Will a Divided Congress Get Anything Done?

Plus: The most expensive Senate races in 2022 ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Today’s the big day! The Congressional Budget Office released its summary for fiscal year 2022 and its estimate of last month’s budget deficit. One ticket sold in California won the record $2.04 billion Powerball lottery jackpot. Oh, and voters are deciding control of Congress and potentially the fate of U.S. democracy. House Republican Leader Kevin McCarthy of California (Reuters) Will Congress Get Anything Done the Next Two Years? As we wait for the election vote totals to come in tonight — and probably over the next few days or weeks — let’s look at what may lie ahead if, as is widely expected, Republicans win control of at least one chamber of Congress. The Washington Post’s Toluse Olorunnipa states the obvious: Tuesday’s results will determine the future of Joe Biden’s presidency, and could determine whether the president faces two years of GOP-led probes and mounting calls to step aside in 2024. "Most analysts expect Republicans to take the House, which alone could engulf the White House in investigations by hardcore supporters of former president Donald Trump," Olorunnipa [writes](. "But even more damaging is the possibility of losing the Senate, considered a toss-up, which would make it hard for Biden to continue elevating federal judges at the same clip and could rule out any Supreme Court confirmation if a vacancy arises." In terms of policy and legislation, though, a Republican win could usher in a return to governing by crisis given that many in the party have been open about their plans to use critical bills like those funding the government and raising its borrowing limit as leverage to advance their agenda and reverse Biden’s. First, the need to raise the nation’s borrowing limit could cast a dark cloud over both the lame duck session to end 2022 and the legislative agenda for 2023. Democrats could look to raise the debt ceiling in the lame duck session, either through attaching an increase to a bigger, must-pass government funding bill or through a separate reconciliation bill. They could also try to repeat the arrangement they worked out with Senate Minority Leader Mitch McConnell last year, in which Republicans allow Democrats to lift the limit on their own. Analyst Chris Krueger of the Cowen Washington Research Group notes that a number of retiring Republican senators would likely be willing to go that route and defuse the threat of a default in 2023. If the debt limit isn’t addressed before the next Congress is sworn in, it will likely be the subject of a 2023 standoff, with Republicans looking to force spending cuts in exchange for any increase. What else might get done legislatively? Probably not much. "Legislation that is signed into law will be hard to come by in 2023, and even more so in 2024 as another election cycle heats up — although there should be some incentives for bipartisan bills to get committee votes every now and again during the 118th Congress," John T. Bennett writes at [Roll Call](. "Analysts say the parties have plenty of reasons to get together on a farm bill, which would please both sides’ rural and business constituencies. There is also routine bipartisanship on the annual defense policy bill, which has become law every year for more than six decades." Brookings Institution Senior Fellow John Hudak tells Roll Call that both parties have said relatively little about what they want Congress to accomplish over the next two years. That means that voters are casting their ballots "on personalities and issues, but not on actual solutions to fix problems," he said. And if Republicans control the Senate as well as the House, Biden said Friday that the next two years would be "horrible" — but added, "The good news is I’ll have a veto pen." The bottom line: We’re unlikely to see major legislation along the lines of the big bills Biden signed in his first two years in office. The Roll Call headline sums it up pretty well: "A noisy, but unproductive, Congress looms." The Five Most Expensive Senate Races in 2022 The U.S. Senate is sometimes described as the world’s most exclusive club, and a glance at this year’s campaign spending figures makes clear it’s a very expensive one to join. According to [data gathered by OpenSecrets]( a nonpartisan group that monitors money and influence in politics, just four Senate seats will involve combined spending of more than $1 billion year. Pennsylvania leads the way, with the race between Democrat John Fetterman and Republican Mehmet Oz costing $373 million so far. The candidates account for about $133 million of that spending, while outside groups have spent roughly $240 million. The second most expensive race is in Georgia, where