a split decision in a divided...
TRANSCRIPT
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A Split Decision in a Divided Nation
What the 2018 Midterms Mean for Succeeding in Washington
Bruce MehlmanDec. 5, 2018 [email protected]
follow @bpmehlman
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CONTENTS
2
I. SUMMARY: Results, Turnout (Slides 3-7)
II. HOW THE DEMS WON THE HOUSE (Slides 8-13)
III. HOW THE GOP GREW ITS SENATE MAJORITY (Slides 14-19)
IV. OUTCOMES (Slides 20-27)
V. NAVIGATING CHANGE IN 2019 WASHINGTON: 7 Recommendations for Business Leaders (Slides 28-35)
VI. THE REMAINDER OF 2018 (Slides 36-38)
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Senate GOP
House GOP
WHAT JUST HAPPENED?
U.S. HOUSE
U.S. SENATE GOVs
STATE LEGISLATIVE SEATS
2018 -40 +2 -7 -313*2014 -12+ -9 -2 -311+
2010 -63 -6 -6 -7082006 -31 -6 -6 -3221994 -52 -10 -11 -514
3
* Unofficial: a few close races not called + Previous wave left far fewer seats to lose
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IT WAS ALL ABOUT TRUMP
17 20
29
1923
17
31
21 17
16 36
40
32
37
0
10
20
30
40
50
60
70
80
CLINTON1994
CLINTON1998
BUSH2002
BUSH2006
OBAMA2010
OBAMA2014
TRUMP2018
Support Oppose
38% 37%
45%
63%
49%
68%
Source: Public Opinion Strategies Post-Election Surveys
55%
Record 2/3rds Voters Sending a Message about the President
4
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5
2000 2002 2006 2008 2010 2014 2016 2018
8 of Last 10 Elections Changed Control of WH, House and/or Senate0
10
20
30
40
50
60
70
80
90NOT A SURPRISE: CHANGE IS THE NEW NORMAL
RIGHT TRACK
WRONG DIRECTION
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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HIGHEST MIDTERM VOTER PARTICIPATION IN 104 YEARS
Source: US Election Project., as of 12/1 8am 6
39.9%
35.7%
32.9%
36.7%
44.5%
46.6%
33.9%
38.8%
43.6%43.5%45.0%
47.7%48.7%
47.3%
39.1%39.0%
42.0%
38.1%38.4%
41.1%
38.1%39.5%
40.4%41.0%
36.7%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
U.S. Voter Turnout as % of Eligible Voters50.4% 50.1%
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BUT IS 49% VOTER TURNOUT REALLY “GREAT”?
2018 50.1%
7
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HOW DEMOCRATS WON THE HOUSE
5 Reasons
8
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#1. THE MAN: LOW PRESIDENTIAL APPROVAL
39 4042 43
45 46
52
58
63 6366
2006 2018 2014 1982 2010 1994 1978 1990 1986 2002 1998
-30 -40 -13 -26 -63 -54 -15 -8 -5 +8 +5
Chamber lost Already in minority9Source: Gallup
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#2. THE MAP: HOUSE BATTLES WERE IN SUBURBS
Democrats Dominated Urban & Suburban Districts
Source: David Montgomery, City Lab, races called as of 11/11 11pm
Democrats’ Winning Percentage by House District Type
DEMS WON 22/25 DISTRICTS THAT VOTED FOR CLINTON IN 2016AZ-2 CA-10 CA-21 CA-25 CA-39 CA-45 CA-48 CA-49 CO-6FL-26 FL-27 IL-6 KS-3 MN-3 NJ-7 NY-24 PA-1 PA-5
PA-6 PA-7 TX-7 TX-23 TX-32 VA-10 WA-8
10
SUBURBANURBAN RURAL
98.8% 70.4% 19.0%
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#3. THE MESSAGE: D’s FOCUSED ON EVERYDAY ISSUES
Democratic Ads Focused on Health Care, Tax Fairness & Jobs
Source: WSJ (CMAG) 11
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#4. THE MESSAGE (cont.): IT WASN’T THE ECONOMY, STUPID
