EDELMAN PUBLIC AFFAIRS

Come November 4, there is a good chance there will be a shift in power in the U.S. Congress. There is little
question that Republicans will retain control of the House, and most political analysts believe that the GOP
has a solid shot at picking up the six seats needed to win the Senate and gain control of Congress.
So what does that mean? The midterms will determine Congressional control and which party sets the policy
agenda leading up to the 2016 presidential election.
A GOP victory in the Senate will give Republicans the upper hand for the fnal two years of the Obama
presidency. Republicans may use the opportunity to demonstrate their ability to govern and reinforce their
argument that the last several years of political gridlock were a result of Democratic leadership. If this is
the case, look for quick movement on issues where the two parties have some common ground, including
energy, tax credits for businesses and trade promotion.
Of course, a Republican-controlled Congress with subpoena power also could seek to make life even
more difcult for President Obama and the Democrats in the run-up to the 2016 presidential election.
In this scenario, we would expect very little progress on important policy issues. Instead, we could see
congressional hearings focused on controversies like the Afordable Care Act, Benghazi and the IRS scandal,
and a series of bills passed with the express purpose of forcing tough votes for Democratic members of
Congress and vetoes by President Obama.
If the Democrats maintain the Senate majority, the next two years will look very much like the last two.
Democrats will continue to push their agenda leading into 2016, with the focus on immigration, minimum
wage and womens rights.
Finally, continued confict in Iraq and Syria could overwhelm any substantive discussions or action on
domestic policy, especially if Congress engages in a full-scale debate over U.S. involvement and war
authorization.
With much still to be decided in the coming months, here is a look ahead to how the 114th Congress may deal
with the following key issues: Energy, Financial Services, Food, Healthcare, Taxes, Technology and Trade.
ELECTION
2014
WHY THE MIDTERMS MATTER
Matt Wagner
Chair, U.S. Public Afairs
Energy has been a major issue in many of the
most hotly contested Senate races, as Democratic
incumbents in oil-producing states like Alaska,
Colorado and Louisiana have touted their support
for increased American energy production. A
Republican-controlled Senate would likely move
quickly on a number of key issues, and even a
Democratic Senate might be more receptive to
debating energy legislation given their candidates
positions on these issues.
One of the frst issues the new Congress might
take up is the Keystone XL pipeline. The
Republican-controlled House has passed seven
bills to allow construction of the pipeline, with
some votes carrying veto-proof majorities,
and a Republican Senate may force President
Obama to either sign or veto a bill. Another
hot topic will be oil and gas exports. In June,
46 House Democrats joined Republicans to
comfortably pass a bill that placed a deadline on
the Obama administration to approve a set of
liquefed natural gas projects. The bill has been
stymied in the Democratic Senate, but a
Republican Senate would likely move quickly. In
addition, both houses might consider relaxing
federal laws banning crude-oil exports, especially
since the Obama administration signaled in May
that it was open to reviewing the policy.
In addition, there will be substantial debate on
environmental policies, especially if Republicans
win the Senate. Republicans and Democrats
from energy-producing states have criticized EPA
draft rules limiting carbon emissions from power
plants, and those attacks could intensify in the
new Congress. In addition, a Republican
Congress could seek to revise the Renewable
Fuel Standard and its ethanol mandates
although the approaching Iowa caucuses
could complicate matters here. Finally, debate
will continue on the role the United States
should play on climate change, especially
after President Obamas remarks at the recent UN
General Assembly meeting and as world leaders
gather for the UN Climate Change Conference in
Paris in 2015.
To learn more about energy policy, please contact
Matt Wagner, Chair, U.S. Public Afairs, at matt.
wagner@edelman.com.
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ENERGY
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2014
Unlike the last two election cycles, the fnancial
services sector which has grappled with a
painstaking regulatory overhaul since the
aftermath of the 2008 fnancial crisis will not
be nearly as prominent in voters minds this
November. However, Wall Street executives have
made it clear they are hopeful for a Republican
takeover of the Senate: According to the Center
for Responsive Politics, the fnancial industry
has disbursed more than $115 million to
campaigns this year, with more than 60 percent
going toward GOP candidates.
At stake for the fnancial sector is the future of the
Dodd-Frank reform act. The current Democrat-
controlled Senate has tended to side with the
White House in pushing back on proposed changes
to Dodd-Frank legislation, including contentious
capital requirements and increased regulatory
scrutiny of institutions deemed systemically risky.
Although the president would have power to veto
changes to the legislation, a Republican-controlled
Congress would be more likely to coerce the
Executive Branch to allow for the fxes Wall Street
is calling for.
The Senate Banking Committees leadership will
also change this election, with current chair Sen.
Tim Johnson (D-SD) retiring. Should the Republicans
gain majority in November, Sen. Richard Shelby
(R-AL) is likely to become chair. Sen. Shelby, who
served as the committees chair from 2003 to 2007,
is an outspoken critic of Dodd-Frank. If appointed,
he could curtail the Financial Stability Oversight
Council, which has been criticized on both sides
of the aisle for how it labels nonbank entities such
as insurance companies as systemically risky a
designation that prompts stricter regulations and
government oversight.
