Market-Friendly Priorities: Tax Reform, Trade and Energy

The "not quite final" Senate tally: Democrats 44, Republicans 54, Independents 2.

• Once the Alaska and Louisiana elections are settled - both of which are expected to be won by the Republicans - the simple majority of the Senate will shift in favor of the Republicans for the next Congress. Both Independents currently caucus with the Democrats, so the party-line voting split will likely be 54 - 46.
• This will give the Republicans a similar majority in the Senate in 2015-2016  to that currently held by the Democrats, which is Democrats 53, Republicans 45, Independents 2.
• Even if the Independent senator from Maine crosses over occasionally to vote with the Republicans, that would still leave the party-line vote at 55-45, far from the 60 votes needed to thwart a filibuster in the Senate and pass contentious legislation.
• Perhaps more importantly for the upcoming Congress, it's not anywhere near the two-thirds majority (67 Senate votes, 290 House votes, assuming all members of Congress vote) needed to override a Presidential veto.
• Remember, Senators serve 6-year terms. So all Senators elected during the 2014 midterms will serve through the final two years of President Obama's term plus the full four year term of the President elected in 2016.

The "not quite final" House tally: Democrats 187, Republicans 248, Independents 0.

• The Republicans are set to increase their current majority in the House from 233 seats to 248 seats of the 435-member House (218 seats is required for a majority).
• House terms are only for 2 years; so all members of the House are up for re-election every election cycle.

The majority party sets the legislative agenda in that chamber of Congress.

• Being the minority party in either the House or the Senate sucks. Being the minority party when the majority controls both chambers of Congress? Sucks even worse. Just ask the Republicans how they felt after the 2008 and 2010 elections.
• Why? Because the majority party gets to appoint the leadership of the legislative committees in its chamber. The committee leadership controls the calendar, effectively controlling what legislative efforts will be discussed, proposed, voted on and passed to the full chamber from their committee. All of the committees will have the majority of their members from the party that holds the majority.  If a member is in the minority party, getting a piece of legislation e.g. out of the committee and onto the Senate floor requires at least enough support from the majority party for it to pass a vote in committee. In practice this means any legislation proposed by a minority member must typically have broad bi-partisan support to advance in a chamber. 

A bi-partisan agenda: tax reform, immigration, trade and energy.

• The Wall Street Journal (link above) has the best article I've read so far on what the Republican's likely priorities will be - and can be - now that they have solid but not overwhelming control of Congress.
• Very briefly, it may result in somewhat lower corporate taxes, an easier immigration policy that favors businesses, improved trade with Asia, and passage of the Keystone pipeline.
• I'm not good at political analysis, since it always surprises me that some politicians are willing to cut off their nose to spite their face (see: Tea Party Republicans in the House). We can only hope that Boehner, McConnell and Obama will put accomplishing an agenda together ahead of recriminations, partisan stonewalling and personal gain.  ... Hahahaha! Yeah, I don't think so either, but I'll hold out hope for the next 36 hours at least.

Coming up - the Treasury quarterly refunding.