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Post-Election Update 2010

Alert
11.03.10

Message from Steve Kupka

Welcome to the Husch Blackwell LLP Post-Election Update 2010. The election on November 2nd was both exciting and historic. The Governmental Affairs practice group of our firm wants to take this opportunity to send you our post-election update. In this document, you will get both an update on the 2010 election results as well as a discussion of what to expect in the lame duck session of Congress and in the 112th Congress.

Our practice group has over 20 professionals who can provide both federal and state government affairs assistance to our clients. Our professionals have a wide range of experience which include the following: former member of the U.S. House of Representatives; former head of the U.S. Office of Management and Budget (OMB) and Federal Trade Commission; former staff members of the U.S. House and the U.S. Senate; former staff of OMB and Central Intelligence Agency; former campaign manager of elected U.S. Senator from Missouri; former State Deputy Attorney General; and former state legislative staff. As you can see, our wide-ranging government affairs experience positions us to work effectively with federal, state and local government agencies and elected officials.

As we learn more in the coming weeks, I will be working with the many experienced attorneys at Husch Blackwell LLP to develop a thorough analysis of what you can expect in the 112th Congress. Please be on the lookout for your complete guide to the 112th Congress in the next few weeks, which will include an analysis of the issues facing our next Congress and the chances for legislative action.

If you have questions regarding this update or are in need of potential client assistance, please do not hesitate to contact me at steven.kupka huschblackwell.com or at 202.378.2300.

Sincerely,

Steve Kupka 
Governmental Affairs Practice Chair

Election Results

As of 3:30 p.m. EST today, the called races following yesterday’s election indicate that the Republicans have gained control of the House of Representatives by winning at least 61 seats. With 10 seats still too close to call, it appears that the 112th Congress, which starts in January of 2011, will include at least 240 Republicans and 185 Democrats. As the remaining seats are finalized, we will continue to update this document.

In the Senate, the Democrats have retained control after losing only six seats to the Republicans. Therefore, it appears that 52 Democrats (counting Joe Lieberman, who is an Independent, but sits with the Democrats in their caucus) and 47 Republicans will comprise the Senate until the undecided race in Washington State is resolved. This estimate presumes that Michael Bennet will retain his seat in Colorado and Lisa Murkowski will be elected by write-in in Alaska. 41 percent of those who voted in Alaska wrote in a candidate name, with the nearest competitor getting 34 percent. It may be some time before this race becomes official.

Members of the Freshman Class of the 112th Congress

Freshman members of the U.S. House of Representatives

 

Alabama 2 - Martha Roby (R) *
5 - Mo Brooks (R)
7 - Terri Sewell (D)
Arizona 1 - Paul Gosar (R) *
3 - Ben Quayle (R)
7 - David Schweikert (R) *
Arkansas 1 - Rick Crawford (R) *
2 - Tim Griffin (R) *
3 - Steve Womack (R)
California 19 - Jeff Denham (R)
33 - Karen Bass (D)
Colorado 3 - Scott Tipton (R) *
4 - Cory Gardner (R) *
Delaware AL - John Carney (D) *
Florida

2 - Steve Southerland (R) *
5 - Richard Nugent (R)
8 - Daniel Webster (R) *
12 - Dennis Ross (R)
17 - Frederica Wilson (D)
21 - Mario Diaz-Balart
22 - Allen West*
24 - Sandy Adams*
25 - David Rivera (R)

Georgia 7 - Rob Woodall (R)
8 - Austin Scott (R) *
Hawaii 1 - Colleen Hanabusa (D) *
Idaho 1 - Raul Labrador (R) *
Illinois 10 - Bob Dold (R)
11 - Adam Kinzinger (R) *
14 - Randy Hultgren (R) *
17 - Bobby Schilling (R) *
Indiana 4 - Todd Rokita (R)
8 - Larry Bucshon (R) *
9 - Todd Young (R) *
Kansas 1 - Tim Huelskamp (R)
3 - Kevin Yoder (R) *
4 - Mike Pompeo (R)
Louisiana 2 - Cedric Richmond (D) *
3 - Jeff Landry (R) *
Maryland 1 - Andy Harris (R) *
Massachusetts 10 - Bill Keating (D)
Michigan 1 - Dan Benishek (R) *
2 - Bill Huizenga (R)
3 - Justin Amash (R)
7 - Tim Walberg (R) *
13 - Hansen Clarke (D)
Minnesota 8 - Chip Cravaack (R) *
Mississippi 1 - Alan Nunnelee (R) *
4 - Steven Palazzo (R) *
Missouri 4 - Vicky Hartzler (R) *
7 - Billy Long (R)
Nevada 3 - Joe Heck (R) *
New Hampshire 1 - Frank Guinta (R) *
2 - Charles Bass (R) *
New Jersey 3 - Jon Runyan (R) *
New Mexico 2 - Steve Pearce (R) *
New York 13 - Mike Grimm (R) *
19 - Nan Hayworth (R) *
20 - Chris Gibson (R) *
24 - Richard Hanna (R) *
29 - Tom Reed (R) *
North Carolina 2 - Renee Ellmers (R) *
North Dakota AL - Rick Berg (R) *
Ohio 1 - Steve Chabot (R) *
6 - Bill Johnson (R) *
15 - Steve Stivers (R) *
16 - Jim Renacci (R) *
18 - Bob Gibbs (R) *
Oklahoma 5 - James Lankford (R)
Pennsylvania 3 - Mike Kelly (R) *
7 - Pat Meehan (R) *
8 - Mike Fitzpatrick (R) *
10 - Tom Marino (R) *
11 - Lou Barletta (R) *
Rhode Island 1 - David Cicilline (D)
South Carolina 1 - Tim Scott (R)
3 - Jeff Duncan (R)
4 - Trey Gowdy (R)
5 - Mick Mulvaney (R) *
South Dakota AL - Kristi Noem (R) *
Tennessee 3 - Chuck Fleischmann (R)
4 - Scott DesJarlais (R) *
6 - Diane Black (R) *
8 - Stephen Fincher (R) *
Texas 17 - Bill Flores (R) *
23 - Quico Canseco (R) *
27 - Blake Farenthold (R) *
Virginia 2 - Scott Rigell (R) *
5 - Robert Hurt (R) *
9 - Morgan Griffith (R) *
Washington 3 - Jaime Herrera (R) *
West Virginia 1 - David McKinley (R) *
Wisconsin 7 - Sean Duffy (R) *
8 - Reid Ribble (R) *

