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Election 2008: A Look Behind the Numbers

The 44th President of the United States

Senator Barack Obama’s solid victory in the 2008 presidential election is historic—an African-American has been elected President of the United States. It is also historic in terms of political history in that his campaign appears to have generated the highest voter turnout in recent memory, based on the percentage of registered voters who came to the polls.

Obama’s win is also notable in that it was truly a national win. In acquiring at least 349 electoral votes, the Illinois Senator garnered victories in key states in every region of the country—New England, Mid-Atlantic, South, Midwest, Plains, Mountain West, Southwest, and Northwest. As John Kerry did before him, Senator Obama carried every state in the Northeast. His breakthrough states, ones he took out of the GOP column from 2004, were Florida, Ohio, Colorado, New Mexico, Virginia, Nevada, and Iowa. As this is written, Obama holds a small lead in North Carolina, a state that went to Bush in 2004. Senator McCain maintains a small lead in Missouri, also a “red” state last time.

In the end, this election—while hard fought—will likely be viewed similar to the way many observers view the 2004 election. The political fundamentals were heavily favoring one side and nothing that happened in the general election campaign did anything to reverse that—quite the contrary. In 2004, the nation was at war and it was the first Presidential election since the September 11 terrorist attacks. With the economy growing, the President was able to keep voters focused on national and homeland security issues. His opponents stumbled out of the starting blocks and never fully recovered. In 2008, the GOP candidate was saddled with a now unpopular war, a President of his own party with disapproval ratings at historic lows, and an economy that began the campaign in a weakened state and ended it in crisis. McCain picked a Vice Presidential nominee, Alaska Governor Sarah Palin, who, according to most polls, became a lightning rod for controversy and opposition and the campaign never settled on a clear narrative.

Key questions now are does President-elect Obama have a mandate and, if so, to do what? Given the decisiveness of his victory and Democratic gains in House and Senate races, it appears clear that the Democrats and the new President will have a mandate to act. Based on the content of the campaign in recent weeks and months, it appears likely Obama will claim a mandate to accomplish the following:

The Economy—take further steps to create jobs and spur economic growth through a blend of significant spending and targeted tax breaks.

Healthcare—expand government programs for child health care so as to ensure all children have insurance coverage. Enact a health care reform package that includes inducements for employers to offer coverage and an expansive government program to cover other Americans without health insurance.

The War in Iraq—reach agreement with the Iraqis for an accelerated timetable for pulling U.S. forces out of Baghdad first and then out of the country altogether.

Infrastructure—enact a new investment program to improve the nation’s infrastructure.

Energy—push for greatly expanded incentives for alternative energy development and reach a compromise on offshore drilling and nuclear power.

The 111th Congress

U.S. SENATE

There has not been this much of a shift in power to one party in the U.S. Senate since the 1994 Clinton mid-term election when Republicans gained eight seats. With the public placing a great deal of blame on the Republican party for the state of the economy, it was difficult for Republicans to defend the 23 seats they had to protect, while the Democrats only had to defend 12 seats.

Currently, Republicans and Democrats each hold 49 seats, and two Independent Senators caucus with the Democrats, giving control of the Senate to the Democratic party. As expected, the results from the 2008 elections significantly increased the Democrats’ majority in the Senate. In the 111th Congress, Democrats will hold 54 seats to the 40 for the Republicans—a 5-seat gain for the Democrats. There are currently 4 undecided races in Alaska, Minnesota, Georgia, and Oregon. The Democratic margin could grow with the outcome of the undecided races, plus, the two Independents—if they continue to caucus with the Democrats. This is significant because the Democrats now have a wider voting margin that increases their ability to move their legislative agenda, especially with a Democratic President in the White House for the first time in eight years.

Cloture – The Magic of 60

There has been a great deal of recent speculation as to whether or not the Democrats were going to reach the magical number of 60 seats needed under the Senate rules to cut off floor debate. In theory, reaching 60 seats would enable Democrats to “invoke cloture.” Cloture is the only procedure by which the Senate can vote to place a time limit on consideration of a bill or other matter, and thereby overcome a filibuster mounted by the minority party. In reality, while obtaining 60 seats would make it easier to secure the necessary votes for cloture, success is not guaranteed for Democratic initiatives because most Senate votes are not straight party-line votes and Senators often chart an independent course from their leadership. In the end, the Democrats have only a slight chance to secure 60 Senators and they need to win all the undecided races and the two Independents to continue to caucus with them.

