Sheet Metal & Air Conditioning Contractors’ National Association

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Midterm Elections: A Hectic Tale of Two Houses

 

November elections-506910971-300x200The contentious and bitter 2018 midterm election, although loaded with drama and filled with wildly varying estimates, ended very much as predicted by the SMACNA Capitol Hill Office. One surprise was the historic voter turnout where more than 115 million voted in a midterm. It was also the first time turnout exceeded the 100 million mark. And, it was the first time since 1966 that most of the eligible voting age population cast ballots in a midterm election. When all of the outstanding races are settled the Democratic House will have at least a 230 to 205 seat majority with a Senate Republican majority of at least 53.

In recent months it became evident that Democrats would take solid control of the House while the Republicans would marginally increase their hold in the Senate. Indeed, it was a tale of two Houses. While over a dozen races are still to be determined, we do know that our industry lost many solid supporters within the GOP moderate wing as well as lost allies who decided to retire and avoid a predicted loss of majority control. On the other hand, we will have a large class of new members on both the GOP and Democratic sides who are supportive of our key issues. Therefore, we expect to see many opportunities to advance bipartisan approaches to infrastructure, tax incentives, energy efficiency, contracting reforms, and, potentially, pension reform.

Balance of Power for 116th Congress

As of 10:00 p.m. EST on November 7, the Democrats appear to have flipped at least 30 seats in the House of Representatives, with good prospects of gaining about seven more when the remaining close races are decided, mostly in the West. In the Senate, Democratic senators in Missouri, Indiana, and North Dakota lost while a Republican was upset in Nevada, resulting in a net gain of two Senate seats thus far for Republicans with two races, Arizona and Florida, too close to call. The Senate race in Mississippi will go into a runoff on November 27 with the GOP favored holding that seat.

Leadership Battles Coming

The focus will now be on the House, and the big question is: Who will be the next Speaker of the House and whom will they support to lead the critical committees in charge of energy issues, health care, taxes, infrastructure, defense procurement and more? Rep. Nancy Pelosi (D-12-Calif.) has the most support among the vast class of new female members, and most importantly, she set a record for Democratic fundraising in the 2018 cycle with hundreds of millions of dollars raised. For these reasons and more, she is the odds-on favorite to lead the 116th Congress on the House side of Capitol Hill. This leadership contest will not be pro forma as she will need to offer concessions to members of the Democratic caucus who have publicly called for new leadership. Rep. Pelosi has discussed being a “transitional” speaker, utilizing a more low-key approach for just two more years. One factor in Ms. Pelosi’s favor is that she has the experience of leading the House during a Republican president and was in a leading role helping pass Democratic landmark legislation, most notably the Affordable Care Act.

On the GOP side, the battle for leadership will be far more contentious, featuring up to a half dozen members representing the bitter splits in the GOP, both ideologically and regionally. While the current Majority Leader, Rep. Kevin McCarthy (R-23-Calif.), is somewhat favored, few believe the climb for any of the leader candidates to become the GOP leader in the 116th Congress will be painless and pleasant. Others making attempts for the leader position include Rep. Jim Jordan (R-4-Ohio), Rep. Mark Meadows (R-11-N.C.), Rep. Steve Scalise (R-1-La.), Rep. Liz Cheney (R-At-Large-Wy.), and others yet to declare. If no leader wins necessary support, other members have indicated they would be available as compromise candidates, some from the moderate ranks of the new GOP House caucus.

Issue Focus for 2019

The Congressional split decision produced by the 2018 electorate won't likely lead to a lot of deal-making in the new Congress next year on every major policy issue, though both House Democrats and Senate Republicans will need to point to some key accomplishments when their majorities are up for grabs in 2020. The areas where all sides seem to indicate options for cooperation include issues advocated by SMACNA for the last few years such as significant and comprehensive infrastructure investments in airports, mass transportation facilities, sea and rail ports, public buildings and energy infrastructure. Another area the Congress has substantial bipartisan support for include energy and infrastructure tax incentives, building retrofits, performance contracting, and contract change orders.

Most of the critical policy initiatives SMACNA has advocated enjoy solid bipartisan support in the House often supported by key members of the new committee leadership. With divided government, both House and Senate committees need to decide on the bipartisan issues they can advance and how to bypass those areas that will need to wait for 2021 when a new Congress and possibly a new White House sits down in a less politically charged environment to develop important national legislative policies.

End of Year Issues

If all the new member changes, issue struggles, and the predicted leadership battles ahead were not enough, a very challenging “lame duck” session opens in mid-November. The special post-election session should last for a month. Over the four weeks, Congress will try to deal with a December 7th expiration of the funding deal made before the Congress left for campaigning last September. There are better than 50-50 chances of another government shutdown in December as President Trump is demanding a lot more funding for his border wall, which many oppose. Coming off a big win in the House, Democratic leaders in the lower chamber will be quite entrenched in their opposition to the President's wall initiative and counter with a major infrastructure package to draw public support even before the new majority is sworn in the first part of January 2019. It is not clear how the midterm election changes the dynamics surrounding the Joint Select Committee on Solvency of Multiemployer Pension Plans (JSC) or on SMACNA's efforts to enact Composite Plans before the end of the year.

As for 2019 and 2020, everyone on Capitol Hill knows well that the focus on the race for the White House will dominate nearly everything. The more things change, the more they stay the same as it always is after a midterm election.