New Day, New Congress

Below is a roundup of headlines that matter and key takeaways from the industries and issues we're following closely. We'll be back later today with more in-depth analysis.

Democrats Take Back the House

Republicans Expand Majority in the Senate

Reaction from top media outlets was mixed, as the results left something for everyone:

Health Care

Health care will continue to be a top issue with Members on both sides of the aisle in the 116th Congress. Democrats will float their own health care policy proposals to expand access to care, especially in underserved areas.

For example, re-authorization of community health centers’ funding will be a priority, as will the annual HHS appropriations bill. We also expect opportunities for bipartisan action around drug prices, including price transparency and generic alternatives, efforts to address the ongoing opioid epidemic, and NIH funding.

Tax

The tax landscape in Congress will look significantly different in 2019 than it did when Republicans passed comprehensive tax reform last year over the objections of Congressional Democrats. Not only will there be a new Democratic majority, but also, many of the Republicans who were key in the drafting the tax reform legislation will not be returning to Congress.

A Democrat-controlled House in 2019 will not be very supportive of President Trump’s recent suggestions for additional tax cuts and may, in fact, look to raise taxes in some contexts. In addition, there may be discussion of reviving tax extenders.

Trade

A new majority in the House of Representatives means Democrats will have greater leverage on implementation of legislation, which will be noted first in the context of the new version of NAFTA that the Administration is finalizing this month.

A hallmark of the past two years is that President Trump has many tools at his disposal to initiate trade actions and he has taken a very broad view of the situations that require his involvement. A new majority in the House will now have to decide how to use its authority to circumscribe Trump’s trade policies that have raised Congressional objections in 2017 and 2018. In the meantime, we expect the Administration will continue to use existing trade laws in an aggressive manner to coerce trading partners, leading to a rising interest in trade law reform.

Environmental & Energy

The Democrats’ victory in the House of Representatives changes the landscape of energy policy, even though Republicans are expected to strengthen their Senate majority further and, of course, President Trump remains the President.

House Democrats will battle the President and the Senate in an effort to hold back what they view as ill-advised efforts to promote coal and undermine President Obama’s clean energy legacy, including introducing messaging bills or Congressional Review Act (CRA) resolutions to reverse Administration rollbacks, and developing legislation to address climate change, including a possible carbon tax – a proposal that has gained some popularity with the growth of the bipartisan House Climate Solutions Caucus. At the same time, the House, the Senate, and the Administration may find common ground on strengthening energy infrastructure necessary to expand the use of increasingly competitive renewable energy and other innovative technologies.

Transportation & Infrastructure

One of the few areas of potential consensus between President Trump and the likely incoming Speaker Nancy Pelosi (D-CA), along with the Senate Republican majority, is a substantial increase in spending on infrastructure programs.

All parties have proposed plans over the past two years but a sticking point has been a means to offset the trillion dollars that would go to rail, aviation, transit, highways, ports, waterways, and technological infrastructure like broadband. With Rep. Pelosi having already announced last night that this is a high priority, and recognizing that all Members like to increase spending on their local transportation infrastructure, it will be worth watching whether this issue gets the attention it richly deserves.

Technology

In the rush to embrace fast, convenient, and inexpensive forms of advancing technology, while meeting consumer demand that encourages access for everyone, questions surrounding consumer data, privacy, and cybersecurity have been ignored.

Americans have recently been victim to several high-profile data breaches of well-known companies and federal agencies. As a result, federal and state governments, as well as governments abroad, are asking how they can achieve true consumer protection and cybersecurity. Over the next two years, the US will grapple with carving a path forward that will keep Americans safe, while enabling competitiveness with the rest of the world.

Anti-Poverty

Policy proposals centered on spending on federal entitlement and safety-net programs will see a renewed focus in the 116th Congress as Democrats take control of the House.

While Democrats will place greater emphasis on increasing federal spending to support programs targeted to assist low-income and working families, they will encounter considerable resistance from the Republican-led Senate and the Trump Administration which seeks to cut entitlements spending and anti-poverty programs as a means to reduce the estimated $779 billion annual federal budget deficit.

Campaign Finance & Election Law

Due to improvements in election security – including new paper-based voting methods, updated machines, provisional balloting, and election integrity programs – it appears the 2018 elections will be contentious on the campaign trail, but not when counting results.

DHS Secretary Kirstjen Nielsen declared these would be the “most secure” elections in US history and David Becker of the Center for Election Innovation and Research agreed in his op-ed for The Washington Post. But those security updates may result in a delayed reporting of results.