With Republican candidates having made significant gains in the mid-term elections by capturing the House and increasing their share of the Senate, President Barack Obama faces a starkly different legislative environment as he seeks to advance the balance of his policy agenda and as he runs for reelection in 2012. In addition to a shift in control of the House of Representatives and a thinning of the Democratic majority in the Senate, 22 of 37 states selected a new governor last night.  An additional 7 gubernatorial races remain too close to call and are still being counted.

There could be nearly 90 new lawmakers once all the races are decided.  The biggest changes took place in key manufacturing states, particularly throughout the Midwest - Pennsylvania, Ohio, Indiana, Michigan, Illinois, Missouri and Wisconsin.   Many pro-manufacturing candidates were elected and will be key players for the metalcasting industry.   Political analyst, Charlie Cook, describes the current Republicans in Congress as the Fortune 500 class versus the new class of 2012 as the “small business” Republicans.

The President has accomplished two of his most ambitious legislative goals on which he campaigned - health care reform and financial services reform, but two remain unfulfilled—energy/climate change legislation and immigration reform. And notwithstanding the need to create jobs and further stimulate the economy, he will likely add deficit reduction as a third one.

Expect the President to attempt to implement as much as possible (enforcement, cap and trade, card check, etc.) through the regulatory process of the various agencies under the administration’s control. Republicans in the House of Representatives will try to stop EPA regulation of carbon by explicitly banning the use of EPA funds to administer such regulations. Annual EPA funding bills that Congress writes would be the avenue. Appropriations bills usually begin moving through the House around March or April.

The courts could also play a pivotal role on EPA issues, immigration reform and implementation of health care reform.  In the absence of legislation, look for the states to possibly drive policy decisions on a wide variety of subjects, such as renewable energy initiatives More than ever, it is critical for the metalcasting industry to remain engaged with these newly elected officials.  Please take time in the next six months to reach out to these lawmakers and their district directors by hosting a sit-down meeting with a group of metalcasters, inviting them to an industry Chapter meeting or holding a plant tour. 

Below is an overview of the mid-term election results, as well as the leadership changes expected in the new 112th Congress:

House of Representatives   (Republicans 239 / Democrats 183)

•  Republicans regained control of the House with the largest swing in House seats since 1948.  With 3 Democratic pickups in Delaware, Hawaii and Louisiana, Republicans needed a total of 42 pickups to regain the majority as well as offset the 3 Democratic pickups.  Republicans have picked up 60 seats and still stand to gain more, as 10 seats are currently too close to call.  To provide some additional perspective, when Republicans gained control of the House in the “Republican Revolution” of 1994, they did so with only 53 seats.
•  The 30 seats Democrats picked up in 2006, which gave them the majority, and the additional 22 seats which strengthened their majority in 2008, are completely wiped out with yesterday’s election result.
• Of the Democratic held seats, 50 incumbents were defeated (so far).
• Among the defeated Democratic incumbents are three chairmen of major committees: Ike Skelton of the Armed Services Committee; John Spratt of the Budget Committee; and Jim Oberstar of the Transportation and Infrastructure Committee.  A fourth major committee Chairman, David Obey of the Appropriations Committee, did not stand for reelection.
• A slew of the 211 Democrats who voted for the sweeping 2009 House climate bill lost their seats Tuesday, such as Reps. Rick Boucher (Va.), Zack Space (Ohio), Tom Perriello (Va.) and John Boccieri (Ohio).


