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Latest news from Washington, D.C. produced by Total Spectrum/SGA exclusively for members of the Arizona Chamber of Commerce & Industry

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Thanks for your interest in Washington, D.C., and thanks for reading This Week in Washington. 

Veterans Day is celebrated this Thursday, so the Senate and the House of Representatives are currently back in their states and districts. 

Heard on the Hill covers last week’s gubernatorial elections in Virginia and New Jersey – the outcome of each election, and the impact that their surprise outcomes are already having on legislative activity and the plans for next November’s off-year elections. I also reviewed the suspense in the House of Representatives before the bipartisan infrastructure bill finally passed and I highlighted two very recent economic reports – one that is encouraging and one that is concerning.  

Kia Motors has a strong presence in the United States with investment and jobs at its manufacturing plant in West Point, Georgia. In this week’s Total Spectrum Spotlight, my colleague and friend Congressman Erik Paulsen interviewed Christopher Wenk, Vice President of Government Affairs at Kia, discussing how policies in Washington impact the industry and what we can expect to see in electric and autonomous vehicle innovation. 

Stay well.

Steve Gordon

Total Spectrum Managing Director

This Week in Washington Spotlight

Christopher Wenk, Kia Motors Corporation

Kia Motors Vice President of Government Affairs Christopher Wenk discusses U.S. auto manufacturing and the future of electric and autonomous vehicles at Kia with Congressman Erik Paulsen.

Heard on the Hill

By Steve Gordon, Total Spectrum Managing Director

One of my early mentors told me once that “…politics and legislation wash each other’s hands – good legislation creates the environment for good political outcomes, and good politics sets the scene for good legislation.” It was true then, and it’s just as true now – so we report on both legislative and political activity. 

Politics – Virginia

The Governor of the Commonwealth of Virginia is a four-year position with the possibility of a second term, but the two terms can’t be successive. Republicans controlled the Governor’s mansion during the 1970’s, most of the 1990’s, and from 2010 through 2013. Democrats held the position in the 1980’s, the first two years of the 1990’s, most of the 2000’s, and since 2014. Virginia was reliably Republican in presidential elections through most of the last half of the 20^th century and through the 2004 election. But Virginia has voted Democrat in each presidential election since 2008. President Biden carried Virginia in 2020 by 451,000 votes (54{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 44{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), and he never once set foot in the state. 

The northern Virginia suburbs around D.C. were once solidly Republican, but Democrats have made major progress in recent years. In 2020, President Biden carried four northern Virginia counties with over 60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the vote and carried another northern Virginia county with over 80{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. 

The general election campaign in 2021 was between Terry McAuliffe, a former governor and a confidant of President Bill Clinton, and Glenn Youngkin, a businessman who was most recently President, COO, and then co-CEO of the Carlyle Group and a first-time candidate for elected office. 

Former Governor McAuliffe started the campaign with almost universal name identification. His campaign stressed the successes he had in his first term. He tied himself to President Biden and brought in both Presidents Biden and Obama. He tried to engage the African-American vote by bringing in Vice President Harris and Stacey Abrams, who is a former member of the Georgia House of Representatives. McAuliffe also tried to tie Youngkin to President Trump, who endorsed Youngkin in the early stages of the campaign but never campaigned for him in Virginia. 

Youngkin decided early in the campaign that the way to bring suburban women back to the Republican column was through the issue of education. McAuliffe handed Youngkin the “key to the castle” by saying in a debate, “I don’t think parents should be telling schools what they should teach,” and that set off a powder keg of outrage concerning parental rights. Youngkin also spoke about the economy and his goal to create more opportunities for growth in Virginia. He looked and sounded conversative without the controversy. A Republican strategist called it a “Trump-light” approach. 

Momentum from that point  was in Youngkin’s favor. Most people expected the election to be very close, and it was. Youngkin defeated McAuliffe 50.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 48.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. There are usually many reasons why one candidate wins and another loses, especially in a very close election. I talked to a few strategists, and here are a few takeaways. 

