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The presidential race is a dead heat, with swing-state polls in recent weeks showing thin margins between the two candidates, within the margin of error, and multiple national likely-voter polls reported on October 13 showing them essentially tied:

• Democratic candidate Vice President Kamala Harris had 50% support among likely voters in an ABC News national poll, compared to 48% support for Former President Donald Trump
• Harris and Trump were deadlocked at 48% support among registered voters in an NBC News national poll
• Harris was ahead 51% to Trump's 48% among likely voters in a CBS national poll

A Newsweek article on the close race said, "The key to victory in the 2016 and 2020 elections was winning Michigan, Pennsylvania and Wisconsin, though neither Trump nor Biden's victory was a landslide. Trump narrowly won all three states in 2016, and Biden flipped them in 2020 when he also won by narrow margins." The story also mentioned a potential razor-thin margin of victory for Trump or Harris in Arizona and Nevada and a similarly close picture in Georgia and North Carolina (Biden flipped Georgia in 2020 after Trump won the state in 2016, while Trump won North Carolina in 2016 and 2020).

Of one closely watched swing state, Senator John Fetterman (D-PA) said on CNN October 14, "it's going to be very close in Pennsylvania. And it's undeniable, Trump does have a very strong connection for voters here in Pennsylvania, but it's also undeniable that Harris has really energized the Democratic base as well in there too."

Multiple recent news stories have discussed the prospect of the Senate flipping to Republican control. The Senate map leans in favor of Republicans, with Democrats and independents defending 23 seats, as opposed to 11 for Republicans. The current ratio is 51-49 and Republicans are highly favored to win in West Virginia with the retirement of Sen. Joe Manchin (D-WV). If Republicans hold their seats, any additional Republican pickup of a currently Democratic seat or a Trump presidency would deliver Senate control to the GOP.

"Control of the Senate appears likely to flip from the Democratic Party to the Republican Party this fall, as one of the nation's most endangered Democrats, Senator Jon Tester of Montana, trails his Republican challenger in his bid for re-election, according to a new poll from The New York Times and Siena College," the NYT said in an October 10 story. "Mr. Tester, who first won election to the Senate in 2006, is winning over moderate and independent voters and running far ahead of the Democrat at the top of the ticket, Vice President Kamala Harris. But as of now, that does not appear to be enough to survive in Montana, a conservative state where former President Donald J. Trump is ahead by 17 percentage points … "

"Heading into the 2024 cycle, Republicans saw a Senate map offering flip opportunities in eight red and purple states as a seemingly once-in-a-decade opportunity. Now, Republicans and Democrats are fighting over a smaller battlefield chiefly focused on two Democratic-held red-state seats in Montana and Ohio," ABC News reported October 9. "And while Senate races in Arizona, Michigan, Nevada, Pennsylvania and Wisconsin essentially remain coin flips, they're discussed in Washington and elsewhere as belonging to a second tier, while GOP-held seats in Florida and Texas are becoming the focus of increased spending. To be certain, Republicans are still favored by most prognosticators to take the Senate this year, but even some GOP operatives conceded that aspirations of a tidal wave election may not be within their grasp."

"Congress may be headed for an Election Day double flip. With less than four weeks to go, Republicans appear poised to win the Senate, which is currently controlled by the Democrats. The Democrats, meanwhile, seem to have a slight edge in the race for the Republican-controlled House," the Washington Post reported October 9. "If the polls and predictions prove right — and that is still a big if — it would be the first such flip, a historic and fitting outcome for a political era marked by slim margins and deep division."

Still, Senator Ted Cruz's (R-TX) re-election race in Texas against Rep. Colin Allred (D-TX) is closer than previously expected, according to a story in today's Wall Street Journal (WSJ), with Cruz leading by 4-5 points in recent polls but consistently running behind Trump, who won Texas by less than six points in 2020. The story said the race is "the latest test of whether Texas is becoming a purple state — in the vein of Georgia and North Carolina — or still leans red," and noted that "Texas is becoming younger and more urban, factors more favorable to Democrats." Cruz had a competitive election six years ago against Rep. Beto O'Rourke (D-TX), and Allred has seat-flipping bona fides from defeating 11-term Rep. Pete Sessions (R-TX) in 2018.

