FL)              Howard Berman (CA)
Homeland Security        Pete King (NY)                         Bennie Thompson (MS)
House Administration     Dan Lungren (CA)                       Robert Brady (PA)
Intelligence             Mike Rogers (MI) or Mac                Silvestre Reyes (TX)
                         Thornberry (TX)
Judiciary                Lamar Smith (TX)                       John Conyers (MI)
Natural Resources        Doc Hastings (WA)                      Rahall (WV) – or move to T & I
Oversight & Govt         Darrell Issa (CA)                      Ed Towns (NY)
Rules                    David Drier (CA)                       Louise Slaughter (CA)
Science & Technology     Ralph Hall (TX) or Joe Barton (TX)     Jerry Costello (IL)
Trans & Infrastructure   John Mica (FL)                         Rahall (WV) – Oberstar lost bid for re elect
Veteran’s Affairs        Cliff Stearns (FL)                     Bob Filner (CA)
Ways and Means           Dave Camp (MI)                         Sandy Levin (MI) or Richard Neal (MA)
Senate Leadership
Senate Leadership Changes (voted on in late Nov.)
Majority Leader                        Harry Reid (NV)
Majority Whip                          Dick Durbin (IL)
Dem. Conference Chair                  Harry Reid (NV)
Dem Policy Committee Chr               Byron Dorgan (ND) retired
Dem Conference Secretary               Patty Murray (WA)
DSCC Chair                             Bob Menendez (NJ)
Minority Leader                        Mitch McConnell (KY)
Republican Conference Chair            Lamar Alexander (TN)
Republican Policy Committee Chair      John Thune (SD)
Republican Conference Vice Chair       John Barrasso (WY)
NRSC Chair                             John Cornyn (TX)
112th Senate Committee Leadership
Committee            Potential Chair (D)                      Potential Ranking (R)
Agriculture          Debbie Staenow (MI) or Kent Conrad ND)   Saxby Chambliss (GA)
                     if he steps down from Budget Chair
Appropriations       Daniel Inouye (HI)                       Thad Cochran (MS)
Armed Services       Carl Levin (MI)                          John McCain (AZ)
Banking, Housing     Tim Johnson (SD)                         Richard Shelby (AL)
Urban Affairs
Budget               Kent Conrad (ND)                         Jess Sessions (AL)
Commerce, Science,   Jay Rockefeller (WV)                     Kay Bailey Hutchison (TX)
Transportation
Energy & Natural     Jeff Bingaman (NM)                       Lisa Murkowski (AK) if
Resources                                                     she wins reelection or Richard
                                                              Burr (NC)
Environment &        Barbara Boxer (CA)                       JamesInhofe (OK)
Public Works
Finance              Max Baucus (MT)                          Orin Hatch (UT)
112th Senate Committee Leadership
Committee                      Potential Chair (D)     Potential Ranking (R)
Foreign Relations              John Kerry (MA)         Richard Lugar (IN)
Health, ED, Labor & Pensions   Tom Harkin (IA)         Michael Enzi (WY)
Homeland Security &            Joe Lieberman (CT)      Susan Collins (ME)
Govt Affairs
Intelligence                   Dianne Feinstein (CA)   Richard Burr (NC) if not ENR
                                                       or VA or Tom Coburn (OK)
Judiciary                      Patrick Leahy (VT)      Charles Grassley (IA)
Rules & Administration         Chuck Schumer (NY)      Lamar Alexander (TN)
Small Business                 Mary Landrieu (LA)      Olympia Snowe (ME)
VA                             Daniel Akaka (HI)       Richard Burr (NC) unless he
                                                       goes as noted above
Indian Affairs                 Maria Cantwell (WA)     John Barasso (WY)
112th Congress – Issue Priorities
   Members in both chambers have begun to outline their priorities for the incoming
    112th Congress—what follows is a brief overview of what to expect in some key policy
    areas
     ◦ Economy
     ◦ Taxes
     ◦ Financial Services/Housing
     ◦ International Trade
     ◦ Energy/Climate
     ◦ Environment
     ◦ Maritime and Fisheries
     ◦ Transportation and Infrastructure
     ◦ Health Care
     ◦ Labor
     ◦ Telecommunications/Privacy
     ◦ Oversight
Economy
   While the recession officially ended in June 2009, the sluggish pace of the recovery remains a top
    concern for both the public and policymakers
     ◦ Unemployment remains near 10% and consumer income and spending are fairly stagnant
     ◦ According to a recent Bloomberg News survey of economists, the unemployment rate will stay
       high for the next year, averaging 9.3%
     ◦ The Federal Reserve just announced plans to purchase an additional $600 billion of longer
       term Treasury debt over the next eight months to loosen credit conditions in order to speed
       the economic recovery and boost job creation
     ◦   Interest rates are expected to remain low for the foreseeable future
   A few legislative measures to help address economic hardships, at least temporarily, are on the
    table—their prospects are unclear
     ◦ The extended unemployment insurance (UI) benefits program expires November 30—
        Republicans will likely insist on spending cuts to offset the cost, so a short-term (i.e., 2-3
        month) extension is the most likely outcome (and may be done retroactively)
     ◦ Additionally, Social Security recipients are not receiving a cost-of-living increase this year and
        some policymakers are calling for a $250 payment—passage is unlikely
   Large stimulus spending efforts appear increasingly unlikely with a Republican-controlled
    House and a slimmer Democratic majority in the Senate—instead, look for Republicans to
    tout the economic benefits of tax cuts and, specifically, the extension of current tax breaks
   Additionally, in an effort to spur job creation, House Republicans have proposed allowing small
   business owners to take a tax deduction equal to 20% of their business income
Economy, Con’t.
   Americans are increasingly concerned about government spending and the nation’s deficits and long-term debt—
    concerns reflected at the polls
     ◦   Government spending expected to be a top priority when the 112th Congress convenes
     ◦   In their ―Pledge to America,‖ House Republicans have outlined a series of proposals to reduce government spending
     ◦   Roll back government (discretionary) spending to 2008 levels, impose budget caps to limit federal spending, impose a
         net hiring freeze on non-security federal employees, and cancel unspent Recovery Act (stimulus) funds
     ◦   Could see a party-wide ban on earmarks


