Election Shakeout

To me, yesterday was "Black Tuesday". The Democrats have taken control of the U.S. House of Representatives by picking up 24 seats. In the Senate, the Republicans maintain a 2 seat advantage, but there are 2 seats still close to call, Virginia and Montana. In both of these races, the Democrat Candidate has a slight lead. To be practical, the Democrats will control both houses of Congress.

So now what? What does this mean? Democrats were elected seemingly as a reaction to the war in Iraq. So can congressional Democrats change the war? No. The President is still the Commander-in-Chief of the armed forces. Congress can control the purse strings, but the President would veto any appropriations bill that didn’t include sufficient funding for the military, and there is not enough votes to override such a veto. Moreover, Democrats who were elected by slim majorities in traditional military counties who cut and run or who cut spending for the military would face tough reelection runs. So, Iraq policy probably doesn’t change at all.

Top on the Democratic agenda will be to reverse the President’s tax cuts. Here, by not renewing the current tax cut laws, they essentially eliminate the tax cuts, without passing a bill to raise taxes. A nice neat ploy…”we didn’t raise taxes, we eliminated tax cuts for the wealthy.” Except, the tax cuts on the wealthy also cut taxes for the middle class. So lets all be prepared for new taxes. They aren’t called the tax and spend Democrats for nothing.

Look for Democrats to push ethanol use in automobiles and higher gas mileage. Generally, either is a bad thing. GM and Ford have already invested tons of money in E85 cars, as opposed to Honda and Toyota which put their bread in the hybrid basket. So Ethanol initiatives help U.S. Farmers and GM and Ford. However, until Ethanol roles out, higher gas mileage helps Toyota and Honda. Way to go Democrats, help Japanese car production! Also, forget about looking for new oil reserves in Alaska or elsewhere, or exploiting black shale deposits in Colorado.

So the only good thing about the Democrat’s victory is that they will have to govern. No more can they blame failures on the Republicans and sit back and say “if we were in control things would be different!” Well you got what you asked for. Now the question is, did you actually want it?

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