Outdoor Industry Association 2014 Election Preview

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1 BACKGROUND ON 2014 ELECTIONS The 2014 election has been difficult to predict due to some dead-heat races in the U.S. Senate, but it appears that Republicans will have an edge next Tuesday in many close races and are poised to take control of Congress. Republicans need a net gain of six seats to win the majority in the Senate and control of both chambers of Congress. Republicans will continue to have a significant majority in the House of Representatives. The Outdoor Industry Association government affairs team has been closely monitoring dozens of races across the country. We work with donors to the OIA Political Action Committee (OIAPAC), who give their personal dollars, to support candidates who support the outdoor industry. OIA member dues are not donated to political candidates. UNITED STATES HOUSE OF REPRESENTATIVES All 435 seats in the House of Representatives are up for re-election. Currently, Republicans control 233 seats and Democrats control 199 seats, with 3 vacancies. The 2014 election is unlikely to change the Republican supermajority in the House and may, in fact, result in a larger number of Republican controlled seats, as they are projected to add between five and seven seats to their majority on November 4. Some of the key races Outdoor Industry Association is watching are those where OIA Political Action Committee (OIAPAC), made contributions. Those include: Representative Jared Polis (D, CO-2) OIAPAC contributed $5000 to Polis. He has consistently been a champion for the outdoor industry, strongly supporting the recreation and trade agendas and regularly meeting with industry executives. Polis is running against Republican George Leing. Real Clear Politics (RCP) rates this race as Safe Democrat. We expect Polis to retain his seat. Representative Suzan DelBene (D, WA-1) OIAPAC contributed $1000 to DelBene due to her strong support for the outdoor recreation economy. She is running against Republican Pedro Celis. RCP rates this race as Likely Democrat. We expect DelBene to retain her seat.

2 Representative Scott Peters (D, CA-52) OIAPAC gave $1000 to Peters due to his support of the industry s recreation agenda. An OIAPAC contribution could make a significant difference in one of the closest House races in the country. Peters is running against Republican Carl DeMaio. RCP rates this election as a Toss Up with the latest San Diego Union-Tribune poll showing DeMaio up by three points. Representative Dave Reichert (R, WA-8) OIAPAC contributed $1000 to Reichert. He is running against Democrat Jason Ritchie. Reichert is a strong supporter of the outdoor industry and is the lead sponsor of the US OUTDOOR Act, OIA s signature trade legislation in the House. He is also a supporter of full-funding of the Land and Water Conservation Fund. RCP rates this race as Safe Republican. We expect Reichert to retain his seat. Representative Kurt Schrader (D, OR-5) OIAPAC approved a $1000 contribution to Schrader, due in large part to his strong support for the outdoor industry s policy agenda. He is running against Republican Tootie Smith. RCP rates this race as Safe Democrat. We expect Schrader to retain his seat. Representative Earl Blumenauer (D, OR,-3) OIAPAC gave $1000 to Blumenauer as he is a strong supporter of the industry s policy agenda. He is running against Republican James Buchal. Blumenauer is the lead Democratic sponsor of the US OUTDOOR Act in the House and an LWCF supporter. RCP rates this race as Safe Democrat. We expect Blumenauer to retain his seat. Representative Erik Paulsen (R, MN-3) OIAPAC contributed a $750 donation to Paulsen, a strong supporter of the industry s trade agenda, who is running against Democrat Sharon Sund. Paulsen has also supported recreation issues like the National Park Service Centennial and is an avid outdoor enthusiast. RCP rates this race as Safe Republican. We expect Paulsen to retain his seat. Representative Mike Simpson (R, ID-2) OIAPAC gave $500 to Simpson who is running against Democrat Richard Stallings for the seat. Simpson is the sponsor of the Wildfire Disaster Funding Act (WDFA) and works closely with the National Parks Coalition and is a LWCF supporter and proponent of a local wilderness proposal. RCP rates this race as Safe Republican. We expect Simpson to retain his seat. 2

