After several years of legislative gridlock, the 2012 election results indicate that the next four years may be marked by more of the same. As we go to print, President Barack Obama won re-election with 303 votes in the Electoral College to Mitt Romney’s 206, with Florida’s 29 electoral votes still to be allocated. President Obama won 50 percent of the popular vote to Romney’s 48 percent.
The Democrats have held onto their majority in the Senate, with a majority of 51 seats prior to the election and a majority of 53 after the election. In the 112th Congress, the two Independents, Senator Bernie Sanders of Vermont and retiring Senator Joe Lieberman of Connecticut, caucused with the Democratic Party. Senator Bernie Sanders is expected to continue to caucus with the Democratic Party in the 113th Congress. It is yet to be determined which party newly-elected Senator Angus King of Maine will caucus. Since the Democrats still hold fewer than 60 seats, their Senate majority is still not filibuster-proof. Republicans kept their majority in the House, albeit their majority is slightly smaller than in the 112th Congress. The chamber moved from a Republican majority of 242 prior to the election to 233 seats at the time of this writing. The Democrats moved from 193 seats prior to the election to 192 as of this writing. Currently, 10 House races are still pending.
Though the relative levels of power between the two parties within each chamber of Congress have shifted somewhat, Democrats still control the Senate, Republicans still control the House, and President Obama remains in the White House, which suggests that in the 113th Congress, the partisan balance of power in Washington will remain largely unchanged. Businesses will benefit if this finally spurs legislators to come together to compromise on major issues, but businesses could also find themselves subject to further legislative and regulatory uncertainty if gridlock persists.
Incoming Senate Leadership
With the Democratic Party remaining in control of the Senate, it is expected that Senator Harry Reid (D-NV) will remain the Majority Leader and Senator Dick Durbin (D-IL) will remain as Majority Whip. On the Republican side, Senator Mitch McConnell (R-KY) is expected to remain as Senate Minority Leader. Senator John Cornyn (R-TX), currently the Chairman of the Republican Senatorial Campaign Committee, is a strong contender to replace retiring Senator Jon Kyl (R-AZ) as Minority Whip.
In the Senate, several committee chairmanships are expected to undergo leadership changes in the 113th Congress. The following are the expected incoming Senate committee chairmanships:
- Agriculture, Nutrition, and Forestry: Senator Debbie Stabenow (D-MI)
- Appropriations: Senator Daniel Inouye (D-HI)
- Banking, Housing, and Urban Affairs: Senator Tim Johnson (D-SD)
- Budget: Senator Patty Murray (D-WA) *
- Commerce, Science, and Transportation: Senator Jay Rockefeller (D-WV)
- Energy and Natural Resources: Senator Ron Wyden (D-OR) *
- Finance: Senator Max Baucus (D-MT)
- Judiciary: Senator Patrick Leahy (D-VT)
- Small Business and Entrepreneurship: Senator Mary Landrieu (D-LA)
Incoming House Leadership
With the Republican Party still in control of the House, House Speaker John Boehner (R-OH), Majority Leader Eric Cantor (R-VA), and Majority Whip Kevin McCarthy (R-CA) are expected to remain in their leadership positions in the House Republican Conference. The House Republican Conference will hold its leadership elections the week of November 11. Rep. Nancy Pelosi (D-CA) is expected to remain as Minority Leader, Rep. Steny Hoyer (D-MD) is expected to continue as Minority Whip, and Rep. James Clyburn is expected to be the Assistant Minority Leader. Should Rep. Pelosi decide to step down as Minority Leader, Reps. Hoyer and Clyburn would likely move up in the ranks. House Democrats will hold their caucus leadership elections on November 29.
