This Week In Washington

More Info: Michael DiMaria | Partner and SW Regional Director | 602-717-3891 | [email protected]

Thanks for your interest in Washington, D.C., for reading This Week in Washington, and for watching Total Spectrum Spotlight.

We decided to do a bonus This Week as a clean-up-and-button-down issue before next week’s elections. In Heard on the Hill, Erik Paulsen and I summarized ‘No Judge Left Behind’ and the successful confirmation of Justice Barrett. We also look at the reason why the COVID stimulus bill couldn’t happen before the election, what’s behind all the optimism about a COVID vaccine, the Congressional Review Act and how it could be used next year, and the outlook for a continued Republican Senate majority from the perspective of Republican strategists.

Al Jackson reports on prospects for defense appropriations over the next four years under a Trump or Biden Administration, and with a Republican or Democratic Majority in the Senate.

Total Spectrum Spotlight features part two of our interview with Neil Newhouse, co-founder of Public Opinion Strategies. Neil is an outstanding pollster with over 40 years of experience. He is a pro’s pro and a wonderful communicator. We had a wonderful response to part one of the interview, and I am sure you will find part two just as informative and interesting.

We will be back on November 11 with a look back at what happened and why in next week’s elections, and a look forward to the lame duck session and 2021. Stay safe.

Steve Gordon, Managing Partner

The Art of Polling: Part II

Join us for the conclusion of a fantastic conversation with polling expert Neil Newhouse of Public Opinion Strategies. Neil offers an insider’s perspective on how polls are conducted and how to better understand what sets good polls apart from bad ones.

Find Part #1 and past editions of Total Spectrum Spotlight on YouTube.

Heard on The Hill

By Steve Gordon, Total Spectrum Managing Partner and Former Congressman Erik Paulsen (2009-2019), Total Spectrum Strategic Consultant

Third Quarter Gross National Product

America’s economy bounced back in a BIG way in the third quarter. The Commerce Department announced Thursday that the economy grew at an annualized rate of 33.1%. This was the fastest pace of annualized growth on record, which followed the worst drop of annualized growth on record when America shut down all non-essential services to prevent the growth of COVID.

Real consumer spending rose 8.9% – an annualized rate of 40.7% – in the third quarter. Both goods and services saw sharp increases. Business investment also surged, increasing 4.7%, or 20.3% on an annualized basis.

We are not yet out of the woods… clearly, we have to expect a few tough months ahead. But it appears that we are on the right path that will take us toward a brighter 2021.

Presidential Political News

The NBC News Political Unit has moved Arizona on their political map from Lean Democrat to Toss-Up.

The Toss-Up states according to NBC News are Arizona, Florida, Georgia, Iowa, Maine’s 2^nd Congressional District, North Carolina, Ohio, and Texas, for a total of 134 electoral votes. The Lean Democrat states are Nebraska’s 2^nd Congressional District, Michigan, Minnesota, Nevada, New Hampshire, Pennsylvania, and Wisconsin, for a total of 67 electoral votes. There are no states currently rated as Lean Republican.

We are coming down to the final days of the campaign, and both campaigns and affiliated groups are going to light up the airwaves with ads. Total spending on radio and television advertising – from the Presidential campaigns and their aligned outside groups – is estimated to total over $150 million, and Democrats are going to outspend Republicans roughly two to one.

Judge Barrett is now Justice Barrett

The Senate Monday night confirmed Amy Coney Barrett to the U.S. Supreme Court, cementing a 6-to-3 conservative majority. Majority Leader McConnell said that “the reason this outcome came about is that we had a series of successful elections.”

Leave No Judge Behind

Leader McConnell and the Senate Republican majority confirmed 220 of President Trump’s judicial nominees. This total includes three Supreme Court justices, 53 circuit court nominees, and 162 district court judges.

COVID Stimulus Bill

Republicans in the Senate and the House charge that the Speaker really did not want to pass a stimulus deal before the election and give the President a win. The Speaker charges that the Republican Senate caucus was divided. Both statements are more right than wrong.

The Democratic House majority was built by moderates who beat Republican incumbents, but the Speaker had to balance the view of House moderates who made the majority with the view of House Progressives who make the most noise. Moderate Democratic members of Congress kept the pressure on the Speaker to negotiate with the Administration. At the same time, the Speaker established a marker in May with the $3 trillion HEROES Act, which included many items of the progressive agenda… and then later passed an updated ‘skinny’ HEROES Act that would have spent about $2.2 trillion.

Moderate Democrats needed a stimulus deal – or at the very least the perception that the Speaker was working toward one – before the election. Progressives did not want to give President Trump a victory of any sort. The Speaker felt that she could posture on the bill, and she did. She also knew that Senate Republicans were divided on the stimulus, and they were.

About 13 Republican Senators were on board to support a significant additional stimulus package. About 41 Republican Senators preferred a targeted bill totaling about $600 billion – which only sounds like a ‘small’ package because we have gotten accustomed to hearing about massive stimulus bills in the neighborhood of $2-$3 trillion.

