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Post-Election Update

Nov. 3, 2010 - Yesterday, the Republican party won big in Congressional mid-term elections.  Republicans won a substantial majority in the United States House of Representatives, with the composition of the House, as of 1 p.m., today, being 239 Republicans and 185 Democrats, with 11 races still undecided.  The party with 218 Members controls a majority of the seats in the House.  By comparison, there are 255 Democratic Members of the House of Representatives in the 111th Congress. 

Democrats retained control of the Senate, although their number will be reduced significantly.  With the winner in the Senate races in Colorado and Washington yet to be determined, the Democrats will have 51 Senators in the 112th Congress, including Sen. Lieberman (I-CT) and Sen. Sanders (I-VT), Independents who caucus with the Democrats.  There will be at least 47 Republican Senators in the 112th Congress including, based on the vote count to date, either Senator Lisa Murkowski or Joe Miller from Alaska.  The reduction in the number of Democrats in the Senate likely will result in a change in the ratio of Republicans and Democrats who serve on each committee as well as an increase in the number of committee staff available to Republicans.

Interestingly, four of the newly elected Senators will take their seats immediately, rather than on January 3, 2011:  Senator Mark Kirk (R) of Illinois, Senator Chris Coons (D) of Delaware, the eventual winner in Colorado, and Senator Joe Manchin (D) of West Virginia.  Each replaces a Senator appointed to occupy a vacant seat until an election could be held.  These newly elected Senators will be sworn in as soon as their respective Secretaries of State certify the election results to the Senate.  These newly seated Senators could change the dynamics of the post-election session of the 111th Congress.

POST-ELECTION SESSION OF THE 111th CONGRESS There is much speculation about the amount of business that will be conducted during the post election session, particularly in light of the House changing from Democratic to Republican control.  Congressional Republicans may favor delaying most decisions on pending matters into the next Congress.  However, the 111th Congress has a significant amount of unfinished business pending.

The most pressing business is the need to fund the federal government beyond its current, temporary funding through December 3rd.  One option for congressional leaders is to pass a Continuing Resolution (CR) that funds the government until February, March or April, 2011 at the level of spending appropriated for the past fiscal year (FY2010).  An alternative approach could be to fund the federal government through an "omnibus bill" that could grow to include other pending matters where bipartisan consensus can be reached.

In addition, the Bush tax cuts are set to expire at the end of 2010 unless action is taken by Congress to extend them.  If no action is taken to extend them, tax rates on individuals and accompanying withholding requirements will increase January 1, 2011.  Since neither political party wants to see tax increases for most Americans, Congress could act on this matter in a post-election session.

At this point, Congress is scheduled to reconvene the week of November 15th and work at least part of that week before adjourning for Thanksgiving.  During that week, the party leadership of the House and Senate will be elected by the Republican and Democratic caucuses of each House.  Congress will reconvene on November 29th and continue in session until adjourning sine die, which will mark the official end of the 111th Congress. 

The post-election session will also mark the unofficial beginning of the 2012 Presidential election campaign with positioning on issues driven to a large degree by national politics.  Speculation, therefore, regarding this post-election session is even more hazardous than usual.

THE 112th CONGRESS AND THE PRESIDENT The Republican agenda for the 112th Congress will be on exhibit in the United States House of Representatives.  The agenda of the Senate will continue to be developed by the Democratic Senate leadership in conjunction with the President. 

All current indications are that this Republican House will distribute power to its Committee chairs, unlike the previous Republican House which concentrated power in its political leadership.  Thus, actions of committees will be more important in the forthcoming Congress than in the previous Republican Congress.

The new Republican Majority is smaller than the Democratic Majority of the 111th Congress.  The challenge of the Democratic Leadership in the 111th Congress was to develop policy positions that would be supported by a sufficient number of Democrats spanning the ideology scale from liberal Democrats to the fiscally conservative "Blue Dog" Democrats to pass the House with few or no Republican votes.  The challenge for the Republican Leadership in the 112th Congress will be similar - drafting and passing legislation with sufficient Republican support spanning the ideological breadth of their caucus.  Although 28 of the 54, close to half, of the "Blue Dog" Democrats will not be returning to the 112th Congress, one current unknown is whether the Republican Majority will develop policy positions that may attract at least some conservative Democratic votes in the House.  This challenge is likely to affect every area of public policy, including energy, natural resources, environmental, health and transportation.

Speculation regarding the 112th Congress and its relationship to the President is likely to be an extremely popular topic for innumerable "talking heads," "pundits," and others for months to come.  Will the Republican House and near-Republican majority in the Senate be able to work with the President on key issues of importance to the American people?  Or, as has happened often in the last decade, will bipartisan gridlock prevent federal action to address the concerns of the American public?  

The remainder of this document briefly highlights likely actions by the Congress and the President on energy, environmental, natural resources, health and transportation matters, and identifies those Members who will not be returning to certain House and Senate committees that are critical to these policy debates.

