WASHINGTON UPDATE POLICY AND POLITICAL OVER VIEW - JANUARY 14, 2020

WASHINGTON UPDATE
POL ICY AND POL ITIC AL OVER VIEW

JANUARY 14, 2020

Congressional Dynamics
   Legislative Progress
       2019 ended with some significant accomplishments
       Democrats eager to show they can investigate AND
        legislate – particularly for vulnerable Members
       Republicans want to keep Senate and retake House
   Legislative Perils
       Senate impeachment trial
       Foreign policy concerns
       2020 campaigning underway

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Year-End Accomplishments
  Massive FY20 funding package served as a vehicle for dozens of
    bills; for example:
• 12 annual spending bills, with        • Repeal of Affordable Care Act
  $50B in new spending                    “Cadillac tax,” medical device tax,
                                          and annual fee on insurance
• Long-term extensions for EX-IM
                                          providers
  Bank, Terrorism Risk Insurance
  Act, Brand USA (tourism)              • Family First Transition Act (child
                                          welfare programs)
• Short-term extension for Flood
  Insurance program                     • Television Viewer Protection Act
                                          and Satellite Television
• Short-term extensions for variety
                                          Community Protection and
  of federal health programs
                                          Promotion Act
• Tax extenders / disaster tax relief
                                    • A host of foreign policy and
• SECURE Act (new retirement rules)   natural resources provisions
   and miners’ pension rescue
                                    • Raised age to buy tobacco from
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• LAB Act                             18 to 21

Year-End Accomplishments, cont’d
 Also in December:
     FY20 National Defense Authorization Act

       Defense policy bill enacted 59 years in a row
     Bipartisan anti-robocall legislation

     USMCA (NAFTA 2.0) implementing legislation

       Approved by House, awaiting Senate passage
     Building Blocks of STEM Act and FUTURE Act
      (education policy)

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Trump Agenda
 Looking ahead to 2020, expect President Trump to continue
    pushing first-term priorities:
       Trade policy, with a focus on bilateral efforts
       Judicial nominations
       Deregulatory efforts
       Continued emphasis on Executive Orders
 No shortage of distractions:
       Senate impeachment trial
       Foreign policy challenges
       Economic uncertainty
         Record low unemployment and high stock markets
         But, lingering manufacturing and trade concerns

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Congressional Agenda
   Despite conventional wisdom that nothing gets done in an election
    year, Congress will need to deliver on some legislation
   This year, Congress will need to:
       Fund the government – already agreed to FY21 spending levels

       Authorize defense programs (FY21 NDAA) – will it be 60 straight years?

       Address a host of expiring programs

         Surface transportation (FAST Act), Chemical Facility Security, 21st
           Century Cures Act, health care extenders, elementary and
           secondary education programs, immigration programs (e.g., E-
           verify), flood insurance, tax extenders

         Could do short-term extensions or substantive reforms

       Watch for a busy post-election lame duck session
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Congressional Agenda
   Other potential action / priorities for voters?
       Infrastructure: Comprehensive package unlikely, but watch for
        action on surface transportation and water resources (WRDA) bills
       Health care: Will May deadline to extend key health programs drive
        action on surprise billing or prescription drug prices? And some
        21st Century Cures Act funding expires in September…
       Privacy: Will state level action, primarily in California, serve as
        catalyst for federal bill?
       Trade: Lawmakers expected to finalize USMCA – and will continue
        oversight of administration’s trade and tariff policies
       Election / Cybersecurity
       Autonomous Vehicles
       Other Democratic priorities, e.g., climate (House E&C’s
        CLEAN Future Act)
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       And expect continued oversight from House Democrats

Key Congressional Dates
   February 4:     State of the Union
   February 10:    Trump FY21 Budget to Congress
   March 15:       Some Foreign Intelligence Surveillance Act
                    authorities expire
   April 1-3:      House Democratic Retreat
   April 17:       Chemical Facility Anti-Terrorism Standards
                    program expires
   April 22-24:    House Republican Retreat
   May 22:         Some federal health programs expire
   September 30:   End of Fiscal Year / expiring authorizations
   October 2:      House adjourns ahead of election
   October 9:      Senate adjourns ahead of election
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Key International Dates
   January 20-24:     World Economic Forum (Davos)
   January 31:        Brexit
   March 2:           Israeli General Election
   April 15:          South Korean Legislative Elections
   April 20-21:       APEC Trade Summit (Malaysia)
   June 10-12:        G-7 (Camp David)
   September:         Hong Kong Legislative Council Elections
   September 15-30:   UN General Assembly (New York)
   October 5:         G-20 Trade Summit (Saudi Arabia)
   November 9-20:     UN Climate Change Conference (Scotland)
   November 12:       APEC Leaders’ Summit (Malaysia)
   November 21-22:    G-20 Leaders’ Summit (Saudi Arabia)

