PSW Weekly Round-Up - 10/15

Lame Duck Session. The Senate last week passed a reauthorization of the Water Resources Development Act and approved a long list of judicial and executive nominations before leaving town until November. Both chambers are now in recess until Nov. 13, with periodic pro forma sessions. The congressional schedule calls for a Thanksgiving recess the week of Nov. 19 and a targeted adjournment date of Dec. 14, leaving just four weeks to address a full agenda.

The biggest battle in the lame duck will be over how much money to appropriate for the border wall. Neither the full House nor Senate has considered an FY 2019 Homeland Security appropriations bill, but money for border security is included in the measures approved by the two appropriations committees. The final funding level is expected to be somewhere between the Senate’s $1.6 billion (for “pedestrian fencing”) and the House’s $5 billion. President Trump is fighting for the $5 billion figure, but Democrats will be unwilling to go much above $1.6 billion unless they can bargain for something in return. Sixty votes will be needed for Senate approval, so Republicans will need Democratic support for the final bill.

The Homeland Security bill is one of seven FY 2019 appropriations bills that have not yet been enacted. Four of the seven --- Environment, Financial Services, Transportation/HUD, and Agriculture/FDA --- are expected to be wrapped up in a minibus not long after Congress reconvenes. That would then leave only three bills – Homeland Security, State/Foreign Operations, and Commerce/Justice/Science – to be finalized in the lame duck. Appropriators will be working to get agreements before Dec. 7, when the Continuing Resolution expires. If there’s no deal by then, President Trump could threaten to shut down those parts of the government that don’t have full-year funding. The threat is unlikely to sway Senate Democrats.

NAFTA/USMCA. On Oct. 12, the U.S. International Trade Commission (ITC) initiated its investigation into the likely economic impact of the new U.S.-Mexico-Canada Agreement (USMCA). The ITC will hold a hearing on the potential economic impacts of the USMCA on Nov. 15, with requests to appear at the hearing due Oct. 29. Public comments on the ITC investigation are due Dec. 20. An ITC spokeswoman indicated the Commission’s report on its findings cannot be issued before then.

According to Trade Promotion Authority (TPA) law, the ITC must issue a report within 105 days of the president signing a new trade agreement. If the President signs the agreement at the end of November, which is the earliest possible date under the TPA timeline, the ITC would have until mid-March 2019 to release the report. USTR lawyers are currently undertaking a “legal scrub” of the USMCA text. Under TPA requirements, the administration must release a list of required changes to law within 60 days after the agreement is signed.

In other trade developments, the USTR may notify Congress of formal trade negotiations with the EU, UK, and Japan as soon as this week.

Elections Update

Big Picture. Politics rolled out the red carpet this week when megastars Taylor Swift and Kanye West swept up media attention. Swift spoke specifically about the Tennessee Senate and House elections, while encouraging her audiences to register to vote in the upcoming midterms. Meanwhile, West met with President Trump at the White House where the two discussed education, prison reform and the 13th Amendment (which abolished slavery) --- among other things.

Swift’s comments over the past week may have stimulated registrations primarily among voters under age 30. Highly contested states such as Florida, Illinois, Missouri, Nevada, Tennessee, and Texas have all reported increased voter registrations. Historically, voter turnout in midterm elections has been lower than in presidential elections, but the surge of voter registrations since 2016 has excited both sides of the aisle.

This week, news broke that Georgia’s Secretary of State and Republican candidate for Governor, Brian Kemp, allegedly stalled over 53,000 voter applications. Kemp is up against Democrat Stacey Abrams, who, if elected, would be the first black female governor in the country. Seventy percent of the stalled applications were from black voters, which has caused national outrage and concern among nonpartisan agencies. Kemp has denied the allegations of any impropriety or voting rights violations.

Fifteen states have October deadlines for voter registration, while 16 states and the District of Columbia have early November deadlines. Nineteen states (including battlegrounds Arizona, Florida, Georgia, Missouri, Tennessee and Texas) have already ended their registration periods as the midterms draw near.

Quick Hits.