   President’s bipartisan National Commission on Fiscal Responsibility and Reform
     ◦   The Commission is charged with developing recommendations to both balance the budget by 2015 (excluding interest
         payments for the national debt) and address the growth of entitlement spending as well as the gap between spending
         and tax revenue—recommendations are due December 1
     ◦   Proposals will likely include spending cuts (both discretionary and entitlement) and tax increases (in the form of
         reduced tax breaks as opposed to increased income taxes)
     ◦   The panel’s leaders have already suggested that neither should take place before 2012—even still, they are likely to
         prove politically difficult


   President Obama has signaled that addressing the deficit and long-term debt could be an area
    ripe for compromise with Congressional Republicans

   Next year’s vote to increase the debt limit—which could come as early as February—may prove
    particularly challenging for the Republican caucus with many pledging on the campaign trail to
    vote against it
TAXES
   Major provisions of the tax code are set to revert to pre-2001 levels at the end of this
    year
     ◦ 2001 and 2003 Bush Tax Cuts: unless renewed, taxpayers will face higher marginal tax rates, a reduced child
       tax credit, and higher rates on capital gains and dividends
     ◦ Alternative Minimum Tax: the tax—not indexed to inflation—is set to reach as many as 23 million taxpayers
       in 2011 and requires either a temporary or permanent patch
     ◦ Estate Tax: the estate tax fell to zero at the end of 2009 and is scheduled to return to 2001 levels in 2011 (55%
       top rate and $1 million exemption)
     ◦ Additionally, the ―Making Work Pay‖ payroll tax cut, created in the 2009 stimulus bill, is also set to expire


   Republicans would like to see all cuts extended permanently
     ◦ Some Democrats—including Senate Budget Committee Chairman Kent Conrad (D-ND)—also argue against
       effectively raising taxes during the weak economic recovery
     ◦ President Obama and many Congressional Democrats have proposed letting the cuts expire for taxpayers
       earning over $250,000 (married) and $200,000 (individual) and, additionally, increasing the tax rate on
       capital gains and dividends from 15 to 20 percent—the President, however, has recently indicated that he is
       open to compromise

