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BPAA Biweekly Federal Policy Updates - November 2

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POLITICAL UPDATE

  • Bloomberg Government latest projections on House races to watch (see powerpoint here): Democrats seem to be well-positioned to win a majority of House seats Nov. 6 after waging well-funded campaigns in scores of Republican-held congressional districts. The attached BGOV OnPoint looks at 85 congressional districts worth watching in the final days of the campaign. Republicans are the defending party in 79 of them, underscoring just how much they’re on the defense in the first midterm election of Donald Trump’s presidency. Democrats need a net gain of 23 seats to overturn the House Republican majority. In midterm elections since World War II, the average result is a net loss of 26 House seats for the White House’s party. Trump’s sagging approval rating is a drag on Republican candidates. Democratic candidates, many of them women and military veterans, have advantages in voter enthusiasm and fundraising. A spike in Republican retirements has also given Democrats opportunities to win some seats they might otherwise not.
    • To be sure, Republicans have some structural political advantages.
      • After the 2010 election, Republican legislators in some key states redrew congressional district lines to fortify their majorities in subsequent elections. In some states, Democratic voters are inefficiently clustered in large metropolitan areas, leading to “wasted” votes. And many Republican incumbents are politically proficient, campaigning on district-specific accomplishments and drawing sharp contrasts with Democrats.
    • Some of the 85 districts in the OnPoint are more competitive than others. It doesn’t purport to identify every competitive district. Plus, a few races could slip under the radar and produce upsets that surprise even the most seasoned political party strategists and nonpartisan analysts. This compilation doesn’t include some uncompetitive districts that are on track to shift from one party’s control to the other. Among those: New Jersey’s 2nd, where Democrat Jeff Van Drew is a shoo-in to succeed retiring Rep. Frank LoBiondo (R), and Pennsylvania’s 6th, where Democrat Chrissy Houlahan should easily win the seat of retiring Rep. Ryan Costello (R) in a suburban Philadelphia district made more Democratic in court-ordered redistricting.
       
  • Bloomberg Government reports Senate Races to Watch Update for Nov. 1: BGOV OnPoint (see powerpoint here): Donald Trump is on a mission to save the Republican Senate majority. In the final five days before the Nov. 6 election, the president will rally Republicans in six states with highly competitive Senate contests among BGOV’s Races to Watch. Trump campaigned in Missouri November 1, then in West Virginia and Indiana on Nov. 2, Montana and Florida Nov. 3, Tennessee Nov. 4, and then Indiana and Missouri again the day before the election. In all of those states except Tennessee, Democratic senators are trying to keep their Senate seats and prevent Republicans from expanding their 51-49 majority. Unlike House Republicans, who may well lose their majority on Nov. 6, Senate Republicans probably will maintain control of their chamber — if only because of the good fortune of an overwhelmingly favorable election map. In the 35 Senate elections, Democrats are the incumbent party in 26 of them. Republicans are defending just nine seats this year. Keep watching the “Big Five” Democratic senators from states that were strongly pro-Trump in 2016: Joe Manchin in West Virginia; Heidi Heitkamp in North Dakota; Jon Tester in Montana; Joe Donnelly in Indiana; and Claire McCaskill in Missouri.
    • Of those five, Heitkamp probably has the toughest race. All have stressed their political independence and sought to put some distance between themselves and the national Democratic Party.
    • There are five other Democrats seeking new terms in states Trump won by more modest margins in 2016. Sen. Bill Nelson (Fla.) is trying to fend off outgoing Gov. Rick Scott (R), who’s spent more than $63 million of his own money on the Senate election.
    • In strongly Democratic New Jersey, Sen. Bob Menendez (D) is weighed down by ethics baggage and is contending with big-spending Republican Bob Hugin, who’s invested at least $36 million of his own money in the race. The nonpartisan Cook Political Report on Oct. 26 shifted its rating of the Menendez-Hugin race to “toss up” from “leans Democratic.”
    • Democrats are seeking to win Republican-held seats in Arizona and Nevada, where the races have been exceptionally close for months.
    • Tennessee is much more Republican-friendly than when Democratic Senate nominee Phil Bredesen was its governor (2003-2011), though he’s still very much in the running for the seat of retiring Republican Bob Corker. Rep. Marsha Blackburn (R) has the edge, though not a big one.
    • In Texas, Sen. Ted Cruz (R) has a determined and well-funded Democratic opponent in Rep. Beto O’Rourke, though Cruz has maintained a steady lead in polls in a state that’s elected only Republicans to statewide offices for more than 20 years.
    • And don’t overlook a special Senate election in Mississippi, which will probably go to a runoff Nov. 27 because no one is likely to win a majority of all votes cast in the all-candidate election next week.