3 OIA is also watching several other House races that may impact the outdoor industry, our 2015 policy agenda and OIA s outreach and advocacy strategies. Those races include: Representative Rob Bishop (R, UT-1) Bishop is expected to win his race against Donna McAleer, a strong proponent of the outdoor industry in Utah and the unsuccessful candidate for the same seat in With his expected victory next week, Bishop is likely to become Chairman of the House Resources Committee, a key committee for the outdoor industry s public land and water legislation. He recently introduced the Federal Lands Recreation Enhancement Modernization Act (FLREA), a bill that authorizes the land management agencies to put park user fees towards recreation enhancements and gives guides and outfitters the authority they need to run trips on public lands. RCP rates this race as Safe Republican. We expect Bishop to retain his seat. Representative Paul Ryan (R, WI-1) Ryan is the former Republican nominee for vice president and is expected to easily hold his Congressional seat this November. Currently Ryan is the Chairman of the House Budget Committee, responsible for cutting recreation and land management budgets and blocking important legislation like WDFA. Ryan, however, will be key to the outdoor industry s trade agenda as the likely Chairman of the House Ways and Means Committee in the next Congress. RCP rates this race as Safe Republican. We expect Ryan to retain his seat. Representative Greg Walden (R-OR, 2) Walden has been a supporter of the outdoor industry and is a rising star in the Republican Party. He will face Democrat Aelea Christofferson in November. RCP rates this race as Safe Republican. We expect Walden to retain his seat. Open Seat (UT- 4) Republican Mia Love is expected to win the seat vacated by longtime industry supporter Democrat Jim Matheson. Love narrowly lost to Matheson in 2012, and she leads Democrat Doug Owens 49 percent to 40 percent. Love will be the first African American, Republican woman to serve in the House of Representatives. OIAPAC hosted candidate forums for Love and Owens at ORSM 2014 where both pledged to work closely with the outdoor industry, but we did not contribute to either campaign. RCP rates this race as Safe Republican. We expect Love to win this race. 3

4 UNITED STATES SENATE There are currently 55 Democratic Senators (including two independents who caucus with the Democrats) and 45 Republican Senators. This year there are 36 Senate seats up for election on November 4. The election will determine whether Republicans take control of the Senate, and therefore control Congress, or if Democrats can hold on to their slim majority. Fifteen seats are considered Safe Republican or Likely Republican by Real Clear Politics, with Louisiana now rated as Lean Republican. There are 11 seats considered Safe Democrat or Likely Democrat. No states are currently rated as Lean Democrat. Nine seats considered toss-ups could go either to the Democrat, the Republican, or in Kansas, an Independent. Republicans must win a net of six seats to assume control of the Senate. The key toss-up races in the Senate to watch are Alaska, Arkansas, Colorado, Georgia, Iowa, Kansas, Kentucky, North Carolina and New Hampshire. Some elections, like Iowa, may be decided before November 4 since early voting has already started and 20 percent of the votes have already been cast in the state. However, candidates in elections that will most likely result in run-offs like Louisiana and Georgia may not be announced for one to two months after the election. OIAPAC made several investments in key Senate races and is closely monitoring the outcome. Those races include: Senator Mark Udall (D-CO) A longtime industry friend, Udall received $5000 from OIAPAC this year, and OIA has hosted two fundraising events for the Senator. Udall is an outdoor enthusiast and a co-sponsor of bills to fully fund LWCF and WDFA. He has also co-sponsored land protection bills in Colorado including Brown s Canyon and Hermosa Creek Watershed. Udall is in one of the closest races in the country against Representative Cory Gardner. The outcome could determine which party controls the Senate and although this race is a tossup, it is trending towards a Gardner win. RCP shows Gardner leading by an average of three points over Udall, but this race could still swing either way. Senator Jeanne Shaheen (D-NH) OIAPAC gave two contributions to Shaheen totaling $4500. This longtime supporter of the outdoor industry is leading in most polls against the former U.S. Senator from Massachusetts, Scott Brown, but faces a closer race than expected. Since 2006, no state has kicked out more federal incumbents than New Hampshire. Shaheen has consistently been a champion of LWCF as well as the U.S. OUTDOOR Act, hosting industry roundtables to discuss its importance. She regularly visits with outdoor industry executives from New Hampshire. This race is a Toss Up but RCP shows Shaheen leading by an average of 2.2 points. 4