• Days Until Election: 22
• Generic Ballot Average: Democrats +8.7%, according to FiveThirtyEight.com
• Number of House Toss-ups: 31 (29 GOP Seats / 2 Dem Seats)
• Number of Senate Toss-ups: 9 (4 GOP Seats / 5 Dem Seats)

Factoid #1. In 2014, voter turnout in the midterm elections was the lowest it has been since World War II. If voter enthusiasm is any guide, 2018 will be markedly different. According to a Washington Post-ABC News poll conducted Oct. 8-11, voter enthusiasm is up significantly from four years ago, with 77% of registered voters saying they are certain to vote or have already voted in the midterms, compared to 65% in Oct. 2014. The sharpest rise is among Democrats, with 81% likely to vote versus 63% in 2014. Independent voters also showed a sharp spike in enthusiasm, from 59% in 2014 to 72% this year. Republicans were starting from an already-high level of voter enthusiasm in 2014, 75%, which increased to 79% for 2018.

Factoid #2. Since the end of July, Democratic candidates in the 70 most contested House races have reserved $109 million in TV ads, compared to $60 million for Republicans, Politico reports.

Factoid #3. Since 2000, 19 former governors have run for the U.S. Senate --- 11 have won and eight have lost. Of the 11 former governors who won Senate seats, the average time between running for the Senate after leaving the governor’s office was 3.45 years, while the eight losers averaged 9.75 years out of the governor’s mansion. Former governors Phil Bredesen (eight years out of office), Mitt Romney (12 years out of office), and current Florida governor Rick Scott are running for the Senate this year, while former governors Joe Manchin, Tim Kaine, and Angus King are looking to hold onto their Senate seats.

Featured House Race -- California-49.

Foreign Affairs Chair Ed Royce is set to retire after having held the Northern Orange County seat for 26 years. Clinton won the district by nine points in 2016, after Romney had carried the seat by two points in 2012. The race has remained in the Toss-Up column since the primary in May.

Democrats narrowly leveraged a candidate into the field after Gil Cisneros garnered 19% of the vote in California’s jungle primary format, where the top two vote getters, regardless of party, advance to the general election. A former Naval officer, Cisneros became a philanthropist supporting education and veterans after winning over $200 million in a 2010 lottery. Largely self-financed, he has already received considerable outside help from both the party and third-party Democratic groups hoping to flip this seat.

Republican Young Kim worked for Rep. Royce’s district office for nearly 20 years before serving in the California legislature for one term. She currently owns a government affairs consulting business. Lagging in fundraising (by roughly $4 million), Kim will rely heavily on her experience in public service and minority advocacy in the district.

The California 39th is a highly diverse district with a 32% white, 32% Hispanic, and 32% Asian population. Royce was a well-known figure who was able to win easily in the diverse district that Clinton previously carried. Analysts believe that Democrats will do well here because there is no governor’s race this cycle so Republican voter turnout will be lower. On the other hand, Republicans may be motivated to turn out in support of a referendum to repeal a 12-cent-per-gallon increase in the gas tax that was enacted last year.

Featured Senate Race-- Tennessee.

Foreign Relations Chair Bob Corker is leaving his Senate seat after two terms. The last Democrat to win a Senate seat from Tennessee was Al Gore in 1990, but he was not able to carry his home state against George Bush in the 2000 presidential election. Trump won Tennessee by 26 points in 2016.

Rep. Marsha Blackburn decided to run for Corker’s seat after 16 years representing her western Nashville and Clarksville district. Blackburn is running on the platform of supporting the Trump agenda, while tying her Democratic opponent, Phil Bredesen, to Democratic congressional leadership and Hillary Clinton.

Democrats have a strong contender in former two-term Tennessee Governor Bredesen, who was the last Democrat to win a statewide election in 2006. Bredesen, a self-confessed centrist who styles himself in the old Southern Democrat manner, has kept his campaign tightly focused on retail politics and issues that affect Tennesseans every day. He has utilized big names from the Tennessee Republican ranks to support his candidacy based on past public statements released by the party (namely Sen. Corker and former U.S. Rep. Chuck Fleischmann).

Thus far, outside spending has played a big role in this race, with roughly $7 million spent on Blackburn and $3.6 million in support of Bredesen. Each candidate has raised over $8 million this cycle. The Real Clear Politics average has Blackburn up +2.7% over the past month, and the race is rated as a Toss-Up.