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A Preliminary Take on the 2022 Election Results

Published by Peter Lawrence on Wednesday, November 9, 2022 - 12:00AM

Disclaimer: House members referenced in this blog were identified using 117th Congressional districts, although many of them may be running in different districts for the 118th Congress.

As of the writing of this post, many key Congressional races remain uncalled, and it appears that it may take several days for results to be clear. However, based on current election results and the leads in key House races, Republicans appear to be on track to narrowly take control of the House, with perhaps 220-225 seats once all races have been called, but it is not inconceivable at this point that Democrats could defy expectations to narrowly retain control. The fate of the Senate is uncertain and could remain uncertain until early December.

Democrats currently have a net gain of one seat in the Senate with four seats uncalled. Republicans are projected to have won 203 seats in the House while Democrats are projected to have won 176, according to the Associated Press (AP). Fifty-six seats remain uncalled, with Republicans leading in 17 races and Democrats leading in 39 races, but several of those leads are likely to change as more votes are counted.

Senate

In the 2022 midterm election there were 21 Republicans up for reelection, including two in states where President Biden won in 2020 (Pennsylvania and Wisconsin). There were 14 Democrats up for reelection, none of which were in states where former President Trump won in 2020. As of the writing of this post, Republicans are projected to have won at least 48 seats (with 49 seats all but certain once Alaska’s ranked choice voting is completed), while Democrats are projected to have won at least 48 seats, including two Independents, Sens. Bernie Sanders of Vermont and Angus King of Maine, who generally vote with Democrats. Four races remain undetermined: Alaska, Arizona, Georgia, and Nevada, the results of which will determine control of the Senate.  The Georgia Senate election is headed to a Dec. 6 runoff between Democratic incumbent Sen. Rafael Warnock and Republican Herschel Walker. Democratic incumbent Sen. Mark Kelly, D-Arizona, is currently leading in his reelection race against Republican Blake Masters and Republican Adam Laxalt is leading incumbent Democrat Sen. Catherine Cortez Masto of Nevada, but there are many votes yet to be counted, and therefore, the ultimate result is uncertain. Given these results, the control of the Senate will be dependent on what happens in the Georgia and Nevada races.

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While control of the Senate is uncertain, the current Senate leaders appear likely to continue to remain in their roles whether in the majority or minority: Sen. Chuck Schumer, D-New York, for Democrats and Sen. Mitch McConnell, R-Kentucky, for the Republicans, along with their respective whips: Sens. Dick Durbin, D-Illinois, and John Thune, D-South Dakota, respectively.

Finance Committee

If Democrats retain control of the Senate, newly reelected Sen. Ron Wyden, D-Oregon, will remain Senate Finance Committee Chair, and newly reelected Sen. Mike Crapo, R-Idaho, will remain the ranking member. Such roles would be reserved if Republicans prevail in Nevada and Georgia. Three Republican members of the committee–Richard Burr, R-North Carolina; Rob Portman, R-Ohio, and Pat Toomey, R-Pennsylvania–are retiring at the end of the Congress, and a fourth–Ben Sasse, R-Nebraska, will resign Dec. 1 to become President of the University of Florida. Six other Republican committee members–Sens. Chuck Grassley, R-Iowa; John Thune, R-South Dakota; Tim Scott, R-South Carolina; Jim Lankford, R-Oklahoma, and Todd Young, R-Indiana, were reelected, as were two Finance Committee Democrats up for reelection, Sens. Michael Bennet, D-Colorado, and Maggie Hassan, D-New Hampshire. A fourth Finance Committee Democrat up for reelection, Catherine Cortez Masto, D-Nevada, is currently trailing in her reelection race to Republican Adam Laxalt, but it is not inconceivable she could ultimately prevail. While the committee size and partisan ratio for the 118th Congress are yet to be determined (for the 117th Congress there are 28 members, 14 Democrats and 14 Republicans), at a minimum there will be at least four new Republicans added to the Committee to fill the vacancies created by the departures of Burr, Portman, Toomey and Sasse, and likely more if Republicans take control. Along with Young, Portman is a leading Republican cosponsor of S. 1136, the Affordable Housing Credit Improvement Act, and with Sen. Roy Blunt, R-Missouri, Portman is a leading cosponsor of S. 456, the New Markets Tax Credit Extension Act. New leading Republican sponsors will need to be identified for the new Congress to replace Portman.