5 Senator Kay Hagan (D-NC) OIAPAC invested $2500 in Hagan s campaign against Republican Thom Tillis in another extremely close race, where OIAPAC dollars may make a significant difference in the outcome. Hagan has been a co-sponsor of legislation to fully fund LWCF, and was a sponsor of legislation to expand access to federal public lands for hunters and anglers, conserve wildlife habitats and reform regulations that prevent people from enjoying the outdoors. The race is still considered a toss-up, but most polls have been trending in Hagan s favor. RCP shows Hagan leading, but this race could still swing either way. Senator James Risch (R-ID) OIA approved $750 for Risch s campaign against Democrat Nels Mitchell. Risch is the co-chair of the Senate Outdoor Recreation Caucus, a LWCF supporter, and was the first senator to co-sponsor WDFA. According to RCP, Risch has a big lead, making this seat Safe Republican. We expect him to easily retain his seat. Senator Brian Schatz (D- HI) OIAPAC approved $500 to Schatz. Schatz narrowly defeated Representative Colleen Hanabusa in the 2014 Democratic primary and will face Republican Cam Cavasso in the general election. RCP rates this race as Safe Democrat and we expect Schatz to retain his seat. Senator Susan Collins (R-ME) OIAPAC approved $500 for Collins who will face Democrat Shenna Bellows in November. Senator Collins is a strong supporter of the outdoor industry, and supports LWCF and national park funding. RCP rates this race as Safe Republican and we expect her to easily retain her seat. Senator Jeff Merkley (D-OR) OIAPAC approved a $500 contribution to Merkley, a supporter of LWCF, national park funding, and multiple land protection bills in Oregon. Merkley is also an original co-sponsor of the U.S. OUTDOOR Act. Republican Monica Wehby first appeared to have a chance to unseat Merkley, but she has faded in recent months. RCP rates this race as Likely Democrat and we expect Merkley to retain his seat. Senator Tom Udall (D-NM) OIAPAC gave $500 to Tom Udall who will face Republican Allen Weh in November. A cousin of Senator Mark Udall of Colorado, Tom has consistently been a leader on land protection by supporting LWCF, national park funding, and multiple land protection bills in New Mexico including the recent Organ Mountains-Desert Peaks National Monument designation. RCP rates the race as Likely Democrat, and we expect him to retain his seat. 5

6 Other key races that could determine control of the Senate include: Alaska: Mark Begich (D) - Begich started out 2014 as one of the most vulnerable Democratic incumbents, but he has run a smart campaign, while Republican nominee Dan Sullivan had a tough primary and suffered some setbacks. Polls show Begich up, but Alaska polling is notoriously inaccurate. We likely won't have a good indication of who will win this race until the morning after Election Day. Arkansas: Mark Pryor (D) Republican challenger Representative Tom Cotton is likely to upset incumbent Pryor, but recent polling shows the race close enough that RCP rates it as a toss-up. Georgia: Open Seat - This seat was thought to be a safe seat for Republicans but is now a toss-up. The Democratic nominee Michelle Nunn, daughter of former Georgia Senator Sam Nunn, has gained traction by attacking Republican candidate David Perdue for his record of outsourcing jobs. Polls show the race as a tie and support has been trending Nunn s way. She must get 50 percent of the vote on Election Day or the race goes to a run-off in January. Iowa: Open Seat - The race to fill the seat of iconic Democratic Senator Tom Harkin is a mustwin for Democrats. The race was not expected to be competitive, but the Democratic nominee, Congressman Bruce Braley, has run a lackluster campaign. The Republican candidate, State Senator Joni Ernst, a Tea Party Conservative, holds a one to two point lead in most polls. Kansas: Pat Roberts (R) - This should have been a safe seat for incumbent Republican Senator Pat Roberts but he is facing a serious challenge from independent candidate Greg Orman. As an independent, Orman could caucus with either party if elected, but it is expected that he will side with the Democrats. Polls show the race in a dead-heat. Republicans must win this race to take control of the Senate. Kentucky: Mitch McConnell (R) The Kentucky senate race may be the marquee match-up of the 2014 election cycle. Democratic challenger Alison Grimes, the current Kentucky Secretary of State, has run a strong challenge to McConnell, the unpopular Senate Minority Leader. The race has been heavily targeted by the Democratic Senatorial Campaign Committee (DSCC) as a Democrat pick-up opportunity. Recently, however, the DSCC, decided to withdraw a $1 million television ad buy on behalf of Grimes and redirect it into the Georgia race. Then last week they announced they are going back up on TV with a $650,000 buy for Grimes Should Republicans win the Senate, McConnell will become Senate Majority Leader, replacing Harry Reid. The race is rated as a Toss Up by RCP. Louisiana: Mary Landrieu (D) With nine candidates on the ballot, it is almost assured that the Louisiana Senate race will not be settled on Election Day. A candidate must receive 50 percent of the vote to avoid a December 6 run-off against the second place finisher. Senator Landrieu has consistently been one of the most vulnerable Democratic incumbents and has not run a smooth campaign. The Republican candidate, Bill Cassidy, is up nearly six percentage points in the polls, but will not secure enough support to avoid a run-off against Landrieu. This race is another that could tip the balance of power in the Senate and is considered Lean Republican by RCP. 6

