Report on the 2014 Midterm Elections

A political tidal wave swept through our nation’s capital on Tuesday night.  The Republicans increased their numbers in the House and will take control of the Senate in January, with Senator Mitch McConnell becoming the new Majority Leader.  Before the election, Democrats had a 55-45 advantage.  Now the Republicans have at least a 52 vote majority, with three elections still pending that could potentially further increase this margin.

Marketers face a new political environment and new leadership on several of our key congressional committees.  Half of the committees in the House will have new chairmen due to retirements and self-imposed term limits.  Most notably, the current House Ways and Means Committee Chair, Dave Camp (R-MI), is retiring.  His replacement will be either Rep. Paul Ryan (R-WI) or Rep. Kevin Brady (R-TX).  A number of political pundits have predicted that Rep. Ryan will get the Chairmanship, although Rep. Brady is well-liked and outranks Ryan in seniority on the Committee.  If Ryan wins the Chairmanship, he will work with the new Republican Senate majority to move to a dynamic scoring approach, as opposed to the current method of static scoring, to forecast tax impacts.

In the House Energy and Commerce Committee, the current Chairman, Rep. Fred Upton (R-MI), will keep his position.  Furthermore, the House Judiciary Committee will also retain its Chairman, Rep. Bob Goodlatte (R-VA).

In the Senate, Sen. John Thune (R-SD) will most likely take over as Chair of the Commerce Committee.  Sen. Orrin Hatch (R-UT) is slated to take over as Chair of the Senate Finance Committee and Sen. Lamar Alexander (R-TN) is predicted to take over the Health, Education, Labor, and Pensions (HELP) Committee.

Two of our industry’s strongest critics – Sen. Jay Rockefeller (D-WV) and Sen. Tom Harkin (D-IA) – are not returning due to retirement.  However, two supporters of our industry – Sen. Mark Pryor (D-AR) and Rep. Lee Terry (R-NE) – lost their elections and will not be returning next Congress.

At this time, it is not clear what the future holds for the new political environment.  Will President Obama, House Speaker Boehner, and Senate Majority Leader McConnell look for compromise and ways to work together to get things done, like on corporate tax reform?  Or will we have two more years of political fights and gridlock?  It is too soon to know.

We have learned that most of the threats we face are bipartisan.  Taxes, privacy, and data security will be on the agenda next year, and so we will be prepared to work with the new leadership and the new members of Congress next January.