 

  • Politico Predicts… - POLITICO analyzed every midterm race for the House, Senate and governor to determine who we think will win. We used historical trends, the latest polling data, evaluations of both parties' campaign strategies and extensive reporting in our analysis. Every race is rated on a scale. Solid seats heavily favor a particular party. The party has a narrow edge in a Lean seat. Likely seats fall somewhere in between while Toss-ups are races we think are too close to call. Read the outlook here.

 

  • New York Times reports - Beto and Cruz Latest, Sinema Pickup, Cuomo Skips Debate: 4 Days to Go Texas Senate race turns on turnout
    • Texas: One of the hottest topics as we enter the final weekend before the midterms is the state of the Senate race in Texas:
      • Does Senator Ted Cruz really enjoy a comfortable lead over Representative Beto O’Rourke?
      • Or are the polls not accounting for a surge in turnout, especially among millennials and first-time voters?
      • Internal Republican polling indicates that Mr. Cruz is ahead by about 8 or 9 points, depending on the survey. Those polls, according to G.O.P. officials, are assuming a turnout of just over six million voters.
      • Public polls and Democratic surveys have showed a tighter race — a Quinnipiac poll taken last week showed Mr. Cruz leading by 5 points — and many Democrats believe that Mr. O’Rourke can narrow the gap. What may determine the ultimate margin is, yes, turnout. Will the total number of voters be closer to the 2016 election or the last midterms? If it’s a big number, the thinking goes, it’s a boost for Mr. O’Rourke.
    •  Read article here.

 

Missouri: Missouri Senate race appears to be in a dead heat between Attorney General Josh Hawley (R) and Senator Claire McCaskill (D) though Real Clear Politics gives Hawley a slight lead. Recent news out of the Senate race, as National Review reports, “Missouri voters received an anonymous political mailer this week attacking Republican Senate candidate Josh Hawley as insufficiently loyal to former GOP governor Eric Greitens and insufficiently supportive of Second Amendment rights.” Read more here.

TAX

  • Bloomberg Government reports: Hill Briefs: Trump, Brady Double Down on 10 Percent Tax Cut: President Donald Trump and House Ways and Means Committee Chairman Kevin Brady (R-Texas) reiterated plans for a middle-class tax cut next year. “We are committed to delivering an additional 10 percent tax cut to middle-class workers across the country. And we intend to take swift action on this legislation at the start of the 116th Congress,” the two said in an Oct. 31 joint statement. The statement comes as Republicans and Democrats battle for control of the House in the midterm elections. Trump previously said that Congress would vote on a measure before the midterms. Trump said the tax cut would be “net neutral,” but the White House hasn’t said how it would be designed. Brady said in an Oct. 26 interview on CNBC that the tax plan would be funded by spending cuts.

