On Tuesday, November 3rd, the tsunami brought Democrats to power not only in both houses of Congress, but also in control of a majority of state offices and state legislatures.
Results show the Democrats have swept at least seven Republican-held Senate seats to give them a current 54-44 majority, with the possibility of flipping two more. The balance of power in the House will shift from Republicans to approximately 254 seats for Democrats and 162 for Republicans, with some 19 seats to be determined. Democrats will win the majority of all governorships, including the governorships in all seven battleground states that decided the 2024 Presidential election.
This writer’s previously red Georgia now has Democrats controlling all state Constitutional offices and a majority of the state House of Representatives and within two votes of the state Senate. Similar results have occurred in previously red Texas. All this was done with the Democratic party that was viewed unfavorably by the majority of midterm voters.
What went wrong for Republicans?
Ninety percent of the midterm voters said the cost of living was a major factor in how they voted for Congress, and high fuel and food prices were particular concerns, resulting in the effective use of the “affordability” issue. Apparently, alleged political corruption was also an issue that could have caused a shift. The two voting groups with the greatest swing toward Democrats were young and Hispanic voters, ironically the same two groups in which President Trump had the greatest gains in winning his second term.
Most viewed the election defeat for the Republicans as a rejection of President Trump and his policies. President Trump, as well as the Democrats, tried to make him the issue in the election, which strategy worked for one of the two political parties. Already, some Republicans have started to distance themselves from Trump positions, as even Vice President Vance has done regarding the strategy of the war in Iran. Some believe Governor DeSantis in Florida has been strengthened as a potential leader in the Republican party, and Marco Rubio does not appear to be as damaged as Vice President Vance with the disastrous Republican defeat.
Democrat Agenda Going Forward
Democrats will be demanding that Trump reverse cuts to Medicaid and food stamps and related work requirements enacted as part of Trump’s signature tax law. Democrats might also attempt to undo some of the tax cuts, particularly ones that benefited higher income households and corporations. AI and data centers will become an increasing issue of regulation. Since the Trump tariffs helped push prices up, they will become a source of tension. The Iranian War, which also served to spike energy prices, will lead to increased efforts to resolve. On the other hand, it is likely that Ukraine will receive additional support in its efforts to defeat the Russian invasion. Similarly, NATO and Taiwan may receive increased Democrat support. Importantly, Democrats will be able to block Trump’s judicial and executive branch nominees, including future Supreme Court picks.
Labor & Employment Issues
In terms of labor and employment issues, Democrats are likely to make protecting and empowering workers and unions a major part of their legislative agenda to address cost of living concerns. On the federal level, there will be efforts to raise the minimum wage, mandate paid sick leave, and strengthen union and collective bargaining rights. The head of the House Education and Workforce Committee, Bobby Scott, anticipates bills to insure employees are not classified as independent contractors and to prevent companies that control another firm’s workers from avoiding obligations as a joint employer. It is notable that the new Chair of the Health, Education, Labor and Pension Committee in the Senate will be Bernie Sanders. There may be a shift in approach by the President toward immigration enforcement.
One wonders how quickly the Democrats will move in the direction of pro-labor ventures. For example, Democrats generally opposed President Trump’s effort to fire members of the National Labor Relations Board, Equal Employment Opportunity Commission, and other federal agencies, moves which were generally upheld by the courts. In this era of politics, this writer would not be surprised if Democrats did the same thing. Elections change policies, and while President Trump wanted to eliminate the Senate filibuster, requiring 60 votes in the Senate to pass legislation, it is the Democrats that may reverse course and try to end the filibuster.
On wonders how much time and effort the Democrats will devote to the investigation and possible prosecution of Trump and his appointed officials. The President surprisingly seemed to accept the results of the election and congratulated the Democrats, saying that he looked forward to working out deals with them. But then he appointed Stephen Miller as his Chief of Staff, replacing Susie Wiles. But the “progressives” within the Democratic party may be opposed to working out any deals with the Republicans in general, and Trump in particular. The Democrat majority will have trouble dealing with the left, which already have called for the replacement of Senate leader Chuck Schumer of New York.
In any event, Democrats are likely to launch many investigations into various facets of the Trump Administration, and the majority vote gives them the platform of public hearings and subpoena power. The likely head of the new House Judiciary Committee, Rep. Jamie Raskin (D-Md.), already said in a statement that Trump and his administration should “lawyer up.” On the other hand, some efforts, including the impeachment of President Trump, which may be championed by the progressive Democrats, may be construed by the majority as being unnecessary and a waste of political capital. Instead, the Democrats may use the lack of impeachment as a bargaining chip to have legislation passed.
The Lame-Duck Congress
Undoubtedly, the time between now and the swearing in of the new Congress in January will offer Republicans a chance to tackle critical legislation before the Democrats take over. Congress will need to address a government shutdown deadline in December, but possibly with interim measures. While the Republicans may make an effort to pass a bipartisan budget bill, the Democrats will likely stall the issue until they gain more leverage next year. Probably the prime GOP effort for the remainder of the year will be to confirm as many judicial and administration nominations as possible before they lose their majority.
What Else?
Some of the major issues will still remain, even after the Republicans exercise their majority power, such as the issue of reduction in the out-of-control federal deficit, a solution to the shortfall in the Social Security Trust Fund, and comprehensive artificial intelligence legislation along with security, job loss, and data center energy issues. One step that may happen is getting rid of the legal debt ceiling, a move that the Democrats have generally supported and that Trump has previously supported while he was in power. It is unfortunate for deficit hawks that this may occur as a result of divided government where often both sides increase their spending priorities, and where depleted defense stocks are a prime desire of the Republicans.
Strategic Advisory
Prepare Your Workplace for the Shift: Experience Counts.
Major political transitions bring rapid regulatory swings and enforcement shifts. Whether auditing your independent contractor agreements, evaluating joint-employer exposure, or updating company wage-and-hour policies, proactive counsel is your strongest risk mitigation.
