Washington Report for 10-26-12

By Steve Kopperud

Election Snapshot 11 Days Out: Tight Races Across the Board

The November 6 elections for President and Congress – just 11 days away – have one thing in common: they’re tight races across the board, and where some incumbents of either party might be expected to have comfortable leads, polling numbers show most key races in statistical dead heats. Analysts now generally agree former front-burner issues – foreign policy, social issues (such as abortion rights) and immigration – are quickly moving to the background as most voters this week tell pollsters their priorities in this election are mostly the “personal” economic issues, including jobs, taxes and health care costs. The presidential contest has also narrowed based on the same focus on the economy, and as of October 26, 2012, of six national public opinion polls among likely voters, Mitt Romney leads narrowly in five, and is tied with President Obama in the sixth. The Electoral College count (it takes 270 votes to win) shows Romney being able to tentatively claim 206 votes, with Obama taking 201, leaving 131 electoral votes in play. In the key presidential election states – Ohio, Pennsylvania, Florida, Wisconsin, Virginia, North Carolina, Iowa and Nevada – Romney and Obama are effectively tied, and the leads enjoyed by Obama in Ohio, Pennsylvania, Wisconsin and Iowa are narrowing. In key Senate races in Indiana, North Dakota, Wisconsin, Virginia, Massachusetts, Montana and Nevada, almost all are statistical tie races at this point, with leads bouncing weekly and sometimes daily between contenders. Even strong incumbents in Ohio and Pennsylvania have seen fairly comfortable margins dwindle in the last 10 days, putting both states’ Senate seats in play, and forcing the national parties to dump millions more in TV and radio advertising into those states. In ag states, the inability of Congress to pass a Farm Bill has played a larger role than expected, with Democrats largely able to leverage the lack of omnibus farm legislation to their favor. In the House, a similar dynamic is playing out. According to polling analysts, it appears the House will remain in GOP control, but the majority may shrink by two or three seats. In the Senate, election analyst Charlie Cook, National Journal, predicts a two- to four-seat gain by Republicans, while other pollsters see little change in Democrat control of the Senate. If the GOP picks up all four seats, the Republicans will control the Senate by a one-seat margin.

An Electoral College Vote Tie – Then What?

Analysts and political junkies are kicking around two notions in the battle for the White House. The first is that one candidate will win the popular vote, but the other will win the Electoral College vote, an outcome not seen since George W. Bush was elected in 2000. The second notion – intriguing, but unlikely – is the current dead heat between President Obama and Mitt Romney could end in an electoral vote tie. Of the 338 votes in the Electoral College – apportioned based upon state populations – 270 is needed to win the presidency. After the November 6 election vote is tallied, the Electoral College meets on December 17 to vote. Only about half of the states, however, legally require their electors to vote based on their state’s majority general election tally. So when the new Congress comes in on January 6, 2013, to ratify the Electoral College vote, and if it’s tied, the 12^th Amendment of the U.S. Constitution kicks in: the House will vote on president; the Senate will vote on vice president. In the House, each state delegation – not each member – gets one vote for president. Right now, the GOP controls 29 state delegations. In the Senate, each member gets a vote for vice president. If the Democrats maintain control of the Senate, it’s possible in this unlikely scenario that Mitt Romney could be elected president and Joe Biden could be re-elected vice president. Congress has had to break an electoral tie three times in history – 1800 (Thomas Jefferson), 1824 (John Quincy Adams) and 1876 (Rutherford B. Hayes). The last time the U.S. had a president and vice president of different parties was in 1804.

Farm Bill “Certain” to be Acted on in Lame Duck: Cantor

Delivering perhaps his most definite statement on the future of the House Farm Bill, this week House Majority Leader Eric Cantor (R-VA) told a Boise, Idaho audience the bill will “certainly” be taken up during the congressional lame duck session in November. The announcement immediately drew praise from Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI). “I’m committed to bring the issue to the floor and then to see a way forward so we can get the votes to pass the Farm Bill,” Cantor said, according to an Idaho newspaper. 