The following major issues are likely to dominate the 112th Congress:

  • Job Creation and Economic Growth. The two political parties are likely to take very different approaches to addressing this national priority.  In all likelihood, while each political party will strive for "credit" on this issue, bipartisan cooperation will be required to make progress on these fundamental issues.
  • Budget/Spending Reduction. We expect Congressional Republicans and the President to pursue budget reductions seriously, both with respect to current expenditures as well as long term federal spending.  The President is likely to use the December 1, 2010 recommendations of his National Commission on Fiscal Responsibility and Reform as a starting point.  There is a report that current Democratic House and Senate leadership would like to force a vote on these recommendations in the post-election session of Congress.  A key issue for energy sector interests will be whether spending cuts in the 112th Congress will affect the federal funds available for alternative energy grants, loan guarantees, energy tax breaks and other such federal programs.
  • Tax Rates and Energy Tax Incentives. We anticipate a serious tax debate in the 112th Congress focusing both on tax rates and tax incentives, including incentives for energy projects.  We believe the President will continue to focus on moving the nation away from fossil fuels and toward sustainable energy sources.  Congressional Republicans are likely to favor the continued use of domestically available fossil fuels for the foreseeable future.  There may be room for bipartisan compromise on national energy policy issues.
  • Climate Change. The 112th Congress will not enact a "cap-and-trade" program. Congressional Republicans, likely joined by some Democrats, may pursue legislation to delay EPA action on CO2 emissions and also may seek to "defund" EPA's ability to adopt new rules on this subject.  On a bipartisan basis, at most Congress may adopt some modest programs to promote greater use of renewable energy, energy efficiency approaches and to advance energy research and development.  We believe the President will continue to attempt to make progress on the climate change issue using existing Executive authority, including specifically where the federal government is under legal obligations under current law and by virtue of court actions that have already resulted in an ambitious schedule of regulatory activity.
  • Health Care. Congressional Republicans can be expected to be aggressive in their efforts to "repeal and replace" the health care legislation adopted in the 111th Congress.  Given continuing Democratic control of the Senate, the almost certain Presidential veto of any such legislation and the almost impossible task of assembling the votes in either House for a veto override, a successful frontal assault on the health care legislation is not likely.  Rather, there will be skirmishing over implementation of the law, the potential for legislative riders on appropriations bills to block funding, legal actions in state and federal courts and perhaps some fine tuning of the legislation, some of which may have bipartisan support.
  • Oversight Hearings. On a range of issues from environmental protection to health care, we anticipate an activist Republican House majority will initiate a broad series of oversight hearings.
  • Executive Branch Action.  As mentioned above, we expect the President to use the full power and authority of the Executive Branch to advance his agenda.  The current statutory authority of the federal government contains a significant amount of existing authorities that can be used to promote his clean energy agenda and climate agenda. We expect the President to use these authorities fully through Executive Orders, rulemakings, directives to federal agencies and departments regarding purchases and practices, reprogramming of appropriated funds and other such mechanisms.  We anticipate the increased use of veto threats and actual vetoes to back up Presidential policy positions.  Congressional Republicans will be on alert for these Executive Branch initiatives and will attempt to constrain the President through legislative action, negotiation and, perhaps, legal action.
CHANGES IN LEADERSHIP AND KEY COMMITTEES OF THE HOUSE AND SENATE IN THE 112TH CONGRESS The ratio of Republican to Democratic Members in the House has changed dramatically, forcing party leaders to renegotiate the number of seats and respective ratios of party members on each committee.  In the coming months, House Republican Leadership will negotiate with Democratic Leadership to make these changes and then appoint chairmen and committee members as well as determine the number of majority and minority committee staff. 

As Congress engages in these negotiations, we will provide updated information about changes in the House of Representatives, including House leadership and the new Chairs of key committees and subcommittees.  Additionally, we will provide information about the agenda of the Republican House and the Democratic Senate as the political situation clarifies itself over the next few days and weeks. 

MEMBERS OF KEY COMMITTEES OF THE SENATE AND HOUSE Click here to view the PDF of this Update which includes the current rosters of Congressional committees with primary jurisdiction over energy, environmental, natural resources, transportation, infrastructure and health care issues, noting departures (as of 1:00 PM on November 3).

### Van Ness Feldman's bipartisan Public Policy practice has represented clients effectively for over thirty years on a wide range of public policy issues primarily in the fields of energy, the environment, natural resources, transportation, federal taxation, federal appropriations and health care.  We have represented clients effectively during periods of one party domination of the Executive and Congressional branches of the federal government and, as will occur in January, during periods of divided government. We have been successful throughout the changes of the last thirty years by focusing on substance, developing deep relationships of trust and understanding the unique process of federal policy development. We look forward to succeeding for our clients on the public policy debates that will occur during the 112th Congress.  If you would like to learn more about our Public Policy practice, please don't hesitate to contact Ben McMakin, Bob Szabo, or any of our professionals, at 202.298.1800.


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