2004 Post Election Analysis & Expected Changes

Social issues of family, health care and job security were the leading issues in many state races, with the health of the state's economy providing a filter for many of the pivotal issues. Fortunately, unlike 2002, state fiscal health played a much smaller role in the elections, as the huge budgetary shortfalls of the past two years have largely been addressed over the short term (although fiscal problems loom on the horizon for most states, particularly for healthcare services and basic infrastructure).

This year's elections also saw a dramatic decline in the use of ballot referenda to position key political issues or to circumvent a stalled legislative process. The number of ballot initiatives was down 19% from the 2002 level and down 22% from the 2000 level. The most common state referendum questions put to voters this year dealt with electoral reform. Twelve states considered a variety of proposals pertaining to candidate selection, voting methods, and ballot initiative approval. The most controversial of these referenda, Colorado 's proposal to change the allocation of its presidential Electoral College votes from a winner-take-all-system to a proportional system, failed by a wide margin. In addition, an effort in Washington to change from its current closed primary election system to a Louisiana-style open primary system passed comfortably, while a similar effort in California failed under heavy pressure from both major political parties.

Ballot proposals to authorize or expand gambling were met by a reluctant electorate, most notably in Washington and California , while another conservative priority — a ban on same-sex marriages — was successful in all eleven states in which it was considered. Other common ballot initiatives dealt with medical liability reform, and the financing and management of scarce state health care funding resources. Finally, California 's bold proposal to issue $10 billion in bonds to finance stem cell research received a resounding vote of approval.

What's Next

The President will aggressively pursue his policy agenda on Capitol Hill and through the Executive Branch. His efforts will be enhanced by the increased Republican margins in the Senate and House. The White House will submit its budget to Congress in early 2005 which will provide insight into the Administration's agenda. Likely spending priorities will focus on homeland security, defense, social security reform, and education. Policy areas of focus are likely to include continued tax relief and other tax policy changes, favorable tax treatment for individual health insurance, medical liability reform, and intelligence agency reform in the wake of 9/11 Commission Report. In addition, strengthened by the gain of conservative seats in the Senate and the pas-sage of gay marriage bans in eleven states, the President may renew efforts to advance the same sex marriage ban at the federal level.

The Bush Administration is likely to focus on core aspects of the President's domestic agenda to reform Social Security and cement the President's tax cuts as a legacy for his Administration. The partisan divide in Congress will require considerable political maneuvering and cohesion among Republican leaders in Congress to achieve success in the new term.

In addition to initiatives proposed by the White House, sunset provisions in current federal programs and carryover bills from the 108th Congress will also be on the legislative agenda in the coming Congressional session. The 109th Congress will likely see debate on the following:

Transportation Programs - House and Senate negotiators remain stalled in discussions over reauthorization of the nation's highway programs. The current extension will expire on June 1, 2005 . Currently conferees do not have sufficient votes for a compromise bill that would provide $299 billion in funding over a six-year period. Even with agreement on that funding level, the White House has threatened a veto.

Extending the 1996 Welfare Overhaul Law - Senate action on this multi-year reauthorization has been stalled over Democrats' efforts to increase work requirements for program participants and threats to increase minimum wage.

Asbestos Litigation Reform - With efforts to create a national asbestos trust fund stalled towards the end of the 108th Congress, a proposal that focuses solely on medical criteria for claimants, and potentially more restrictive venue requirements, may be the focus of efforts to address this growing class of cases in the 109th Congress.

Telecommunications - More than eight years have elapsed since the passage of the 1996 Telecommunications Act, and growing Congressional frustration with the perceived lack of progress by the Federal Communications Commission creates an opportunity for reform. Industry players will engage in a high stakes battle as Congress revisits the 1996 Act.

Energy Bill — The comprehensive energy bill, which fell one vote short of Senate passage, is likely to receive renewed interest in the 109th Congress.

Reauthorizing Higher Education Programs - Despite a series of hearings on the issues of student loans and reform of the existing funding mechanisms for higher education, there was limited Congressional action on this issue in the 108th Congress. With many programs set to expire and considerable interest in improving access to colleges and universities a priority issue for Members in both parties, this issue will be on the front burner for the109th Congress.

Capping Medical Liability Claims - Despite the defection of moderate Senate Democrats in support a compromise bill, procedural delays prevented a final vote on this legislation in the 108 th Congress. Tort reform remains a key element of the Republican agenda and is likely to reappear in 2005.

Restructuring the Tax Code - Both President Bush and Treasury Secretary Snow say they have every intention of pursuing sweeping changes in the tax code during a second term, although details of the plan have not yet been released.

Congressional Redistricting Reform – House Majority Leader Tom Delay received much criticism from Democrats and three separate admonishments from the House Ethics Committee for his part in leading a Congressional redistricting plan in Texas during his last term. The plan ousted four Texas House Democrats incumbents from their seats by placing them in tough re-election bids. Although this type of political sparing is not unusual on both sides of the partisan fence, the audacity of this particular incident will probably serve as a springboard for debate in Congress or state legislatures. As it stands now, Congress is responsible for determining the boundaries of Congressional districts. Critics claim this power represents a major conflict of interest in the legislature and should be delegated to a nonpartisan third party committee.