The Administration called for a large stimulus bill, and Secretary Mnuchin worked hard to negotiate a deal. But it was a fixed game he couldn’t win.

More aid is needed, and more will surely be forthcoming. The question is when and how much, and the election will have a big impact on the answers to those questions.

Operation Warp Speed

There is little doubt that the development of safe and effective vaccines is the way we get out of the pandemic. Operation Warp Speed was the vision of Senators Roy Blunt (R-MO) and Lamar Alexander (R-TN), both members of the Appropriations Committee. Senator Blunt is the Chairman of the Appropriations Subcommittee on Labor, Health, and Human Services, Education and Related Committees, while Senator Alexander serves with Senator Blunt on that subcommittee, and is the Chairman of the Senate Health, Education, Labor, and Pensions Committee.

Health and Human Services Secretary Alex Azar issued a short report on October 23^rd about Operation Warp Speed.

The Congressional Review Act

Many people will recall that President Trump and the Republican Senate majority worked together in the first months of 2017 to overturn some administrative rules that were passed in the last 60 days of the Obama Administration. They used the Congressional Review Act 16 times to negate those rules, and you can bet money that if Joe Biden is elected president and if Democrats achieve a majority in the Senate, they will similarly use this Act to negate late-passing Trump Administration rules.

The Congressional Review Act was enacted in 1996, but it was only used one time prior to 2017 because it is very difficult to use it unless the majority party controls both the House, the Senate, and the Presidency.

An administrative rule is reviewable under this Act for 60 working legislative days in the House and 60 session days in the Senate. Assuming the House sticks to its current calendar, June 24 (or thereabouts) is the last date a rule could be reviewed in 2021 if Joe Biden is elected and if there is a Democratic Senate Majority.

Outlook for the Senate

I have sampled Republican strategists and have come up with a narrative that describes what I heard from people with their eyes and ears placed squarely on the ground.

First, a disclaimer: Senator McConnell started saying near the outset of this two-year cycle that Republicans had no better than a 50-50 chance of holding the Senate, and he said it again yesterday. His prediction started to sink in over the summer and early fall as Republicans watched Democrats outraise and outspend them.

Republican candidates and strategists are still sitting on pins and needles, but they feel a little momentum from the successful Supreme Court nomination of Justice Barrett. There is also a natural tendency for races to tighten as voters ‘come home’ and Republicans are coming home in a number of key states too.

Republicans currently have a three-seat majority, and it is assumed by both Republican and Democratic strategists that Senator Doug Jones (D-AL) will lose to Republican Tommy Tuberville. His victory in Alabama will create a four-seat majority.

The races to watch still are Arizona, North Carolina, Maine, Montana, Iowa, Colorado, Georgia #1, the Georgia Special, Kansas, Alaska, and South Carolina. All these states have Republican senators running for reelection. The Republican challenger that has the best chance of defeating a Democratic incumbent is John James, who is opposing Senator Gary Peters in Michigan.

Republicans can afford to lose four seats if President Trump is reelected, or only three seats if Joe Biden is elected. That is because a Vice President Kamala Harris would break the tie and allow Senator Schumer to become the Majority Leader and Democrats to chair committees and control the agenda.

We may know next week which party will control the Senate, or we may have to wait until January 5, which is the date of the runoff election(s) in Georgia.

SOME IMPORTANT DATES

November 9 – The Senate returns to Washington
November 9 and 10– New Senator Orientation
December 14– Electoral College electors meet in each state
December 23 – Deadline for Senate to receive electors’ ballots
January 5 – Georgia run-off election

Defense Update

By Al Jackson, Strategic Consultant to Total Spectrum

With less than two weeks until one of the more important elections in our recent history, it’s time to take a look at the presidential candidates’ positions on national security.

Former Vice President Joe Biden has indicated that, if elected President, he doesn’t foresee major reductions in the U.S. defense budget as the military refocuses its attention to potential threats from world powers such as China and Russia. The challenge of meeting this objective will come from the progressive wing of the Democratic Party, which is calling for drastic reductions in defense spending, thereby weakening the strides made by the current administration to strengthen the military. The progressive wing of the Democratic Party is focused primarily on combating climate change through the Green New Deal and more spending on domestic giveaway programs. Combine this notion with pandemic-related economic pressures and it may ultimately add up to budget cuts for a Biden-controlled Pentagon.

In recent statements, former Vice President Biden has avoided any sweeping pronouncements about how defense spending might change in his administration. He has indicated he didn’t think budget cuts would be inevitable but suggests “we need priorities in the budget,” adding that the Pentagon must invest in emerging technologies. “We have to focus more on unmanned capacity, cyber and IT in a very modern world that is changing rapidly. I’ve met with a number of my advisors and some have suggested in certain areas the budget is going to have to be increased.” Mr. Biden vowed to better equip the National Guard and that he would work to reassure allies who are concerned about the last four years of an “America First” approach. He’s indicated backing for a small footprint of U.S. troops in the Middle East but couldn’t promise a full withdrawal given the complicated conditions in Syria, Afghanistan, and Iraq.

