Election: ‘Blue Wave’ Becomes ‘Blue Wait’

Published by Michael Novogradac on Tuesday, December 1, 2020
Journal Cover Thumb December 2020

After a cliffhanger presidential election that saw Democratic candidate Joe Biden beat incumbent Republican Donald Trump and Democrats retain control of the House of Representatives, the balance of power in the U.S. Senate hinges on two Jan. 5, 2021, runoff races in Georgia.

That said, irrespective of the result of the runoffs in Georgia, enacting laws in 2021 will likely depend on bipartisanship: Republicans and Democrats coming together to govern. Here’s why.

If Republicans win either of the Georgia runoff races, they will control the Senate. The need for bipartisanship will be clear.

If both Democratic candidates win their Georgia runoff races, their caucus will control the Senate, since it will be 50-50 and the tie-breaking vote will be cast by Vice President-elect Kamala Harris. This would give the Democratic party control of the federal government for the first time since 2010, the end of Barack Obama’s first two years as president. But Democratic control of both chambers of Congress and the presidency likely doesn’t mean the end of the need for bipartisanship.

That’s because Joe Manchin, D-W.Va., said he would not vote to eliminate the legislative filibuster–the ability of Senators to hold continuous debate on a topic to prevent a bill from coming to vote, which means legislation would need at least 10 Republican votes to pass the Senate.

A remaining hope for Democrats to pass significant tax legislation without Republican support would be budget reconciliation–a scenario that likely requires Democratic control of the Senate. Budget reconciliation allows expedited consideration of certain legislation not subject to Senate filibuster, so a bill can pass with a simple majority. Reconciliation can be used for legislation that changes spending, revenues and the federal debt limit. Such an effort would be a challenge, as any one of 48 Democratic senators or two Independents could frustrate such an effort. The House could also prove challenging, as the Democratic will hold only a single-digit majority in that chamber.

All this means we are likely entering an era of negotiation between two men who are among the 20-longest-serving members in the Senate’s history: Biden, who spent 36 years as a senator and eight as vice president, and Sen. Mitch McConnell, R-Ky., who just completed 36 years in the Senate and is beginning another six-year term. McConnell will be the majority leader or minority leader of the Senate, depending on the outcome of the Georgia runoff elections.

The next two years will likely see Democratic tax policy initiatives that can garner the agreement of at least 10 Senate Republicans. Those who expect a repeat of the past two years, when there was little agreement between the Democratic-controlled House of Representatives and a Republican-controlled Senate, might be in for a surprise for two reasons: McConnell will be negotiating without Donald Trump in the White House and the 2022 election is already visible on the horizon.

Election Results

Biden’s win came after a long, contentious campaign during a worldwide pandemic. Biden will be sworn in Jan. 20, 2021, as the nation’s 46th president and will have a Democratic-controlled House of Representatives, albeit with only a slim majority.

Republicans entered the election with a 53-47 Senate majority, but were in a defensive mode, as 23 of the 35 seats up for grabs were held by Republicans. By Nov. 3, polling aggregation and analysis website fivethirtyeight.com gave Democrats a 75 percent
chance of controlling the Senate.

It didn’t happen, at least on Nov. 3. Three seats flipped and there was a net gain of one seat for the Democratic Party. The best possible outcome for Democrats is a 50-50 split.

Why Democrats Still Want Control

While Manchin’s refusal to vote to end the filibuster appears to doom that path and budget reconciliation can be used only once a session and is fraught with challenges, there remain significant reasons for the Democrats to seek to gain control of the Senate. Biden’s cabinet appointments, for instance, will require the consent of the Senate. With a Democratic majority, Biden could rely on the Senate to approve most of his appointments without much difficulty.

Control of the chamber would also give the Democratic Party leadership of the Senate and all committees,
giving the party the authority to determine what issues come to the floor for votes and what issues are highlighted in committee hearings and markups. While the outcomes might not change, Democratic committee leaders could force Republicans into uncomfortable positions of voting on issues they would rather avoid–particularly senators who face challengers in two years–and draw attention to policies that Democrats want to advance.

