GOP Surges in Midterm Elections

***From The Maritime Executive magazine, Nov-Dec 2014***

The 2014 midterm elections lifted congressional Republicans to new heights as they recaptured control of the U.S. Senate and expanded their majority in the House of Representatives to a level not witnessed since Herbert Hoover’s presidency. Pundits who predicted a “wave” election proved prescient as Republican candidates won most of the races that the polls suggested were “too close to call.” In many instances, the margin of victory substantially exceeded the poll numbers that had shown the races were likely within the margin of error. As President Obama reluctantly conceded, Republicans “had a good night.”

Historical Context

While the major media outlets promote drama and novelty in the pursuit of headlines and ratings, history teaches us that such results are not new. The sixth year of a presidency usually proves very difficult for the president’s party in the midterm elections. Since World War II, it has lost on average about 32 seats in Congress – 26 in the House and six in the Senate. And this year’s result is consistent with that average. Republicans gained fewer House seats than the average, apparently about 15, but are on track to beat the average in the Senate, having already gained seven seats and likely two more to be decided. 

Presidents Franklin Roosevelt, Harry Truman and Dwight Eisenhower all sustained larger reversals than President Obama this year. Most recently, in 2006 President George W. Bush presided over a major reversal with Democrats recapturing control of Congress by large majorities, winning 30 House seats and six Senates seats from Republicans. Obama is the third president in a row to preside over the loss of both the House and Senate.

The result says more about the circumstances than the president himself. While the national media highlights President Obama’s approval rating of 42-44 percent as if it were exceptionally low, President Bush suffered from an even lower approval rating (33-37 percent) during the 2006 midterms.

Historically, how a president responds to midterm elections that flip control of Congress to his opponents has differed. President Truman ran against the “do-nothing” Republican Congress in his successful 1948 reelection bid. On the other hand, President Clinton embraced the verdict of the midterm elections by declaring the era of big government was over and apologizing for raising taxes. President Bush picked his battles carefully and cooperated with Congress in some instances and defied it in others. What history teaches is that presidents may cooperate with a Congress of the opposing party and at the same time block it.

Therefore, while Obama and likely Senate Majority Leader Mitch McConnell (R-KY) said all the right things after the elections, the truth is that each side will proceed according to its own self-interest. If opportunities for agreement or compromise arise, we can expect congressional Republicans and Democrats and President Obama to pursue them. But, each side will still seek advantage, and the ability to reach agreement will no doubt turn on what each side perceives it will gain. 

We witnessed this during the “lame duck” session following the 2012 elections when Vice President Biden and then-Senate Minority Leader McConnell brokered the agreement that avoided across-the-board, automatic tax increases and an impending fiscal cliff. So we should expect lots of maneuvering and bargaining in the months ahead, and that process usually includes frustrating moments of potentially missed opportunities as each side postures to secure its ultimate advantage. 

Legislative Priorities in the Lame Duck Session

House Speaker John Boehner (R-OH) quickly announced that key House Republican priorities would be to repeal Obamacare, authorize construction of the Keystone XL pipeline, reduce the federal debt, reform the federal tax system and pursue “fast track” free trade legislation. Both Speaker Boehner and Senator McConnell pointed to legislation previously passed by House Republicans, which they claim languished in the Senate because of Democratic Majority Leader Harry Reid (D-NV). It would not be surprising for congressional Republicans to start with legislation they believe can garner the 60 votes needed in the Senate to overcome a filibuster, and Keystone XL may be a leading candidate.

To be sure, some fundamental circumstances have changed that may signal the possibility of progress on discrete measures. First, the Republican establishment, and not the more radical Tea Party element, appears dominant among congressional Republicans. Senator McConnell indicated that when he announced immediately after the election that there would be no government shutdown and the nation’s credit would not be risked in a showdown over raising the national debt limit next year. Prominent Tea Party Republicans like Senator Ted Cruz (R-TX) will surely make their differing views known, but ultimately they don’t appear to have the votes to block the establishment leadership on critically important matters. 

Second, the elections are over and, with a larger majority in the House, the Republican leadership should be more willing to take votes avoided before the election because they would have divided the Republican caucus. Third, the smaller Democratic caucus in the Senate has less need to protect red-state Democratic senators from casting votes that would have embarrassed them before the election and can now operate more cohesively, choosing to cooperate when it suits and to block Senate Republicans with filibuster threats just like Senator McConnell did to them when they held the majority.

It would be surprising for Senate Democrats to forget how Senate Republicans frustrated the legislative process through their expanded resort to the threat of a filibuster and the resulting need for Majority Leader Reid to file over 100 cloture motions annually. It remains to be seen how Senator McConnell can expect Senate Democrats not to use the same tools against him that he employed so successfully against them.

What can be accomplished in the lame duck session may remain unclear until after December 6 because of the runoff election in Louisiana. Senator Mary Landrieu (D-LA) led but failed to get the necessary 50 percent in Louisiana’s unusual “jungle primary” election, in which multiple candidates from the same party can run against each other, but she is plainly the underdog in the runoff. Nevertheless, President Obama and Senate Democrats need not make any binding commitments until after her fate is determined. And many of the compromises necessary to achieve agreement on appropriations levels can be worked out behind closed doors if that goal is pursued.

Obama has emphasized that his priorities are to achieve congressional approval of the use of military force against ISIL (along with supplemental funding for that fight) and secure $6 billion in additional emergency funding to address the threat posed by the Ebola epidemic. He has also signaled that he will take executive action on immigration policy, which could provoke a firestorm of Republican opposition and “poison the well,” according to Speaker Boehner.

Maritime Priorities

Maritime interests are seeking to protect their programs both through the appropriations process and substantive legislation. Ports and waterways representatives are urging legislators to increase the appropriations for waterways projects consistent with the most recent authorizing legislation, the Water Resources Reform and Development Act. The ability of maritime interests to increase the appropriations levels to match the authorizing legislation will measure their political clout. 

Ports are also pursuing reauthorization of the Terrorism Risk Insurance Program, without which their insurance premiums are likely to increase substantially.

The domestic maritime industry is also pursuing relief from the Environmental Protection Agency’s vessel general permit requirements, including the small vessel permit requirement set to take effect on December 19. The industry is also pushing enactment of the Vessel Incidental Discharge Act, aimed at establishing a uniform set of national discharge standards to replace the patchwork quilt of state regulations.  However, it remains unclear what the industry’s supporters are prepared to offer key senators from those states that support the right to impose additional requirements on vessels operating in their waters. Historically, this has proven to be a difficult hurdle to clear. 

Maritime interests supporting the U.S. flag fleet trading internationally are seeking an increase in the Maritime Security Program appropriation, restoration of the 75 percent cargo preference requirement for food aid cargoes, relief from regulatory burdens and, ultimately, a longer reauthorization of the Export-Import Bank’s charter. 

Common Ground

Both parties have plenty of common interests at stake in the popular tax-extender legislation pending in Congress, and the reasons for stalling it have been overcome by the elections. In a recent development, fossil fuel interests have targeted renewable energy tax credits for elimination, but the fate of these credits, so important to offshore wind energy projects, is more easily determined by simple votes now that the elections are over.

Republicans may seek to repeal the Obamacare medical device tax as part of their broader attack on Obamacare, but such partisan measures are not well suited for what will likely be business-oriented consensus tax-extender legislation aimed at helping the economy rather than settling political scores. – MarEx

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