In the biggest landslide election since the Republican Revolution of 1994, Democrats have seized control of the House and the Senate. The Democrats also wrestled control of many state legislatures as well.
Democrats now control both legislative chambers in 23 states. Republicans hold both houses in 16 states. Control is split in 10 or more states. Most of the Democratic gains were in the East and the Midwest.
Candidates friendly to the forest products industry lost in a number of races. According to the Hardwood Federation, 98 industry friendly candidates won while 21 lost.
Winners include: Bob Corker in Tennessee, Joe Lieberman in Connecticut, Geoff Davis in Kentucky. Losers include: Anne Northup (R-KY), Forestry Appropriations SubCommittee Chair Charles Taylor (R-NC), House Agriculture Forestry Subcommittee Chairman Gil Gutknecht (R-MN), Don Sherwood (R-PA), Mike Sodrel (R-IN) and Chris Chocola (R-IN).
House Resources Committee Chairman Richard Pombo (R-CA), one of the strongest voices for reform of the Endangered Species Act (ESA), lost too. He was defeated in large part due to a massive campaign against him from national preservationists groups.
Betsy Ward, the executive director of the Hardwood Federation, said, “The election results present the hardwood industry with both opportunities and challenges as we try to achieve our legislative priorities over the next two years… The Federation lost several strong Congressional hardwood leaders in these elections. However, our record of bi-partisan support does assure us that we will have pro-hardwood allies under either party in control.”
President Bush called the election results a “thumping.” He took responsibility for the public reaction to his policies and promised to work with Democrats on issues important to the country.
Lame Duck Session
Before the Republicans hand over control of Congress, they want to get a number of important bills pushed through the process. It appears that anything too controversial will not make it. The Congress will likely consider some international trade deals and energy legislation. It does not appear that any major issue that the forest products industry wanted will be taken up during the lame duck session.
State Ballot Issues
A number of states considered private property rights initiatives that were meant to restrict the use of eminent domain to take property. Voters in 9 out of 12 states approved measures to limit the taking of private property.
Many of these initiatives sprang up after a decision by the U.S. Supreme Court in Kelo v. New London. The decision allowed a Connecticut city to condemn homes as part of a neighborhood revitalization effort. Private property rights advocates were outraged and started grassroots ballot efforts to limit the use of eminent domain.
Voters in Arizona, Florida, Georgia, Michigan, Nevada, North Dakota, Oregon, South Carolina and New Hampshire voted for property right protections.
Efforts in California, Washington and Idaho for more ambitious property right measures failed. These proposals would have required governments to compensate landowners when rules or regulations reduce property value by limiting land usage.
For example, Proposition 90 in California would have required governments to compensate property owners when regulations and laws resulted in “substantial” economic losses. Some viewed these measures as too far reaching. Critics claimed that these measures would make it harder to pass zoning restrictions, environmental protection and workplace safety laws. Proposition 90 supporters indicate they will try to put the issue back on the ballot in 2008 since the measure was narrowly defeated.
Private property rights have always been an important issue to landowners and the forest products industry because much of the country’s timberland, especially in the East and South, is on private land.
Immigration Reform
Some pundits believe that Democratic control will make it easier for comprehensive immigration reform to pass. While it is true that moderates are more likely to support more than just a wall, many of the Democrats elected in the recent election were more conservative than typical Democrats in the previous Congress.
Dan Stein, president of the Federation for American Immigration Reform, said, “When candidates promised that they would ‘get tough on illegal immigration,’ voters understood this to mean that they would enforce borders, crackdown on employers, and create real deterrents to illegal immigration. If there was a single newly elected Democratic legislator who ran on a platform of amnesty for illegal aliens and massive new foreign guest worker programs, we are not aware of it.”
Democratic interests on the issue are mixed. The AFL-CIO has supported a comprehensive approach while the Teamsters and the International Brotherhood of Electrical Workers opposes it. Democrats want to court the growing Hispanic vote, but the party can’t risk offending the middle class workers who helped them sweep into power either. Immigration reform is noticeably absent on the Democrat’s agenda for change.
In a number of close races, Democrats talked as tough as did the Republicans when it came to border security and a guest worker program. The last thing either party wants to appear is anti-middle class.
After the election, President Bush indicated that the new Congress may provide the right makeup to pass comprehensive immigration reform. In all reality, the issue may be put on the backburner because it is such a politically controversial subject.
Given the new leadership in Congress, any legislation that does emerge will likely be less employer friendly than what would have been developed under Republican control. But the Democrats will not want to bash big business too much if they want to remain in power and court corporate campaign dollars.
China Policy
A number of high profile Democrats who won ran on the trade deficit as a major campaign issue. Next year expect for a number of bills attempting to crack down on China, especially its floating currency. More than two dozen measures aimed at China and its economic practices were proposed over the last two years. In the past, Republicans were able to block these bills while attempting to use diplomacy to get China to play fair.
Nancy Pelosi, the incoming Speaker of the House, and Harry Reid, the probable Senate Majority Leader, both opposed China’s entry into the World Trade Organization. Pelosi has urged the Bush Administration to file a complaint with the WTO over Chinese piracy concerns.
Some companies would welcome limits on Chinese imports or possibly even tariffs. Others would see it as a major blow to lowering costs. U.S. companies, such as Ford Motor Co. and Wal-Mart Stores Inc. look to China as a low cost supplier of goods.
Democratic Agenda
The Democrats are launching out with a few key proposals. This includes: increasing the federal minimum wage, forming new Iraq policy, cutting student loan interest rates, funding embryonic stem cell research, authorizing the federal government to negotiate lower drug prices for Medicare patients and imposing a national cap on industrial carbon dioxide emissions.
President Bush has indicated his willingness to work on some of the Democratic agenda. Look for a minimum wage increase to pass. Right now it appears the proposal is to increase the rate from $5.15 to $7.25 per hour. He will also consider Democratic priorities such as finding a compromise on renewing the No Child Left Behind education law and overhauling budget-busting entitlement programs.
Even amidst telling some jokes during a press conference, President Bush made it clear that he was not going to roll over and give the Democrats everything that they wanted.
Talking about Nancy Pelosi, Bush said, “She’s not going to abandon her principles and I’m not going to abandon mine.”
The makeup of the new Congress will make it harder for a number of issues important to the forest products industry to get on the agenda. This includes ESA reform, estate tax repeal and necessary changes to federal forest management policies.
The forest products industry has reached out to members of both parties over the last few years. And many of the new Democrats are fairly conservative, but anything can happen in politics. How much people tow the party line and how liberal the agenda becomes will be something that impacts the outcome of the 110th Congress.
Democrats have to be careful though. If seen as unproductive or too obstructionist, they risk losing their majority in two years. With only a slim majority in the Senate and President Bush in the White House, they will have to work across party lines to get things done.
Democrats know that they are being watched by the electorate. How they govern could impact the party’s chances for the White House in 2008.
