Implications of 2014 Mid-Term Elections

Written by Martin Feeney, Madison Services Group

In case you hadn’t noticed, Republicans won big on election night last week. In the biennial tradition of Congressional elections, changes are coming to the House and Senate. The following is an overview of the mid-term elections and what changes to expect when the new Congress convenes this coming January.

The Elections – Big Changes Set for 2015

In the Senate, Republicans gained eight seats, giving them control of the upper chamber come January. Pending the outcome of a run-off election in Louisiana between incumbent Sen. Mary Landrieu (D-LA) and challenger Rep. Bill Cassidy in December, Republicans will have at least 53 seats to the Democrats’ 46. In the House, Republicans increased their majority by 12 seats, their largest majority in the House since 1930. In the states, the GOP won outright control of nine state legislatures and defended 24 Governors’ mansions and added two more.

The California Congressional delegation lost two stalwarts of the House, Reps. George Miller (D-CA) and Henry Waxman (D-CA) to retirement this year. Serving a combined 80 years in Congress, both were elected in 1975 and rose to lead the House Education and Workforce and Energy and Commerce Committees, respectively. Minority Leader Nancy Pelosi (D-CA) will retain the top spot for Democrats in the House as will House Majority Leader Kevin McCarty (R-CA).
Two incumbents, Reps. Ami Bera (D-CA) and Jim Costa (D-CA) were both locked in races that were not called until November 19, more than two weeks after the elections. Neither of California’s two Senators were on the ballot this year.

A couple of noteworthy observations from last week’s elections: once again, women made up the majority of voters, making up 51% of the vote. Broken down, 51% of women voters supported Democratic candidates and 47% voted Republican.

There were a number of firsts: the election of the first black Republican Senator from the South since Reconstruction, Senator Tim Scott (R-SC) from South Carolina and the first black Republican woman elected to the House, Mia Love from Utah. There are also 100 women in the Congress for the first time ever, while the number of black women in in Congress will rise to 18.

New Committee Chairs Take Over in the Senate and House

Focusing on the Senate, the shift in power sets up a whole new Committee structure. CAMEO works closely with the Chairs and Ranking Members of many Committees that impact the microbusiness industry. The Senate Small Business and Entrepreneurship Committee is of particular importance to CAMEO’s work. Changes in that Committee will see the Chair switch from Senator Maria Cantwell (D-WA) to Senator David Vitter (R-LA). The Ranking Member will shift from Senator James Risch (R-ID) to either Senator Cantwell or Senator Ben Cardin (D-MD).

With respect to the Appropriations Committees that oversee government funding, there are changes as well. The new Chair of the Senate Appropriations Committee will be Senator Thad Cochran (R-MS) and the new Ranking Member will be Senator Barbara Mikulski (D-MD), who has led the Committee for the last two years. The Senate, Health, Education, Labor and Pensions (HELP) Committee – the one that oversees the Department of Labor and its workforce training system – will be likely chaired by Senator Lamar Alexander (R-TN) and the Ranking Member could either be Senator Bernie Sanders (I-VT) or Senator Bob Casey (D-PA).

Although the parties did not switch in the House, the Republicans have long had a rule that Committee Chairs can only serve for a total of 6 years. This was instituted in 1994 to allow opportunities to switch the leadership of the Committees. As a result of being “termed-out,” Rep. Sam Graves (R-MO) will step down from his Chairmanship of the House Small Business Committee. The Republican Steering Committee, the arbiter of Republican Committee slotting, has already tapped Rep. Steve Chabot (R-OH) to serve as Chair in the new Congress. The Ranking Member will remain Rep. Nydia Velasquez (D-NY). The Chairs of the House Appropriations Committee, Rep. Hal Rogers (R-KY), and the Education and Workforce Committee, Rep. John Kline (R-MN), will remain the same.

Leadership Changes: Titles Change, but Faces Don’t

At the leadership level in the Senate, there will be many title changes, but few new faces. When the new Congress convenes in January 2015, Senator Mitch McConnell (R-KY) will be Senate Majority Leader and Senator Harry Reid (D-NV) will be Senate Minority Leader. The Democrats made one notable change—they added Senator Elizabeth Warren (D-MA) to their leadership team to liaison with the progressive wing of the Democratic party. In the House, the leadership changes came mostly on the Democratic side. Minority Leader Nancy Pelosi (D-CA) elevated two women – Rep. Rosa DeLauro (D-CT) and Rep. Donna Edwards (D-MD) to head the powerful Democratic Steering and Policy Committee. In addition, she chose a relative newcomer, Rep. Ben Ray Lujan (D-NM) to head the Democratic Congressional Committee. The Republicans kept most of their leadership team the same.

What to Expect: New Policy Priorities

These major shifts in power bring new opportunities to CAMEO and our members. First, we have an opportunity to talk about microbusinesses to a whole host of new Members and their staffs. Second, Republicans are pledging a more orderly and predictable budget and appropriations process given that they will control both Houses of Congress. That would be exceptionally good news for our policy work because of the importance of PRIME, the Microloan Program, the Community Advantage Program, the CDFI fund, Women’s Business Centers, Boots to Business Program, and the Rural Microentrepreneur Assistance Program.

Republicans have outlined comprehensive tax reform, repeal of the Affordable Care Act, and reducing regulations and fiscal restraint as the path toward economic growth. In the Democratic-controlled Senate, the list was not the same. Senator Cantwell, and Senator Landrieu before her, were focused on entrepreneurship and ways to strengthen tools available to them. Both also focused heavily on the wealth gap and barriers for women entrepreneurs. It is doubtful that incoming Chair Vitter will have the same priorities. Chair Graves in the House, made procurement reforms for small businesses a priority—the new Chair is not likely to have the same priority.

Small business issues, however, are not particularly partisan. Republicans and Democrats share a willingness to help businesses start, grow and succeed. While they have traditionally championed lowering taxes and reducing regulations, we know those alone are not enough. AEO research has shown that with training and counseling, business success increases, both in terms of business success rates and increased average revenues. Similarly, the SBA’s loan programs have been essential to filling the lending gap in the private sector since 2008, as have CDFIs, which provided more than 24,000 business loans last year. CAMEO’s advocacy for these programs contributes directly to the success of microbusiness businesses in California. Investment in small business is a theme both parties can rally around.

In the coming months, please take a moment to reach out your elected officials, whether they are freshman Representatives or long-time incumbents. Educate them on the work you do and the importance of microbusinesses to California’s economy.