   Will there be a short-term (e.g., 1 or 2-year) extension of all tax cuts? Will the President and
    Congress agree to a higher threshold for ―high earners,‖ for whom they would let the tax cuts
    expire? Will deficit concerns affect the debate?
TAXES, Cont.
   Additionally, dozens of temporary tax breaks expired at the end of 2009 and more are scheduled
    to expire at the end of 2010
     ◦   Credits that expired in 2009 include the R&D tax credit, the state and local sales tax deduction, the biodiesel
         production credit (along with a number of others, particularly related to energy production)
     ◦   Another set of energy tax credits will expire at the end of 2010, including the ethanol blenders credit (VEETC), the
         small ethanol producer credit, and credits for energy efficiency improvements, among others


   While there is pressure on both sides of the aisle to extend the tax credits—and both
    chambers have passed versions of ―extenders‖ bills—an inability to agree upon pay-fors
    (Democrats have targeted multinational corporations) has held up final passage of the 2009
    extenders package for close to a year

   Potential for broad tax overhaul
     ◦   The Senate Finance Committee began hearings on the issue last year
     ◦   In the 111th Congress, Senators Ron Wyden (D-OR) and Judd Gregg (R-NH) introduced the
     ◦   Bipartisan Tax Fairness and Simplification Act, the broadest tax reform bill since 1986
           The bill would streamline the tax code’s innumerable exemptions, deductions and credits, allowing for lower
             individual income and corporate tax rates