 

House GOP Pickups (61):

* denotes incumbent & italics denotes Democrat

District	Won	Lost	Previous Incumbent if Open Seat
AL-02	Martha Roby	Bobby Bright*
AR-01	Rick Crawford	Chad Causey	(Berry)
AR-02	Tim Griffin	Joyce Elliott	(Snyder)
AZ-01	Paul Gosar	Ann Kirkpatrick*
AZ-05	David Schweikert	Harry Mitchell*
CO-03	Scott Tipton	John Salazar*
CO-4	Cory Gardner	Betsy Markey*
FL-02	Steve Southerland	Allen Boyd*
FL-08	Daniel Webster	Alan Grayson*
FL-22	Allen West	Ron Klein*
FL-24	Sandra Adams	Susan Kosmas*
GA-08	Austin Scott	Jim Marshall*
ID-01	Raul Labrador	Walt Minnick*
IL-11	Adam Kinzinger	Deborah Halvorson*
IL-14	Randy Hultgren	Bill Foster*
IL-17	Bobby Shilling	Phil Hare*
IN-08	Larry Bucshon	Trent Van Haaften	(Ellsworth)
IN-09	Todd Young	Barron Hill*
KS-03	Kevin Yoder	Stephene Moore*	(Moore)
LA-03	Jeff Landry	Ravi Sangisetti	(Melancon)
MD-01	Andy Harris	Frank Kratovil*
MI-01	Dan Benishek	Gary McDowell	(Stupak)
MI-07	Tim Walberg	Mark Schauer*
MN-08	Chip Cravaack	Jim Oberstar *
MO-04	Vicky Hartzler	Ike Skelton*
MS-01	Alan Nunnelle	Travis Childers*
MS-04	Steven Palazzo	Gene Taylor*
NC-02	Renee Ellmers	Bob Etheridge*
ND-AL	Rick Berg	Earl Pomeroy*
NH-01	Frank Guinta	Carol Shea-Porter*
NH-02	Charlie Bass	Ann Kuster	(Hodes)
NJ-03	Jon Runyan	John Adler*
NM-02	Steve Pearce	Harry Teague*
NV-03	Joe Heck	Dina Titus*
NY-13	Mike Grimm	Mike McMahon*
NY-19	Nan Hayworth	John Hall*
NY-20	Christopher Gibson	Scott Murphy*
NY-24	Richard Hanna	Michael Arcuri*
NY-29	Thomas Reed	Matthew Zeller	(Massa)
OH-01	Steve Chabot	Steve Driehaus*
OH-06	Bill Johnson	Charlie Wilson*
OH-15	Steve Stivers	Mary Jo Kilroy*
OH-16	Jim Renacci	John Boccieri*
OH-18	Bob Gibbs	Zack Space*
PA-03	Mike Kelly	Kathy Dahlkemper*
PA-07	Pat Meehan	Bryan Lentz	(Sestak)
PA-10	Tom Marino	Chris Carney*
PA-11	Lou Barletta	Paul Kanjorski*
SC-05	Mick Mulveney	John Spratt*
SD-AL	Kristi Noem	Stephanie Herseth Sandlin*
TN-04	Scott DesJarlais	Lincoln Davis*
TN-06	Diane Black	Brett Carter	(Gordon)
TN-08	Stephen Fincher	Roy Herron	(Tanner)
TX-17	Bill Flores	Chet Edwards*
TX-27	Blake Farenthold	Solomon Ortiz*
VA-02	Scott Rigell	Glen Nye*
VA-05	Robert Hurt	Tom Periello*
VA-09	Morgan Griffith	Rick Boucher*
WA-03	Jaime Herrera	Denny Heck	(Baird)
WI-07	Sean Duffy	Julie Lassa	(Obey)
WI-08	Reid Ribble	Steve Kagen*
WV-01	David McKinley	Mike Oliverio	(Mollohan)

 

House Democratic Pickups (3):

* denotes incumbent & italics denotes Democrat/p>

 

District	Won	Lost	Previous Incumbent if Open Seat
DE-AL	John Carney	Glen Urquhart	(Castle)
LA-02	Cedrick Richmond	Anh "Joseph" Cao*
HI-01	Colleen Hanbusa	Charles Djou*

 

Too Close To Call (9):

* denotes incumbent & italics denotes Democrat/p>

 

