Recap of 2010 Election, Ramifications and Repercussions and the 112th Congress

November 12th, 2010 by Steve Amitay

Recap of 2010 Election, Ramifications and Repercussions and the 112th Congress

As many predicted, the mid-term 2010 congressional elections last Tuesday turned out to be a clear repudiation (especially by independent voters and seniors) of the Obama Administration’s big government/big spending policies facilitated by a Democrat-controlled Congress. While Dem losses in the Senate (6 seats) were bad and could/should have been worse, the Dem losses in the House were historic. Dems lost 63 seats (the most seats lost in election since 1948) and there are still 7 Democrat seats up for grabs in races that have not been called yet. (The GOP leads in 4 of those races so the GOP could end up with a 67 seat gain.) Conversely, the GOP lost no seats in the Senate and lost just three seats in the House (but not Dan Lungren, and industry friend who had been challenged vigorously).

The makeup of the 112^th Congress will be — Senate: 53 Dems and 47 GOP’ers; House 239 GOP’ers and 189 Dems (with 7 seats undecided). There will be close to 100 new House members and 16 new members of the Senate!

To say that the passage of health care reform, a self-inflicted Democratic wound, hurt the Dems would be an understatement. Dems also bore the brunt of the weak economy which was not all their fault. In addition, Tea Party fueled enthusiasm for the GOP and against Obama contrasted with voter apathy from traditional Dem constituencies. For instance, in 2008, voters under 30 (who mostly voted for Obama and Dems) comprised of 18% of the electorate, in 2010 they were 11%. Even the voting from union households dropped off from 2008 to 2010. Most significantly, independents (who made up 28% of the electorate) turned on the Dems. In the 2006 mid-terms, Dems won Independents by 18% on Tuesday the GOP won Independents by 18% — a 36 point reversal. Of note, in the 48 Democratically controlled congressional districts won by John McCain in 2008, the GOP took over 36 of them on Tuesday. Another factor in the GOP tsunami was the influx of massive amounts of outside conservative/corporate money into close races (much as a result of “Citizens United” Supreme Court decision). While liberal groups and unions spent big too, it has been reported that conservative-aligned groups spent $2 for every $1 spent by liberal-aligned groups.

It was not all bad for the Dems though. While the Tea Party definitely played a role in many House victories (39 Tea Party backed GOP candidates won election) at the same time in the Senate, several Tea Party backed candidates who defeated more moderate/”establishment” candidates in the GOP primaries, probably cost the GOP three Senate seats. This was definitely the case in Delaware, most likely the case in Nevada, and likely the case Colorado. Also, it’s likely that the Tea Party (and Tea Party House members), given their “constitutional conservative” ideological purity and anti-establishment attitudes, will create problems for their more moderate/establishment House GOP leaders. The first instance could be in a few weeks when the House returns and party leaders will be elected. While John Boehner will be Speaker and Eric Cantor will be Majority Leader, there is a race for the number three leadership position (GOP Conference Chairman) between Tea Party heroine Michele Bachmann and the establishment pick Jeb Hensarling. However, Hensarling is as conservative as one can get, with a 98 life-time score from the American Conservative Union, so a major intraparty battle should be able to be averted.

The real key test for the House GOP leadership will be early next year when legislation will be required to be passed to raise the federal debt ceiling. The Tea Partiers are dead set against raising the debt ceiling and are willing to risk the adverse consequences (the federal government shuts down as it is no longer able to borrow money to operate, U.S. bonds will be in technical default, financial market chaos could ensue). In the most recent vote to raise the debt ceiling (in February), the GOP House leadership played to the Tea Party’s extreme “fiscal constraint” position and all GOP House members voted against legislation raising the ceiling — knowing though that the Dem majority would have the votes to pass it. Now, with the GOP in the majority, several dozen GOP’ers will have to go along with the Dems to raise the debt ceiling and if the Tea Partiers are not satisfied with GOP efforts to that point to cut spending, this could be like walking the plank for the GOP leadership. The GOP leadership will thus have to take some serious actions related to spending cuts, most likely including calling for cuts to the defense budget and entitlement programs, and this could alienate other GOP constituencies.

In addition, while at the same time the GOP will be pushed hard by the Tea Party wing to make “no compromise” with Obama, many others on Tuesday voted for the GOP candidates not because they are loyal GOP conservatives but because they think Washington and Congress are “broken”. They may not like Obama’s policies but at the same time they have not endorsed GOP obstinacy, and they will expect the new GOP House majority and new GOP Senators to find ways to work with Obama and the Democrats.

The Dems though too are being squeezed. While conventional wisdom would dictate that after such a electoral “shellacking” Dems will scale back their grandiose, big government, liberal agenda, the left wing of their party are essentially saying the Dems should double down. They believe Dems didn’t spend enough on the stimulus, Dems alienated Hispanics and gays by not acting on their issues, and the real problem was not the substance of Dem actions, but how they were communicated. More so, with Dem moderates in the House having been decimated on Tuesday, the liberals within the House Dem ranks could have even more influence within the party. While Obama is already making overtures to work with the GOP (e.g. extend the Bush tax cuts to all persons) — following the successful route taken by Bill Clinton in 1995 after the House and Senate flipped to the GOP in the 1994 election — many House Dems are unwilling to support such compromise.

