Tom Block’s Takeaways: Biden appears to win, no blue wave, strong Republican showing in House and Senate, Biden agenda starts to emerge.

Tom Block’s Takeaways: Biden appears to win, no blue wave, strong Republican showing in House and Senate, Biden agenda starts to emerge. Stimulus possible in lame duck as DC digests positive vaccine news.

  • News outlets declared Biden President-elect, President Trump continues to push legal battles but this week the Trump team will need to present evidence if cases are to proceed.  Clearly the President believes his most favorable venue is SCOTUS but no roadmap yet of how the Court gets a case.
  • No blue wave as Democrats fail to defeat any Republicans member of the House and Democrats lost seats.  Republicans outperformed in Senate races and await Georgia runoffs to determine which party controls the Senate.
  • Biden and Congress: A man of the Senate, SCOTUS ACA decision, role of Senate moderates as key to deals. Republican Senators Collins and Murkowski could rule Senate agenda. Biden’s relationship with McConnell may help with legislation.
  • Biden agenda: executive orders day one, immigration, climate change, and healthcare
  • Stimulus and government funding issues for lame duck Congressional session. Impact of vaccine to be determined but 10 million still unemployed.

Election

Biden accepts mantle of President-elect on Saturday after all the major news networks declared the former Vice President and Senator Harris the winners of 270 electoral votes

President Trump has leaned on his legal team to try and reverse the apparent Biden/Harris victory. Under the leadership of former Mayor Rudy Giuliani there have been charges of fraud and counting errors; but to date little if any evidence has been produced and most of the cases filed have been quickly dismissed.  The one win was the decision to count ballots in Pennsylvania received after Election Day separately, but these ballots are unlikely to be enough to change the outcome.

Historically, recounts seldom move the results by more than a few votes and as has been pointed out by many experts election fraud in the US is rare.  Mail in and absentee ballots are only sent to registered voters and in most cases to their home addresses; electronic systems with bar codes now track most ballots.  Fraud on election day is difficult with over 100,000 polling locations makes election day cheating very difficult.  Since national elections only occur every four years it gives little opportunity to test and practice voting fraud schemes.  US election fraud is not zero; but likely not close to the point of reversing a national election.

No blue wave 

Polling again missed the mark in predicting a large blue wave that would see the Democrats capture the Senate and make significant gains in the House.  In fact so far House Democrats didn’t defeat a single House Republican and appear to have lost around ten seats, giving Pelosi a narrow majority in the House.  Senate Republicans were defending 23 seats and so far have only lost two, and as expected gained a seat in Alabama.  Once the late counting in Alaska and North Carolina is complete the Senate lineup is expected to be 50 Republicans and 48 Democrats.  The two Georgia seats, currently held by Republicans Perdue and Loeffler, will be decided by a runoff on January 5. The Republicans only need to win one to have a 51 to 50 majority; but a Democratic victory in both races would give Democrats control of the Senate and make a big difference for policy in Washington.

In the House where polls had predicted sizable Democratic pickups there was not a single Republicans running for re-election who was defeated, and it appears that Republicans will increase the numbers by 8 or more seats and leave House Democrats with a narrow majority.

Biden and Congress

Joe Biden is a creature of the Senate, he was first elected at the minimum age of 30 and over his many terms served as Chair of both the Judiciary and Foreign Relations Committee.  Over the years he developed a personal relationship with Republican leader McConnell, and indeed Senator McConnell was the only Republican Senator who attended the funeral of Biden’s son Beau.  McConnell has often admitted that he had a strained relationship with former President Obama, but when a deal needed to be cut it was usually a McConnel/Biden agreement that broke the deadlock.

While the Georgia runoffs will determine control, and Democratic control will make a large difference in policy; even if Republicans win both Georgia seats McConnell will only have a thin two vote majority.  With Vice President Harris sitting in the chair to break ties the Republicans won’t have the extra vote of the VP.

Furthermore, it leads to an interesting situation for Senators Collins and Murkowski, the two remaining moderate Republicans.  While everyone remembers the dramatic moment when Senator McCain came to the Senate floor and with a thumb down motion killed the Republican effort to end Obamacare; there were two other NO Republican votes: Collins and Murkowski.  They will now become a real power twosome as siding with Democrats they can control legislative outcomes.

Biden Agenda
The President-elect already has a team of lawyers looking at Executive Orders that can be signed in the first week of the new Administration.  Biden has said he will rejoin the Paris climate accord and the WHO.  President Trump’s Executive Orders on immigration are top targets for action including renewing the DACA or Dreamers program and repealing the travel ban from Muslin nations.  Trump through Executive Order reversed many environmental initiatives of the Obama/Biden Administration ranging from auto gas mileage to clean air standards, these too will be reversed through Executive Order.
President Trump tested the limits of Executive Orders, and the strides he made will now be enjoyed by Democrats as they reverse the decisions.

Trade was an interesting issue under Donald Trump as his policies were more out of the Democratic playbook than Republican.  Republicans rarely support tariffs but went along with the Trump trade war.  Biden is unlikely to immediately change course on China trade, though there is likely to be a focus on improving relations generally and getting China to live up to the terms of the deal they reached with the Trump Administration.  What may change is the threat of tariffs against our allies such as Japan and the EU.  From his days as chair of the Foreign Relations Committee, Joe Biden has built relations with leaders of our allies and building on those connections will likely be part of a Biden foreign policy.

Stimulus
While today’s positive vaccine news is obviously positive for employment over the next year, there are still millions unemployed and businesses on the brink of closing.  The day after the election Senator McConnell called for a stimulus bill during the lame duck.  Prior to the election Speaker Pelosi and Treasury Secretary Mnuchin tried but failed to reach an agreement on a $1.8T bill.  It is uncertain what role the White House will play in the lame duck session but obviously any bill will need the President’s support.  

The most immediate issue is that extended unemployment expires on 12/31 and millions of unemployed risk losing their Unemployment Insurance.  While the employment numbers have improved there are still millions unemployed and businesses such as travel, entertainment, restaurants, retail and others that are far from their pre-pandemic levels.  The consumer is the key to economic recovery and there is bipartisan support for some level of supplemental unemployment and a $1200 individual stimulus check.  Both sides also believe that despite the reports of some misuse of funds that the small business PPP loans saved many businesses and jobs; a replenishment of PPP may also be part of any bill.  As was the problem prior to the election money for state and local governments and the Republican demand for liability protection are likely to re-emerge again as key issues. 

Again, the role of President Trump could be critical as he begins to look at his legacy in dealing with the economic recovery from the pandemic.

Disclosures (show)

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