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Key 2020 Election Dates
    February 3:             Iowa Caucuses kick off primary season
                             See primary calendar on next slide
    March 3:                Super Tuesday
    March:                  By the end of March, 29 states will have held
                             their primaries – accounting for 2/3 of
                             Democratic pledged delegates
    July 13-16:             Democratic Convention (Milwaukee, WI)
    August 24-27:           Republican Convention (Charlotte, NC)
    September 29:           First presidential debate (South Bend, IN)
    October 15:             Second presidential debate (Ann Arbor, MI)
    October 22:             Third presidential debate (Nashville, TN)
    November 3:             ELECTION DAY

                   November 3rd is less than 300 days away!
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2020 Primary Calendar
DATE          DEMOCRATIC STATE PRIMARIES
February 3    Iowa caucuses

February 11   New Hampshire primaries

February 22   Nevada Democratic caucuses

February 29   South Carolina Democratic primary
              Super Tuesday – Alabama, Arkansas, California, Colorado, Maine, Massachusetts,
March 3
              Minnesota, North Carolina, Oklahoma, Tennessee, Texas, Utah, Vermont and Virginia
March 10      Idaho, Michigan, Mississippi, Missouri, North Dakota, Washington

March 17      Arizona, Florida, Illinois, Ohio

March 24      Georgia

April 4       Alaska, Hawaii, Louisiana, Wyoming

April 7       Wisconsin

April 28      Connecticut, Delaware, Maryland, New York, Pennsylvania, Rhode Island

May           Kansas, Indiana, Nebraska, West Virginia, Kentucky, Oregon
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June          DC, Montana, New Jersey, New Mexico, South Dakota

2020: President’s Job Approval
 President Trump’s Job Approval
      Latest job approval rating: 45% (Dec 2019)
      Term average to date: 40%
      Highest job approval rating to date: 46% (Apr 2019)
      Lowest job approval rating to date: 35% (Dec 2017)

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                                                    Source: Gallup (January 2020)

2020: Dem Contenders

13           Source:
             Morning Consult National Polling (1/5/2020)

2020 Presidential Election
         270 Electoral College votes to win
         Right now: 205 GOP, 248 Dem, 85 Toss Up

                                          All 5
                                        current
                                        toss-up
                                         states
                                        went to
                                       Trump in
                                          2016

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Source: The Cook Political Report

2020 Presidential Election
       Flashback to 2016 battleground states
       Less than 80,000 votes in Michigan, Pennsylvania and Wisconsin
        were deciding factor

        Margins of Victory: Top 10 Battleground States
TRUMP                                    CLINTON
Michigan: 0.3% (11k)                     New Hampshire: 0.3% (3k)
Pennsylvania: 0.7% (44k)                 Minnesota: 1.5% (45k)
Wisconsin: 0.7% (23k)                    Nevada: 2.4% (27k)
Florida: 1.2% (113k)                     Maine: 2.9% (22k)
Arizona: 3.5% (91k)
North Carolina: 3.6% (173k)

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2020 House Elections
 House Party Breakdown
      232 Democrats, 197 Republicans, 1 Independent

      5 Vacancies (2 D, 3 R)

 House Members leaving at the end of the term:
      26 Republicans (including 6 from TX); 9 Democrats

      Most are likely to stay in same parties’ hands – though a
       few will be competitive
      More than 40% of House Republicans in office when
       President Trump was sworn in are gone or leaving
       (retirements and 2018 election losses)
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Key House Races
    28 House Democrats currently represent districts Trump won in 2016 –
     21 are freshmen
    Another 18 freshmen Dems are in seats held by the GOP in the last
     Congress (CA-25 is vacant after Rep. Hill’s resignation)
    3 Republicans currently represent districts Clinton won in 2016
        Reps. Fitzpatrick (R-PA), Hurd (R-TX) and Katko (R-NY)

    Cook Political Report has 18 Democratic seats rated as toss-ups, along
     with five GOP seats
        Additionally, seats being vacated by Reps. Holding (R-NC) and Walker (R-NC)
         are expected to flip following that state’s redistricting; seats being vacated
         by Reps. Hurd (R-TX) and King (R-NY) will also be competitive

