2012 Election Results for Construction: 'Status Quo, But More of It'

Status quo election result may be blessing in disguise given uncertainty of federal tax and budget policy and the broader economy

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There's no denying that President Obama and the Democrats won the 2012 elections.

Here's some of the down-and-dirty on what the victories mean, from the Association of Equipment Distributors' (AED) government affairs team.

Obama came back from a self-described political "shellacking" in the 2010 midterms to win a convincing re-election, although he is the first president to win a second term with fewer electoral votes than he received his first time out.

The Democrats picked up a few seats in the House, but didn't make significant gains.

The real story was the Senate. Given the number of seats the Dems were defending, adding to their majority was an impressive feat (keep in mind that it wasn't long ago that the Republicans were considered to have at least an even shot at winning the Senate). Of course, a few Dem victories Tuesday came because of fumbles by the GOP, but in the end every goal counts.

Democratic Senate candidates who won the toss-up races (particularly in red states) proved their stuff. We're guessing that a few of them will quickly emerge as important national figures. We also hope they'll be mindful of their narrow victories and show a willingness to work with the business community and across the aisle to expand their support back home.

Who lost?
The Republican Party has some soul searching to do. It underperformed with women, minorities, and younger voters. While the Republicans still have an edge on economic policy, extreme positions on immigration and social issues clearly hurt GOP candidates, even in states Romney won.

We're already hearing Republican friends talk about the need for the party to evolve its thinking in some areas and embrace a more modern and consistent libertarian platform that keeps government out of the boardroom and the bedroom.

How did AED PAC do?
Not every race turned out the way we wanted, but AED will be well positioned to represent the industry's interests in the next Congress. More than 80 percent of the congressional candidates AED PAC supported in the general election won Tuesday night (the full report card is here). Given the volatility this election cycle and the number of competitive races we waded into, that's not a bad track record.

Our giving strategy focused on candidates who shared our views on infrastructure, tax, and regulatory issues. We don't agree with all the candidates we supported on every issue, but if you look at our list you'll see people with a demonstrated ability to govern and a willingness to engage in a mature dialogue about the industry's policy priorities.

AED PAC also doesn't make its giving decisions in vacuum. With very few exceptions, the candidates we supported this cycle had relationships in their home states and districts with AED members. The majority of our PAC support was delivered at ImPACt 2012 meetings between local distributors and candidates. Even if all our candidates didn't win, having a member-driven political program is something we don't plan to change going into the next election cycle. We think actively engaging our members in the candidate selection process is the key to a strong grassroots network and one of the reasons that AED has been so successful on the Hill in recent years.

What's next?
As you've no doubt heard, the re-election reaffirmed the status quo ("It's the status quo, but more of it," our communications manager Josh said). Although the Democrats won, neither party can claim a mandate. If anything, the narrow margins tell us voters don't think either party has all the answers. Our hope is that this message finally gets through to the president and congressional leaders in both parties. Nothing substantive is going to happen on the policy front unless both parties agree.

If compromise is in the air (and Republicans on the Hill are already making noise in that direction), it's even more imperative for our industry to be engaged in the process to make sure our views and interests are taken into account. AED's legislative agenda is no different now than it was before. We want a quick resolution to the fiscal cliff; a simpler, more consistent tax code; budget reform; new user fee revenues to support increased investment in infrastructure; and common-sense regulatory policy (particularly to allow continued growth in the energy sector). We're sending a letter to President Obama this week offering to work with him and congressional leaders in a bipartisan manner to accomplish those goals.

Is there a silver lining?
Given all the uncertainty surrounding federal tax and budget policy (not to mention the broader economy), a status quo election result may be a blessing in disguise. We have no doubt Gov. Romney would have managed a swift and effective transition (and been a good president), but it would have taken months to get his cabinet approved by the Senate, staff up the administration, and develop a concrete policy agenda. In the interim, we would have had more uncertainty and distraction, not less.

Love 'em or hate 'em, all the major players are the same today as they were the day before the election (including all the staff). That means there's absolutely no excuse for the president and congressional leaders not to hit the ground running as soon as next week and act swiftly, decisively, and collectively to address the problems they know they have to solve. We'll be there to keep them going in the right direction.

Emotions are probably running high outside the Beltway. We want to know what you think about the elections and the path forward. Contact AED Government Affairs to let us know.