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  • 2018 United States midterm election

    Uncertainty and Fallout

    The results on Tuesday’s 2018 midterm elections revealed a deeply divided country, with both sides dissatisfied with the state of politics in America. These same sentiments will continue to shape the climate of the upcoming Congress and the 2020 Presidential election, as both parties advance policies and nominees that appeal to their base, largely because their most ardent supporters demand it.

    Democrats won control of the House of Representatives on the back of a strong performance among women in suburban districts. Republicans retained control of the Senate – and added to their margin — thanks to strong rural turnout and conservative energy following the battle over the Supreme Court nomination of now Justice Brett Kavanaugh. The Democratic majority in the House will use its investigatory powers to probe the Trump Administration’s ties to Russia, investigate violations of the emoluments clause, and likely subpoena the president’s tax returns.

    Limited Cooperation between Trump and the Democrats

    With Democrats in control of the House and Republicans in control of the White House and the Senate, the Trump administration will be constrained in what it can accomplish during the 116th Congress. There will be few issues where the two parties can work together. Trump will focus on foreign policy, an area where he thinks he can score big wins, including nuclear negotiations with North Korea and Iran. Democrats will look to steer the domestic agenda through oversight of the administration, seeking to block deregulation pushes, and pass liberal legislation (that will die in the Senate) to rally their base ahead of 2020.

    Trade

    On foreign policy, there is the potential – albeit small – for cooperation between Republicans and Democrats particularly on trade. The USMCA trade deal, which will replace NAFTA once ratified by Congress, appeals to the voters of both sides and the new agreement could be confirmed in either the lame duck session of Congress or early in the new Congress.

    Although it is unlikely that any additional deals could be concluded before the end of Trump’s first term, he will look to begin negotiations with American allies such as the UK, EU, and Japan. But the negotiation process will not be easy and likely include many tense conversations and tariff threats. Trump has embraced a confrontational style, attacking all three trading partners and implementing tariffs on steel and aluminum from Japan and Germany. Trump believes this tactic will generate better trade deals for the US and deliver a win for his base – the American blue-collar worker.

    Healthcare

    Healthcare was a major issue for voters this election cycle and will continue to drive the political conversation heading into 2020. Expect House Democrats to go hard after drug prices. Passing legislation will require significant cooperation between the Senate, the House, and President Trump – something that appears unlikely. During the 2018 election, there was rhetoric and focus on drug prices from both Democrats and Trump, this will grow louder in 2019. House Minority Leader Nancy Pelosi, who is likely to become Speaker of the House, told pharmaceutical industry leaders that lowering drug prices would be a legislative priority for the new Congress and the President has already signaled a willingness to use the regulatory process to go after this issue, which he sees as a vote winner heading into 2020.

    Legislation targeting drug companies is one potential area for cooperation between House Democrats and President Trump, but House Democrats may be reluctant to give Trump a win on a key part of his agenda heading into 2020… and vice-versa. Democrats used Republican opposition to legal protections for people with pre-existing conditions as a major talking point in the Midterm campaigns, especially in the pivotal Midwest, and they will look to do so again in 2020.

    Infrastructure

    Infrastructure is often cited as the area for bipartisan cooperation most likely to succeed. Both sides agree that American infrastructure urgently needs upgrading but disagree on how to fund such projects and which to pay for. Pelosi will be ready to put forth a $1 trillion infrastructure bill before the House, which Republicans could be reluctant to support. But President Trump, who made infrastructure a key issue during his campaign, could be the bridge that brings the two sides together on the issue. Today there are few that will bet on that legislation going forward. There’s little agreement on how to pay for it and, as with healthcare, there’s the question of whether Democrats want to give Trump a major legislative victory so close to the presidential election.

    All Roads Lead to 2020

    The 2020 presidential election is two years away but campaigning has already begun. The legislative focus in each chamber will reflect each party’s 2020 priorities with both sides looking to energize their base and set the agenda for the next election.

    Trump will use the Republican majority in the Senate to continue appointing conservative judges appealing to his base, while Democrats will propose legislation addressing social issues, such as criminal justice reform, Equal and Civil Rights, areas they see as crucial to 2020 and that will generate excitement among their supporters.

    A few Democratic members of Congress have laid the foundation for a prospective Presidential run – including as many as nine senate Democrats, including, Sens. Elizabeth Warren (Massachusetts), Cory Booker (New Jersey) and Kamala Harris (California).With colleagues like Sens. Sherrod Brown (Ohio) and Amy Klobuchar (Minnesota) also mentioned as possible nominees. All prospective candidates will seek to position and differentiate themselves on key issues before officially launching their campaigns. Trump will look to define the political environment and his opponents before they can define themselves.

    Several midterm races offered previews of the strategies and messages that Democrats might use in 2020 when they take on Trump. Despite losing their races, progressive Democrats Stacy Abrams in Georgia, and Beto O’Rourke in Texas, demonstrated that a well-organized grassroots campaign can make even deep-red states competitive. O’Rourke in particular gained a national following, raising vast amounts of money for his Senate campaign and laying the foundation for a potential presidential run. Centrist Democrats will point to victories in the House in Republican districts, and Tony Evers gubernatorial victory in Wisconsin as proof that moderation and appeals to the middle ground are required to make Democrats successful in 2020. The primary process will likely be a battle between these two approaches.

    The 2020 US presidential election campaign has begun in earnest. It is expected to be divisive, hard fought and personal. In such an environment, and absent war or attack, legislative compromise will continue to be highly unlikely. But we can expect it to be loud. Buckle up.

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