Due to House Republican term limits, several House committee chairmanships are up for grabs now that the elections are over. The following are the anticipated House committee chairmanships in the 113th Congress:
- Agriculture: Rep. Frank Lucas (R-OK)
- Appropriations: Rep. Harold Rogers (R-KY)
- Budget: Rep. Paul Ryan (R-WI)
- Energy and Commerce: Rep. Fred Upton (R-MI)
- Financial Services: Rep. Jeb Hensarling (R-TX) ∗
- Judiciary: Rep. Bob Goodlatte (R-VA) *
- Natural Resources: Rep. Doc Hastings (R-WA)
- Science, Space, and Technology: Rep. Lamar Smith (R-TX) *
- Small Business: Rep. Sam Graves (R-MO)
- Transportation and Infrastructure: Rep. Bill Shuster (R-PA) *
- Ways and Means: Rep. Dave Camp (R-MI)
Upcoming Issues on the Legislative Agenda
With the elections over, members of Congress will return to Washington on November 13 for what could be a lame-duck session of Congress lasting roughly six weeks. It is expected that during this time legislators will turn to the nation’s fiscal issues, the most immediate of which are budget sequestration and expiring tax provisions, including the payroll tax cut, unemployment benefits, and the 2001 and 2003 Bush-era tax cuts. The United States will also hit its $16.4 trillion debt ceiling in the spring. Members of Congress will have to negotiate to raise the limit before then or risk defaulting on the nation’s debt. Given that the more immediate issues comprising the “fiscal cliff” are expected to dominate the lame-duck session, it is unlikely that legislators will tackle the debt-ceiling issue during this short time frame. It is more likely that members of Congress will negotiate the debt-ceiling issue in late February or early March, as the U.S. actually nears the deadline. Finally, since the continuing resolution that passed in September funds the government until March 2013, members of Congress will need to either extend or replace this measure at that time. Taken together, these issues make it clear that the country’s finances will dominate the legislative agenda both during the lame-duck and after the Administration and members Congress take office in 2013.
Other issues that members of Congress may take up in the lame-duck session include:
- Cybersecurity legislation
- Data breach
- Defense authorization
- Electronic Communications and Privacy Act
- European Union airline emissions
- Farm bill reauthorization
- Foreign Intelligence Surveillance Act reauthorization
- Creation of a national infrastructure bank
- Internet gambling
- Medicare Sustainable Growth Rate
- Miscellaneous Tariff Bill
- Mortgage Forgiveness Debt Relief extension
- Online sales tax
- Permanent normalized trade relations with Russia
- SAFER and FIRE grants
- Water Resources Development Act
In the wake of Hurricane Sandy, legislators are also considering a $12 billion supplemental appropriations bill to fund cleanup and recovery efforts. H.R. 6581, introduced by Rep. Chaka Fattah (D-PA) on November 2, would direct funds to the Army Corps of Engineers Flood Control and Coastal Emergencies Account, Small Business Administration disaster loans, FEMA’s Disaster Relief Fund, and FEMA disaster assistance loans. Legislators may attach an omnibus spending bill or fiscal cliff legislation to this supplemental appropriations bill. Since the appropriations bill is not offset elsewhere in the budget, it will likely face opposition from deficit-hawks in Congress, particularly in the Republican-controlled House of Representatives.
With the status quo largely unchanged, there is less of an incentive to punt fiscal negotiations until after the inauguration of the President and the new Congress. Republicans, who will still control the House in the next Congress, will have a slimmer majority, creating a greater incentive to negotiate during the lame-duck session, when they hold more power then they will in the next Congress. There is therefore a greater possibility that members of the current Congress will be more willing to craft a grand fiscal bargain in the lame-duck session. To avert the fiscal cliff, legislators may try to negotiate a deficit reduction package addressing the nation’s spending and revenue. On November 7, House Speaker Boehner said Republicans would be open to a deficit-reduction plan that would include new tax revenue, overhaul the current tax system, and reduce the growth in entitlement spending. However, it may be difficult for legislators to craft such a grand fiscal bargain during the short time frame of the lame-duck session. If legislators cannot agree on a grand fiscal bargain during this time, they may instead pass stopgap measures delaying the enactment of the fiscal cliff.
House Republican leaders have said that during the lame-duck session they would push to replace the sequester and extend current tax rates. If Democrats and the Obama administration agree to this, it would give legislators more time to negotiate a broader fiscal deal in 2013. A schism may flare up within the Republican party during the lame duck, with fiscally conservative legislators agreeing to delay sequestration but in return demanding that tax provisions like the payroll tax cut be allowed to expire. Legislators could also pass a bill in the lame-duck delaying sequestration and mandating that the 2010 Simpson-Bowles deficit-reduction plan automatically take effect at a later date unless legislators can agree on an alternative deficit reduction package in an interim time period.
With President Obama remaining in office, the Republicans maintaining a majority in the House, the Senate remaining in Democratic hands, the partisan balance of power will remain largely unchanged in the next four years. As such, devising an alternative plan to the budget sequestration and expiration of tax provisions will require compromise. This also leaves open the possibility, however, that any negotiations to avert the fiscal cliff will devolve into gridlock. Officials in the Obama administration said during the campaign that President Obama would veto any legislation averting the fiscal cliff if it did not also raise the tax rates on upper-income earners, setting the Administration up for a show-down with Congressional Republicans in the lame-duck session.