District	Ahead	Behind
CA-11	David Harmer 75,697 (48%)	Jerry McNerney* 74,006 (47%)
IL-08	Joe Walsh 96,636 (49%)	Melissa Bean* 95,839 (48%)
TX-23	Francisco Canseco 74,566 (49%)	Ciro Rodriguez* 67,100 (44%)
WA-02	John Koster 87,687 (50%)	Rick Larsen* 86,258 (50%)
WA-09	Adam Smith* 74,266 (53%)	Dick Muri 64,756 (47%)
GA02	Sanford Bishop* 86,167 (51%)	Mike Keown 81, 360 (49%)
KY-06	Ben Chandler* 119,845 (50%)	Andy Barr 119,245 (50%)
NY-25	Dan Maffei* 95,286 (51%)	Ann Marie Buerkle 93,090 (49%)
VA-11	Gerry Connolly* 110,401 (49%)	Keith Fimian 109,914 (49%)

Senate   (Democrats 51 / Republicans 47)

• Republicans needed to pick up 10 seats to regain control of the Senate but thus far have only come up with six:  Arkansas, Illinois, Indiana, North Dakota, Pennsylvania and Wisconsin.
•  Key Democratic victories in California, Colorado, Nevada and West Virginia made the difference in preserving the slim Democratic majority.
• Two states, Alaska and Washington, remain too close to call.
•  Incoming class of Senate Republican freshmen will have available with establishment pros - the kind of playmakers who could give the White House a target-rich environment for deal making – for example - former Bush budget director and trade chief Rob Portman of Ohio, former House Whip Roy Blunt of Missouri, North Dakota Gov. John Hoeven, and former Senator Dan Coats of Indiana, and former Florida House Speaker Marco Rubio who has a reputation for bridging divides between the right and center in his party.

 Considering it takes 60 votes to end a filibuster in the Senate, if Republicans stand together they will have the ability to block or significantly alter any Democrat legislative proposals.

 GOP Pickups (6):

* denotes incumbent & italics denotes Democrat

 

State	Won	Lost	Previous Incumbent if Open Seat
AR	John Boozman	Blanche Lincoln*
IL	Mark Kirk	Alexi Giannoulias	(Obama)
IN	Dan Coats	Brad Ellsworth	(Bayh)
ND	John Hoeven	Tracy Potter	(Dorgan)
PA	Pat Toomey	Joe Sestak	(Specter)
WI	Ron Johnson	Russ Feingold*

 

Remaining Senate Races (13):

*denotes incumbent & italics denotes Democrat

State	Won	Lost	Previous Incumbent if Open Seat
CA	Barbara Boxer*	Carly Fiorina
CT	Richard Blumenthal	Linda McMahon	(Dodd)
CO	Michael Bennet*	Ken Buck
DE	Chris Coons	Christine O'Donnell	(Biden)
FL	Marco Rubio	Charlie Crist/Kendrick Meek	(Martinez)
KS	Jerry Moran	Lisa Johnston	(Brownback)
KY	Rand Paul	Jack Conway	(Bunning)
MO	Roy Blunt	Robin Carnahan	(Bond)
NH	Kelly Ayotte	Paul Hodes	(Gregg)
NV	Harry Reid*	Sharon Angle
OH	Rob Portman	Lee Fisher	(Voinovich)
UT	Mike Lee	Sam Granato/Scott Bradley	(Bennett)
WV	Joe Manchin	Jon Raese	(Byrd)

 

Senate Seats Too Close To Call (2):

* denotes incumbent & italics denotes Democrat/p>

 

State	ahead	behind
AK	Write-in/Lisa Murkowski* 81,876 (41%)	Joe Miller/Scott McAdams 68,288 (34%)/ 47,414 (24%)
WA	Patty Murray* 722,396 (50%)	Dino Rossi 708,391 (50%)

 

Election Impact on House and Senate Leadership
   Leadership Changes in the House of Representatives

With Republicans reclaiming the House, we anticipate that Republican Leader John Boehner (R-OH) will ascend to the Speakership while Republican Whip Eric Cantor (R-VA) will rise to the Majority Leader spot.  Congressman Greg Walden (R-OR) has already been tapped to lead the transition for the Republicans as they assume leadership of the House.  While there may be some jockeying for the other slots, we expect that Republicans will likely be trying to minimize any contentious intra-party Leadership battles after their victory and instead focusing their energy on organizing the Committees and preparing for 112th Congress.

