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► Midterm Surprises Leave Congress Divided

As we write this, many days after the midterm election, one thing is clear: This was a historic election in that the party in power performed far better than anyone predicted—indeed, better than any such party has performed in decades. As a result, the Democrats will retain control of the Senate, with Republicans at this point winning the House by a narrow margin.

Early Conclusions

Abortion really mattered in states where it was at risk, affecting Senate, House, and gubernatorial races (e.g., Arizona, Michigan, Pennsylvania, and Virginia). Further, proabortion referenda/amendments won in unexpected states (Kentucky, Montana, and Vermont). Where abortion rights were not threatened (California and New York), other, more traditional midterm patterns were followed, which was reflected in Republican success in New York (the party won 6 of 7 contested seats) and unpredicted strength in California, which may decide the House.

“Quality” candidates mattered in races across the board (Arizona, Nevada, New Hampshire, Michigan, and Pennsylvania) and may keep Georgia in the Democratic Senate camp. Further, the most aggressive election deniers, the four “America First” secretaries of state, all lost, preserving election integrity. Over 140 Republican incumbent election deniers, however, were reelected to the House. Mitch McConnell again proved he is the most astute vote counter in Congress—or anywhere.

The Lame Duck Session remains critical, but with Democrats retaining the Senate, it is slightly less critical. The government funding expires on December 16 so that will be priority one. The debt ceiling is looming in 2023, so that may also be a Lame Duck focus. The Democrats will continue to confirm judges, while Equal Employment Opportunity Commission (EEOC), Office of Information and Regulatory Affairs, and Wage and Hour Division (WHD) nominees remain secondary concerns since they can be renominated in the new Congress. There may be some “tail wind” from the election results for the administration, but Republican opposition will be a harbinger of legislative “life” in the next House.

Impact of Republican House on Employers

Even the narrowest of victories, which now seems likely, will have a profound effect on the House, it may not yield significant changes for employers or the economy. Administration policies remain intact, and agency leadership remains in place. But a new Republican speaker will control the agenda, and Republicans will chair all committees. As a result, there will be a limited legislative calendar, but there will be House investigations, ad infinitum.

Significantly, Virginia Foxx, an outspoken critic of President Joe Biden’s pro-union agenda, will chair the House Labor Committee, and the leadership of the U.S. Department of Labor (the WHDH, the Office of Federal Contract Compliance Programs, and the Occupational Safety and Health Administration), the Equal Employment Opportunity Commission, and the National Labor Relations Board (NLRB) can expect to be constantly questioned in formal hearings. Every initiative will be challenged, every regulation contested. The often-overstretched enforcement agencies will be required to devote precious time to preparing for and testifying before Congress.

Appropriations for enforcement agencies will be squeezed even more in future budgets. The NLRB already is pleading for more funding in light of increased union organizing activity and subsequent Board responsibilities. Other agencies may find their capacity to accelerate the regulation writing process similarly impaired.

However, the new speaker, who is expected to be Kevin McCarthy, will be severely challenged to control his fractious but narrow majority. The House’s “Culture War” bills (a national abortion law, a national right-to-work law, amendments to the National Labor Relations Act, and means tests or limits for Medicare and Social Security) from the Freedom Caucus will die in the Democratic Senate, avoiding the need for politically charged vetoes during the runup to 2024.

As for House Democrats, they will struggle to build on this encouraging election to craft a lasting unified party and message. If Nancy Pelosi steps down or retires, a fierce and divisive leadership fight is likely.

Impact of Democratic Senate on Employers

The new Democratic Senate will likely have some of the same difficulties as the old Senate in close confirmation battles. If the majority is 51, Senators Joe Manchin and Krysten Sinema will have diminished clout, which would bode well for Biden’s nominees and for the continuation and possible expansion of the administration’s non-legislative priorities.

What Employers Can Expect

The only way forward in divided government is through presidential actions. There will be accelerated efforts to roll out and finalize worker-friendly regulations, such as those related to independent contractors; the overtime threshold; joint employers; federal contracting, environmental, social, and governance; and more from the Environmental Protection Agency. To do so, the agencies must have more and better leadership to succeed in a more hostile environment. 

This article was written by the editors of Federal Employment Law Insider.


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