Association of Metropolitan Water Agencies: Election Results and Impacts on the Water Sector

George Washington addresses the Continental Congress via Son of the South
George Washington addresses the Continental Congress via Son of the South

Here’s the release from the AMWA:

[The November 4] midterm elections will remake the look of Congress next year, as the Republican party will control both the House and Senate for the first time since 2006. While votes are still being counted in many parts of the country and many decisions are yet to be made about the new majority’s priorities for the 114th Congress, this memo will provide an early look at where things stand and what AMWA should prepare for heading into 2015.

The Makeup of Congress

Republicans picked up seven U.S. Senate seats outright last night, and appear likely to pick up two more by the time all the votes are counted. The GOP won open seat races in West Virginia, South Dakota, Montana, and Iowa, defeated Democratic incumbents in Arkansas, North Carolina, and Colorado, and successfully defended all GOP-held seats up for election (most notably Kentucky, Georgia, and Kansas).

This gives Republicans 52 Senate seats as of this morning, but the total will grow to 54 if Republican Dan Sullivan holds onto his slim lead over incumbent Democrat Mark Begich in Alaska, and Republican Bill Cassidy defeats Democratic incumbent Mary Landrieu in a December 6 Louisiana runoff election. Meanwhile, Virginia Democratic incumbent Mark Warner holds a slim 12,000-vote lead over Republican challenger Ed Gillespie in a race that appears headed to a recount.

In the House Republicans have gained a net of 14 seats so far, though 15 more remain too-close-to-call or headed to a runoff as of this morning. Analysts say the party appears on track to hold at least 246 House seats next year – which would mark the party’s largest majority since the 1940s.

Notable Winners and Losers

Democratic Rep. Tim Bishop of New York – Ranking Member of the House Water Resources and Environment Subcommittee and a strong proponent of investing in water infrastructure (particularly the Clean Water SRF) – was defeated in New York’s First Congressional District. Also losing was House Transportation and Infrastructure Committee Ranking Member Nick Rahall of West Virginia and Colorado Senator Mark Udall, who served on the Senate Energy and Natural Resources Committee.

On the Republican side, Nebraska Rep. Lee Terry is trailing Democratic challenger Brad Ashford by about 4,000 votes in a still too-close-to-call race. Rep. Terry serves on the Energy and Commerce Committee and is the lead sponsor of H.Res. 112, a resolution marking the importance of tax-exempt municipal bonds. And defeated outright was Florida Republican Steve Southerland, who has been a harsh critic of EPA and its “Waters of the U.S.” proposal.

Pulling out a win was Oregon Democratic Senator Jeff Merkley, who earlier in the year found himself in a competitive race but ultimately defeated his Republican challenger by a comfortable 17-point margin. Sen. Merkley serves on the Environment and Public Works Committee and was an early advocate for the new “Water Infrastructure Finance and Innovation Act” (WIFIA) pilot program.

Committee Ramifications

The election results will lead to some shuffling on the House Transportation and Infrastructure Committee, where Rep. Peter DeFazio (D-Ore.) is expected to take Rep. Rahall’s place as Ranking Democrat and Rep. Donna Edwards (D-Md.) appears in line to take Rep. Bishop’s spot as lead Democrat on the Water Resources and Environment Subcommittee. T&I Chairman Bill Shuster (R-Penn.) and Water Resources and Environment Chairman Bob Gibbs (R-Ohio) each won reelection and are expected to maintain their gavels.

Michigan Republican Fred Upton will return as Chairman of the House Energy and Commerce Committee, and New Jersey’s Frank Pallone is expected to succeed the retiring Henry Waxman as Ranking Democrat. Leadership of the Environment and Economy Subcommittee – which has direct oversight of SDWA – appears likely to remain unchanged with Chairman John Shimkus (R-Ill.) and Ranking Democrat Paul Tonko (D-N.Y.) each winning reelection.

Wholesale changes are in store for Senate committees, as the Republican takeover of the chamber will allow GOPers to replace their Democratic counterparts as chairmen. Most notably for the water sector Oklahoma Republican James Inhofe will be the new Chairman of the Environment and Public Works Committee, bumping Barbara Boxer (D-Calif.) to Ranking Member, while Arkansas’ John Boozman is likely to replace Maryland’s Ben Cardin as Chairman of the Water and Wildlife Subcommittee.

The Policy Landscape of the 114th Congress

While Republicans will be able to drive policy discussions on Capitol Hill for the next two years, their majorities in both chambers will fall well-below veto-proof margins – thereby requiring some degree of cooperation with Democrats and President Obama. Senate Republicans will also have to deal with possible filibusters from members of the new Democratic minority – many of whom will be eager to pay back the GOP for what they saw as an excessive use of the filibuster in recent years.

Looking ahead, lawmakers will return to Washington next week for what could be a brief lame duck session, where a budget measure to keep the government operating beyond December 11 is expected to pass easily. But once newly-elected members are sworn in to begin the 114th Congress the water sector will be affected in a number of ways:

  • If Republicans and Democrats aim for compromise early next year, a comprehensive tax reform bill could be on the agenda. Earlier tax reform proposals have included plans to raise revenues by reducing the tax benefits of municipal bonds – a policy that would have the side effect of increasing infrastructure borrowing costs for local communities. AMWA should be prepared to take part in a major effort to defend municipal bond tax benefits and educate lawmakers on its role for financing infrastructure. This effort will be complicated by the possible loss of Rep. Lee Terry, who sponsored the resolution in support of municipal bonds that served as a rallying point on the issue.
  • The newly-Republican Senate and the more-conservative House will probably take a fiscally conservative approach to writing FY16 appropriations legislation – especially when it comes to agencies like EPA. This could translate to less funding availability for the SRF programs and the new WIFIA pilot, so AMWA will need to brief lawmakers on the economic and job-creating value of water infrastructure investments.
  • Appropriations legislation could also serve as a vehicle for Republicans to attach riders undoing controversial policies, such as EPA’s “Waters of the U.S.” proposal and the agency’s greenhouse gas regulations. Appropriations riders could also be used to attack possible administration efforts to impose “inherently safer technology” (IST) reviews or mandates on water and chemical facilities through Section 112(r) of the Clean Air Act. However, these and other riders would probably draw veto threats from President Obama, thereby forcing Republicans to decide if fights on these issues are worth risking a potential government shutdown.
  • The Republican majority will virtually ensure Congress takes no action on divisive issues such as stand-alone legislation to impose “IST” mandates on water treatment facilities and measures to regulate greenhouse gas emissions or otherwise address climate change. Democratic-backed legislation to reauthorize the Drinking Water SRF also faces an uncertain future, even though a similar version of the bill unanimously passed the House in 2010 before dying in the Senate.
  • Looking to 2016 and Beyond

    Because it is never too early to look ahead to the next election, there is already talk in Washington that the GOP’s new Senate majority could be short-lived. When voters head to the polls in 2016 Republicans will have to defend a slew of competitive seats in states that generally trend blue in presidential election years (including New Hampshire, Pennsylvania, Ohio, Illinois, Wisconsin and Florida). Running the table in these races could tip the Senate’s balance of power back in favor of Democrats – something that might motivate GOP senators from these states to spend the next two years searching for issues on which to reach across the aisle in the spirit of bipartisanship.

    No such competitive environment appears on the horizon in the House, where partisan redistricting has created an environment where most Republicans represent overwhelmingly conservative districts, and most Democrats hail from strongly liberal ones. Most political observers expect the House of Representatives to remain firmly in Republican hands at least through 2020, when the results of the next census will give state lawmakers a chance to once again redraw House district lines.

    More 2014 Colorado November election coverage here.

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