The much-anticipated midterm congressional races are over, and as is normal in the aftermath of every election, each side is trying to claim victory. Aside from some individual races, however, the overall outcome is as many had expected: Democrats won control of the House and Republicans retained the Senate.
Going into Election Day, Democrats needed to pick up 23 seats to take control of the House of Representatives. While not all the votes in some races have been counted and some remain too close to call, it appears Democratic gains in the House will be more than they needed, with current estimates approaching 30 seats gained. As Gallup reported, “Presidents with job approval ratings below 50 percent have seen their party lose 37 House seats, on average, in midterm elections,” so the Democratic gains were in line with historical norms.
The picture in the Senate was much different. Democrats needed to net a two-seat gain to take control of the Senate, but faced difficult odds because they were defending seats in many states that President Donald Trump had won easily in 2016, such as North Dakota, Montana and Missouri. Republicans will not only retain control of the Senate, but add to their majority, winning some races that Democrats thought had been trending their way.
So both sides can legitimately claim a measure of victory. The voters gave Democrats a majority in the House, altering the balance of power in Washington and ensuring a check on the White House. Republicans are poised to increase their majority in the Senate, with much of the gains due in no small part to Trump’s campaigning for Republican candidates. Mitch McConnell will continue to control the Senate schedule as Senate Majority Leader and Republicans will have more leeway to confirm the president’s judicial nominees. Democrats increased their share of governorships but came up short in some high-profile races such as in Florida.
How will this affect NAIOP’s agenda? In the short term, lawmakers will soon gather in a lame-duck session of Congress. Lawmakers still need to complete some appropriations bills, but the top concern for NAIOP is a technical corrections bill that is needed to fix drafting errors in last year’s tax reform bill. The key issue is the tax treatment of “qualified improvement property,” (“QIP”), which is broadly defined as improvements to an interior portion of a commercial building. These include tenant improvements or an office build-out.
NAIOP is working with a coalition of 300 organizations and businesses affected by the QIP error to stress the need for immediate action. Richard (“Richie”) Neal (D-MA), a pragmatic former mayor who wants to advance legislation, will be the new chairman of the House Ways and Means Committee. Lawmakers on both sides of the aisle have indicated they understand the need for action on QIP, and there may be a willingness by Neal and House Democrats to dispense with technical corrections in a lame-duck session and clear the decks for a Democratic agenda in the next Congress.
With the new Congress and over the longer term, an opportunity exists for movement on an infrastructure initiative – another major NAIOP policy goal. In her post-election public remarks, Minority Leader Nancy Pelosi, who hopes to regain her role as Speaker of the House in the next session of Congress, vowed to pursue bipartisan goals including working with Trump on an infrastructure package. While there will be serious disagreement as to how an infrastructure package is funded, there is at least a bipartisan acknowledgement that more investment in infrastructure is a shared bipartisan goal.
This is important, because over the next two years, a Democratic House will push back against the administration in several areas, particularly in exercising its oversight role. The House may attempt to force Trump to release his past tax returns. The incoming Democratic Congress is also expected to focus on oversight and to push back on some of the administration’s regulatory reform. On a national level, some Democratic senators are already positioning themselves to run for president, which complicates any possible cooperation with Trump. So the post-election forecast calls for more gridlock from Washington, at least through 2020. Luckily, infrastructure may be the one area where the politics allow for legislating.
NAIOP’s Government Affairs team will host a members-only webinar November 20 at 2 p.m. ET, to provide further analysis of the congressional elections and their likely impact for the future of our public policy agenda. The focus will be on NAIOP’s key issues, including tax legislation, the future of infrastructure policy, environmental issues and federal regulatory matters. Join us for this special webinar for additional post-election insights.
Aquiles Suarez is Vice President for Government Affairs at NAIOP.