It's still very early, but that's not stopping many pundits from making their mid-term election predictions. All 435 House seats are up for grabs and 35 seats in the Senate are in play. Most experts agree that the Republicans will maintain a majority in the House. The big battle is in the Senate. The race is tight. In fact, one report this week put the chances at "80 percent" that the Republicans would win back the Senate from the Democrats this year.
So what does this mean for you? If the Republicans do win the Senate and control both Houses of Congress would this have a big effect on your business? In short, no.
For starters, any Republican victory would be a slim one. Even some of the most optimistic projections from the right put the Republicans only a few votes ahead of a majority in both Houses. That would let them control the agenda and appoint committee chairs. But remember that to pass a bill you need a 51 percent majority in both the House and the Senate. Yet to override a presidential veto you need a 2/3 majority in both. No one predicts that the Republicans will have anywhere near that kind of majority nor does it seem very likely that they would be able to persuade members of the opposing party to join them in overriding a presidential veto during these partisan times. Filibustering aside (and I admit that the ability to filibuster is a powerful tactic) the Republicans would have more, but not much more political power when there's a Democrat president sitting in the White House. Particularly this president and this Congress who famously don't get along.
However, the controlling party would be a pain in the neck for Mr. Obama.
Take the Affordable Care Act. Barring any major event, like the website continues to crash or Nancy Pelosi loses her health insurance, this will not be repealed. As noted above, the Republicans do not have the 2/3 majority needed to override a presidential veto and the president is not going to sign a repeal of this law. Repeat: not. It's got his name on it for God's sake! However, the Republicans could take away funding for certain key aspects of the law. They could introduce bill after bill that pecks away at some of the Act's main provisions. And, if public opinion significantly turns, or the business community shouts loud enough about the upcoming mandate requirement, it's very possible that amendments and adjustments will happen to it. As a business owner, that means you have to pay extra close attention to these developments because it affects the kind of insurance you're providing your people, your options and what you're paying.
Healthcare aside, the president's main initiatives will mostly be ground to a halt. With a Republican-controlled Congress his hopes of getting more funding for education, infrastructure, energy and other pet programs will be reduced to very little. If you're in those industries, you're out of luck. Unless the President moves more to the center, like President Clinton did when he was faced with the same political environment, you'll not see much action. Instead, you're likely to see him plead and complain and ultimately get on a plane and get cheered by the few countries left in the world who actually like us, which is what lame duck Presidents like to do.
Our national debt and deficits will come back to the top of the news cycle. Our deficits are dropping but are still twice what they were before the recession and are forecasted to start climbing again in just a few years. Our national debt is now topping $17.5 trillion and getting into the Greek zone. Look for a Republican-led Congress to propose more budget cuts, more sequestration and more austerity to try and rein in spending. Social, education and other liberal favorites will face cuts and businesses in those industries or regions affected by those industries will have to prepare. Even the military will likely face more scrutiny, although not as much as before.
However, and believe it or not, a Republican controlled Congress will have some common ground with the president. It's to everyone's best interest to show the voting public that they at least can get something done. And that something will likely be two things: immigration and tax reform.
Despite their differences, both parties have agreement on most of the main points of immigration reform and recognize the need to do something -- in fact, the latest version of the bill was drafted by a Senate bi-partisan committee (notoriously called the "Gang of 8" but don't get scared because they're mostly just politicians in suits and not really gang members). And something will be done, I predict, so if your business is a startup with immigrant founders, does work with green card holders who are seeking education here or hires non-citizens this may impact you. There will be more opportunities, and likely more paperwork that may benefit both the business owner and employee alike.
Did you know that the House Ways and Means Committee in the 112th Session met 20 times on tax reform alone and have established 11 separate Ways and Means Tax Reform Working Groups? And you thought they were just slacking. Leaders from both sides of the table are agreeing on some of tax reform and right now they're targeting the big corporations that use loopholes to avoid taxation or funnel money overseas where taxes are lower. Many business owners I know correlate "tax reform" to "tax increases" and the fact is: they're right. A comprehensive tax reform bill will surely address corporate America's shenanigans but it will also likely result in new taxes and/or higher rates for some (those darned wealthy!). Tax reform will be part of overall deficit reduction talks and I believe this is something that Washington will accomplish before the President leaves office. This will affect every business owner.
The Democrats control the Senate and we get political infighting. The Republicans control the Senate and we'll likely get the same. Whatever happens, smart business owners will be paying close attention. Man, where's Ross Perot when you really need him?
A version of this blog previously appeared on Inc.com.