What the 2012 Election Means Going Forward

This November marked the conclusion of a long and arduous presidential election. After nearly two years of politicking and billions of dollars spent the results are: President Obama was re-elected to a second term; the Democrats retained control of the Senate; and the Republicans retained control of the House. On the surface it would appear to be a status quo election, but there are important details within the election results that could have meaning for the IT community.

The Executive Branch

Obama defeated Mitt Romney by nearly 3.5 million votes and claimed 332 electoral votes over Romney’s 206. We expect that the president will seek to use his leverage during the lame duck session of Congress to get as much as he can with respect to revenues, as well as outline of potential entitlement reform. Most expect some kind of short-term agreement on the “fiscal cliff” and a framework for broader tax reform and deficit reduction. These will be addressed in the coming year.

Other items we anticipate will be high on the president’s agenda for 2013 are comprehensive immigration reform, legislation aimed at climate change and international trade agreements. In addition, there are many signature efforts from his first term – for example, financial and health care reform and broadband deployment – that require the administration’s attention with regard to implementation and protection of existing funding.

The Senate

In the Senate, Democrats had been expected to lose seats, if not lose their majority altogether. Instead, due to some strong campaigning by Democratic candidates and a boost from the top of the ticket in areas such as Massachusetts, Democrats lost just one seat that they were defending in Nebraska and picked up two formerly Republican seats in Indiana and Massachusetts. Angus King’s victory in Maine will add a second independent to the Senate and both will caucus with Democrats, thus providing the Democrats a 55 to 45 working majority.

As a result, Senate majority leader Harry Reid will play a much more prominent role in negotiations over the fiscal cliff and other key priorities for the administration such as broader tax reform and immigration reform. There have been some promising hints toward compromise with respect to the fiscal cliff, as some prominent Republicans have indicated a willingness to break with the “no-tax pledge” and some Democrats are speaking openly about entitlement reform. Still, in the longer term, with moderate Republicans Scott Brown, Olympia Snow and Richard Lugar leaving the Senate and victorious Republicans gutting out tight elections based on standard Republican principles, we do not expect that the Democratic gains will result in a wholesale move toward bipartisanship. Democrats do not hold a 60-seat majority and therefore the filibuster is still a potent tool.

The House of Representatives

As of this writing, in the House of Representatives, Democrats won 26 seats and lost 17 for a net pick up of nine congressional seats. This narrows a still sizeable Republican majority to 234 to 199. There are still two outstanding races in Louisiana and North Carolina. One involves a run-off between two Republicans and the other is a recount to assess a 600-plus vote difference.

Republicans in the House are leveraging their majority to place, as much as possible, the burden of negotiating the fiscal cliff on the president. Still, the White House understands that the time to shape a Republican response is now, before the draconian cuts and big tax increases of the fiscal cliff take effect.

House Democrats, especially conservative Democrats, may play a targeted role on must-pass issues where Republican leaders cannot secure enough conservatives votes. Still, we do not see a significant shift in philosophical posture in the House. While it is true that several of the more visible Tea Party members lost or nearly lost re-election – Alan West (FL) and Joe Walsh (IL) lost while Michele Bachman (MN) secured a narrow victory – the fact remains that many more of the Republican House losses were from more moderate conservatives – Judy Biggert (IL), Robert Dold (IL), Brian Bilbray (CA), Mary Bono Mack (CA) – and so their departure will likely empower the more conservative voices.

Leadership Posts of Note

One of the biggest victories this election delivered to the tech community was the rise of tech allies in Congress to key leadership positions. With respect to the Republican majority, Rep. McMorris Rogers (WA), a pro-tech policy maker with a strong tech-based constituency, will be the new Republican Conference Chair – the No. 3 position in the Republican leadership. Rep. Greg Walden (OR), the chair of the Telecommunications Subcommittee, will remain in that position and become the new chair of the National Republican Congressional Committee, which is responsible for recruiting and electing Republican candidates. Rep. Steve Scalise (LA), who is also a member of the Telecommunications Subcommittee, will become the chair of the Republican Study Committee – a caucus of conservatives in the House. Additionally, Rep. Bob Goodlatte (VA), who has been responsible for crafting the Republican tech agenda, will be the new chair of the Judiciary Committee. Fred Upton (MI) and Darrell Issa (CA), the chairs of the Energy and Commerce Committee and the Oversight and Government Reform Committee, respectively, will remain in their posts and will continue to be strong advocates for the tech community.

In the Senate, Jerry Moran (R-KS), a co-sponsor of the Start-Up 2.0 Act and friend of the tech community, will become the chair of the National Republican Senatorial Committee. For the Democrats, there were no major changes in the top leadership posts, but we await word on whether Michael Bennet (D-CO) will accept the post of chair of the Democratic Senatorial Campaign Committee, which is responsible for recruiting candidates and raising money for the 2014 mid-term elections. Regardless, Bennet should take on a higher leadership profile and has been friendly to tech issues, particularly with his leadership on crowd funding and high-skilled immigration.

Nancy Pelosi’s recent announcement to remain as Democratic leader in the House indicates there will not be much movement at the leadership table amongst Democrats. However, it wouldn’t be surprising to see an elevated position for Xavier Becerra, who is an emerging leader from Southern California and touts tech policy as a key part of his agenda. Democratic House leadership elections are scheduled for November 29.

The Future

One area that we could very well see alignment between Democrats and Republicans and the executive and legislative branches is immigration reform. The electoral writing is on the wall – Republicans must be proactive to earn the Latino vote if they hope to win the White House in the future. This stark reality will bring all sides to the table and this could have meaning for the high-tech community, which is looking for greater availability of talent from overseas, whether it comes from increased H1-B visas or from retention of STEM graduates here in the United States through a new visa category. As early as this week, Republicans in the House are expected to bring legislation to the floor that would reallocate up to 55,000 green cards a year to new green card programs for foreign graduates of U.S. universities with advanced STEM degrees.

Beyond that, the following are other items of relevance to the tech community:

Cybersecurity Reform: It failed again during the lame duck session but could come up again in the next Congress.

Broadband Deployment: The Administration set the ambitious goal of having broadband wireless Internet access available to 98 percent of the country.

Privacy: There could be an impetus to achieve reform on law enforcement and standards of privacy. We also anticipate a focus in Congress and by the administration on privacy and the mobile device marketplace.

A Skilled Workforce: While it is unclear whether the Senate and House can achieve agreement on big legislative pieces that underpin our workforce efforts (the Workforce Investment Act, the Perkins Act, the Elementary and Secondary Education Act), we do anticipate that the White House will use all of its arsenal to expand focus on STEM education, career and technical education and support for veterans.

Tax Reform: Key policies impacting the tech industry – from online sales tax to the R&D Tax Credit – will be debated as part of a comprehensive tax reform proposal expected in 2013.

The CompTIA Public Advocacy Team is looking forward to advocating for the IT industry in the New Year!