CNN Inside Politics October 13 included discussion of the fact that, while Republicans are favored to take the Senate in November, the House is a different story, because with so few battleground districts, it could go either way. Additionally, a CNN data reporter said, "We're probably not going to know who won the House for days, if not weeks, on end because the ballots are counted so slowly out in California. Of course, there's so many key districts there, key battleground districts." With all 435 House seats on the ballot, it's not unusual for a handful of races to remain unresolved for an extended period of time for a variety of reasons, simply as a statistical matter. But with a historically narrow 4-seat Republican majority, these unresolved races could determine control of the House in the next Congress.

Tax — A story in the October 14 WSJ gaming out tax policy scenarios for a Democratic or Republican sweep or split control of Washington said, in a GOP trifecta, Senate Finance Ranking Member Mike Crapo's (R-ID) view that extending TCJA provisions expiring at the end of 2025 shouldn't be offset because they would simply continue current policy "isn't universal, and some Republicans might be concerned enough about adding $4 trillion or more to budget deficits to resist that position." Senator Thom Tillis (R-NC) said any "non-pro-growth" policies should be paid for, quipping, "We're going to have to do car washes, bake sales, find the parts of the American Rescue Plan and the Inflation Reduction Act that are sources for pay-fors."

In a Democratic-controlled Washington, "Even with narrow majorities, Democrats could likely agree on some tax increases, because they would no longer be blocked by exiting Sens. Kyrsten Sinema and Joe Manchin, who limited the party's revenue-raising policies in 2021 and 2022 … Democrats would work down the list of what is most politically feasible, probably starting with a higher corporate tax rate and tax increases on U.S. companies' foreign profits." The story alluded to the temporary extension of Bush tax cuts after 2010 and permanency of the provisions except those for high incomes in early 2013 as precedent but noted of the 2025 tax cliff that "these extensions aren't just tax cuts. Moving pieces such as the $10,000 cap and international tax law create a much more complex negotiation."

A previously circulated WCEY Alert on taxes in the three election scenarios is available here.

An October 14 NYT story said VP Harris' September 25 Pittsburgh speech announcement that "we will reform our tax laws to make it easier for businesses to let workers share in their company's success" was rooted in her advisers' soliciting ideas from Wall Street and being pitched on providing more tax breaks for companies that allowed their workers to become part owners. The campaign had already been discussing such an idea with a private equity firm, it said. The idea is "emblematic of Ms. Harris's approach to economic policy since she took the helm of the Democratic Party in July … her campaign has carefully courted business leaders, organizing a steady stream of meetings and calls in which corporate executives and donors offer their thoughts on tax policy, financial regulation and other issues," the story said. A Harris-Walz campaign press release supporting the September 25 speech said the worker benefits being envisioned would include broad-based employee stock ownership and profit-sharing plans.

An EY Alert, "Final IRC Section 367(d) regulations open door to intangible property repatriation for US multinationals," is available here.

Health — On October 8, Vice President Kamala Harris unveiled her "Medicare at Home" proposal to expand Medicare to cover a home care aide for enrollees who are deemed "unable to independently perform activities of daily living like bathing, eating, and going to the bathroom and/or face serious cognitive impairment. The Harris campaign said cost sharing would be on a sliding scale based on income. The proposal also includes initiatives to bolster the home care workforce through private sector partnerships and improved wages. Harris proposed to pay for the expanded benefit, as well as expanded vision and hearing coverage, by expanding Medicare drug price negotiations, increasing manufacturer discounts on certain brand-name drugs, and increasing transparency on pharmacy benefit manager (PBM) practices.

Friday, October 18 (12 p.m.) is the EY Webcast, "Tax in a time of transition: legislative, economic, regulatory and IRS developments."

With Congress away, What to Expect in Washington is being published less frequently, though WCEY Alerts will be issued as events warrant.