A Great Economy Will Not Guarantee Reelection
12
DESPITE EXTRAORDINARY ECONOMIC DATA
• Lowest Unemployment Rate in 49 Years (3.7%)
• Fastest Wage Growth in 10 years (all incomes, 3.1%)
• Highest Consumer Confidence in 18 Years
• Fastest GDP Growth in 4 Years
• More “Very Satisfied With the Economy” in Nov. 2018 (28%) than in 1998 (27%) or any prior midterm polled
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#5. MEGATRENDS: GREAT AWAKENINGS
Source: Open Secrets (money), as of 11/8
$923.38
$250.34
$573.92 $612.41
$174.07 $235.84
$- $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00 $900.00
$1,000.00
Candidates Raised Parties Raised Outside Groups Spent
DEM GOP
DONORS: Small Dollar Democrats & Liberal Billionaires
Mill
ions
$$$
13
206 222 235 247
298334
281312
529
2002 2004 2006 2008 2010 2012 2014 2016 2018
WOMENWomen Running for House & Senate
3.5%4.0%
4.8% 5.1%5.6%
6.8%7.0%
11.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
1990 1994 1998 2002 2006 2010 2014 2018
Hispanic Share of Midterm Voters
LATINOS
Source: Rutgers CWAP Sources: US Elections Project / 2018 CNN Exit poll
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HOW THE GOP GREW ITS SENATE MAJORITY
5 Reasons
14
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#1. THE MAN: TRUMP RALLIED GOP BASE
78
61
82
62
82
81
75
91
83
89
50 55 60 65 70 75 80 85 90 95 100
JFK (1962)
LBJ (1966)
NIXON (1970)
CARTER (1978)
REAGAN (1982)
GHWBUSH (1990)
CLINTON (1994)
BUSH43 (2002)
OBAMA (2010)
TRUMP 2018
Presidential Job Approval by Own Party on Eve of 1st Midterm Election (Gallup)
57% of GOP Voters Say Their Congressional Vote Was to Support Trump
Sources: Exit Poll (vote to support Trump); Own Party (Gallup) 15
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#2. THE MAP: SENATE BATTLES IN TRUMP COUNTRYOf the 12 Top Senate Battlegrounds: Dems were defending 8/12 (color of state below)
Trump had won 10/12 in 2016 (all but NJ, NV)
Trump net job approval positive in 9/12 (## shown below)
+9+8
+10 +15
+20
16
-8
+7
Source: Morning Consult
+2
-7
+3
+27
-14
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#3. THE MESSAGE (1): KAVANAUGH FIGHT ENERGIZED GOP
17
Betting Markets Saw Hearing on Blasey-Ford Allegations As Inflection
Bet GOP Will Control Senate
Bet DEMs Will Control SenateBett
ing
Volu
me
Blasey-Ford Hearing
2574
Not Very / Not at AllVery / Somewhat
Importance of Brett Kavanaugh confirmation (to your vote)
Sources: PredictIt; AP VoteCast conducted by NORC for AP & Fox News
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#4. THE MESSAGE (cont.): IMMIGRATION RALLIED BASE
Trump Closing Argument Railed Against the “Caravan”
Source: 2018 Exit Poll 18
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#5. MEGATRENDS: GEOGRAPHY IS DESTINY
18
2421
17
21 22 21
33
37
48
0
6
23
65 1
5
21
19
25
12
6
15 1513 12 11 16
20 20
13
6
11 8 11 4
2 2
7
17
51
5658 57
52 52 51 51
64
50
0
10
20
30
40
50
60
70
1982 1986 1990 1994 1998 2002 2006 2010 2014 2018
GEOGRAPHY GAP AGE GAP GENDER GAP EDUCATION GAP RACE GAP
Geography & Education = Fastest Growing Demographic Divides
Rural vs. Urban 18-29 vs. 65+ Men vs. Women College vs. No College
Generic Ballot Avg. Gap in House Nat’l Polling (Final Month)
Source: Adrian Gray Consulting tracking generic ballot by demographics over time 19