   The reform effort may gain momentum following the debt-reduction commission’s
    recommendations, with interest from incoming Ways and Means Committee Chairman Dave
    Camp (R-MI) and Senate Budget Committee Chairman Kent Conrad (D-ND)
Transportation & Infrastructure
   Incoming House Transportation and Infrastructure Committee Chairman John Mica (R-FL) will
    be challenged to balance a slate of program reauthorizations with growing deficit concerns and
    limited revenue options—Senators on the Environment and Public Works Committee will face
    similar issues
   Reauthorization of Surface Transportation Programs
     SAFETEA-LU expired on September 30, 2009 and has operated under short term
    extensions since; last extension expires December 31, 2010
   Outgoing House Transportation and Infrastructure Committee Chairman Jim Oberstar
    (D-MN) has crafted and is advocating a $500 billion reauthorization of the transportation
    programs
   Obama Administration has proposed a six-year reauthorization with a $50 billion upfront
    investment for ―roads, railways, and runways‖ and the establishment of an
   Federal Aviation Administration (FAA) extension
    infrastructure bank
   The FAA has been operating under short-term extensions since 2007
Transportation & Infrastructure,
con’t.
   Water Infrastructure
     ◦ The authorizations for both of EPA’s Clean Water and Safe Drinking Water State Revolving Funds have long-
        since expired
         • In the 111th Congress, the House passed H.R. 1262, the Water Quality and Investment Act of 2009, to
            reauthorize the clean water state revolving fund and H.R. 5320, the Assistance, Quality and Affordability
            Act of 2010 (―AQUA Act‖) reauthorizing the drinking water state revolving fund program
     ◦ The Senate failed to consider S. 1005, the Water Infrastructure Financing Act of 2009, which authorizes $20
        billion for the clean water revolving fund and $14.7 billion for the drinking water state revolving fund due to
        opposition to the bill’s permanent prevailing wage requirement and opposition to the bill’s state allocation
        changes
     ◦ The Water Resources Development Act (WRDA) (which funds navigation, flood control and environmental
        restoration projects) also awaits reauthorization
   Infrastructure Policy in the 112th Congress
     ◦ Likely forced to focus on revenue stream for surface transportation programs including creation of an
        ―infrastructure bank‖
     ◦ Projected fall in gas tax revenues may mean cuts to the program
     ◦ Revenue stream concerns may lead majority party policymakers to look to other cost cutting mechanisms
        including the streamlining of permitting process and to other revenue such as ―transportation enhancements‖
        that currently receive 10% of federal highway funding
   Republicans may push for increased public/private investments in transportation and
    infrastructure projects
Health Care
    In general, expect intense oversight of the new law and its implementation
      ◦ Could see a symbolic repeal vote from the Republican majority in the House—in reality,
        however, complete repeal is nearly impossible
      ◦ Additionally, there are several provisions which Republicans support—those include
        insurance reforms ro prevent denial of coverage based upon pre-existing conditions, to
        eliminate lifetime caps, and to eliminate the Medicare prescription drug ―donut hole‖
   Instead, look for legislative efforts to address what Republicans view as the more onerous
    provisions—a ―repeal and replace‖ strategy
      ◦ In the GOP’s ―Pledge to America,‖ House Republicans pledged to enact medical liability
        reform, allow purchase of health care coverage across state lines, expand Health Savings
        Accounts, and tighten abortion restrictions
   Specific repeal measures could attract bipartisan support
      ◦ Repealing new taxes
      ◦ 1099 additional tax reporting requirement
      ◦ Republicans also view the individual coverage mandate (effective in 2014) as a tax
   Repeal/reform new Independent Payment Advisory Board
      ◦ Beginning in 2014, if the Medicare growth rate exceeds its target, the IPAB would recommend
        cuts would which go into effect unless Congress passed an alternative proposal that would
        achieve the same budgetary savings
   Republicans may also use the annual HHS appropriations bills to prevent implementation
   of key programs (over 100 provisions in the new law require appropriations)
Health Care, Cont’d
   Additionally, while Comparative Effectiveness Research is expected to result in cost savings over
    the long term, many Republicans suggest that it could lead to rationing and may seek to weaken
    the role of the newly-created Patient-Centered Outcomes Research Institute
   How will the new law impact job-based health insurance coverage?
     ◦ HHS recently granted waivers to 30 employers to exempt their mini-med plans (low-cost, low-benefit policies
        for lower income works) from new Medical Loss Ratio requirements (i.e., minimum percentages of premiums
        that insurers have to spend on patient care)
     ◦ Looking ahead, will employers begin to shift employees into the state-based exchanges set to go online in
        2014?
   Role of implementation at the state level and various constitutional challenges?
   Slowing the growth in Medicare and Medicaid will also be a focus as Congress attempts to
    address burgeoning budget deficits
   A number of Medicare policies are set to expire at the end of 2010 and have been stalled in
    various ―extenders‖ packages throughout the year
   Congress is still grappling with the pressure to address looming cut in physicians payments under
    the Medicare Sustainable Growth Rate (SGR) formula
   Doctors face a 23% cut on December 1 and another 6.5% cut on January 1; while there is
    pressure for a permanent fix, cost issues are a concern
     ◦ Congressional Budget Office has estimated that a long-term fix (through 2020) would cost $276 billion
     ◦ Potential for a short-term fix while legislators look for a longer-term solution
Health Care, Cont’d.
    Drugs and Devices
     ◦ Prescription Drug User Fee Act (PDUFA) and Medical Device User Fee and Modernization Act (MDUFMA)
       set to expire in September 2012
     ◦ PDUFA authorizes FDA to collect user fees from drug manufacturers to fund an expedited drug
       review/approval process and MDUFMA does the same for medical device manufacturers
     ◦ Drug safety reform was a priority in the 111th Congress—looking forward, the PDUFA and MDUFMA
       reauthorizations could serve as vehicles for other FDA reforms (though comprehensive reform legislation is
       less likely under Republican leadership)
     ◦ Focus could shift from safety legislation to oversight of the FDA approval processes, including the speed of
       FDA approvals of new drugs and devices
     ◦ Regulatory efforts will be chief policy tool for the Obama administration, if funds remain available
    Food Safety
     ◦ Comprehensive reform legislation was passed by the House in 2009; a bipartisan bill is pending in the Senate
       and could see action in the lame duck session—whether it passes that chamber, and whether a final bill can
       be negotiated with the House before the end of the year, remains to be seen
     ◦ If a final bill is not enacted, the issue could receive attention in the next Congress, especially in light of
       recently salmonella scares
     ◦ In the meantime, FDA and USDA will try to use existing regulatory tools to expand and improve on food
       safety; while Congress reviews effectiveness of current food safety programs
     ◦ Regulatory efforts will depend on funding, which could be targeted in the expected budget debate
Labor
   Pending or planned Democratic labor-related legislative initiatives are very unlikely
    to move forward in 112th Congress
    ◦ ―Card-check‖ legislation (Employee Free Choice Act)
    ◦ Mine safety reform
    ◦ Legislation to allow all firefighters and police officers to unionize