* indicates political party change

Freshman members of the U.S. Senate

 

Arkansas John Boozman (R) *
Connecticut Richard Blumenthal (D)
Delaware Chris Coons (D)
Florida Marco Rubio (R)
Illinois Mark Kirk (R) *
Indiana Dan Coats(R) *
Kansas Jerry Moran (R)
Kentucky Rand Paul (R)
Missouri Roy Blunt (R)
New Hampshire Kelly Ayotte (R)
North Dakota John Hoeven (R) *
Ohio Rob Portman (R)
Pennsylvania Pat Toomey (R) *
West Virginia Joe Manchin (D)
Wisconsin Ron Johnson (R) *
Utah Mike Lee (R)

* indicates political party change

What to Expect in the Lame Duck Session

The U.S. House of Representatives and the U.S. Senate are expected to come back into legislative session the week of Monday, November 15, 2010. At this point, it is expected that the House and Senate will be in session for one week in November and potentially two additional weeks in December. However, the timing of a lame duck session in the month of December is still undetermined.

With respect to the potential issues covered in the lame duck session, it is fraught with uncertainty. Newly emboldened conservatives had been wringing their hands for months over the lengths a lame duck Democratic leadership might go in pushing through elements of its agenda in the waning days of the 111th Congress. Only time will really tell whether such concerns are justified, but it's our bet that it won't happen. Spending bills, taxes, and some sort of energy legislation will be on the front burner, but there won't be much time to cook.

It is expected that a discussion on tax cuts will dominate the lame duck session. A key question will be whether the tax cuts signed into law by President Bush in 2001 and 2003 will be extended. President Obama is supportive of extending these tax cuts for everyone earning less than $200,000 a year, and married couples who file jointly earning less than $250,000 per year. Moreover, an additional outstanding tax matter is the expiring "tax extenders." Multiple tax extenders (such as the research and development tax credit, and the state sales tax deduction, among others) will expire unless Congress extends them by year end.

In addition to tax matters, it is expected that Congress will attempt to do an appropriations bill in the lame duck session which funds the federal government for FY 2011 (which started on October 1, 2010). Currently, the federal government is operating under a continuing resolution. A bill will likely be considered in the lame duck session of Congress, which would prevent a reduction of 20 percent in the Medicare reimbursement to doctors.

What to Expect in the 112th Congress

The Republicans have gained the ability to set the legislative agenda in the House and have narrowed the Democratic majority in the Senate. The question is: what kind of legislation can we expect from the 112th Congress?

If this issue is not addressed in the lame duck session, extension of the Bush-era tax cuts will likely be the first order of business. The Republicans’ Pledge to America calls for an extension of all the current tax rates, while the Democrats have hesitated to extend the cuts on those earning more than $250,000. The Obama Administration is said to be drafting a compromise agreement that would permanently extend the Bush-era tax cuts for families making less than $250,000 a year and would temporarily extend tax cuts for those making more for an additional year or two. Both parties are likely to agree on some extension of the Bush-era tax cuts relatively quickly in the lame duck session of the 112th Congress.

Deficit reduction is likely to be the top issue for Republicans throughout the 112th Congress and it is expected to be a reoccurring theme. On December 1, 2010, President Obama's National Commission on Fiscal Responsibility and Reform is expected to release its recommendations to balance the federal budget. The Commission's report will likely draw fire from both sides of the aisle, but the Republicans will attempt to use the report to push their agenda of bringing government spending to "pre-bailout" and "pre-stimulus" levels. While there is no concrete plan detailing specific cuts, both parties will likely try to find minimal budget cuts over the coming two years. Considerably more important to pending legislation is the expectation that Republicans will require new legislation to follow pay-go rules, which mandate all new legislation be paid for either with tax increases or cuts to other government programs. This will make it difficult to pass new legislation in the 112th Congress.