One clear sign that many Dems did not get the message of 2010 to move to the center is the fact that Nancy Pelosi, in a surprise to many, has decided to stay in Congress and run to become the Dem. Majority Leader. Moderate Dems are not obviously not happy, and North Carolina Dem Rep (and former Redskin first round QB bust) Heath Shuler has said he would run against Pelosi, but he has no chance. In the past, Speakers of the House whose party lost the majority usually would retire, and if Pelosi did take that route, then it was likely that the more moderate Dem Rep Steny Hoyer (MD), the current Majority Leader would become the Minority. However, Pelosi has turned this commonsense conventional wisdom on its head, and apparently the 70 year old Pelosi believes the Dems can retake the House in the near future. To no surprise, the GOP is ecstatic that Pelosi will remain the leader and face of the House Dems. Also troubling for the Dems is that now a fight is shaping up for the number #2 Dem. House position (Minority Whip) between Hoyer and the current #3 Dem, the more liberal Rep. James Clyburn (SC).

Of course, as it increasingly seems to be the case, when it comes to passing legislation the real action is in the Senate and there could be opportunities to overcome to current Senate gridlock. With a slim majority, and a more moderate membership, it is very likely that Senate Dems and Republicans will be able to work together, and then with work with the GOP controlled House to pass legislation. Much of what might be passed by the Senate could likely infuriate House Dems, and then they will have to rely on Obama to hold the liberal line. Thus, it will be key to see if Obama is also willing to compromise. Senate Democrats cannot afford to dig in and be portrayed as problematic. In 2012, there are no less than 23 Dem Senators up for re-election (many from the historic takeover class of 2006) and the GOP is already aiming to take back many of those seats and flip the Senate. Dem Senators are up in Red States such as Nebraska (Nelson), North Dakota (Conrad), Montana (Tester) and will be targeted, as well as Dems in states that went very Red in 2010 and have been traditional swing states: (VA – Webb), (OH – Chabot), (FL—Nelson), (MO—Caskill).

As to the outlook for the security industry in the 112^th, without a doubt the situation in the House is much improved. Rep. Peter King (NY) will reclaim the Chairmanship of the House Homeland Security Committee, supplanting the pro-union/pro-Fed government Bennie Thompson. While it’s clear that King and his staff are concerned about the performance of the contract security guards at FPS, it also clear that he is not convinced that federalizing the FPS contract guard force is the solution. At the first House HSC hearing on FPS, while Dem members of the Committee attacked FPS contract security guards, King was concerned with whether FPS could provide adequate security related to a possible trial of Khalid Sheik Mohammed in NYC. King’s staff also made sure that the industry (through NASCO) was represented at the second, more critical and guard focused Committee hearing on FPS. Also, the number three most senior Republican on the Committee is industry friend Dan Lungren (CA).

A huge change will take place on the House Judiciary Committee, where the liberal felon–friendly John Conyers (MI) will turn over the Chairmanship to Lamar Smith (TX) a veteran conservative who is tough on criminals, illegal immigrants, and trial lawyers. The Dem legislation (H.R. 5300) to wipe away arrests without dispositions from the FBI database will never see the light of day. In addition, another key Committee that is going into very friendly hands is Transportation and Infrastructure where Rep. John Mica (FL) will become chairman. Mica has been a strong supporter of allowing contract security services to continue to operate at airports (the Screening Partnership Program) and is a friend of the industry. In addition, any FPS reform bill in the House will have to go through the House and Transportation and Infrastructure Committee.

On the Education and Labor Committee — the scene of the most recent activity on legislation related to FBI background checks for security officers, — the Committee will now be chaired by Rep. John Kline (R-MN), and union champion Rep. Rob Andrews (D-NJ) will no longer chair the Health, Employment, Labor and Pensions Subcommittee.

Finally, Rep. Buck McKeon (R-CA) will take over as the Chairman of the House Armed Services Committee, the source of many initiatives that have reduced the Services use of contract security. While already the Army has put in place a plan to eliminate the use of contract security at bases, the other Services are not so far along, and perhaps there could be an opportunity to stave off this insourcing, before the authority to use contract security expires at the end of FY 2012.

All these “new” putative GOP chairman have to be appointed by the GOP leadership, but barring any major unforeseen developments that should be the lineup.

In the Senate, there will not be any major changes. The very liberal Russ Feingold (D-WI) a top member of the Judiciary Committee is gone, but all the Chairman and Ranking members of the key Committees for the industry (Homeland Security and Judiciary) will stay the same. We should definitely expect some action next Congress in the Senate on the bi-partisan (Lieberman/Collins) FPS Reform bill.

As to the upcoming lame duck which is scheduled to start on November 15^th and run through the middle of December, this will be the Dems last hurrah, and many Dems want to “go for it”; however, no legislation that we are concerned about is likely to come up. The Dem “hail marys” are likely to be to try to repeal “Don’t Ask, Don’t Tell” (DADT), pass the DREAM Act (create a path for illegals who go to college/military to get green cards) and many an energy bill. The paranoids in the business community think the Dems might try to slip elements of EFCA onto some must pass legislation, but there is no chance such a move will succeed. Remember, while maybe a departing GOP Senator (Voinovich, Gregg) might be willing to go along with the Dems on some provision, newly elected GOP Senator Mark Kirk (IL) will be sworn in during the lame duck, as well as newly-elected Dem Senator Joe Manchin (WV) who is very opposed to EFCA. The lame duck agenda will be dominated by the need to pass a bill to continue funding the government beyond the December 1, and whether or not to extend the Bush income tax cuts which expire at the end of the year. Other issues that will come up but not necessarily be acted upon include other expiring taxes; the Defense Authorization bill; extending unemployment benefits; and the START treaty.

Finally, as the health care reform, it’s very likely that the House will pass legislation to repeal the law, but such a broad repeal stands no chance of passing the Senate.

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