Support Drops after Media Blitz, Voters Split on California GM Labeling Ballot Question

A California state ballot initiative to require labeling of all foods – including animal feeds and pet foods – that are the product of, or may contain, genetically modified ingredients was seen as a slam dunk victory just three months ago, but the most recent polling numbers reported this week by the Los Angeles Times show voter support for the question has eroded to the point the state is evenly split on the question and a big chunk of likely voters are undecided. The Times reported that currently, 44 percent support the question, with 42 percent opposed and 14 percent undecided, and support for the measure dropped 17 points in just the last month. This week, opposition got a shot in the arm from the American Association for the Advancement of Science, “the most prestigious scientific organization in the U.S.” and publisher of Science magazine, when its board voted to oppose the labeling mandate because it will “only serve to mislead and falsely alarm consumers.” Opponents, primarily agriculture groups, the feed industry and food processors and retailers, have spent $41 million in TV and radio advertising to defeat the measure, keying on messages that include an increase in the cost of food, reduction in food availability and asking voters if they want to live with the consequences of the measure. Supporters, reporting income of about $6.7 million, announced they’ll launch a barrage of television ads next week hammering home the “consumer-has-the-right-to-know” message about food labeling.

MF Global Execs Get New Round of Questioning

The Department of Justice and the Commodity Futures Trading Commission have stepped up interviews of former MF Global executives in recent weeks, a prelude to civil charges being filed over the next few months, according to reports. Last month, federal investigators met with former MF Global chief executive John Corzine – who has testified before multiple congressional committees on the circumstances leading to the company’s bankruptcy and the whereabouts of investor assets – and the new interviews with other MF Global principals followed those talks. Reuters is reporting civil charges are more likely against the MF Global executives than criminal charges. Meanwhile, the House Financial Services Committee is continuing its independent investigation of the year-old MF Global bankruptcy and is expected to release its report within the next several weeks.

More than 80 CEOs Call for Action on Fiscal Cliff; Congressional Action Continues

A letter signed by more than 80 chief executives urging Congress and the White House to take immediate action to cut spending and raise new revenues was delivered this week, telling both the President and House and Senate leaders that uncertainty over tax policy, spending policy and a $16-trillion debt is blocking overall economic growth. Meanwhile, congressional negotiations, led by the Senate “Gang of Eight” bipartisan members, continued this week with the goal of finding a way to replace the feared spending cuts and tax increases before the end of the year, while coming up with an alternative program that can be finalized in 2013. One congressional proposition is to set aside the $109 billion in cuts, replacing it with a $75-billion “down payment” on reductions, with a binding agreement to defer further cuts for six months. Another option floating around the fiscal cliff discussions would set aside the mandatory spending cuts, replacing them with a mandatory target of reducing the deficit by $4 trillion over 10 years, instructing congressional committees to come up with revenue and cuts from programs under their jurisdiction. However, the businesspeople said the overall uncertainty has stymied corporate investment while other economic factors, including housing, are improving. Congress must confront the so-called “fiscal cliff” – expiring Bush era tax cuts and an alternative to an automatic across-the-board 3 percent cut in federal spending come January 1, 2013 – or watch personal and corporate taxes skyrocket while vital federal programs are curtailed. The group of executives didn’t endorse tax increases, but said tax reform, including shifts in rates and the closing of loopholes, must be on the table. They said they support limiting the growth of Medicare and Medicaid, changes to Social Security, while broadening the tax base, lowering rates, raising revenues and cutting the deficit. The group has raised $30 million to finance its efforts.

CME to Acquire KC Board of Trade; Willing to Talk about Reduced Trading Hours

CME Group and the Kansas City Board of Trade have signed an agreement under which KCBT becomes part of CME. CME is paying $126 million in cash for KCBT, and CME said it will maintain a committee of KCBT traders to advise on wheat contracts for at least three years. Meanwhile, it’s also reported that CME is willing to listen to those who want to explore a reduction in trading hours after market displeasure with the nearly around-the-clock trading hours the company has implemented. A survey of traders is expected, with a goal of critics to get CME to adopt a closing time on outcry trading of 1:15 p.m. Central time. 

U.S.-Panama Trade Pact in Force

The politically delayed U.S.-Panama Trade Promotion Agreement, finally ratified earlier this year by Congress, went into force this week, with Agriculture Secretary Tom Vilsack praising the trade pact for eliminating tariffs and other barriers to U.S. goods and services. In 2011, the U.S. exported more than $504 million in ag products to Panama, which is considered to be one of the fastest growing Latin American economies. Next week, nearly half of those exports will move duty free, with remaining tariffs disappearing over 15 years.