Banking, Housing and Urban Affairs Committee

If Democrats retain control of the Senate Sen. Sherrod Brown, D-Ohio, will likely remain the Senate Banking, Housing and Urban Affairs Committee Chair, and, and with the retirement of Toomey, newly reelected Tim Scott will return to being the ranking member. In addition to Toomey, Republican member Richard Shelby, R-Alabama, is retiring at the end of the Congress. Two other Republican committee members, Sens. John Kennedy, R-Louisiana, and Jerry Moran, R-Kansas, were reelected as was Democrat Sen. Chris Van Hollen, D-Maryland. As mentioned above, committee Democrats Cortez Masto is currently trailing in her reelection, and Warnock advanced to a Dec. 6 runoff election with his Republican opponent Herschel Walker. Like the Finance Committee, the committee size and partisan ratio for the 118th Congress are yet to be determined (for the 117th Congress there are 24 members, 12 Democrats and 12 Republicans), but at a minimum there will be at least two new Republicans added to the Committee to fill the vacancies created by the departures of Shelby and Toomey, and likely more if Republicans take control.

Appropriations Committee

Both leaders of the Senate Appropriations Committee–Sens. Pat Leahy, D-Vermont and Shelby–are retiring at the end of the Congress, so the committee will have new leadership. If Democrats retain control of the Senate, newly reelected Sen. Patty Murray, D-Washington, will likely become the chair and Sen. Susan Collins, R-Maine, is likely to be the ranking member, with the roles reserved in a Republican controlled Senate. As a result, Collins will likely give up her top Republican seat on the Transportation, Housing and Urban Development (THUD) Subcommittee for the full committee leadership, meaning there will likely be a new top Republican of the THUD Subcommittee. In addition to Shelby, Republican committee member and lead Republican cosponsor of S. 456, the New Markets Tax Credit Extension Act, Blunt is retiring at the end of the Congress. As mentioned above, Democrat committee member Van Hollen was reelected in addition to Murray, as were Republican committee members Moran; Kennedy; Lisa Murkowski, R-Alaska; John Hoeven, R-North Dakota; John Boozman, R-Arkansas, and Marco Rubio, R-Florida. Like the Finance Committee, the committee size and partisan ratio for the 118th Congress are yet to be determined (for the 117th Congress there are 30 members, 15 Democrats and 15 Republicans), at a minimum there will be at least two new Republicans added to the Committee to fill the vacancies created by the departures of Shelby and Blunt, and likely more if Republicans take control.

House

All 435 seats in the House of Representatives were up for reelection. Currently, there are 221 Democrats, and 212 Republicans, with two vacancies–one of which were previously held by Democrats (Florida-13th) and the other previously held by Republicans (former Rep. Jackie Walorski, R-Indiana-2nd who died tragically in a car accident last August and was the lead House Republican sponsor of H.R. 2573, the Affordable Housing Credit Improvement Act).

According to the AP at the time of this writing, Democrats have been declared the winner in 176 seats, Republicans in 203 seats and 56 seats are still uncalled, with Republicans currently leading in 17 races and Democrats in the other 39. Although there is potential for the leads to change, it appears more likely Republicans will take control of the House.

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If Republicans take control, Rep. Kevin McCarthy, R-California-23rd, is expected to become Speaker of the House. However, given the likely narrow size of the majority, McCarthy may have difficulty securing the necessary 218 votes for Speaker in January 2023. If McCarthy is elected Speaker, Rep. Steve Scalise, R-Louisiana-1st, will likely become House Majority Leader. While she has not announced her plans yet, many policy insiders believe the current House Speaker, Nancy Pelosi, D-California-12th, will not seek the top leadership position for House Democrats. It is expected that House Democrats will hold their leadership election after Thanksgiving. One of the members often mentioned as a likely successor to Pelosi is Rep. Hakeem Jeffries, D-New York-8th, although current House Majority Leader Steny Hoyer, D-Maryland-5th, and House Majority Whip Jim Clyburn, D-South Carolina-6th, have not announced their plans yet, either.

