Polls are closed across the country and it seems clear that Republicans will likely take control of at least the House of Representatives and that they have a shot at control of the Senate. While there was no red tsunami, Republicans made gains and, thankfully, we will likely have a divided government for the remainder of the Biden presidency.
So, what does that mean for working- and middle–class Americans? What can Republicans do to turn the economy around with only one – perhaps two – houses of Congress? As it turns out, they can do quite a lot. Let’s look at what might play out economically under each of the likely post-election scenarios.
First, with a majority in at least the House, Republicans can put an end to the Democrats’ passing the massive spending spree legislation that has been driving inflation and crushing American families (such as the bloated American Rescue Plan and the ironically named Inflation Reduction Act). That alone will do wonders for the business community as it will eliminate the current uncertainty about what horribly misguided legislation Democrats will pass next.
Should Republicans win both the House and Senate, they could use the reconciliation process (which avoids the filibuster and allows the Senate to pass fiscal legislation on just a majority vote) to pass pro-growth legislation. Biden would then be forced to either veto the legislation (as Clinton did with the Republican-passed tax cuts in 1995) or sign it into law (as Clinton did with welfare reform).
If that is ultimately the case, I would expect Republicans to focus on energy and crime. Energy is both a jobs and anti-inflation issue, with substantial national security overtones.
Given Tuesday night’s election results and the genuine crises facing our nation, there are likely Senate Democrats who would support measures in both areas – maybe not enough to defeat a filibuster, but enough to make those issues genuinely bipartisan. That’s the kind of bipartisanship Americans have been hoping for. This is an opportunity for both political parties to deliver.
Even with control of just the House, Republicans can also start turning the tide on excessive government spending and inflation. Inflation and the economy consistently polled as the #1 issue on the minds of voters and were a deciding factor in a number of otherwise close races. Two ways House Republicans can address excessive spending are:
Government Funding: By tradition, general appropriation bills originate in the House and appropriations is where most policy fights will happen over the next two years.
It’s also where Republicans will have maximum leverage – Biden’s government needs taxpayers’ money in order to do anything. Republicans should rein in spending levels and also cut off harmful spending that funds the left’s agenda. Cutting back on funding for some of Biden’s spending and tax giveaways to green energy programs would be a great place to start.
Debt Limit: Treasury will hit the $31.2 trillion debt limit next year. That is an absurd amount of debt, particularly with interest rates rising. Increasing the debt limit has historically served as a leverage point for doing something about spending, going back 40 years.
Any agreement on a debt limit increase should be paired with spending cuts and reforms that address our nation’s underlying problem – unsustainable spending.
All of this points to a better, stronger economy with Republicans in control of one or both houses of Congress.
Elections matter because policy matters – and, as the last 21 months demonstrate, it matters a lot.