By Matt Vallone, Senior Analysis Manager
Main Story: Election Outcomes Becoming Clearer and December Funding Fight Begins
As the 2016 election draws to a close, the expectations for election day are becoming more firm. Former Secretary of State Hillary Clinton has a fairly commanding lead in both national and state-level polling over businessman Donald Trump. Barring some major shock, she should win the presidency with an excess of 300 electoral votes.
While the race for the White House appears to be reasonably stable, the outlook in Congress has become more uncertain. Democrats appear to have a slight edge in the race for the Senate majority, with improving poll numbers in states such as Nevada, Missouri, and New Hampshire. The House may also be in play. Sparse public polling for many of these races makes it more difficult to assess the state of the race, but the generic Congressional ballot is increasingly leaning toward Democrats. However, Republicans benefit from structural advantages such as gerrymandering, a tendency for Democratic voters to concentrate in large cities, and the sheer size of the Republican majority, so it would take a wave election that few analysts see coming to secure the House for Democrats.
The composition of the Congress in 2017 is likely the key factor in forecasting government spending. Assuming a Clinton White House, there are really two different outcomes that are on the table. The most likely outcome is divided government where Republicans hold at least the House or possibly both chambers. From the perspective of forecasting government spending, the difference between a Democratic Senate and a Republican Senate would likely be negligible. Comparing the last two years of unified Republican control to the 2011-2014 period, there are more similarities than differences in the budget process. Both featured negative or low growth in spending, both featured brinksmanship and disruption (the debt ceiling crisis, a government shutdown and the deposing of the Speaker of the House). However, should the less likely outcome obtain and Democrats manage to win the House of Representatives and the Senate, you would see a starkly different budget forecast for FY2018 and beyond.
As the election begins to wind up, there also have been some developments in Congress on the upcoming budget fight. Late last week, House Minority Leader Nancy Pelosi dismissed Speaker Ryan’s plan for ‘minibus’ packages of appropriations bills as ‘too cute’. Normally Pelosi’s opposition to legislation doesn’t have much bearing on its fate. However, in the case of funding bills, House Speaker Paul Ryan will almost certainly need some Democratic votes to pass an eventual appropriation. This is because Senate Democrats and the White House can stop any funding legislation dead in its tracks and will therefor need to be on board with the legislation. This will likely require funding bills to be at the level of the 2015 Bipartisan Budget Agreement (BBA) and to avoid containing significant conservative policy riders. As a result, it is almost certain that a significant number of House conservatives will refuse to vote for the funding bills, forcing the Speaker to rely on Democratic votes.
However, there are definite hazards that would likely go along with Speaker Ryan attempting to use Democratic votes to pass bills. If the result of the November election is a Democratic White House and a much smaller House Republican majority, Ryan may wish to postpone any big spending votes until after he is re-elected Speaker. In his first nomination fight, he received nine ‘no’ votes from Republicans, so combining a smaller majority with even a modest increase in dissent would put his chance of re-election at risk. All of this combines to make it increasingly likely that the government will be operating under a continuing resolution when the next President is sworn in.
Source: NY Times Upshot
- SASC – No hearing scheduled
- HASC – No hearing scheduled
- HAC-D – No hearing scheduled
- SAC-D – No hearing scheduled
Government Activity Round-Up
The GAO has several reports worth looking at, particularly reports on foreign assistance spending, an update on DoD’s efforts to standardize its credentialing programs, and the U.S. Air Force’s quarterly report on GPS. The CBO doesn’t have much new material either, but you can read about how trade agreements can impact the economy here.
Other DC/Defense Activity
Despite Congress being away, there are quite a few interesting events this week. On Tuesday, the Atlantic Council is hosting an event on the Arctic titled, “Geopolitics, Security, and Energy in the Arctic”. On Wednesday they are having a second event worth following looking at Nordic Defense (I guess it’s Scandinavia week). On Thursday, the McCain Institute for International Leadership is hosting an event on whether or not to re-engage with Russia. Lastly, on Friday the Heritage Foundation is looking to offer perspectives on “A Conservative Internationalist Grand Strategy”.
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