7 POSSIBLE OUTCOMES, IMPACT ON THE OUTDOOR INDUSTRY, AND OPPORTUNITIES Republicans are likely to retain a significant majority in the U.S. House of Representatives and will control the House committees that are key to the outdoor industry s policy agenda. OIA will continue outreach to non-traditional allies in the Republican caucus, and OIAPAC will continue to recommend contributions for candidates on both sides of the aisle. Leadership: Following the general election on November 4, both parties will hold caucus elections that will determine the Speaker of the House, Majority Leader, and Majority Whip, among other positions. OIA does not expect those elections to result in significant changes in House leadership with John Boehner (R, OH-8) retaining his position as Speaker of the House, Kevin McCarthy (R, CA-23) continuing as Majority Leader and Nancy Pelosi (D, CA-12) continuing to serve as Minority Leader. House Republican leadership will determine committee assignments. Rob Bishop is likely to become Chairman of the House Natural Resources Committee and Paul Ryan is expected to become Chairman of the House Ways and Means Committee. The election will determine which party controls the U.S. Senate, and therefore the chairmanships of key Senate committees. If Democrats hold their majority, strong outdoor industry ally Ron Wyden (D-OR) will continue as Chairman of the Senate Finance Committee and LWCF supporter Mary Landrieu (D-LA) will chair the Senate Energy and Natural Resources Committee. Republicans, however, are likely to win enough contested seats in November to take the majority, and with it, control of key Senate committees. Orrin Hatch (R-UT) will become Chairman of the Senate Finance Committee and Lisa Murkowski (R-AK) will be the new Chairwoman of the Senate Energy and Natural Resources Committee. POST-ELECTION OPPORTUNITIES FOR THE OUTDOOR INDUSTRY Whatever the outcome of next Tuesday s election, there is expected to be a brief, but potentially impactful lame-duck session of the Congress, where many current members who may have lost their election will come back to Washington, D.C. as a lame-duck policymaker. Staff from the Senate Finance Committee and the House Ways and Means Committee might take up a trade package during this lame duck session. The centerpiece of this package will likely be Trade Promotion Authority (TPA) or fast-track authority, legislation that authorizes the President to negotiate trade agreements and submit them to Congress for a simple up or down vote without amendments. Given the support of the Chairman of the Finance Committee, Ron Wyden (D-OR), the U.S. OUTDOOR Act is well positioned to be included in this package that may also include miscellaneous tariff bills and the GSP Update Act. 7

8 If Republicans take control of the Senate, however, it is probable that the current Minority Leader on the Finance Committee, Senator Orrin Hatch (R-UT), will prefer to hold off on consideration of a trade package until he assumes the Chairmanship of the committee in There may be an omnibus appropriations bill that gets passed during the lame duck session and WDFA has a great chance of being enacted with it. There is also some speculation around a public lands package that would include some legacy projects for outgoing members of Congress, like Representative Doc Hastings (R, WA-4) who is retiring. There may also be an opportunity for a package with a few Washington public lands bills such as his Manhattan Project National Historical Park and Patty Murray s (D, WA) Alpine Lakes Wilderness Bill. A LOOK AHEAD: THE 114 TH CONGRESS The gridlock that has plagued Washington, D.C. is unlikely to subside with the 114 th Congress, slated to convene in late January. Both parties will be positioning their candidates for the 2016 presidential elections, though House Majority Leader McCarthy has pledged a shift in GOP strategy from brinkmanship and extremism to collaboration and productivity. The outdoor industry s policy pursuits will be tested, non-traditional alliances will be formed (exploring partnerships with oil and gas, healthcare industries), and the bipartisan appeal of the industry will be proven. If Republicans win the Senate and gain control of both houses of Congress, the outdoor industry s trade agenda is still well positioned for success. Senator Hatch s chief trade counsel, Everett Eissenstat, visited Outdoor Retailer Summer Market in August where he saw first-hand the innovation of the industry and the unnecessary and disproportionally high tariffs outdoor apparel and footwear products face. Senator Hatch told the outdoor industry that, as Chairman of the Finance Committee, he will be active and focused on trade issues like tariff reform that will benefit the outdoor industry. The incoming Chairman of the House Ways and Means Committee, Representative Paul Ryan, will also likely push a more expansive tariff liberalization agenda. Republican control of both chambers may not be as positive for OIA s recreation agenda. With one party controlling the House and the Senate, some of the harmful budget cuts and public lands provisions that passed the House in the 113 th Congress may now have enough votes to pass the Senate in the 114 th Congress. There may also be more desire to diminish the President s power to designate new national monuments through the Antiquities Act during the last two years of his Administration. There may also be Republican efforts to cut funding to agencies like the Environmental Protection Agency as well as to the Department of the Interior. However, there is real opportunity here to work with Chairman Bishop and (potential) Chairwoman Murkowski to cut a deal on LWCF by being pairing it with other funding bills that are important to western states. Incoming Natural Resources Committee Chairman Bishop is expected to get his Federal Lands Recreation Enhancement Modernization Act signed into law, which would benefit our industry for the next five years. We may also see more progress on the backlog of wilderness bills than we did in the 112 th and 113 th Congresses, especially those sponsored by Republicans and already passed through the Natural Resources Committee. 8

