WASHINGTON, DC—To no one's surprise the Republicans captured the Senate in Tuesday's mid-term election.
As predicted by many the GOP claimed the vast majority of the 13 contested seats in the Senate, including Iowa, Colorado, Arkansas, Montana, South Dakota, West Virginia and North Carolina. Alaska and Louisiana remain undecided.
The GOP also secured some surprising gubernatorial wins in Maryland and Massachusetts, two states that are traditional Democratic strongholds but have been known to swing Republican for the right candidate.
How this election will impact the next two years still unclear. Some initial projections of interest to the commercial real estate community:
A budget will be produced. After years of stalemates Congress delivered one in 2013 without resorting to brinkmanship. With the GOP in charge of both chambers they will be eager to show they can deliver on this again.
Pressure will grow against the Consumer Financial Protection Bureau. Not exactly a beloved entity by the GOP, the CFPB is bound to experience more scrutiny and more pushback from Congress.
Ditto the Federal Reserve. Expect to see more demands from Congress that Fed Chair Janet Yellen accommodate their views when setting the Central Bank's monetary policies. The Wall Street Journal delved into this possibility this morning. The Journal predicted that the GOP will push to have more input into interest-rate decisions, via congressional audits of monetary-policy, and otherwise shift its focus to inflation rather than unemployment.
TRIA will pass but possibly with scaled back protections. The Senate and the House have passed their respective measures to renew the federal backstop for building insurance against acts of terrorism with the House's version more stringent in its terms. It is difficult to image Congress letting this measure expire given the business community's near unanimous demand for it, but the final version hammered out in committee could favor the House.
The GSEs will continue on their privatization path. This is one of the few areas on which both parties agree. Also, it appears the GSEs aren't waiting for marching orders from Washington but moving ahead with products and offerings that incorporate greater risk-sharing from the private sector. Expect to see more of that as a plan unfolds for their privatization.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