   In fact, legislative efforts moving in the opposite direction have been proposed
    previously
    ◦ Anti-card check legislation (Secret Ballot Protection Act)
    ◦ Campaign finance reforms to regulate use of union dues to support union political activity
    ◦ Repeal of Davis-Bacon public works prevailing wage requirements

   Some Democratic priorities can be pursued through administrative efforts of the
    Department of Labor or the National Labor Relations Board
    ◦ Those entities and others may be under pressure if House oversight efforts target the
      Department of Labor or unions themselves, e.g. through enforcement of Landrum-Griffin
      Act rules
Oversight
   In September, incoming House Oversight and Government Reform Committee Chairman Darrell
    Issa (RCA), released a report entitled "A Constitutional Obligation: Congressional Oversight of
    the Executive Branch‖
     ◦   While his primary focus will be on the Administration, Congressman Issa indicated that oversight efforts will extend to certain
         areas of the private sector as well
   Potential areas for oversight under his leadership include:
     ◦   EPA climate programs and international climate data (―Climategate‖)
     ◦   Deepwater Horizon/BP oil spill
     ◦   Medicare waste/fraud
     ◦   Pensions
     ◦   Financial Services/―Bailouts‖
            TARP, auto bailout, the SEC, government-sponsored entities (Fannie Mae and Freddie Mac)
     ◦   The American Recovery and Reinvestment Act (the ―stimulus‖)
     ◦   Food safety laws and systems
     ◦   Congressman Issa has suggested that inspector generals at governmental agencies be granted the power to subpoena testimony
   Potential Republican leaders of the House Energy and Commerce Committee have also signaled
    that the Committee’s Oversight and Investigations Subcommittee will actively oversee
    implementation of the new health care law and the economic impact of EPA’s regulatory activity
   Other Committees may examine the Administration’s enforcement of the new Iran Sanctions law,
    our military efforts in Afghanistan and Iraq, and Defense Secretary Gates’ spending reduction
    initiative
   Will Republicans focus on the power of unconfirmed Administration officials—e.g., CMS Director
    Berwick (an Obama recess appointment), Financial Consumer Protection Bureau advisor
    Elizabeth Warren, and White House ―czar‖ positions?
Looking Ahead – Key Questions
   In the wake of Republican gains in both chambers, will the President move more to the middle and revive efforts
    to work with Republicans, following in the footsteps of President Clinton? And will we see cooperation on major
    policy initiatives, such as the reauthorization/revamp of No Child Left Behind?

   Will President Obama be able to ―win back‖ the independent vote in 2012?

   Will widespread concerns related to deficits and long-term debt remain at the forefront? And what will be the
    impact of the President’s national debt commission, whose recommendations are due December 1? Even more
    pressing, how will Members concerned with deficit spending vote on raising the debt limit next year?

   The Obama Administration has already seen a number of key departures, including White House Chief of Staff
    Rahm Emanuel and most of the President’s economic team (OMB Director Peter Orszag, Council of Economic
    Advisors Chair Christina Romer, and National Economic Council Director Larry Summers). What other shake-
    ups can we expect?

   What is the impact of the Tea Party movement on the Republican Caucus—will the Caucus be divided on policy
    priorities or coalesce around opposition to the Administration? Will they show a willingness to cooperate with
    President Obama?

   In the wake of this year’s election and the loss of a Democratic majority, will we seek some key retirements in the
    House, such as outgoing Speaker Pelosi, Energy and Commerce Chairman Emeritus Dingell (D-MI), Judiciary
    Committee Chairman Conyers (D-MI), or Education and Labor Committee Chairman Miller (D-CA)?
   Will an already partisan atmosphere be strained ever further by the loss of moderates in both chambers? Will we
    see two years of legislative gridlock?
Information Provided by:
Hurt, Norton & Associates

Government Relations & Public Policy Team at
Kelley Drye Law Firm

				
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