Surprises

One might look at the vulnerable Republicans who won their re-election as the surprise winners in this political environment, instead of looking at GOP incumbent losses. It was surprising to see many traditionally “red” states, such as North Carolina, Mississippi, Georgia, Alaska, and Kentucky, in such hotly contested races. In the end, the incumbents who lost their bid for another term include Senator John Sununu (R-NH) and Elizabeth Dole (R-NC). The current fate of Senators Ted Stevens (R-AK), Saxby Chambliss (R-GA), Gordon Smith (R-OR), and Norm Coleman (R-MN) remains uncertain—although Stevens, Chambliss, and Coleman have the slightest of leads.

Open Seats

With the elevation of Senators Obama and Biden to the White House, there are now two vacated seats in the U.S. Senate. Both seats will be appointed by their respective governors, who are also from the same party.

Illinois Under Illinois law, Governor Rod Blagojevich, Democrat, could choose someone from either party to ride out the rest of Senator Obama’s term, which will conclude in 2010. Names that have surfaced include:

• Emil Jones, President of the Illinois Senate;
• Attorney General Lisa Madigan;
• Tammy Duckworth, former Iraq veteran and Director of the Illinois Department of Veterans' Affairs; and
• Congressman Jesse Jackson, Jr., a current member of the U.S. House of Representatives.

Governor Blagojevich, who is up for reelection in 2010, is currently dealing with his own political imbroglio and has extremely low approval ratings. In light of this, there is speculation that the Governor would appoint his closest competitor in the gubernatorial race, Attorney General Lisa Madigan, to fill Senator Obama’s vacant spot until 2010.

Delaware The vacancy in Delaware leaves Governor Ruth Ann Minner (D), with a choice as well. Senator Biden just won his 7th term but will not serve in the next Congress. It is widely speculated that Senator Biden’s son, Delaware Attorney General Joseph R. “Beau” Biden III, might be a logical replacement. However, Beau Biden is a member of the Delaware Army National Guard and will be serving in Iraq until October 2009. Some suggest the possibility of appointing a “placeholder” candidate who will promise to resign the seat after Beau Biden returns from Iraq.

There is one more variable to consider in Delaware. Governor Minner’s term in office ends at 9:00 a.m. on January 20th, while Senator Biden will not be sworn in as Vice President until after noon that same day. If Senator Biden wants Minner to make the choice, he may have to relinquish his Senate seat before Minner leaves office, or perhaps decline to be sworn in for his new Senate term.

Although Senator Biden will be moving into a much loftier position in the Executive Branch, the State of Delaware and its many corporations will be losing a champion in the Senate. Delaware’s corporate-friendly laws have brought more than 60 percent of the American Fortune 500 firms to the tiny state, which has been an economic boon. Senator Biden has been very pro-business on bankruptcy issues and a staunch protector of Delaware’s corporate interests. A freshman replacement Senator, even with the same pro-business attitudes, will have difficulty providing the same support for Delaware business interests as a powerful, senior legislator like Senator Biden.

Leadership and Committee Assignments

With the start of a new Congressional session next year, Congressional leadership and committee assignments will be reshuffled. Members of the 111th Congress will be nominating and electing their colleagues for leadership positions. The Democrats are not expected to make any changes to their current lineup of Majority Leader Harry Reid (NV) and Majority Whip Dick Durbin (IL). There is talk that Senator Chuck Schumer (NY) will stay on to head the Democratic Senatorial Campaign Committee (DSCC) for another cycle, or possibly recruit Senator Bob Menendez from New Jersey.

With the narrow re-election of Minority Leader Mitch McConnell (KY), there is not expected to be a great deal of shift in power with the Republican Senate leadership team. Senator John Kyl of Arizona was not up for re-election and should remain as the Minority Whip. The only major change will be a new head of the National Senatorial Congressional Committee (NRSC) as Senator John Ensign (NV) steps down.

With the new Congress, there will be new committee assignments, as more senior Senators get elevated to “A” list committees, such as the Finance and Appropriations Committees. There will also be a new chairman of the Foreign Relations Committee, as Senator Biden leaves for the Executive Branch. It is difficult to predict who will take over committee chairmanships and exactly what committees will be vacated by Senators moving to different committee assignments and committee leadership positions. Senator Chris Dodd (CT) is next in line in seniority on the Foreign Relations Committee, but may choose to retain his position as Chairman of the Banking Committee because of that committee's importance in addressing the financial crisis. If Senator Dodd declines the Foreign Relations Committee chairmanship, it is expected that Senator John Kerry (MA) will readily give up his gavel on the Small Business Committee to take on the Foreign Relations assignment. The Republicans will have a reshuffling of committee assignments but it is widely assumed that their ratios on each committee will be lowered with the increasing Democratic majority.