White vs. Nonwhite
Gap
in P
refe
renc
e fo
r Whi
ch P
arty
Con
trols
Con
gres
s (G
ener
ic B
allo
t que
stio
n)
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OUTCOMES6 Impacts of the
Election
20
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DEMOCRATS NOW DOMINATE THE COASTS157 of Democrats’ 235 Members Will Come from East or West Coast
2
More Dems from CA alone (46) in the 116th Congress than 35 other states combined (AK + AR + ID + MT + NE + NE + ND + SD + WV + WY + KS + OK + UT + AL + DE + DC + KY + LA +
ME + MS + VT + HI + IN + MO + NH + NM + RI + TN + IA + SC + NV + NC + WI)
21
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THE INDUSTRIAL MIDWEST IS UP FOR GRABS
BOTH PARTIES LIKELY TO PUSH POLICIES POPULAR IN THESE STATES
IL IN MI OH PA WI
GOV. 2016
GOP GOP GOP GOP GOP DEM GOP
GOV. 2018
GOP DEM GOP DEM GOP DEM DEM
SENATE2019-20
2 R 2 D 2 R 2 D 1D / 1R 1D / 1R 1D / 1R
WH 2012
DEM DEM GOP DEM DEM DEM DEM
WH 2016
GOP DEM GOP GOP GOP GOP GOP
IL IN OH PA WIMI
As Goes the Rust Belt? The Road to 2020 Runs Through…
22
IA
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THERE ARE FEWER & FEWER “PURPLE” STATES
23
27
2524
23
21 2122
21
19 19 19
14 14 14
17
15
1918
1514
9
0
5
10
15
20
25
30
79-'80 81-'82 83-'84 85-'86 87-'88 89-'90 91-'92 93-'94 95-'96 97-'98 99-'00 01-'02 03-'04 05-'06 07-'08 09-'10 11-'12 13-'14 15-'16 17-'18 19-'20
Split Senate Delegations (1 R, 1D) to Modern Low
Source: Drew DeSilva, Pew
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FEWEST STATES WITH SPLIT LEGISLATURES SINCE 1914
Control of state legislatures after the 2018 elections
■ Democratic-controlled ■ Republican-controlled ■ Split Legislature ■ Nonpartisan■ Election not yet called
24Source: Nat’l Journal
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COLLEGE MOMS ARE THE NEW SOCCER MOMS
CA-2 CA-11 CA-12 CA-13 CA-14 CA-15 CA-17CA-18 CA-28 CA-30 CA-33 CA-52 CO-1 CO-2CT-4 DC GA-5 IL-10 IL-5 IL-9 MA-4MA-5 MA-6 MA-7 MA-8 MD-3 MD-6 MD-8MN-4 MN-5 NC-4 NJ-5 NJ-12 NY-3 NY-4NY-10 NY-12 NY-16 NY-17 VA-8 VA-11 WA-1WA-7 WI-2 CA-48 CA-49 CO-6 GA-6 IL-6KS-3 MI-11 MN-3 NJ-7 NJ-11 PA-6 PA-7TX-3 TX-7 TX-32 VA-10 CA-45 AZ-6 IN-5
MO-2 TX-21 TX-22 TX-24 TX-26
Democrats won 90% of the Congressional districts with the most college-educated women (40%+ of female residents)
Represented by Dem before & after election
Captured by Dem in 2018
Represented by GOP before & after election
25Sources: Census Bureau; Analysis by Madeline Sweeney, MCR&T
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EMPOWERED CITIZENS ARE DRIVING CHANGE
Not Waiting on Politicians… New Risks & Opportunities
FL measure to restore voting rights for non-violent felons got more votes in midterm
than Trump got in 2016 general… odds of federal
criminal justice reform went up
TOTAL VOTES IN FLORIDAAmendment 4 (2018): 4,687,379Trump-Pence (2016): 4,617,886
Sources: FL4; Trump;
CO, MI, MO & UT voted to reform redistricting process, making 12 of 50 states who have reformed… watch for many similar efforts in 2020 ahead of next redistricting
ID, NE & UT voters opted to expand Medicaid in their states,
while KS, ME, WI elected pro-ACA governors… combined
with Ds’ effective campaigning on protecting pre-existing
conditions, makes future ACA repeal even less likely.
