How the 2018 Midterm elections might affect your business October 29, :00-3:00pm ET

Transcription

1 Please disable pop-up blocking software before viewing this webcast How the 2018 Midterm elections might affect your business October 29, :00-3:00pm ET

2 Speakers Nichole Jordan National Managing Partner of Markets, Clients and Industry Grant Thornton linkedin.com/in/nicholejordan Mary Moore Hamrick National Managing Principal of Public Policy Grant Thornton linkedin.com/in/marymoorehamrick 2

3 Learning objectives 1 Describe how the upcoming elections may impact your business 2 Identify steps your company can consider to prepare for various election outcomes 3

4 Days to Election

5 Republicans House Majority Democrats Republicans Vacant Democrats need to win a total 23 additional seats to take control of the chamber (Including 5 Vacancies) Source: FiveThirtyEight (October 16, 2018)

6 Cook Political Report House ratings Source: Cook Political Report (October 23 rd 2018) 6

7 Historical trends Factors to consider and how they size up in today's political climate: Since WWII, the 1 Additional seats Democrats 23 president's party has lost need to take the House average of 25 House seats, taking net losses in 16/18 midterms Source: The Hill (July 22 nd 2018)

8 Historical Trends 2 Presidential approval impact 44% 100% 90% 80% 70% 89% 88% President Trump s current approval rating 60% 50% 40% 30% 20% 10% 0% 42% 36% 13% 9% Republicans Democrats Independents Source: Real Clear Politics (October 23 rd 2018) 8

9 Historical trends 3 Enthusiasm of the opposing party: Special election wins sparked a Democratic wave Special election wins sparked Democratic wave. Source: The Hill (October 22 nd 2018)

10 Historical trends 4 Total projected spend: $5 Billion ,181,682, ,852,658, ,631,712, ,845,393, ,190,063,790 Source: opensecrets.org

11 56 Republicans outraised by Democrats in Q2 $146 million $102 million DEMOCRATS 56 outraised incumbent REPUBLICANS 3 outraised incumbent Source: FEC data, House Campaign Finance Reports (October 21 st 2018)

12 Not seeking reelection: 51 red, 23 blue 5 Retirements & Resignations Makes up roughly 17% of the entire House 74 Surpasses previous record (41 Democrats in 1992) 435 Largest Republican exodus since 1958 (27) Sources: Pew Research, Brookings, Roll Call (October 12 th 2018)

13 House outlook Source: FiveThirtyEight (October 23 rd 2018) 13

14 Republicans Senate Majority Democrats Republicans Independents Democrats need to win 2 additional seats to take control of the chamber Source: FiveThirtyEight (October 16, 2018)

15 2018 Senate map favors Republicans Democrat incumbent Independent incumbent Republican incumbent WA # of seats to defend Democrat: 26 Republican: 9 OR NV CA ID UT AZ MT WY CO NM ND SD NE KS OK MN IA MO AR WI IL MS IN MI TN AL KY OH GA WV SC NC VT ME NH NY MA RI PA CT NJ DC DE VA MD AK TX LA HI FL

16 Vulnerable Democrats unfazed in Trump's first year How often Senate Democrats seeking reelection in states Trump won have voted with him Senator State Legislation ACA repeal Tax reform Nominations Total Trump '16 MOV Manchin WV 31.3% X X 83.3% 53.6% Heitkamp ND 25.0% X X 79.2% 50.0% Tester MT 18.8% X X 62.5% 39.3% Donnelly IN 31.3% X X 66.6% 47.3% McCaskill MO 28.1% X X 62.5% 43.6% Brown OH 15.6% X X 50.0% 30.4% Nelson FL 25.0% X X 54.2% 37.5% Casey PA 15.6% X X 45.8% 28.6% Baldwin WI 12.5% X X 33.3% 21.4% Stabenow MI 18.8% X X 45.8% 30.4% + 0.3