First 100 Days of Biden

Traditionally, the first 100 days of presidential administration is crucial for a new president. Franklin Roosevelt famously reshaped the government in his first 100 days, signing 76 bills and 99 executive orders. Subsequent presidents have paled in comparison, but it still remains a significant time frame for a new president: In Trump’s first 100 days, he signed 28 bills and 24 executive orders.

Barring a sweep in Georgia, Biden will be the first president since George H.W. Bush in 1989 to enter office without his party also in control of the Senate and House (Bush faced a far more lopsided Senate and House). Biden’s ability to push through legislation will be limited, although a Democratic-controlled Senate (which would give his party control of both chambers of Congress) would enable some bills to go through.

McConnell’s Role, 2022 Election’s Shadow

Republican control of the Senate–or even a 50-50 split with Democrats narrowly in control–means that McConnell looms large as the Republican gatekeeper in an otherwise-Democratic controlled government. Assuming Biden and the Democratic-controlled House of Representatives reach agreements, McConnell will be responsible for making or killing deals, something that might be met with dread by Democrats.

However, McConnell may play a different role in the 117th Congress than the past two years.

Since the Democratic Party took control of the House in 2018, Trump cast a massive shadow over negotiations between McConnell and House Speaker Nancy Pelosi, sometimes changing the White House stance on issues as agreements loomed. That situation reached its apex with COVID-19 relief negotiations in recent months, as McConnell turned to Treasury Secretary Steven Mnuchin to negotiate with Pelosi to ensure Trump’s cooperation.

Without Trump in the White House, expect McConnell to approach things differently. He’ll possibly approach things differently for another reason, too: the 2022 midterm elections.

McConnell will enter the Biden administration’s first two years knowing that–at best–the Republicans hold a narrow margin in the Senate and that control of the chamber will be up for grabs again in 2022, when the GOP will defend seats in 22 of the 34 elections. Among Republicans set to face voters are several candidates in swing states: Ron Johnson of Wisconsin, Rob Portman in Ohio, Chuck Grassley (who may retire) in Iowa and Marco Rubio in Florida. In addition, incumbents Pat Toomey in Pennsylvania and Richard Burr in North Carolina–both swing states–have announced their retirements.

For the Democrats, it’s a friendlier field. Among the 12 incumbents facing voters are just a few swing-state candidates, including recently elected Mark Kelly in Arizona, Catherine Cortez Masto in Nevada and Maggie Hassan in New Hampshire. Whomever wins the Kelly Loeffler-Raphael Warnock race in Georgia will run again in 2022, too.

For the next two years, McConnell may have to work with Democrats to help at-risk Republican senators in 2022. It’s no guarantee of any major agreements, but McConnell’s position is definitely different in 2021 than it was in 2019 and 2020.

The position of Pelosi in the House of Representatives isn’t as dramatic, but there are similarities. The threat of losing the Democratic majority in 2022 could result in decisions to avoid some progressive legislation that could put moderate Democratic representatives in swing districts in trouble in 2022.

What Biden Can Do

As Biden begins his term needing agreement with Republicans to push through any tax provisions, there remain plenty of ways he can make an impact.

Biden can tackle regulatory issues on Day One, meaning such things as Community Reinvestment Act reform, the status of government-sponsored entities Fannie Mae and Freddie Mac, funding and responsibilities of the Community Development Financial Institutions Fund and Internal Revenue Service regulations for tax incentives can be addressed without Senate approval or consent.

But for legislative progress, it’s likely going to require bipartisan negotiations.

It appears that the most important relationship in Washington, D.C., will be that between a 77-year-old president who was elected to the Senate in 1972 and a 78-year-old Majority Leader who joined him in 1984.

It’s a new era.