    Assuming current vacancies don’t change hands, GOP needs to win
     18 Democratically-held seats to take control
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Key House Races
21 Freshmen Dems in Trump Districts   7 Other Dems in Trump Districts
Axne, Cynthia           IA   3d       Bustos, Cheri           IL   17th
Brindisi, Anthony       NY   22d      Gottheimer, Josh        NJ   5th
Craig, Angie            MN   2d       Kind, Ron               WI   3d
Cunningham, Joe         SC   1st      Loebsack, David*        IA   2d
Delgado, Antonio        NY   19th     Maloney, Sean Patrick   NY   18th
Finkenauer, Abby        IA   1st      O'Halleran, Tom         AZ   1st
Golden, Jared F.        ME   2d       Peterson, Collin C.     MN   7th
Horn, Kendra S.         OK   5th                                   *Retiring
Kim, Andy               NJ   3d
Lee, Susie              NV   3d
Luria, Elaine G.        VA   2d
McAdams, Ben            UT   4th
McBath, Lucy            GA   6th
Pappas, Chris           NH   1st
Rose, Max               NY   11th
Sherrill, Mikie         NJ   11th
Slotkin, Elissa         MI   8th
Spanberger, Abigail     VA   7th
Stevens, Haley M.       MI   11th
Torres Small, Xochitl   NM   2d
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Underwood,     Lauren   IL   14th

Key House Races
     18 Freshmen Dems in Seats Held By GOP in Previous Congress
                  Allred, Colin Z.             TX       32d
                  Casten, Sean                 IL       6th
                  Cisneros, Gilbert Ray, Jr.   CA       39th
                  Cox, TJ                      CA       21st
                  Crow, Jason                  CO       6th
                  Davids, Sharice              KS       3d
                  Fletcher, Lizzie             TX       7th
                  Harder, Josh                 CA       10th
                  VACANT*                      CA       25th
                  Kirkpatrick, Ann             AZ       2d
                  Levin, Mike                  CA       49th
                  Malinowski, Tom              NJ       7th
                  Mucarsel-Powell, Debbie      FL       26th
                  Phillips, Dean               MN       3d
                  Porter, Katie                CA       45th
                  Rouda, Harley                CA       48th
                  Schrier, Kim                 WA       8th
                  Shalala, Donna E.            FL       27th
                  Wexton, Jennifer             VA       10th
19                 *Total was 19 prior to resignation
                   of Rep. Hill (D-CA)

2020 Senate Elections
    Senate Party Breakdown

        53 Republicans, 47 Democrats (includes two Independents)

        5 Democratic Senators currently running for President

    Senate Retirements

        Republican Kelly Loeffler appointed to fill seat of Sen. Isakson (R-GA) who
         retired at the end of 2019; she must now run in a special election to
         finish the term which runs through 2022

            Jungle Primary on Election Day; if needed, January 5, 2021 runoff

            Sen. Perdue (R-GA) is running for re-election in 2020, meaning Georgia will
             have two Senate races on the ballot

        Another 3 Republicans (Alexander, Enzi, Roberts) and one
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         Democrat (Udall) not seeking re-election in 2020

2020 Senate Elections
 Senate Seats Up in 2020
12 Democrats                   23 Republicans
Booker, Cory A. (D-NJ)         Alexander, Lamar (R-TN)*       Inhofe, James M. (R-OK)
Coons, Christopher A. (D-DE)   Capito, Shelley Moore (R-WV)   Kelly Loeffler (R-GA) (SPECIAL)
Durbin, Richard J. (D-IL)      Cassidy, Bill (R-LA)           McConnell, Mitch (R-KY)
Jones, Doug (D-AL)             Collins, Susan M. (R-ME)       McSally, Martha (R-AZ) (SPECIAL)
Markey, Edward J. (D-MA)       Cornyn, John (R-TX)            Perdue, David (R-GA)
Merkley, Jeff (D-OR)           Cotton, Tom (R-AR)             Risch, James E. (R-ID)
Peters, Gary C. (D-MI)         Daines, Steve (R-MT)           Roberts, Pat (R-KS)*
Reed, Jack (D-RI)              Enzi, Michael B. (R-WY)*       Rounds, Mike (R-SD)
Shaheen, Jeanne (D-NH)         Ernst, Joni (R-IA)             Sasse, Ben (R-NE)
Smith, Tina (D-MN)             Gardner, Cory (R-CO)           Sullivan, Dan (R-AK)
Udall, Tom (D-NM)*             Graham, Lindsey (R-SC)         Tillis, Thom (R-NC)
Warner, Mark R. (D-VA)         Hyde-Smith, Cindy (R-MS)

                                   *Not seeking re-election
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2020 Senate Elections
 35 Senate seats up for election
      Republicans hold 23 of the seats, Democrats hold 12

      In 2016, President Trump carried all but 2 states where
       Republicans are defending Senate seats (CO and ME)
        He won 15 of those states by at least 14 points
 Races to Watch
      Democratically-held seats in Alabama and Michigan

      Republican-held seats in Maine, Colorado, Arizona,
       North Carolina, Iowa

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