Clint's Window: A Divided Government, Again (11/5/96)

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	Divided Government, Again Clint's Window by Clint Stretch, Director Tax Legislative Affairs, Deloitte & Touche LLP Tuesday, November 5, 1996

Polls show Clinton probably will win, Senate leaning to the GOP,
and the House remains a toss-up

Polls predict that the divided government of the last two years will be reinstated in some form by voters when they go to the voting booths throughout the day Nov. 5.

President Bill Clinton probably will be returned to the White House and many of the proposals he offered during the campaign and in the fiscal 1997 budget will be resurrected in the fiscal 1998 budget.

As for the House, pollsters say that whichever party is in the majority -- it’s a toss-up, but leaning Republican right now -- the winner probably will control only by a razor-thin margin. Currently, there are 235 Republicans, 197 Democrats, and one independent, who generally votes with the Democrats. Two vacant seats were held by a Republican and a Democrat.

The Senate also is a toss-up, but is leaning toward a GOP victory. The possibility also exists that neither side will gain a majority, and there will be an even split of 50 Democrats and 50 Republicans. Under such a scenario, the Democrats probably would control the Senate, given that Vice President Al Gore under the U.S. Constitution would cast the deciding vote. Currently, 53 Republicans and 47 Democrats hold seats in the Senate.

Even if the Democrats win the White House and both houses of Congress -- an unlikely outcome -- Republicans almost certainly will have enough votes to block action in the Senate and will be able to moderate Democratic positions.

Similarly, the Democrats will be able to influence legislation in Congress if the GOP retains control of Congress because they will have sufficient numbers in the Senate to block action.

Coattails, but how long?

The size of voter turn-out and the length of Clinton’s coattails will determine which party wins the battle to control Congress.

Traditionally, in an election year such as this one when the voters are choosing both Congress and the president, the party that captures the White House picks up congressional seats.

The size of the president’s party’s gain in Congress varies greatly from election to election. A large victory in the presidential election by one party does not necessarily translate into as large a congressional victory. Neither former President Richard Nixon’s 1972 reelection, nor former President Ronald Reagan’s 1984 reelection produced significant gains for congressional Republicans.

New chairs possible

Based on the latest polls, the greatest possible impact the congressional elections now could have on tax policy would be to alter the chairmen of the tax-writing committees in Congress. If the Democrats gain a majority, Rep. Charles Rangel, D-N.Y., and Sen. Daniel Patrick Moynihan, D-N.Y., are next in line to become chairmen.

Regardless of which party wins, expect some change in the composition of the tax-writing committees because of the retirement of some members and the defeat of others.

Of the current 39-member House Ways and Means Committee, eight members are not running for re-election for various reasons. Of the 23 committee Republicans, Rep. Mel Hancock, Mo., is retiring; Rep. Dick Zimmer, N.J., and Rep. James Hayes, La., are seeking higher office; and Rep. Greg Laughlin, Texas, was defeated in a state primary.

On the Democratic side, three top members are retiring: Reps. Sam Gibbons, Fla., Andy Jacobs, Ind., and Harold Ford, Tenn. Their retirement would be particularly significant in the context of a Democratic takeover, given that subcommittee chairs usually are given to senior subcommittee members. Rep. Lewis Payne, D-Va., also is retiring.

Though many committee members -- including Chairman Bill Archer, R-Texas and Rangel -- are running unopposed or are expected to prevail, committee members Rep. John Ensign, R-Nev., and Rep. Phil English, R-Pa., are in tight races.

If the GOP prevails in the election, the ratio of Democrats to Republicans on the committee would remain the same, but the total number of slots could shrink, Archer told reporters. Thus, some open committee seats may not be filled after the election, he said.

Rep. William Jefferson, D-La., whose seat on the committee was cut in 1993 when the GOP regained control over Congress, is among the House Democrats interested in joining the committee.

Finance Committee: The 19-member Senate Finance Committee also has three committee members retiring, Sen. Alan Simpson, R-Wyo., Sen. Bill Bradley, D-N.J., and Sen. David Pryor, D-Ark.

Committee members Max Baucus, D-Mont., and Sen. Larry Pressler, R-S.D., are in tight elections. Also up for re-election are committee members Phil Gramm, R-Texas, and Jay Rockefeller, D-W.Va.

Budget Committees: Other important committees that have an impact on tax policy are the budget committees, and their chairs will be affected by the outcome of the election.

Because the House Budget Committee’s chair is determined on a rotating basis, the party caucuses after the election must determine whether Rep. John Kasich, R-Ohio, and Rep. Martin Sabo, D-Minn., will lead the committee as chairman and ranking member.

On the Senate side, Sen. Pete Domenici, R-N.M., and Sen. Frank Lautenberg, D-N.J., are expected to lead the committee, depending on the outcome of the election.