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Legislative / Policy Update

House Floor. There will be no votes this week, but on Monday and Thursday the House will be in pro forma session, allowing bills to be introduced and Senate-passed bills to be received in the House. Members will return next week for the final time before the elections to deal with FY 2019 spending bills.

Senate Floor. The Senate is in session except for the observance of Yom Kippur on Wednesday. Senators are expected to approve three bills --- the conference report on the Defense/Labor-HHS appropriations for FY 2019, a package of proposals aimed at combating the opioid abuse epidemic, and legislation that would make it easier for pharmacists to advise patients of cheaper alternatives to drugs prescribed by their doctors.

Government Funding. Even though not all the FY 2019 appropriations bills will be enacted by the start of the fiscal year on Oct. 1, there will be no government shutdown. Lawmakers have agreed to approve a continuing resolution that will provide funding through Dec. 7. The CR will be included in the Defense/Labor-HHS-Education spending bill that the Senate plans to pass this week. House passage is expected the following week. The CR allows Congress to postpone a battle over funding for the border wall until after the midterm elections. Negotiators are trying to work out a deal before Sept. 30 on a minibus that combines four bills --- Interior-Environment, Financial Services, Transportation-HUD, and Agriculture-FDA. However, if a deal is not reached by then, funding for those departments will be covered by the CR.

FAA and Farm Bill. Sept. 30 is also the deadline for Congress to act on an FAA reauthorization bill and the 2018 farm bill. It’s possible that neither will be done by then, and short-term extensions will be needed. An informal House-Senate conference committee is trying to hammer out a deal on the FAA bill. However, since the Senate never passed its bill, the negotiations are a little trickier than usual, and there is Democratic resistance to a provision that would preempt state rules related to meal and rest hours for interstate truckers. The farm bill, meanwhile, is the subject of formal conference committee negotiations, but the outcome is really in the hands of the “Big Four” --- the chairs and ranking members of the House and Senate agriculture committees. Three of the four appear to be ready to strike a deal, but House Agriculture Chairman Mike Conaway continues to push for strict work requirements for participants in the Supplemental Nutrition Assistance Program --- language that would likely kill the bill in the Senate.

Kavanaugh Vote. In light of new allegations against Supreme Court nominee Brett Kavanaugh, two Republican Senators (Jeff Flake and Bob Corker) have joined Democrats in saying the Judiciary Committee should not vote on the nomination until the allegations are investigated. The committee is currently planning to vote Thursday at 1:45 p.m. Republicans would like a vote in the Senate the week of Sept. 24.

Tax Reform 2.0. House Speaker Ryan has indicated that the House will vote on three tax bills when lawmakers return the week of Sept. 24. The three measures, which were approved by the Ways and Means Committee on Sept. 13, would (1) make permanent the tax cuts for individuals and pass-through businesses that are scheduled to expire at the end of 2025, (2) promote retirement savings, and (3) reduce barriers to new business formation. The bill making the tax cuts permanent does not have enough support to clear the 60-vote threshold in the Senate, but it’s possible that in the lame-duck session Congress could approve a retirement savings bill that might also include an extension of certain expiring tax benefits, some technical corrections to the 2017 tax reform bill, and possibly legislative adjustments to the 2017 bill.

NAFTA Negotiations. The U.S. wants more access to the Canadian dairy market, and that continues to be one of the major stumbling blocks in the NAFTA negotiations. While Mexico has wrapped up its talks with the U.S., a deal with Canada has yet to be finalized and talks are expected to continue this week. If a deal is to be signed before the new Mexican president takes office on Dec. 1, the text of the new NAFTA agreement must be submitted to Congress by Sept. 30.

China Tariffs. The Trump Administration this week plans to announce tariffs on $200 billion in Chinese goods imported into the U.S. The tariff rate is expected to be 10%, rather than the 25% rate floated in August. China has said it will respond by targeting $60 billion of U.S. goods with tariffs that could range from 5% to 25%. In July, the Administration imposed 25% tariffs on $50 billion of Chinese goods and China responded in kind.