9 OIA will continue to focus on our industry s bipartisan appeal, especially as it pertains to recreation access, and work with Congressman Daines (Senator Daines come January) (R, MT) and Senator Tester (D, MT) to set aside a percentage of LWCF funds for access to recreation assets. OIA will also focus on bipartisan commonalities like sportsmen s issues and healthcare savings through close-to-home recreation and legislation like PHIT (Personal Health Investment Today). We will also capitalize on the bipartisan appeal of our nation s national parks in preparation for the upcoming National Park Service Centennial in Conclusion The 2014 midterm congressional races, especially in the Senate, will go down to the wire and a lot could change over the next week with issues like Ebola gaining traction among a worried, disgruntled electorate. Adding to the uncertainty, we may not know who will control the Senate in the next Congress until Georgia holds its run-off in January. As we have noted, there are positives and negatives for the outdoor industry if the Democrats retain control of the Senate or if the Republicans take over. Regardless of the outcome, the era of gridlock and inaction may very well continue. Nevertheless, there is a small window for legislating before the 2016 Presidential race kicks off in mid Gridlock also provides time and energy to create outdoor industry champions and work with newly elected officials to introduce them to our issues. Having established positive relationships on both sides of the aisle in the House and Senate, the outdoor industry can be a key player in helping to break the logjam and achieve substantial benefits for outdoor companies and our customers. INDUSTRY POLICY INITIATIVES AND LEGISLATION Trans-Pacific Partnership (TPP)- OIA has actively engaged Congress and the Obama Administration on the negotiation of the Trans-Pacific Partnership, the proposed free trade agreement between the United States and 11 other Pacific Rim countries including Vietnam, Australia, Canada, Mexico and Japan. In May, 10 Congressmen signed a letter led by Representative Erik Paulsen (R-MN) and Mike Thompson (D-CA), signed a letter calling for flexible rules of origin and immediate duty phase-outs for outdoor apparel and footwear in the TPP. OIA has also pressed for stricter rules of origin and longer duty phase-outs for outdoor products made in the U.S. The Administration has said that accommodating the outdoor industry is one of their top priorities in the TPP. Negotiations are ongoing and may spill into U.S. OUTDOOR Act- Introduced in the House by Representatives Dave Reichert (R-WA) and Earl Blumenauer (D-OR) and in the Senate by Senators Maria Cantwell (D-WA) and Kelly Ayotte (R-NH), the U.S. OUTDOOR Act will eliminate import tariffs on recreational performance outwear and create new definitions and tariff classifications for those products in the U.S. Harmonized Tariff Schedule (HTS). The Senate bill would also create the Sustainable Textile and Apparel Research Fund to support the research and development of sustainable textile and apparel supply chains. If Congress does consider a trade package during the lame duck session following the November election, the OUTDOOR Act is well positioned to be included in that package. 9

10 Land and Water Conservation Fund (LWCF)- LWCF was signed into law by President Lyndon Johnson on September 3, 1964 to protect and provide recreational access to our nation s irreplaceable outdoor spaces. Under the Act, a small percentage of federal lease royalties from natural resource extraction in our nation s Outer Continental Shelf (OCS) are to be invested in conservation and outdoor recreation. Yet, since its enactment, in every year except for one, LWCF has seen a majority of its funds diverted to other, unrelated purposes despite the fact that recent polling shows that 85 percent of American voters want and expect the nation to continue to invest in LWCF. Wildfire Disaster Funding Act (WDFA) - WDFA is a bipartisan proposal that seeks to prevent the land management agencies from having to borrow money from other, unrelated accounts when wildfire budgets run dry. The proposal recognizes that wildfires outside of the ten year average need to be treated like the natural disasters they are, and funded similarly to the disaster response to hurricanes and floods. 10