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THE 2020 CAMPAIGN HAS STARTED
27
CHARISMATIC PROGRESSIVE ROCK STARS
PRAGMATIC MIDWESTERN MODERATES
“REASONABLE” REPUBLICAN MODERATES
TRUMP-EMBRACING POPULISTS
Gillum (FL)O’Rourke (TX)Abrams (GA)
Donnelly (IN)Bredesen (TN)McCaskill (MO)McGrath (KY)
Curbelo (FL)Comstock (VA)
Lance (NJ)Coffman (CO)
Kobach (KS)Heller (NV)
Arrington (SC)
Both Parties Saw Failures Going Left or Right
Dems’ 2020 Strategy Unclear… GOP’s Unquestioned
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NAVIGATING CHANGE IN 2019 WASHINGTON
7 Lessons for Business Leaders
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73
39
56
69
92
67
7774
81
4350
33
44
110
86
74
40 41
54
40
55 54
94
82
5952
93
1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Freshmen Classes 1967-2019
21% OF HOUSE WILL BE NEW: Get to Know Them Before You Need Them
Size of Freshman Classes in the House of Representatives, 1967-201929Source: CRS (thru 2008) & research by A. Yukawa, MCR&T;
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EXPECT MORE EXECUTIVE ACTION: Stay Engaged w/ the Administration
President Obama’s “Phone & Pen” Remain in the Oval Office
30
Trade Friction with China Likely to Accelerate
Immigration Showdown Expected
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DEM-LED HOUSE WILL BE AGGRESSIVE: Engage Leaders Early & Often
Potential Deals
Stop Trump
Rally the Base
• Infrastructure• Rx Prices• Trade• Tax Reform-Reform• Data Privacy, Antitrust• Criminal Justice Reform
• Immigration/ Dreamers• Ethics Reform• Gun control• Pay Equality• Voting Rights• Medicare for All
• Endless Oversight• Block Deregulation • Protect / Save ACA• Undo Tax Cuts
31
What We Expect from Dem-Led House in 2019-20
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OVERSIGHT IS COMING: Early Preparation & Outreach Are Key
32
POTENTIAL HEARINGS ON…
2017 TAX REFORM IMPACT-- CapX vs share buybacks-- Wage growth vs CEO pay-- Repatriation
HEALTH CARE-- Rising costs-- Prescription Drug prices
CLIMATE / ENERGY-- GHG emissions
WALL STREET-- High frequency trading-- Too big to fail
BIG DATA, BIG TECH-- Privacy-- Antitrust
WORKFORCE-- Diversity, #MeToo-- Automation, Retraining
High Impact Oversight• BIG TOBACCO 1994 $206B settlement agreement
• MICROSOFT 1997 DOJ antitrust lawsuit
• MORTGAGE-BACKED SECURITIES 2010 Dodd-Frank
• BANK SECRECY 2009 Global prosecutions
• RUSSIAN ELECTION INTERFERENCE 2017 Techlash
Congressional Oversight Can Be High Risk, High Impact
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BIPARTISANSHIP STILL DELIVERS: Maintain Friends on Both Sides
Real Majorities on Real Bills
33
MAJOR BIPARTISAN DEALS IN 2018Music Modernization Act
Economic Growth, Regulatory Relief, and Consumer Protection Act (Dodd-Frank fix)
FAA Reauthorization Act of 2018Opioids
Stop Enabling Sex Trafficking ActFY19 Appropriations*
Russia Sanctions“Grain Glitch” / WOTC
CHIP (10 years)Water Resources Development Act
Miscellaneous Tariffs BillPortman-Cardin IRS Bill
Save Our Seas Act of 2018
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OTHER NATIONS
ACTIVISTS NGOs
STATES
WASHINGTON VACUUM BEING FILLED: Broaden Stakeholder Engagement
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PRESSURE ON BUSINESS WILL GROW: Prepare for Rising Activism
New Accountability
New Audiences
New Opportunities
New Risks
Social Issues Increasingly Inescapable for Companies
35Sources: AP (licensed), Nike, Starbucks, Lyft
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As for the Rest of 2018…
Our October predictions for the Lame Duck stand…
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Leadership Contests
Budget Battles & Trade Wars Probes, Purges & Pardons
Fighting About the Elections
NOVEMBER-DECEMBER
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WHAT REMAINS FOR THE 115TH CONGRESS?
Battles Over Wall-Funding & Nominees Likely
1. Funding Government Past 12/7 Continuing resolution expires Pres. Trump may veto spending
bill that fails to significantly fund border wall.
2. 132 Nominees awaiting Senate Confirmation (on Executive Calendar)
3. Farm Bill / Food Assistance (SNAP)
4. Intelligence Reauthorization
5. Nat’l Flood Insurance Program
6. Higher Education Act
7. Tax Extenders & Technical corrections
8. IRS Reforms
9. Election Security
10. Violence Against Women Act
38Source: Senate Executive Calendar, pending civilian nominations
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is one of the nation’s most innovative government relations firms, offering strategic solutions to companies, trade associations,
non-profits, and entrepreneurs that help them succeed in Washington.
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