Elections Update

Big Picture. Democrats need a net gain of 23 seats to regain control of the House next Congress. According to The Hill, the President’s party has lost seats in 36 of the 39 midterm cycles going back to the Civil War. The average is a net loss of 33 seats over that period. While there is little doubt that Democrats will gain seats, there is competing data as to whether those gains will be greater or less than the historical average. On the one hand, the President’s numbers are historically low and there is unprecedented energy on the left --- a possible harbinger of Democratic turnout on election day. On the other hand, Republicans believe voters will reward them for a strong economy and lower taxes. Importantly, the Congressional redistricting following the 2010 census means fewer competitive House seats overall.

Democrats have a steep hill to climb in their effort to take back the Senate. They are defending 10 seats that Trump carried in 2016, five of which he carried by double digits. Currently, the Cook Political Report rates eight seats as toss-ups, including GOP-held seats in Tennessee, Arizona, and Nevada. The Texas race is getting a lot of buzz…more on that in a moment. The Democratic campaign committees are outpacing the counterparts on the right. Outside spending is breaking new records, as independent expenditures have more than tripled since Q1, now totaling more than $300 million.

Quick Hitters.

  • Days Until Election: 50
  • Generic Ballot Average: Democrats +10%, according to FiveThirtyEight.com
  • Number of House Toss-Ups: 30 (28 GOP Seats / 2 Dem Seats)
  • Number of Senate Toss-Ups: 8 (3 GOP Seats / 5 Dem Seats)

Factoid #1. According to a Newsweek story this weekend, President Obama had 46% approval / 47% disapproval ratings at this time in 2010. Democrats lost a net 63 House seats that year. By comparison, FiveThirtyEight’s composite currently has President Trump at 40.2% approval / 53.6% disapproval.

Factoid #2. A record 256 women --- 197 Democrats and 59 Republicans --- will be on the ballot as House or Senate candidates this fall. A recent Pew study found that 61% of Americans say it’s a good thing that more women are running for Congress this year. Kaiser Family Foundation polling found that women voters ages 18-44 are more enthusiastic about voting this year than in previous mid-term elections; 29% of women surveyed said that health care is the #1 issue for 2018, followed by gun policy (24%), the economy and jobs (22%), and immigration (20%). A large share of women voters are also more likely to vote for a candidate that supports work-related issues like paid parental leave and harsher penalties for sexual harassment in the workplace.

Featured House Race - Michigan-11.

Two-term GOP Congressman David Trott is retiring. Trump won the district in 2016 by 4%. FiveThirtyEight.com has the race as Lean D.

Democratic candidate Haley Stevens is the 33-year-old former chief of staff to the Obama Auto Task Force. She won a crowded Democratic primary with 27% of the vote.

Republican candidate Lena Epstein served as Trump's 2016 Michigan campaign chair. She is largely self-funded and won the Republican nomination with 31% of the vote.

The district is 99% suburban, a constituency that Democrats hope will break hard for them in November. Democratic turnout in the primary slightly outpaced Republican turnout, 89,000 to 85,000.

Featured Senate Race - Texas.

The last Democrat to win a Texas Senate race was Lloyd Bentsen in 1988. Trump won Texas by 9% in 2016. Real Clear Politics has Senator Ted Cruz leading Congressman Beto O’Rourke by 3.2%.

O’Rourke has raised $23.65 million in 2017-2018, $23.5 million of which is from individual contributions. Cruz in the same period raised $13.2 million, with $9.8 million from individual contributions.

Outside groups have spent nearly $900,000 in support of Cruz or in opposition to O’Rourke this year. Nearly two-thirds of those expenditures came within the last three weeks, according to a review of campaign finance data.

The two candidates will debate three times before November. The domestic policy debates will take place Sept. 21 at SMU in Dallas and Sept. 30 at the University of Houston, followed by a foreign policy debate on Oct. 16 in San Antonio.


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