Democrats have won control of the House in 2019 and are expected to hold at least 220 seats and Republicans at least 196 seats. Republicans have retained control of the Senate, though the party ratio will remain tight — the current tally is 51 Republicans, 46 Democrats for 2019 — meaning Republicans will need Democrats to pass most legislation with a filibuster-proof 60 votes. Gridlock could ensue. The campaign season focused on health care and immigration more so than taxes — for nearly half of voters, tax reform had no impact on how they voted, according to exit polls — and the results reflected a split between House seats more fought in suburban districts with voters sending a protest message about President Trump, and Senate races in more Trump-loyal rural states.

The results will impact the lame-duck session of Congress before the transfer of power in the House, and in 2019 as Washington returns to an era of divided government with House Democrats expected to conduct extensive oversight of the Trump administration, and possibly seeking areas of bipartisan compromise on policy priorities. While the dust has yet to settle following the elections, it is expected House GOP leaders will try to act on some priorities in the lame-duck session, and the success of that effort will depend in part on what they are willing to offer Democrats in return for their cooperation. There are only a handful of must-do items for the lame-duck session: (1) government funding beyond December 7; (2) reauthorization of the farm bill; and (3) extension of the National Flood Insurance Program beyond November 30. Other items that may be considered include:

• Tax Cuts and Jobs Act (TCJA) technical corrections (as IRS guidance continues to be released)
• Tax Reform 2.0 package, especially retirement incentives (already passed in the House)
• Tax extenders
• Repeal or further delay of certain Affordable Care Act (ACA) taxes
• Pharmaceutical company fix related to Medicare coverage gap

Democratic Leader Nancy Pelosi (D-CA) has suggested that Democrats could combine a vigorous investigation of the Trump administration along with bipartisanship in policy areas like infrastructure, which the President has long eyed as a priority. The President and the GOP-controlled Senate will serve as a backstop on partisan proposals House leaders may advance, and House Democrats will likely block some proposals from advancing beyond the Senate.

For more details on the 2018 election results, the lame duck session and the 2019 agenda, please see the attached Alert.

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ATTACHMENT

2018 Election