More on the Impacts of the U.S. Midterms

Democrats that were elected by flipping a Republican seat are a more varied lot than one might think. Some will be very liberal on spending for social causes, but others will be more fiscally conservative. That is particularly true of East Coast suburban districts that have traditionally been Republican, but are really turned off by the nasty rhetoric on immigration and women’s issues.

In the Senate, assuming Florida and Mississippi go to the GOP when the count is done, it appears the Republicans will claim 53 seats and the Democrats 47. Since the vice president breaks the tie, the Republicans only needed 50 seats to retain control of the Senate. In some cases, U.S. legislation requires a two-third majority, however, which means the Republicans occasionally will need Democratic votes. That’s how the immigration bill failed. Generally speaking, the new Republicans are in the Trump mold. They will be tough opponents for Democrats.

USMCA…the New NAFTA

With the new U.S.-Mexico-Canada Agreement, some Democrats are not thrilled about the lack of enforcement on some of the provisions related to Mexico. This does not have to hold up the deal, however. Congress can legislate in protections without scrapping the USMCA. I think it will pass, though probably with much more drama and bluster than necessary.

Budget/Debt Ceiling

The federal budget for FY 2018-2019 was agreed along with the FY 2017-2018 budget, so it didn’t interfere with the midterms. So, not much will be done on any front that requires new money. That means no new infrastructure package in 2019. That’s for 2020 or 2021 and likely depends on the state of the economy.

The debt ceiling needs lifting sometime in the spring. Dems were pretty amenable on that last time around, so there may be a lot of posturing over how bad the deficit is, but it shouldn’t result in a government shutdown.  

Cooperation is the Operative Word

The majorities in Congress are slim and no party can count on 100 percent participation. So, bipartisanship will be needed. Democrats are looking ahead to the presidential race in 2020 as well as Senate elections where many Dems are up for re-election—unlike this time when they were trying to un-seat. So, they need to behave themselves today in order to have a favorable impression among voters in two years’ time. They will be careful not to pick the wrong fights. We could see minor changes on healthcare, prescription drugs and income tax cuts, but it will be hard for this divided Congress to get anything really revolutionary done.