the battle between Democratic incumbent Raphael Warnock and Republican challenger Herschel Walker has cost $271 million. Arizona ($234 million), Wisconsin ($205 million) and Ohio ($202 million) round out the list of the top five most expensive races. "The spending on Senate races is equivalent — or even higher — to what presidential candidates spend on individual states," [writes]( CNN’s Chris Cillizza. "And much of it is driven by spending by outside groups – usually super PACs closely connected to party leaders." Although efforts have been made to reduce the role of raw cash in American elections, what "numbers like these suggest is that attempts – earlier this century – to lessen the impact of money in politics have failed utterly," Cillizza says. "There is more money than ever before, and it’s difficult to track where some of the money, spent by nonprofit groups that aren’t required to disclose their donors, comes from." Number of the Day: $83 Billion The federal government ran a deficit of $83 billion last month, the Congressional Budget Office estimated Tuesday in its [monthly budget review](. That shortfall is $82 billion less that the deficit for October 2021, but if not for a shift in the timing of payments due on October 1, which fell on a weekend, the deficit would have been $146 billion, or $19 billion less than last October. The CBO report also provides a reminder that the deficit for fiscal year 2022 totaled nearly $1.4 trillion, or 5.5% of gross domestic product — "the third largest as a percentage of GDP over the past decade and greater than the 50-year average of 3.6 percent." Federal receipts were up by 21% while outlays fell by 8% compared to 2021. "Compared with the size of the economy," the report says, "federal debt held by the public fell to 97.0 percent of GDP in 2022 from 98.4 percent of GDP at the end of fiscal year 2021 and 100.1 percent of GDP at the end of 2020. That decline occurred, despite the large 2022 deficit, because nominal GDP increased by a larger percentage than did the debt. In contrast, debt held by the public stood at 79.4 percent of GDP at the end of 2019, before the pandemic." --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- News - [Inflation, Democracy Drive Demoralized US Voters]( – Associated Press - [Biden’s Future Closely Tied to Midterm Outcome]( – Washington Post - [Despite Torrent of Misinformation, Voting Unfolds Relatively Smoothly]( – Washington Post - [As Midterms Near, Biden Faces a Nation as Polarized as Ever]( – New York Times - [Why We May Not Know Election Results on Tuesday]( – Axios - [7 Important Election Night Bellwethers]( – Axios - [8 Election Day Predictions From the Nation's Leading Pollsters]( – The Week - [What Will Republicans Do With a House Majority?]( – The Week - [What Midterm Elections Could Mean for the US Economy]( – CNN - [Possible End of Emergency Spurs Debate on Medicaid]( – Roll Call - [South Dakota Voters to Decide on Medicaid Expansion]( – Associated Press - [Defense Panels Face Big Roster Upheaval]( – Roll Call - [It's Going to Be Hard for Biden to Meet This $11 Billion Climate Change Promise]( – NPR - [The Tiny Insurance Company Standing Between Taxpayers and a Costly Coal Industry Bailout]( – Bloomberg - [California’s Pension Bills to Rise, Echoing Pain in New York]( – Bloomberg Views and Analysis - [Democrats Shouldn’t Be Shocked by a Miserable Midterm]( – Bloomberg Opinion Editors - [Democrats Are Drowning in Denial]( – Catherine Rampell, Washington Post - [Five 2022 Races That Will Tell Us About 2024 — and Beyond]( – David Byler, Washington Post - [The 5 Big Questions on Election Day 2022]( – Aaron Blake, Washington Post - [The Likeliest Scenarios After the Election Dust Settles]( – Nathan L. Gonzales, Roll Call - [A Noisy, but Unproductive, Congress Looms]( – John T. Bennett, Roll Call - [Is Divided Government Good? Don’t Take Elon’s Word for It]( – Paul Krugman, New York Times - [Biden’s Economy Is Second Only to One at Midterm]( – Matthew A. Winkler, Bloomberg - [Democrats Have Alienated the Voters They Need Most]( – Clive Crook, Bloomberg - [U.S. Democracy Slides Toward ‘Competitive Authoritarianism’]( – Ishaan Tharoor, Washington Post - [A MAGA America Would Be Ugly]( – Paul Krugman, New York Times - [Already in a Hole, the Federal Reserve Keeps Digging]( – Jeffrey Sonnenfeld and Steven Tian, American Prospect - [Telemedicine Has Improved Health-Care Access. Let’s Keep It That Way]( – Leana S. Wen, Washington Post - [Republicans Could Deepen Their War With Corporate America]( – Olivier Knox, Washington Post - [These Bipartisan Deals in Washington Make Sense in 2023]( – Karl W. Smith, Bloomberg - [A Recession Suddenly Looks Like It Can Be Avoided]( – Conor Sen, Bloomberg Copyright © 2022 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](