There will also be a great deal of reshuffling of committee leadership assignments with the retirement and defeats of prominent Republicans. With the outcome of Senator Stevens’ (AK) seat unknown, and questions about possible expulsion from the Senate due to his recent conviction if he wins, there is a possibility of an opening in the Ranking Member position on the Commerce, Science, and Transportation Committee. There are other major Republican committee leadership positions being vacated by retirements. For example, Senator Pete Domenici (NM) is the Ranking Member of the Energy and Natural Resources Committee and did not seek re-election.

U.S. HOUSE OF REPRESENTATIVES

As expected, Democrats will remain in the majority in the House of Representatives for the 111th Congress. The new breakdown will be 252 Democrats to 172 Republicans with 11 races still to be decided.

The decks were stacked against the Republicans from the start, with just six Democratic open seats in the House, compared to 29 Republican open seats. That figure included 23 Republican retirements—an unprecedented number—compared with just three Democrats retiring.

Even though some races are still too close to call such as Rep. Dave Reichert (R-WA-8) and Rep. Bill Sali (R-ID-1), there is no doubt that Democrats have increased their margin. Some states have a whole new makeup, such as New York. With six Republicans in the 29-member House delegation in the 110th Congress, there are now only three. Connecticut Republican Christopher Shays (CT-4) lost his seat, leaving New England without a single Republican seat in Congress.

Other notable races were:

Rep. Michele Bachmann (R-MN-6): Already facing soft support from her constituency in the face of current economic woes, Bachmann drew national attention—and controversy— to her campaign after she made comments on MSNBC’s Hardball that she “was very concerned [Barack Obama] may have anti-American views.” The Democratic Congressional Campaign Committee immediately responded by pouring $1 million into the contest in support of Democratic candidate, Elwyn Tinklenberg. Bachmann may only be able to attribute her win to the fact that Minnesota’s 6th district has been a reliably Republican stronghold since the 2000 elections.

Rep. Tim Mahoney (D-FL-16): Republicans targeted this seat to win back almost as soon as Mahoney was elected to his first term in 2006, believing the win was a fluke response to Mark Foley’s resignation in the face of scandal. Faced with an already hard race, Mahoney’s campaign was all but doomed when his own personal scandal of an alleged extramarital affair, rumors of legal and ethical violations, and potential investigations by both the FBI and a House panel became nationwide front page news in October. In the end, Tom Rooney, a former Army officer and lawyer whose family owns the Pittsburgh Steelers, handily won the district by a comfortable margin of 21%.

In addition to the Mahoney seat, Republicans did flip a few other Democratic seats including Nick Lampson (TX-22) and Louisiana State Senator Bill Cassidy, winning back the seat taken by Democrats in a special election last spring by Rep. Don Cazayoux (D-6).

Leadership and Committee Assignments

The Democratic leadership is expected to remain constant into the 111th Congress. Speaker of the House Nancy Pelosi (CA) will retain her role, with Steny Hoyer (MD) staying on as Majority Leader, Jim Clyburn (SC) as Majority Whip, and Rahm Emanuel (IL) as Democratic Caucus Chair. The only potential change here will be if Congressman Emanuel decides to accompany his friend and fellow Chicagoan, Barack Obama, to the White House as the new President’s Chief of Staff.

Maryland Representative Chris Van Hollen is expected to be an emerging player for the Democrats since he spearheaded the Democratic Congressional Campaign Committee (DCCC) during this election cycle.

What the results of the election have not clarified is what will happen on the Republican side of the aisle with regard to their party leadership. Ohio Congressman John Boehner has had a rough year as Minority Leader, as have the Minority Whip Roy Blunt (MO) and Republican Conference Chairman Adam Putnam (FL). Putnam wasted no time in telling his colleagues that he plans to leave his post, possibly to pursue a run a for governor in his state. Conservative Republican Representative Jeb Hensarling (TX) is expected to seek the position.

It will be tough for Boehner and Blunt to hang on. In this instance, even if Boehner tries to retain his post, there are rumors that Congressman Blunt plans to hand his whip responsibilities over to Congressman Eric Cantor, Virginia, a rising star in the Republican party. The conflict between the conservative and moderate wing of the Republican party, which really intensified during the debate surrounding the financial rescue package, will likely continue into the 111th Congress.

Organizational meetings are planned for the week of November 17 so answers will be coming shortly.

With the newly-widened margin, Democrats will have little problem moving their priority bills out of the House, even though Congressional Republicans can still employ procedural hurdles to slow down the process. In fact, the increased majority may give Speaker Pelosi the flexibility to let her more conservative members vote against bills and still get them passed. As was the case during the 110th Congress, however, the true test for many of these bills often plays out in the Senate. While the results for a few Senate races remain outstanding, it does not appear that Democrats will hold 60 seats in that chamber.

