The Impact of U.S. Political Change Is More Than Domestic

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Written by Jon Gregory, Guest Contributor

There is a growing perception internationally that the Republican takeover of the U.S. Senate that occurred in this week’s elections will not impact the global community in any meaningful way, and therefore, there is little point in paying attention. There is a sense that Republican control of the U.S. Congress will not change the trajectory or substance of how the U.S. engages the global community. While this may be true from a macro perspective, there will be implications that will matter for the global community. On Election Day, the U.S. policy agenda changed and that fact will impact U.S. policies and actions globally. But first, it is important to understand what happened and what changed.

What Happened and Why

In an expected change of party control in the U.S. Senate, Republicans won a total of 7 seats, switching their Senate minority of 44 seats to a new Senate majority of 52 seats—a number that could increase if Louisiana Senator Mary Landrieu loses a run-off election, and Mark Begich loses his race in Alaska, which is too close to call. Democrats, now in the minority, have 45 seats, including 2 independents who align with Democrats. In the U.S. House of Representatives, Republicans increased their numbers from 233 to 250, the largest Republican majority since 1928. House Democrats declined from 199 to 185. Republicans also gained 4 governors seats, increasing the current Republican advantage to 32, with 16 Democrats, with one race too close to call and one Independent.

While these numbers represent a significant loss for Democrats, they reflect a strong disillusionment with President Obama and the direction of the country, particularly frustration with gridlock in Washington, rather than an endorsement of a broad conservative or Republican agenda given that Republicans did not aggressively promote a national platform. Republicans ran a relatively disciplined race with strong candidates at the local level, but made the election a national theme, allowing Democrats to be defined by President Obama. Further, because many voters’ perceptions were framed by President Obama’s response to foreign policy crisis such as ISIL and Ebola, Democrats were unable to campaign on traditionally strong domestic issues such as education, wages, child care, tax fairness, and other bread and butter issues. Finally, after several elections with very high Democratic turnout for voters, overall voting was down, which benefitted Republicans. The large advantage that Democratic candidates had in 2012 in votes from women, Latinos, and Millennials was lessened considerably in 2014.

What the 2014 U.S. Elections Mean for the Global Community

The Republican takeover of the U.S. Senate is likely to create new dynamics and possibilities on several international issues:

Trade: Republican control of the Senate means that the Trans Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) agreements may have a better chance of consideration and passage, as Democrats will no longer control the agenda and be able to block consideration of such agreements due to environmental, labor, and fair trade concerns. Earlier this week, U.S. Trade Representative Michael Froman and European Union Trade Commissioner Cecelia Malmstrom agreed to reinvigorate trade talks. In addition, the U.S. business community has already begun to advocate for trade agreements and provide support for giving the President “fast track” trade promotion authority to negotiate and pass such agreements. Reports that current Senate Finance Committee Chairman Ron Wyden (D-OR) has been discussing concrete steps on trade with a bipartisan group of members suggests that support is growing on Trade Promotion Authority (TPA). Republican control of the U.S. Senate could accelerate and makes more possible U.S. trade legislation. Trade has historically been and continues to be one of the few areas, domestic or international, that can be addressed in the final two years of a presidency. Bill Clinton passed PNTR (permanent normal trade relations) with China in 1999 and George W. Bush passed trade agreements under fast track authority (Chile, Singapore, and several others) in 2007—and both presidents did so with a Congress controlled by the opposing party. While Tea Party conservatives in both Houses may fight hard to stop such agreements, recent budget votes demonstrate that a bipartisan middle ground is possible in Congress.

Iran: The U.S. Senate supports stronger action against Iran, but has deferred to President Obama on direct talks, expecting results by November 24th. If an agreement is not reached, the Senate and the House will likely pressure President Obama to initiate tougher measures or pass legislation to enact tougher sanctions and dare him to veto. Democratic Leader Harry Reid and Senate Democrats have given President Obama some space to operate, but may no longer be able to do so in the future. Republicans are more likely to be aligned with Israeli Prime Minister Benjamin Netanyahu, who will likely oppose any deal with Iran.

Russia: The Senate Foreign Relations Committee voted 18-0 earlier this year in favor of new and tougher sanctions against Russia in response to Russia’s actions in Ukraine. When he becomes Minority Leader Harry Reid and his democratic colleagues may be able to block the most egregious or aggressive proposals; the bipartisan coalition of Senate Members demanding stronger action by President Obama could accelerate President Obama’s application of future rounds of Russia sanctions with the threat of potential comprehensive sanctions legislation becoming a more realistic possibility. This would potentially include a more aggressive military support posture in the Ukraine and more aggressive U.S. leadership with the EU in taking actions against Russia, either in a multilateral or unilateral manner. While the Obama Administration and some in the U.S. Senate argue that the president needs to maintain flexibility in the sanctions process and that a new law would be difficult to ever undo or repeal, the President may be faced with having to negotiate or veto a sanctions bill that he thinks is unworkable.