 

  • Bloomberg Government reports: What Democrats Want to Do on Taxes If They Win the House: If Democrats win control of the House, scrutinizing the 2017 tax law and finding a way to force President Donald Trump to hand over his tax returns will be high on their to-do list. Lawmakers and former congressional aides say the party is also ready to push for middle-class tax cuts and a tax on carbon emissions, setting the stage for 2020’s campaign messaging. Even if the chances are low that such bills are signed into law—because Democrats would control only the House—public hearings on the issues would highlight priorities Democrats would push in 2020. Floor votes on Democratic tax priorities would put many Republicans on record as opposing those policies, and incumbent Democrats would go into the presidential election year able to show voters what they’re for instead of just the GOP legislation they voted against.
    • Here’s what to watch for in 2019. 
      • 2017 Tax Law: Democrats have vowed to scrutinize last year’s tax overhaul, focusing on how it benefits corporations and the fast pace at which it was passed without bipartisan input. Rep. Richard E. Neal (D-Mass.), who would chair the Ways and Means Committee if Democrats win the House, has promised to hold hearings to dissect the overhaul. Those hearings could produce legislation to change the law, focusing on raising taxes on the wealthy, repealing the cap on the state and local tax deduction, and ending the tax break for carried interest.
      • Middle-Class Tax Cuts: Much Democratic criticism of the 2017 tax law has been that “working Americans” aren’t seeing much benefit from it. To push the message, lawmakers could propose expanding the earned income tax credit and the child tax credit and establishing new education tax credits. These credits could be part of the overall economic message lawmakers push out on economic inequality, said a former Senate Democratic aide who spoke on the condition of anonymity. Democratic presidential hopefuls in the Senate are already rolling out their tax agendas, focusing on middle-class tax cuts.
      • Infrastructure: Democrats, including those on Ways and Means, want to pursue a transportation and infrastructure package, but there may be differences of opinion on how it would be funded. Trump surprised a group of lawmakers earlier this year by saying he would support a 25-cent-per-gallon increase in federal gasoline and diesel taxes—an idea backed by the U.S. Chamber of Commerce and American Trucking Associations. But the president never endorsed the idea publicly, and prominent Republicans flatly rejected any tax increase.
      • Carbon Tax: Democrats could also use the next two years to set the table for a carbon tax push after 2020 by holding hearings and introducing legislation. But serious conversation about this issue wouldn’t happen until after 2020, said the former Senate aide who spoke anonymously. With the individual tax cuts in the 2017 law expiring at the end of 2025, and pressure to shore up Medicare and Social Security, the hunt will be on for revenue raisers, Metcalf said. A carbon tax could be a “good intro consumption tax,” he said.

 

  • Bloomberg reports: Kamala Harris's Middle-Class Tax Plan Seen Costing $2.8 Trillion: It’s been a week for tax ideas with potentially hefty price tags. A plan from Senator Kamala Harris, a California Democrat regarded as a possible 2020 presidential candidate, would cost $2.8 trillion over a decade, the conservative Tax Foundation said Wednesday. Harris’s proposal would provide a tax credit or direct payment to middle-class and poor individuals and families. Shortly after Harris introduced her plan last week, President Donald Trump floated the idea of a 10 percent middle-class tax cut, catching members of his party and administration off guard. The effort -- seen as a campaign tactic ahead of the midterm elections -- could cost from $410 billion to more than $2 trillion, depending how it’s designed, according to an analysis of data from the Joint Committee on Taxation and Congressional Budget Office.

LABOR ISSUES

  • The Hill reports - Trump adviser rules out deal on raising federal minimum wage:  White House economic adviser Larry Kudlow on Thursday said he would oppose any deal that would raise the federal minimum wage. "My view is no. My view is a federal minimum wage is a terrible idea, and will damage, in particular, small businesses," he said when asked about the prospect at a Washington Post event. Democrats have pushed for increasing the federal minimum wage to as much as $15 an hour, over double its current rate of $7.25.  "Today, a full-time minimum wage worker is unable to afford to rent a small, two-bedroom apartment anywhere in the United States. Republicans’ failed trickle down policies have left the American people with a raw deal, jeopardizing our children’s future and the future of our economy," House Minority Leader Nancy Pelosi (D-Calif.) said in a July statement marking nine years since the last minimum wage hike. Kudlow said he opposed the federal minimum wage because state and local economies were so varied that a one-size-fits all approach would not work, but he also said that he opposed minimum wages at the state and local level.
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