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2012: A Historic Election With Yet Unknown Consequences

On Tuesday night (11.6.2012), President Obama was re-elected over former Massachusetts Governor Mitt Romney. As of Thursday morning, President Obama had roughly 50.4% of the popular vote and 303 electoral votes.

This election was a historic one for a number of reasons:

Advertising played a large role in this year’s election. As much as $6 billion dollars is estimated to have been spent on political ads for the presidential and congressional races in this election cycle according to the Center for Responsive Politics. More than 1 million TV ads for the presidential race aired. This was the first presidential race since the Supreme Court’s Citizens United ruling, which allows almost unlimited spending by individuals and corporations and also led to the creation of so-called Super PACs. Despite this fact, the initial assessment is that Super PACs generally were not decisive in any of the Senate races or for the presidency. However, candidate-generated expenditures were very important in initially framing the presidential race and in some Senate races, such as in Wisconsin.

Senate Races

The Democrats widened their margin of control in the U.S. Senate. Democrats won a number of closely contested Senate races, including:

Republican Deb Fischer defeated former Senator Bob Kerrey for the seat of retiring Democratic Senator Ben Nelson.

A number of senators who have been supportive of our interests in the past were also re-elected, including Amy Klobuchar (D-MN), Kirsten Gillibrand (D-NY), and Roger Wicker (R-MS).

The makeup of the 113th Senate will be 55 Democrats (with two independent senators who will caucus with the Democrats) and 45 Republicans, as compared to a 53-47 margin in the 112th Senate. The 55 seat majority in the Senate falls short of the 60 votes needed to block a filibuster, although there has been discussion about amending the filibuster rules. This majority should, however, generally stand as a firewall against any presidential veto overrides.

House Races

Democrats appear poised to pick up five to ten seats in the House of Representatives. There were a number of close races in the House of Representatives, with the largest shake-up in House seats seen in California. Among the most notable House races are:

A number of key leaders in the House were re-elected, including: Ways and Means Committee Chairman Dave Camp (R-MI), Energy and Commerce Committee Chairman Fred Upton (R-MI), House Appropriations Committee Chairman Hal Rogers (R-KY), and Energy and Commerce Committee Ranking Member Henry Waxman (D-CA). As of Thursday morning, the 113th House will be 234 Republicans and 193 Democrats with 8 races not yet called. Prior to the election, the 112th House was 240 Republicans and 190 Democrats with five vacancies.

The Lame Duck Session of Congress

A lame duck session of Congress is expected to convene next week and will have the enormous task of trying to avert the “Fiscal Cliff” before January 1st. A number of tax increases are set to occur at year’s end: the expiration of the Bush Tax Cuts, the expiration of the reduced payroll tax, an increase in estate tax rates, and an expiration of exemptions to the Alternative Minimum Tax (AMT) that may increase taxes on as many as 30 million middle class families. As well, a number of automatic cuts (“sequestrations”) for both defense and domestic government spending will take effect as a result of the failure of the congressional Super Committee to find $1.5 trillion in spending cuts over the next decade.

Both Federal Reserve Chairman Ben Bernanke and the Congressional Budget Office have warned that a failure to avoid the so-called “Fiscal Cliff” could have dire consequences for the economy. House Speaker John Boehner has been quoted in recent days as saying that he would consider supporting a temporary fix during the lame duck session, though he has also actively opposed any revenue increase measures without major reform of the tax code. Boehner has opposed tax rate increases, but has said he could support the closure of undefined “tax loopholes.” Likewise, Assistant House Minority Leader Jim Clyburn has said he believes there will be a temporary fix passed in the lame duck session. Any such temporary fix could pose a major threat to the advertising community’s interests, as the tax deductibility of advertising expenses could be looked to as a source of revenue.

The 113th Congress

A number of issues will continue to affect the advertising community in the next Congress. It seems likely that major work will have to be done on deficit reduction and reforming the tax code. Such actions could put us in the crosshairs. Online privacy will remain a hot-button issue, and outreach to new members of Congress, as well as returning members with whom we have established relationships, will be necessary. Food marketing, particularly to children, may also come under attack, especially with rising obesity rates.

We expect major changes to the memberships of the Senate Commerce and Finance Committees, as well as some shifts on the House Ways and Means and Energy and Commerce Committees. As committee membership in the new Congress takes shape, we will have to work carefully to ensure our interests are kept safe. We are already talking to many major leaders in this regard.

If you have questions, please feel free to contact Dan Jaffe in ANA's Washington, D.C. office at 202.296.1883 or via email (djaffe@ana.net).

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