Other Republican priorities include small business tax reform, legislation repealing the Patient Protection and Affordable Care Act of 2009, and legislation ending the Troubled Asset Relief Program and the American Recovery and Reinvestment Act. However, with Democrats retaining control of the Senate and President Obama maintaining the power of the presidential veto, it will be difficult for Republicans to pass any legislation repealing key Democratic priorities, including the health care bill.

With the Democrats’ defeat in the House, the Republicans will likely work to defeat many of President Obama's outstanding legislative initiatives. It may be unlikely that the President's proposals for an infrastructure stimulus bill, the creation of an infrastructure development bank, immigration reform, and energy legislation will achieve passage in the 112th Congress.

Both parties will have to work together to implement the specifics of the new financial services regulatory law and the new health care law.

Of note, the political environment may become increasingly more partisan, making it more difficult to achieve compromise and pass legislation. Numerous House Democrats who lost their seats were considered moderate Democrats, but the members who replace them are conservative, many of whom had support from the Tea Party. This sets up a potential conflict between the set of House and Senate Democrats who were able to retain their seats and an emboldened Republican party hoping to achieve a number of core conservative legislative victories ahead of the 2012 elections. Members who won with significant tea party support will be particularly aggressive in promoting legislation to decrease the size of the federal government and reduce government regulation.

Expected Committee Chairs in the House and Senate

House

Agriculture: Frank Lucas (3rd - Oklahoma)
Appropriations: Jerry Lewis (41st - California)
  or Harold Rogers (5th - Kentucky)
Armed Services: Buck McKeon (25th - California)
Budget: Paul Ryan (1st - Wisconsin)
Education and Labor: John Kline (2nd - Minnesota)
Energy & Commerce: Joe Barton (6th - Texas)
  or Fred Upton (6th - Michigan)
Financial Services: Spencer Bachus (6th - Alabama)
Foreign Affairs: Ileana Ros-Lehtinen (18th - Florida)
Homeland Security: Peter King (3rd - New York)
Judiciary: Lamar Smith (21st - Texas)
Natural Resources: Doc Hastings (4th - Washington)
Oversight: Darrell Issa (49th - California)
Rules: David Dreier (26th - California)
Science: Ralph Hall (4th - Texas)
Small Business: Sam Graves (6th - Missouri)
Transportation and Infrastructure: John Mica (7th - Florida)
Veterans' Affairs: Cliff Stearns (6th - Florida)
Ways and Means: Dave Camp (4th - Michigan)

Senate

Agriculture, Nutrition and Forestry: Either Debbie Stabenow (MI)
  or Ben Nelson (NE)
Appropriations: Daniel Inouye (HI)
Armed Services: Carl Levin (MI)
Banking, Housing, and Urban Affairs: Either Tim Johnson (SD)
  or Jack Reed (RI)
Budget: Kent Conrad (ND)
Commerce, Science and Transportation: Jay Rockefeller (WV)
Energy and Natural Resources: Jeff Bingaman (NM)
Environment and Public Works: Barbara Boxer (CA)
Finance: Max Baucus (MT)
Foreign Relations: John Kerry (MA)
Health Education, Labor and Pensions: Tom Harkin (IA)
Homeland Security and Governmental Affairs: Joe Lieberman(CT)
Judiciary: Patrick Leahy (VT)
Rules and Administration: Charles Schumer (NY)
Small Business and Entrepreneurship: Mary Landrieu-(LA)
Veterans' Affairs: Daniel Akaka (HI)

Leadership Races in the House and Senate

House
With Republicans taking over the House, Representative John Boehner (the current House Minority Leader from Ohio) is expected to become the Speaker. Representative Eric Cantor (R-VA) will likely be named as the House Majority Whip. Other candidates for House Republican leadership positions include California's Kevin McCarthy and Texas's Pete Sessions. The Democrats are expected to select Representative Steny Hoyer (D-MD) as the next House Minority Leader, and Representative Jim Clyburn (D-SC), as the Minority Whip.

Senate
After winning re-election, Senator Harry Reid is likely to retain the Majority Leader position in the Democratically controlled Senate. It is unclear as to whether Senator Dick Durbin (D-IL) will continue in his position as the Majority Whip. Senator Chuck Schumer (D-NY) may attempt to run for a Senate leadership position. We will know more in the coming weeks.

Husch Blackwell's Political Action Committee

An important part of our Governmental Affairs practice group is the Husch Blackwell Political Action Committee (PAC). Our PAC is a necessary and powerful tool in today's competitive legal environment and most top AmLaw firms utilize a PAC. The Husch Blackwell PAC is a federal, non-connected, multi-candidate committee. Our PAC is governed by a 13-member bipartisan board which fairly represents our different regional locations. The Husch Blackwell PAC provides visibility to both our attorneys and our clients. To give you an example of the work of our PAC, we made contributions to over 20 federal candidates in 2010 in the following states, among others: Tennessee, Illinois, Kansas, Missouri, Iowa, Nebraska, Colorado, and Kentucky.