The news of Biden’s comments is consistent with the forecast that defense spending will be flat or down 4-8% over the next five years depending upon external political factors and the makeup of Congress. A Democrat-controlled White House and Congress could be detrimental to adequate defense spending. Putting even more pressure on the budget is the national deficit which ballooned to $3 trillion this year, fueled almost entirely by increased federal spending due to the pandemic. Congress and the White House are currently in negotiations to spend even more in pandemic-related funding, thereby exacerbating the deficit further. One issue to closely watch will be interest rates since rising borrowing costs for the government would make it more difficult for the Pentagon to sustain spending growth.

As it relates to future military budgets, the likely risk to defense spending will come less from the economy and more from Congress, depending upon which party is in control. Defense spending could experience major cuts should the Democrats take control, as it may empower the progressive wing of the party to greatly influence the process. Senator Bernie Sanders (I-VT) will likely assume the chairmanship of the Senate Committee on Budget if the Democrats win control of the Senate. Senator Sanders has been a longtime critic of robust defense spending. In fact, he led the fight in the Senate recently to cut the defense budget by a whopping 10%.

President Trump continues to advocate for an increase in defense spending to continue the rebuild of the military. Specifically his proposal would repeal the defense “sequester” cuts that were implemented in 2013, which enacts automatic spending reductions. The sequester cuts reduce the budget caps originally agreed upon in the Budget Control Act of 2011 by roughly $55 billion per year and repealing them will cost roughly $450 billion through 2026 before interest. The President would ask Congress to fully offset the cost of these changes, largely by reducing improper payments and cutting non-defense discretionary spending. Improper payments occur when federal funds go to the wrong recipient or the recipient receives the incorrect amount of funds. Trump’s proposal calls for:

Increasing the number of troops in the active Army from 475,000 to 540,000
Increasing the number of Marine battalions from 24 to 36
Increasing the number of Navy ships from a planned 280 to 350
Increasing the number of Air Force fighter aircraft to at least 1,200
Instructing his generals to present a plan to defeat ISIS
Modernizing missile defense and cyber security

In order to help make room for this new spending, Trump calls for other countries – including Japan, Germany, South Korea, Saudi Arabia, and members of NATO – to take more responsibility for their own defense needs or reimburse the United States for what they provide.

President Trump has been a champion for the military during this first term in office by pushing for increases to defense spending, major new weapons programs, and establishing a new branch in the Space Force. The President has also promised to wind down U.S. troop commitments in Afghanistan and the Middle East while focusing on greater competition with China and others. Other achievements include the following:

Increases in the defense budget during the first two years in office, which reached $716 billion in 2019. He proposed some $750 billion in 2020 and $740 billion for the upcoming FY2021.
The administration’s 2018 National Defense Strategy, the first such review since 2014, emphasized the importance of the Asia-Pacific and European regions, with a particular focus on competing with China and Russia.
President Trump campaigned on removing U.S. forces from Afghanistan. While he increased U.S. troop presence in 2017 to deal with the uprise of ISIS, by July 2020, U.S. troop levels in the country had fallen to 8,600 from 12,000 earlier in the year.
An updated missile defense plan was introduced in 2019, the first such review since 2010, which emphasizes using new technologies and space-based systems to protect the United States and its allies.
A new, sixth branch of the military, a U.S. Space Force was created in 2019, which is established now as one of eleven unified combatant commands.
The administration’s 2018 Nuclear Posture Review, the first update since 2010, announced plans for the first new nuclear weapons since the end of the Cold War and broadened the circumstances for the use of such weapons.
The United States withdrew from the 1987 Intermediate-Range Nuclear Forces (INF) treaty citing Russian violations, but the President has expressed hope for new arms-control negotiations with Moscow.
His administration also overturned an Obama-era policy allowing transgender personnel to serve openly in the military.

In recent defense news, Congress recently approved the Pentagon’s reprogramming request to the tune of $1.3 billion in already-appropriated funding. The request to shift billions across various accounts in the defense budget is an annual practice by the Pentagon to fix spending issues and address emerging requirements. Additionally, the National Defense Authorization Act (NDAA) remains in conference between the House and Senate. The bill should be on the floor of each chamber soon after the election. Last month the President signed a continuing resolution, funding the government until December 12, 2020. Depending upon the outcome of the election, there could be another CR that could take us through March or April 2021.

What you need to know about Trump’s and Biden’s Platforms

Click image below

Biden campaign has outraised, outspent Trump

Click image below

What you need to know about Uninsurance in America

Click image below

Pandemic tide rises as election approaches

Click image below

This e-newsletter is produced by Total Spectrum/Steve Gordon and Associates and the Arizona Chamber of Commerce and Industry. The views expressed herein may include subjective commentary and analysis that are the views of the editors and authors alone. Information in this e-newsletter is obtained from sources believed to be reliable, but that cannot be guaranteed as independently investigated or verified. Information in this e-newsletter is not an endorsement, advertisement, recommendation, or any type of advice; political, legal, financial or otherwise. For questions about the content of this e-newsletter, please contact the Arizona Chamber of Commerce and Industry.

This Week In Washington