If the Democrats hold on, look for the possibility of
Sen. Sherrod Brown (D-OH) to take the gavel at the
Senate Banking Committee. This scenario sends a
shiver up the spine of many Wall Street bankers,
as Sen. Brown has long been an outspoken critic
of big banks and would continue to push for
greater oversight of the fnancial industry.
One of the biggest fscal ramifcations of the
election will be the make-up of the Fed Board.
Currently, there are three vacant seats on the
seven-person panel, which steers monetary
policy. If Republicans take control, it is going to be
tough for the White House to get its picks through
the Banking Committee and a GOP-controlled Senate.
To learn more about fnancial policy, please
contact Sean Neary, Executive Vice President, DC
Corporate Afairs, at sean.neary@edelman.com.
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FINANCIAL SERVICES
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2014
In the lead up to the midterm elections, there are
several potential legislative agendas for the food
industry to watch closely. Public interest in the food
industry is high as pressure on politicians to act
increases, and many companies may face
increased costs as regulations change with new
elected ofcials.
The 2015 Dietary Guidelines Advisory Committee
(DGAC) is expected to submit their fnal report
to HHS and the USDA by February 2015, which
will inform the governments fnal Dietary
Guidelines for Americans (DGA). This DGAC has
been viewed as controversial for moving beyond its
traditional scope to look at environmental
sustainability and how the food environment impacts
Americans healthy food choices. The governments
fnal guidelines are expected no later than
December 2015, which means if Republicans gain
control of Congress, those who feel the DGAC has
gone too far and beyond their scope will have a
more favorable ear at a vital time. Republicans
could pressure the agencies to soften some of the
recommendations in the fnal DGA, though the
White House is highly engaged on this issue and
will be playing too.
The dialogue surrounding labor was most recently
infamed by the nation-wide fast food workers
strike that led to more than 500 arrests in early
September. In particular, eforts to increase
Americas minimum wage rate are a hot topic this
November and something of particular interest
to the food industry. If the Democrats end up
controlling Congress after midterms, proposals
to increase minimum wage are likely to pour
through both the Senate and House. However, if
Republicans take control of the Senate, in the
words of Senate Minority Leader Mitch McConnell
(R-KY), Republican lawmakers will not be debating
all these gosh darn proposals [for raising the
minimum wage].
Democrats have called for an overhaul of the
foreign acquisition review process to ensure
foreign owners uphold the same high food safety
standards as domestic producers. In the past,
Republicans have attempted to slow implementation
of food safety regulation to make transitions
easier for businesses, and the same will hold
true for food safety issues when it comes to
international acquisitions. Expect more movement
on the regulatory front in the future, as American
companies look to capitalize on rapidly growing
international food markets.
As in years past, there is also much discussion over
the use of antibiotics in livestock and perceived
negative health implications of GMOs in food.
Activists have capitalized on widespread consumer
confusion to push multiple agendas non-GMO
regulation, GMO and antibiotic labeling, etc. while
public health advocates and some lawmakers
feel that the growing concern over antibiotic
resistance is not being given the attention
it deserves.
To learn more about food policy, please contact
Kate Wyatt, Senior Vice President, DC Food and
Nutrition, at kate.wyatt@edelman.com.
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FOOD
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2014
With attention focused on new international
challenges in the Middle East and slow economic
improvements at home, ever-contentious
healthcare reform is no longer the dominant voter
issue it was in 2012. According to a recent Kaiser
Foundation survey, just 13 percent of respondents
cited healthcare as their top issue and a mere 3
percent specifcally referenced the Afordable Care
Act (ACA). Nevertheless, the issue remains a staple
on candidates platforms. In eight of the most
competitive Senate races, six Democratic and six
Republican candidates have included healthcare
and health-related issues in their top fve
advertising messages.
The future of the ACA, the healthcare industry
and related issues depend greatly on Novembers
results. If projected low Democratic turnout
(the party experienced a 30 percent drop in this
years primaries) and disenchantment with the
president win the GOP the six seats they need to
gain control of the Senate, the ACA will face new
attempts to roll it back.
Additionally, the ACA will once again be in the
spotlight next year as Americans begin to fle their
taxes. Individuals who opted not to purchase
health insurance may fnd themselves facing
individual mandate penalties. In addition, new
reports show that as many as 300,000 people
who received premium subsidies for health
insurance were not entitled to them. Come April,
they may have to pay back the IRS. Expect to see
heightened news coverage and ACA scrutiny as
tax day approaches.
No matter which party emerges victorious, Medicaid
expansion is likely to continue. Although generally
a Democratic platform, several Republican
governors (e.g., Tom Corbett of Pennsylvania, Gary
Herbert of Utah, Matt Mead of Wyoming) recently
jumped on the expansion bandwagon.
One of the main items on the must-do list early
next year is to pass a new doc fx bill that would
prevent a cut in reimbursements to physicians
under Medicare. The high number of uninsured
Americans remaining despite the introduction of
the ACA is another health-related issue expected
to garner the 114th Congress attention.
To learn more about healthcare policy, please
contact Laura Gordon, General Manager, DC
Healthcare, at laura.gordon@edelman.com.
