Someone Hit the Reset Button

By the numbers, here’s what happened in last Tuesday’s midterm elections:

  • Republicans caught a wave and captured control of the US Senate, assuring themselves of at least 53 seats, with the Louisiana race still to be decided in a December runoff.
  • With a handful of races still outstanding, Republicans widened their margin of control in the House, giving the GOP its largest majority since the Truman administration.
  • The Republican wave swept across the nation’s state governments as well, holding at least 33 governorships and 67 state legislative chambers–more than at any point in history.

Beyond that, things get a bit confusing because, while the numbers demonstrate a clear pattern, inconsistencies abound, leaving some political pundits scratching their heads.

In Colorado, for example, voters rejected a statewide referendum on personhood, but elected a new senator who cosponsored federal personhood legislation. The electorate in four states voted to hike their minimum wage by huge margins while electing senators or governors who oppose raising the federal minimum wage. And about half a million Kentuckians signed up for Kynect, the commonwealth’s version of the Affordable Care Act. Presumably, some of them contributed to Senator Mitch McConnell’s resounding victory, allowing his to follow through on a campaign promise to “pull out Obamacare, root and branch.”

So, what’s next?

Before the new 114th Congress is sworn in, the 113th Congress has about a month to work through a pretty daunting to-do list.

The lame-duck session offers lawmakers a prime opportunity to strike a deal to replace the Medicare formula for calculating physician reimbursements–the so-called “doc fix.” Congress came close to signing off on a deal last spring, but negotiations stalled when lawmakers couldn’t agree on how to pay for the deal’s $150 billion price tag. Over the past several weeks, however, more than 110 lawmakers have joined in a bipartisan effort urging their party leaders to pass a deal before year’s end.

With the 2014 tax filing season just around the corner, Congress can also take up the more than 50 tax extenders that will have expired by year’s end. In May, the Senate Finance committee adopted bipartisan legislation to extend most of the expired tax provisions for two years. The House took a different approach, passing legislation making select extender provisions permanent, including the R&D credit, bonus depreciation and the exclusion for charitable distributions from an IRA. Most likely both chambers will agree to a short-term extension, setting the stage for more comprehensive tax reform.

Also on the docket for the lame duck session is the annual defense authorization bill. During the midterm election recess, the House and Senate Armed Services panels have been working assiduously to reach agreement on what will constitute a conference report. At stake is a 50-year record of passing the annual defense authorization.

But certainly one of the most critical decisions facing House and Senate leaders is whether to complete work on fiscal year 2015 appropriations. For the past several weeks, House and Senate Appropriations staff have been negotiating what they hope will constitute an omnibus appropriations bill. Unless a deal can be struck, lawmakers will pass either another stop-gap measure or a full-year continuing resolution.

The coming months will bring another transition of power, marked by possible threats and potential opportunities–something CRD Associates has experienced many times since its founding in 1980. Regardless of what happens, our clients will benefit from the firm’s deep policy roots and first-hand experience.

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