17 Spending on Senate races $489.7 million $353.2 million DEMOCRATS REPUBLICANS Source: FEC data (October 21 st 2018)

18 9 deadlocked Senate races State Democrat / Republican Arizona Sinema / McSally Florida Nelson*/ Scott Indiana Donnelly* / Braun Missouri McCaskill*/ Hawley Montana Tester*/ Rosendale Nevada Heller*/ Rosen North Dakota Heitkamp*/ Kramer Tennessee Bredesen / Blackburn Texas O Rourke / Cruz* *denotes Incumbent candidates, everything else = open seats 18

19 Senate outlook Source: FiveThirtyEight (October 23 rd 2018) 19

20 Trump Factor How Trump will be graded Election Day 2016 October 2018 Unemployment 4.8% 3.7% Shadow unemployment 9.5% 7.5% GDP growth 1.4% 4.2% S&P 500 2, , Consumer confidence

21 Republicans - what it takes to win Tax Cuts Strong Economy Regulatory Cuts Supreme Court

22 Democrats - what it takes to win + #ResistTrump Messaging? Blue wave

23 Kavanaugh factor Brett Kavanaugh Neil Gorsuch

24 Capitol Hill Timeline Key legislative and political events October Congress adjourns for incumbents to campaign December 5 Dem House leadership votes December 7 Government funding expires December Lame duck session Mid-November GOP House leadership votes November 6 Midterm Election Day December 14 Congress adjourns January 3 New Congress sworn in

25 Battle for House leadership Steny Hoyer James Clyburn Cedric Richmond Hakeem Jeffries Kevin McCarthy Steve Scalise Jim Jordan Kevin Brady

26 Lame duck: what remains to be done Funding Government Past December 7 th 154 Nominees Awaiting Senate Confirmation Farm Bill National Flood Insurance Program IRS Reforms Tax Extenders & Technical Corrections Election Security Intelligence Reauthorization

27 116 th Congress Trade & tariffs: how businesses are affected Uncertainty Slowing or reversal of economic growth TPP NAFTA Steel & Aluminum Tariffs Tariffs on China Retaliatory Tariffs

28 116 th Congress House Republicans tax agenda Tax Reform 2017 Tax reform 2.0: a 3 part package Protecting Family & Small Business Tax Cuts Act Individual Cuts Permanent Family Savings Act Family Savings Account American Innovation Act Start-Ups Write Off Costs

29 116 th Congress House Democrats tax agenda Increase Corporate Tax Rate Increase Highest Marginal Rate Reinstate SALT $1.6k in refundable income tax credits on less than $100K

30 116 th Congress Healthcare 30

31 116 th Congress Infrastructure

32 116 th Congress House Democrats agenda Oversight Impeachment Medicare For All Tax Issues Immigration 32

33 2020: The clock is ticking 18 months until the Iowa caucus M. Avenatti A. Cuomo E. Holder D. Patrick J. Biden J. Delaney J. Kander B. Sanders M. Bloomberg E. Garcetti J. Kerry H. Schultz C. Booker K. Gillibrand A. Klobuchar T. Steyer P. Buttigieg K. Harris T. McAuliffe M. Warner J. Castro J. Hickenlooper M. O Malley E. Warren

34 Any final questions?

35 Speakers Nichole Jordan National Managing Partner of Markets, Clients and Industry Grant Thornton linkedin.com/in/nicholejordan Mary Moore Hamrick National Managing Principal of Public Policy Grant Thornton linkedin.com/in/marymoorehamrick 35

36 Disclaimer This Grant Thornton LLP presentation is not a comprehensive analysis of the subject matters covered and may include proposed guidance that is subject to change before it is issued in final form. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this presentation. The views and interpretations expressed in the presentation are those of the presenters and the presentation is not intended to provide accounting or other advice or guidance with respect to the matters covered For additional information on matters covered in this presentation, contact your Grant Thornton LLP adviser.

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