Despite having a comfortable majority, Speaker Pelosi may still not be able to push through a completely liberal agenda. As has remained the case since she rose to power, she will still be hampered on some issues by the Blue Dog Democrats, the moderate-to-conservative wing of the party. Many of the new Democrats elected yesterday are likely to be closely aligned with the Blue Dog mindset.

Another sticking-point that will remain the same next year despite yesterday’s results will be utilizing “pay-as-you-go” financing. The Democrats instituted such a rule when the party took the majority in 2006, and it has proven an obstacle to getting things done. With the deficit increasing to record numbers, finding offsets to pay for President-elect Obama’s priorities will likely hamstring both Congress and the new Administration. Extending a series of expiring tax incentives focused on renewable energy production, research and development, an enhanced child tax credit, and an optional deduction for state sales taxes was held up for much of the past year due to a disagreement over whether offsets needed to be used to extend the credits. While an agreement was finally reached, most incentives were only extended for two years, meaning that the same issue is likely to emerge during the 111th Congress since the tax incentives will need to be extended again very soon.

On some issues, regional concerns have always played a bigger role and we expect to see that again during the 111th Congress, despite the Democratic gains. For example, support for certain renewable energy initiatives tends to fall along regional lines as opposed to being purely partisan.

GUBERNATORIAL RACES

There were 11 gubernatorial contests on the ballot this year: 4 Democratic incumbents; 2 Democratic open races; 4 Republican incumbents; and 1 Republican open race.

While the outcome was not in any doubt for six of them, the other five have been interesting to watch—especially two of the five that early on were resisting the Democratic tide that was moving across the country.

After yesterday’s elections, we have Democrats in control of 28 states across the nation compared with the 22 held by Republicans.

On the Democratic side, incumbent Governors Brian Schweitzer in Montana, John Lynch in New Hampshire, and Joe Manchin in West Virginia all won by a substantial margin. In the open seat contest in Delaware, State Treasurer Jack Markell (D) won by a double digit margin.

For Republicans, Governors John Hoeven in North Dakota and Jon Huntsman in Utah also won their respective races. In Vermont, Governor Jim Douglas won a fourth, two-year term receiving 55% of the vote. If Governor Douglas had not received over 50% of the vote, the election would have gone to the Democratic controlled legislature.

The only other Republican incumbent seeking re-election was Indiana Governor Mitch Daniels who faced former Democratic Representative and former Clinton Administration USDA Under Secretary Jill Long Thompson. Daniels’ approval ratings have been hovering at 50% since 2005 and despite his close ties and former service in the White House he was able to pull out a victory. With 96% of the precincts reporting, Governor Daniels won with 58% of the vote, compared to Long Thompson with 40%. While Long Thompson was able to benefit some from the Obama campaign’s efforts to win this traditionally red state, in the end it was not enough. Daniels held on to his job by emphasizing his efforts to boost the state’s economy.

The most problematic seat for Republicans was the open seat in Missouri. Attorney General Jay Nixon (D) handily won the race against Representative Kenny Hulshof (R). Hulshof faced several challenges in his campaign including not being that well known to Missourians outside of his congressional district. Nixon, by contrast, was running in his seventh statewide election after 16 years as Attorney General. Nixon emerged victorious and gave the Democrats a one seat gain.

Democrats had two seats that were considered a toss up; the open seat in North Carolina and Governor Chris Gregoire in Washington. In both of these races, the Republican candidates ran on the theme of “change.”

In North Carolina, Democratic Lt. Governor Bev Perdue was in a tight race with Republican Charlotte Mayor Pat McCrory. McCrory was the change candidate in this race since Democrats have held the governorship for 16 years and Perdue had been Lieutenant Governor for eight of those. Republicans did a good job of portraying Perdue as the personification of the status quo while Perdue struggled to find a message that resonated with voters. However, the Obama campaign had registered thousands of new voters and this was Perdue’s saving grace as those voters turned out in record numbers. With 95% of precincts reporting, Bev Perdue has won this race with 50% of the vote and is the state’s first female governor.

In Washington, the race was a rematch of the 2004 contest when Governor Chris Gregoire defeated former Republican State Senator Dino Rossi by 133 votes. While many Republican candidates for statewide office in blue states were struggling, Rossi managed to portray himself as a candidate of change during this election by contrasting himself to Gregoire, who has served over 39 years in state government, and kept the governor locked in a tight race throughout the campaign. In the end, Senator Obama’s lead in this blue state and an almost ideal political landscape for Democrats allowed Governor Gregoire to eke out a victory with 52% of the vote compared to Rossi’s 48%.

Notice: The purpose of this newsletter is to review the latest developments which are of interest to clients of Blank Rome. The information contained herein is abridged from legislation, court decisions, administrative rulings, and other sources and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.