ISIL/Syria/Iraq: The Republican Congress, including new Senate Defense Committee chairman John McCain, will press for a more aggressive posture against ISIL, including possible ground troops and specific authorization for the Pentagon’s program to train and equip legitimate Syrian rebels, a program that expires December 11, 2014. In a similar manner, Republicans will now have the ability to increase funding in the National Defense Authorization Act and include specific provisions to direct President Obama to take specific actions.

Energy: Approval of the Keystone Pipeline, a lifting of the current ban on U.S. oil exports and the acceleration of U.S. exports of gas become issues which President Obama will have to address, as they are key priorities for the Republican Congress. Congressional Republicans will have the votes not only to exert public pressure, but to send the president legislation to increase U.S. energy production as well as address the crises in Ukraine, Syria, and Iran by expanding U.S. energy influence through more global supply.

Cybersecurity/Intelligence: Reform of the National Security Agency and its cybersecurity and enhanced interrogation programs is now more likely to be limited in scope with the changes in leadership and committee influence in the new Republican Senate. Strong and vocal reformers as well as strong critics of Central Intelligence Agency interrogation procedures during the Bush Administration have lost some influence, which will have an effect on future cybersecurity policy. In the end, such changes may mean that U.S. intelligence operations are not modified as greatly as initially anticipated.

U.S. Export-Import Bank: Republican control of the U.S. Senate makes it very likely that the Export-Import Bank of the United States will see significant reform. While most observers believe that it will continue to exist, its mission and operations are likely to be substantially modified. The complicating factor will be the split between Republican mainstream Senators and Tea Party Members of the House of Representatives and if they can agree on a model to be accepted by President Obama.

What Happens Next

The same political dynamics that affect the U.S. domestic agenda will also influence the U.S. international agenda. Will conflict or compromise prevail and will politics trump policy? We wiil not know the answers for a few months, but below are key observations to consider.

2016 Elections

Domestic and international policy is framed by the 2016 elections, without question. The 2014 elections were a battle to set the framework for the 2016 elections. Politics is the undercurrent of the international policy issues mentioned above, but that does not mean that changes in each area wiil not occur. Republicans will be motivated by a desire to demonstrate leadership and hold President Obama accountable while changing course on important issues. President Obama will be guided by a desire to define his legacy positively and to reverse the trend of negative issues that currently define him, particularly global issues. While issues such as immigration, taxes, healthcare, financial services reform, and others will be used by both parties to create divisions that define each party, the bulk of the international agenda is less divisive and more open to action. It is for this reason, among many others, that the global community has a stake and should care about the 2014 U.S. elections.

Governance and Compromise

President Obama and Republicans in Congress have incentive, albeit limited, to compromise and find common ground in 2015 and 2016. While President Obama’s approval ratings are low, they are not historically low for a President or for a second-term President. Harry Truman, Richard Nixon, and George W. Bush were all considerably lower. The choice of whether to use any remaining political capital to advance specific policies or to block Republican initiatives is at his discretion. The President has veto-proof numbers in both houses (can stop majority votes) and can block cloture (final consideration) in the Senate, so retains his formal and informal powers. He often waits for compromise solutions, rather than initiates them, which has lessened the chance for deals in the past. Given that Senate Republicans must defend 22 seats and President Obama is not running in 2016, he can afford to block GOP initiatives.

In a similar manner, Republicans who ran without a high-profile and well-defined 2015 agenda can afford to challenge the president by sending him conservative legislation to portray him as obstructionist and position the Republican Party to keep control in Congress and win the presidency in 2016. The challenge for Mitch McConnell will be to unite a Senate Republican Caucus of mainstream and Tea Party Senators, defend a majority of the 2016 Senate seats, and put Democratic Senators and Presidential candidates on the defensive on issues, while being sensitive to potential Republican presidential candidates and current Senators Rand Paul (KY), Marco Rubio (FL), and Ted Cruz (R-TX). A tall order indeed, and international issues may be easier to manage.

There is personal animosity (or at least coolness) between Senator McConnell and President Obama, a factor that does not bode well for agreement. However, Vice President Biden has a good working relationship with Senator McConnell and has indicated publicly the Obama Administration’s willingness to compromise.

The one incentive for both sides to work together is to demonstrate that they can govern and that Washington can work. International issues such as trade, energy, and sanctions policy are areas where such compromise can occur more easily, as both parties are more naturally aligned. If history is a guide, Republicans should be cautious not to overreach as Democrats did in 2008, leading to the 2010 Republican takeover of the House; likewise, President Obama should be careful not to be too independent or rigid, as President Bush was in 2008, which in part led to Obama’s election that same year.

The U.S. political climate continues to be unsettled by historical trends which will continue to lead to some level of uncertainty and inconsistency in U.S. foreign and economic policy. However, in the short term, divided government has proven to be the most effective combination in getting things done. President Obama and the new Republican Congress will have an opportunity to advance U.S. policy in the next two years in a manner that impacts the U.S. international agenda.

Jon Gregory is a director in APCO Worldwide’s Washington office. Find him on Twitter @beltwayview.

Photo: Speaker John Boehner (cc).