In contrast, and now starting from a more entrenched minority position, Democrats are likely to push for rollbacks to certain aspects of the President's tax cuts, revisions to the Medicare prescription drug plan, authorization of prescription drug importation from Canada, an increase in the minimum wage, reversal of overtime pay rules, an assault weapons ban, and hate crime legislation. Other potential matters include stem cell research funding (after the success of the state initiative in California ), health care reform and health insurance parity for mental health patients, and reform for Congressional redistricting. Moderates in the Republican Party are holding out some hope that the change in the Senate minority leadership caused by Daschle's defeat may contribute to healing the partisan divide that marked the 108th Congress. However, Harry Reid has been viewed by many as less willing to compromise than his predecessor. Even with a change in Senate leadership, a 60 vote majority remains the rule, rather than the exception, for consideration of any major piece of legislation. Accordingly, the new Congress is likely to remain bitterly divided and subject to procedural delays - making existing alliances and relationships between Senate and House leaders even more critical.

Possible Cabinet Changes

With the reelection of President Bush, the Administration is likely to see a number of new faces in the Bush Cabinet as well as new roles for existing senior officials. Unlike past administrations, where Cabinet members frequently change every two years, this Cabinet has remained largely the same. All the key members are the same officials who presided during the tragedies of September 11 and stayed in office through the aftermath. This occurrence is highly unusual and was extended by the short amount of time between the conclusion of the 9/11 Commission Report and the start of the 2004 campaign season. As a result, we should expect a high turnover this Fall.

Having masterfully orchestrated a successful reelection, lead strategist in the Bush White House, Karl Rove will remain the President's most trusted advisor, along with Chief of Staff Andrew Card and a number of other political aides. Nevertheless, there has been speculation about which officials will be leaving the Administration. Among the high profile changes that could occur in the second Bush Administration:

Secretary of State – Colin Powell was though to be one of the most likely Cabinet members to leave his post. Palestinian leader Yasser Arafat's death will keep the Secretary of State as head of the Bush Administration's diplomatic corps, however. With his impressive resume as a Cabinet member, Powell is almost an indispensable member of the current administration.

Secretary of Defense — Condoleezza Rice, currently the National Security Advisor, has indicated interest in replacing Donald Rumsfeld. The Defense Secretary, however, has indicated he wishes to remain until the resolution of the Iraqi conflict.

Secretary of Health and Human Services — Current Centers for Medicare and Medicaid Services Administrator Dr. Mark McClellan is a leading replacement for Tommy Thompson, who has suggested that he may retire at the end of 2004.

Secretary of Commerce - Donald L. Evans, a close friend of Bush, resigned after the Election to return to Texas . No successor has yet been named.

Secretary of Homeland Security — Having led the Department of Homeland Security during its formative years, Secretary Tom Ridge may move on to new challenges. Potential replacements include current White House Chief of Staff Andrew Card and former Montana Governor Marc Racicot.

Secretary of Treasury — Treasury Secretary John Snow is a relatively recent arrival to the Bush Administration and will likely remain in place. In a second term for President Bush, the Treasury Secretary may see a higher profile role if the President continues to press for-ward with plans to overhaul the tax code.

Attorney General — Attorney General John Ashcroft successfully endured four years in the highly scrutinized post but resigned after Election Day. The race to become Ashcroft's successor could spark debate between Republican Party hopefuls. At the top of the list is current White House counsel Alberto R. Gonzales, a Texan and personal friend of the President. Other possibilities are Ashcroft's former deputy Larry D. Thompson who, although he has indicated disinterest, would be the first African-American Attorney General if appointed; Marc Racicot, chairman of Bush's reelection efforts; former New York mayor Rudolph W. Giuliani; and New York governor George E. Pataki.

National Security Advisor — Though unlikely, If Condoleezza Rice were to become Defense Secretary, likely candidates would be Deputy Secretary of Defense Paul Wolfowitz, Vice President Cheney's Chief of Staff I. Lewis Libby, and Deputy National Security Advisor Steven Hadley. Otherwise, expect Rice to remain as one of the President's most trusted advisors.

The Shape of 109 th Congress

SENATE - Republicans had a net gain of four seats in the Senate. Democratic candidates overall won approximately three million more votes than Republicans. Five of the six Republican seat gains were in open seats without incumbents, and each of the winning Republicans in these open seat races ran behind the President's winning total in the state. The sixth seat gain for Republicans was in South Dakota where Tom Daschle was defeated; he was the only Senate incumbent to lose. The Democrats' two gains were in open seats in Republican-leaning Colorado and Democrat-leaning Illinois .

HOUSE - 416 out of 435 seats (95.6%) were won by non-competitive victory margins of at least 10%. 369 out of 435 seats (84.8%) were won by landslide margins of at least 20%. More than 99% of incumbents outside of Texas won, with only three (one Democrat and two Republicans) losing. (Four Democratic incumbents lost in Texas after being victimized by brutal gerrymandering, as detailed below, including two losing to Republican incumbents.) Only one victorious incumbent won by less than 4%. Note that these safe incumbents won in an election where the voter turnout was 50% higher than it had been in 2002 -- but the new voters broke along very similar partisan lines, based largely on the partisan nature of most districts.

Full list can be found on our website: http://www.ifmif.org/109-congre-up.asp