Ways and Means Committee

If Republicans take control of the House as currently projected and with current ranking member Kevin Brady, R-Texas-8th, retiring at the end of the Congress, there will be a new Ways & Means Committee Chair. There are three Republicans in the running: Vern Buchanan, R-Florida-16th; Jason Smith, R-Missouri-8th; and Adrian Smith, R-Nebraska-3rd. It is expected that the Republican Steering Committee will select a new Chair after Thanksgiving. Current Chair Richard Neal, D-Massachusetts, will likely become ranking member.  Of the 43 current members of the committee, three Democrats did not seek reelection: Ron Kind, D-Wisconsin-3rd; Tom Suozzi, D-New York-3rd; and Stephanie Murphy, D-Florida-7th. Most of the remaining 38 current members (22 Democrats and 16 Republicans) were reelected; only Reps. David Schweikert, R-Arizona-6th; and Steven Horsford-D-Nevada, are in danger of not being reelected based on current election reports. If House leadership decides to keep the committee size and partisan ratio (25 members for the majority and 18 for the minority) the same, then current Democratic members Jimmy Panetta, D-California-20th; Jimmy Gomez, D-California-34th; Horsford; and Delegate Stacey Plaskett, D-U.S. Virgin Islands, will likely lose their committee seats, and at least nine new Republicans will be added to the committee. Some of the Republicans reportedly under consideration are Michelle Steel, R-California-48th; Randy Feenstra, R-Iowa-4th; Greg Steube, R-Florida-17th; Blake Moore, R-Utah-1st; Bryan Steil, R-Wisconsin-1st; among others.

Financial Services Committee

If Republicans take control of the House as currently projected, current ranking member Patrick McHenry, R-North Carolina-10th, will likely become chair, and current chair Maxine Waters, D-California-43rd, will return to being ranking member. Of the current 54 members of the committee, six committee members will not be returning: Democrats Carolyn Maloney, D-New York-12th, and Ed Perlmutter, D-Colorado-7th, and Republicans Lee Zeldin, R-New York-1st; Ted Budd, R-North Carolina-13th; Trey Hollingsworth, R-Indiana-9th; and Anthony Gonzalez, R-Ohio-16th. Committee Democrat Al Lawson, D-Florida-5th, was not reelected, and Cindy Axne, D-Iowa-3rd, is currently trailing in her reelection race but all committee Republicans are expected to be reelected. If House leadership decides to keep the committee size and partisan ratio (30 members for the majority and 24 for the minority) the same, then current Democratic members Nikema Williams, D-Georgia-5th, and Jake Auchinloss, D-Massachusetts-4th, will likely lose their committee seats, and at least 10 new Republicans will be added to the committee.

Appropriations Committee

If Republicans take control of the House as currently projected, current ranking member Kay Granger, R-Texas-12th, will likely become chair and current chair Rosa DeLauro, D-Connecticut-3rd, will become ranking member. Of the current 59 members of the committee, nine committee members will not be returning: Democrats David Price, D-North Carolina-4th (and current THUD Subcommittee chair); Lucille Roybal-Allard, D-California-40th; Tim Ryan, D-Ohio-13th; Cheri Bustos, D-Illinois-17th; Brenda Lawrence, D-Michigan-14th; Charlie Crist, D-Florida-13th; Ann Kilpatrick, D-Arizona-2nd; and Republicans Jaime Herrera Beutler, R-Washington-3rd, and Steven Palazzo, R-Mississippi-4th. Committee Democrat Susie Lee, D-Nevada-3rd, is narrowly leading in her reelection race. If House leadership decides to keep the committee size and partisan ratio (30 members for the majority and 24 for the minority) the same, then at least nine new Republicans will be added to the committee.

Implications for Upcoming Lame Duck Session

Given the likely change in control in the House, it is possible that Congress will defer action on final fiscal year (FY) 2023 spending until February or March by passing another continuing resolution (CR) to fund the federal government past the expiration of current CR on Dec. 16. It is also possible that legislative plans for the lame duck may not settle until the results of the Georgia Senate runoff are determined. If not, a FY 2023 omnibus spending bill could serve as a legislative vehicle for low-income housing tax credit (LIHTC) proposals, new markets tax credit permanence, opportunity zones (OZ) legislation and possibly proposals from the Historic Tax Credit Growth and Opportunity (HTC-GO) Act (H.R. 2294/S. 2266). Less likely, but still possible, the 2023 National Defense Authorization Act, the annual defense policy bill Congress has passed 62 years in a row, might serve as a legislative vehicle for a year-end tax bill.

More to Come

To learn what these results mean for the LIHTC, new markets tax credit, historic rehabilitation tax credit, OZ and renewable energy communities, please listen to the special edition of the Tax Credit Tuesday podcast on Nov. 15 and read the December issue of the Novogradac Journal of Tax Credits.

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