While America watched the New Year's ball drop in NYC's Time Square, Congress was in Washington dropping the ball on the fiscal cliff. Although a deal was ultimately reached following the cliff deadline, it did very little to solve any of America's systemic economic challenges. It merely solved a problem that Congress manufactured in the first place. Who are the winners and losers of the fiscal cliff negotiations? After this entire debacle I would argue everyone lost ... the President, House Republicans, Senate Democrats, the American people, the legislative process, yes, everyone. But as both parties continue to point fingers and play the blame game, the business community stands ready to address the challenges of this New Year, this new Congress, and the new realities we face after what was not, to me, a status quo election. We see these challenges as an opportunity to take the road less traveled and lead the charge to fix what's broken and push for meaningful reform that will create more prosperity and growth.
Tomorrow, Congress will swear in 13 new Senators (12 elected in November, and the newly appointed Senator Tim Scott-R) and 84 new members in the House of Representatives. This will bring party control in the Senate to 55 Democrats and 45 Republicans with two Independents caucusing with Democrats. The House will have 233 Republicans and 200 Democrats with two vacancies (IL 2 and SC 1). Although party control in both Chambers remains the same, the demographic and cultural make up of both bodies has changed dramatically. The Senate will hold a record number of women, a Buddhist will serve in the Senate for the first time, and in the House a Hindu. More Hispanics and younger members will serve in the House and Senate than ever before – a governing body much more reflective of the nation's workforce.
However, the most striking change to both Chambers will be the extremely large number of newcomers. With Senate seats changing in SC, MA and HI (see below), the number of U.S. Senators serving their first six years in office will reach 47 in 2013, just under half of the entire body. When new members in the House replace the vacancies created in IL 2 and SC 1, and after February MO 8, the number of U.S. Representatives serving in their first or second term will reach 169 or 39 percent. Again, not status quo. The greatest challenge of this new and diverse Congress is that it's expected to be significantly more polarized. Only 88 of all 435 Congressional districts can be considered moderate or swing districts – down from 188 two decades ago. And far less are splitting tickets with the presidential vote than ever before. (To see an excellent New York Times post on the district breakdowns, click here.) Only five Senate races split tickets with the presidential vote in 2012, four of which were Democrats who won in Romney states (MO, IN, MT, ND) and one Republican who won an Obama state – Nevada.
So what does this new reality mean for the business community moving into 2013? For starters, despite the steep learning curve of this new Congress, the high number of newcomers provides ample opportunity for different industry sectors to educate incoming members on their issues and create winning coalitions. But the path to achieving our goals will not be solely through Congress. Only by operating outside the box and looking to governors and state legislatures, to regulators, and even the court system will we see success in 2013.