The composition of the Democratic Leadership team is much less clear.  Speaker Nancy Pelosi has several options available to her: a) she could seek the Minority Leader position; b) she could resign from her leadership role and remain a Member of the House; or c) she could retire.  It likely is easier politically for Speaker Pelosi retain the top post in the minority because it only requires a majority vote of the Democratic Caucus versus 218 of the House as a whole.  Historically, when either party has suffered significant losses in the elections, it has been a catalyst for a new Leadership team. 

What complicates the forecasting in this instance is that the House has been extremely active under Speaker Pelosi’s Leadership and she is considered and likely will remain a champion for many Members in the Democratic Caucus who would prefer her to stay in leadership.  If addition, Members that could be more motivated to remove her from leadership will likely not return next Congress.  If Speaker Pelosi decides not to run for the Minority Leader spot, there are several members who may compete for the Democratic top spot including Democratic Conference Vice Chairman Xavier Becerra (D-CA), Joe Crowley (D-NY), current Majority Leader Steny Hoyer (D-MD), Democratic Conference Chairman John Larson (D-CT), Assistant to the Speaker Chris Van Hollen (D-MD), and Debbie Wasserman-Schultz (D-FL).  House Democrats are eyeing November 18th as a possible date for their leadership elections.

Leadership Changes in the Senate

Senator Harry Reid (D-NV) is expected to retain his position as Majority Leader.  Majority Whip Dick Durbin (D-IL) and Conference Vice Chairman Charles Schumer (D-NY), who occupy the next two spots in leadership of the caucus, are expected to retain their spots.  Senate Democrats are planning to hold leadership elections for the 112th Congress on November 16.

The Senate Republicans are not expected to make changes within their Leadership regime. Republican Leader Mitch McConnell (R-KY) to continue in his current role with Senator Jon Kyl (R-AZ) as his Republican Whip. Senate Republicans are expected to hold their leadership elections on November 16th.

Lame Duck Session

The Bush tax cuts expire on Dec. 31.   If Congress does not act, taxes will go up for nearly all households. That has the potential to cause both political and economic problems.  Even a lame-duck is likely to act.

The growing feeling among policy watchers will probably be closer to the Republicans’ wishes (extending all the tax cuts) than President Obama’s (extending all the cuts for households making less than $250,000 a year while allowing most of the cuts for households above that threshold to expire).

Making all the tax cuts permanent would add nearly $4 trillion to the national debt over the next 10 years. Allowing tax cuts for those in the upper brackets to expire would knock about $700 billion off that amount.

Senator John Rockefeller (D-WVA) is pushing for a vote during the "lame duck" session, planned to start that would suspend Environmental Protection Agency regulation of greenhouse gases, including those emitted from burning coal, for two years. Rockefeller says a two-year pause is needed to give the coal industry time to perfect clean technologies. Passage would prevent EPA from regulating pollution from large factories and utilities starting in January.

Of 100 senators, 47 voted in June to permanently strip EPA of its power to regulate greenhouse gas emissions.  If a vote isn't staged during the post-election session this year, Rockefeller is likely to have more Senate colleagues next year, especially Republicans, who would vote with him.  If the curbs on EPA were to pass Congress, Obama has stated that he would veto the bill.

We expect Congress to adjourn in December having addressed relatively few issues, but having got a head start on organizing for next session. We look forward to working with the metalcasting industry in this new political climate and the new 112th Congress.

If you have questions or need additional information regarding the 2010 mid-term election overview, contact Stephanie Salmon, MAGA Washington Office, 202/842-4864 – ssalmon@artemisdc.com