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HEALTHCARE
ELECTION
2014
One of the biggest obstacles to tax reform has
long been Democratic leadership in the Senate.
If the GOP takes control, look for a quick push for
a small corporate reform package that brings U.S.
rates more in line with the rest of the world. Its
unlikely youll see full comprehensive reform, but
rather small parts that could eventually lead to a
larger package. The White House and the GOP
agree on many aspects of corporate reform, so
this is low-hanging fruit.
Individual reform is a tougher nut to crack. The
Administration is against lowering individual rates.
The GOP and its leader on reform, Rep. Paul Ryan
likely to take the helm at the Ways and Means
Committee could choose to paint the president
as standing in the way of comprehensive tax
reform, while promising it will get done with a
Republican in the White House come 2017.
If Democrats keep the Senate, Finance Chair
Ron Wyden will push to work with Rep. Ryan
toward tax reform, placing Rep. Ryan a possible
2016 presidential contender in an awkward
position: Does he work with Sen. Wyden on a
bipartisan proposal, or does he continue to push
the party line?
Inversions were a hot topic this past summer.
Republicans say punishing companies that move
overseas is not the solution, but rather lawmakers
should look for ways to incentivize them to stay
by lowering the corporate tax rate, for example.
The focus will stay on inversions throughout
the fall as Congress will work to push back on
the Administrations new rules and tie any anti-
inversion legislation to tax reform. If the GOP is
in control next year, expect lawmakers to tie tax
reform/inversion legislation to the must-pass
debt-ceiling package.
To learn more about tax policy, please contact
Sean Neary, Executive Vice President, DC
Corporate Afairs, at sean.neary@edelman.com.
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ELECTION
2014
TAXES
Republican control of both legislative chambers
would allow the GOP to revisit myriad
technology policies that have previously stalled due
to partisan gridlock.
On the cybersecurity front, the Cyber Intelligence
Sharing and Protection Act (CISPA) will undoubtedly
remain a controversial bill that brings together
strange bedfellows from both left and right. The
Republican House passed CISPA in 2012 and then
again in 2013 with considerable support from
Democrats, as well as technology companies
and associations such as the U.S. Chamber of
Commerce. A Republican Senate may follow
the House and make a strong push for action,
attempting to inoculate the party in the public
eye in case of a future cyber-attack. But even
with control of the Senate, Republicans will have
a difcult time obtaining a 60-vote supermajority,
making quick action on this or any contentious
legislation extremely unlikely.
Patent reform is another combative issue that
will certainly be reconsidered come January,
regardless of who controls the Senate. The
House overwhelmingly passed the Innovation
Act in December 2013, but the legislation
hit a snag in the Senate, primarily over the
issue of fee shifting forcing the losing
party in patent lawsuits to cover the winners legal
fees. Senate Republicans support fee shifting to
deter the frivolous lawsuits of patent trolls, while
Democrats warn that it could prevent companies
from pursuing legitimate lawsuits altogether.
A Republican Senate will certainly redouble its
eforts to include this issue as part of any patent
reform package.
Privacy remains a hot issue for many sectors,
but none more than the technology sector.
With international blow back from the Snowden
disclosures continuing, privacy advocates and
many technology companies continue to push for
reforms to the Federal Intelligence Surveillance
ACT (FISA) law of 1978. The current legislation,
known as the USA Freedom Act, has support in
both chambers, yet the diferences between
the House and Senate versions of the bill make
movement unlikely in the expected lame duck
session. Action on both bills is likely early in the
next Congress, with a strong chance some reform
measure will pass next year.
To learn more about technology policy,
please contact Pearson Cummings, Senior Vice
President, DC Technology, at pearson.cummings@
edelman.com.
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ELECTION
2014
Regarding global trade, midterm election voters
will have sway beyond their Congressional districts.
Midterm outcomes could impact U.S. trade policy,
particularly two massive free trade agreements
(FTAs) currently in negotiation: the Trans-Pacifc
Partnership (or TPP) a deal with 11 other
countries throughout Asia-Pacifc and the Trans-
Atlantic Trade and Investment Partnership (or TTIP)
between the United States and the European
Union. Both deals depend partially on whether
Congress grants President Obama fast-track trade
negotiation power, or Trade Promotion Authority.
Conventional wisdom would suggest that a Republican,
pro-trade, pro-business Senate would naturally
accelerate negotiations in Europe and Asia, providing
the president power to fast track the FTAs. But with
a presidential bid looming, Republicans may elect
to hold tight in hopes of inking a trade agreement
under a Republican president thats more
appealing to the U.S. business community.
No matter which party ultimately controls the House
and Senate, political calculations will determine
when and if the trade agreements advance. The
president has demonstrated that he wants to
complete the trade agreements on his watch,
but the likelihood of this happening with a split
Congress is low. Regardless, what appears to be
a simple process could turn into a political maze,
with some horse trading required to complete
these two historic trade agreements.
To learn more about trade policy, please contact
Jere Sullivan, Vice Chairman, International Public
Afairs, at jere.sullivan@edelman.com.
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ELECTION
2014