The externals were all on Youngkin’s side. It’s typical for the party out of power in Washington to get a bounce in the off-year elections following a Presidential election, and this year is no different. President Biden’s favorability polls are in the low 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}’s. Democrats control both the Senate and the House of Representatives, and both their actions and inactions created the perfect storm. Many suburban independents who voted against President Trump in 2020 didn’t like the progressive politics coming out of Congress. Virginia Democrats – especially liberals and progressives – were looking for tangible legislative progress from President Biden and a Democratic Congress and were disappointed. Republicans were enthused about the possibility of retaking the Governor’s office. 

Education is a major issue. Concerns about public school education were emphasized when kids and parents were home together during the pandemic.  

The 2020 election was a referendum on President Trump; this election was a referendum on President Biden and the Democratic Congress. Elections are always about the future. 

Get out the Vote Programs don’t cost – they pay. McAuliffe still carried the blue northern Virginia suburbs, but by a smaller margin. Conversely, the red rural counties got redder. President Biden lost the rural counties of Virginia by six points in 2020, but McAuliffe lost the rural counties by 27 points in 2021.

Politics – New Jersey

President Biden won New Jersey in 2020 by 15 points – 57.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 41.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. Governor Phillip Murphy won his reelection campaign by 2.5 points. New Jersey’s gubernatorial campaign was a nail-biter that nobody saw coming. 

The Bipartisan Infrastructure Bill

A truly bipartisan piece of major legislation is exceptionally hard to pass in our current partisan environment. A group of Senators, led by Kyrsten Sinema (D-AZ) and Rob Portman (R-OH), crafted language that passed the Senate on August 10. Nineteen Republicans voted for the bill in the Senate, including Minority Leader McConnell. 

There was a tug-of-war in the Senate between moderate and progressive Democrats, but the struggle in the House was fit for the Olympics. Moderate House Democrats wanted to vote on the Senate bill, but progressives didn’t want to allow a vote until they were sure that they could get everything they wanted in the Build Back Better social infrastructure bill. President Biden tried to broker a deal within the Democratic caucus several times, but he finally put his foot down last Friday. Six progressives ultimately voted against the bill, and 13 Republicans voted for it. 

Estimated to cost more than $1 trillion, the bill includes funding for roads and bridges, ports, airports, public transit, Amtrak, water resources and broadband. About $250 billion of the total cost came from previously appropriated funds that had not been spent. The Congressional Budget Office estimates that about $250 billion will be added to the national debt over a ten-year period. 

Some Democrats are wondering out loud if the outcome in Virginia and New Jersey would have been different if the infrastructure bill had passed several weeks ago. While that is impossible to know, it is clear that Democrats read the results and knew that they had work to do.

Jobs and Inflation Reports

Last week’s jobs report from the Department of Labor was exceptionally good. Non-farm payroll was up over 531,000, which beat an expected number of 450,000. The unemployment rate fell to 4.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.

The U.S. Labor Department reported today that consumer prices rose 0.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in October on a seasonally adjusted basis from the previous month. Over the last 12 months, the inflation rate is up 6.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, and core prices – which include food and fuel – went up 4.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. These are the highest increases in over 30 years.

Congressional Calendar

All times ET

Tuesday, November 9

• 11:00 a.m. House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials hearing – Discrimination in Federal Passenger Rail Contracting
• 1:00 p.m. House Natural Resources Subcommittee on National Parks, Forests and Public Lands hearing – pending legislation
• 3:00 p.m. House Administration Committee hearing – Oversight of the Office of Congressional workplace Rights: Lessons Learned from the Congressional Accountability Act of 1995 Reform Act.

Wednesday, November 10

• 10:00 a.m. House Science, Space and Technology Subcommittee  on Research and Technology hearing – National Windstorm Impact Reduction Program.
• 12 noon. House Agriculture Subcommittee on Nutrition, Oversight and Department Operations hearing – Hunger Among Veterans and Servicemembers.
• 1:00 p.m. House Education and Labor Committee Markup – Retirement Savings Improvement/Enhancement.

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