Political Report: 11/7/2018

 In Weekly Wire

Main Story: Midterm Results Affirm Divided Country

After days and weeks of feverish speculation, reams of polling data, and dozens of memes, the nation voted in the 2018 midterms yesterday and, while results for several races remained outstanding at the time of writing, largely affirmed the sharp divisions that have been evident in polling for some time. In the House, Democrats captured a tenuous majority with roughly 230 seats called or leaning towards Democratic candidates. In the Senate, incumbent Democrats in states won by President Trump had a brutal night with losses in Indiana, Missouri, North Dakota, and behind in the count in Montana and Florida. This sets the stage for a significantly different governing structure in 2019 and 2020 as a divided Congress will seek to work with a Republican White House for the first time since 2001. But the shadow of the 2020 presidential election will loom ever-larger.

While the macro-political changes are interesting, the focus of this newsletter has always been on Congressional defense activity. In this context, the change from Republican to Democratic control of the House of Representatives will have several major impacts. Both the House Armed Services Committee (HASC) and House Appropriations Committee-Defense (HAC-D) will be under new leadership. More broadly, a Democratic House will likely demand more concessions from Republicans in any spending agreement to address the last two years of the Budget Control Act (BCA) caps (FY20 and FY21). It’s too early to tell whether this new arrangement will be better or worse for spending, but it certainly promises to make the budget process for FY2020 more difficult to predict.

In terms of policy changes, new leadership in the HASC will undoubtedly impose more oversight on the Trump administration’s defense policies. Incoming chairman Adam Smith (D-WA) has suggested increased oversight of overseas operations as something the committee would take seriously under his leadership. Similarly, Smith has indicated he expects defense spending to decline in the future, reflecting concerns over rising budget deficits. Lastly, Smith has supported a variety of cuts to existing defense spending, whether it be limiting nuclear recapitalization or supporting a new Base Realignment and Closure round. While the structure of the HASC may change with new leadership, below is a list of current subcommittees and potential new leaders (based on current Ranking members).

Note that these may change as members are limited in how many leadership positions they can accept. Thus, some may take positions in other committees. One exception is Joe Courtney (D-CT), who will almost certainly seek the Seapower subcommittee chairmanship.

Political Report: 11/7/2018

Rep. Pete Visclosky (D-IN) is set to takeover at HAC-D. While less media-friendly than Smith, Visclosky will play a crucial role in setting out funding priorities in the appropriations process. Additionally, it will be interesting to see which members choose to move on to HAC-D once Democrats take the majority.

Next year will feature the need for a new spending deal to avoid the BCA caps in FY20 and FY21. While Minority Leader Nancy Pelosi is likely favored to be the next Speaker, it is not yet certain. A significant number of candidates indicated they would not support her as Speaker, so it remains to be seen if she will have enough votes to get to 218. If she is unable to do so, the race to replace her could result in any number of new faces fulfilling that role. This would potentially impact the House’s posture heading into negotiations on spending.

Overall, a Democratic House with a Republican Senate is a configuration that has not been present in Washington since the 1987. Early predictions about how these dynamics will play out seem premature, but it will certainly make for an interesting couple of years.

Key Dates & Appropriations Update:

  • November 13th – House returns to session
  • December 13th – Last scheduled session day in 2018
  • January 3rd – 116th Congress begins (Democrats take control of the House, new Senators seated)
  • February 4th – Fiscal Year 2020 President’s Budget scheduled to be delivered to Congress
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