Cozen Currents – 2023: The Year of the Moderates?

“Populism isn’t abating, but moderation is back in vogue.”

— Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• Although former President Trump is the only declared candidate for 2024 thus far, several in the GOP will seek to claim the mantle of the MAGA movement. Meanwhile, President Biden will lay the groundwork for his re-election with his unique brand of progressive institutionalism.
• Senator Raphael Warnock’s (D-GA) win last week gave Democrats an outright Senate majority in the 118th Congress, but under divided government, all of the Senate’s legislative output will require bipartisan consensus.
• House Minority Leader Kevin McCarthy’s (R-CA) Republican majority will be similar to what House Speaker Nancy Pelosi (D-CA) had to manage over the last two years with a vocal minority, but with moderate members’ electoral victories having provided the majority.

The Pre-Presidential Election in 2023

The Year of the Octogenarian: There may be a new generation of Democratic leaders in Congress, but President Biden is ready to run, or perhaps trot, as the first 80-something presidential incumbent.

• All signs are pointing to a reelection run for Biden. His approval rating may be stuck in the low 40s, but Democrats had the best midterms for a president’s party in 20 years. Biden may not be beloved, but his political power is to not be hated in a polarized era.
• Biden feels compelled to run against Trump again, and thinks he can win again. But if Republicans nominate someone else, Biden will focus on pinning the Republican nominee as “ultra-MAGA” which represents an extremism out of line with most voters. The more moderate candidate tends to win a general election.
• Biden will keep Vice President Harris on the ticket. Talk about the next generation of national Democratic leaders revolves around the likes of Governor Gretchen Whitmer (D-MI), Governor-elect Josh Shapiro (D-PA), Governor-elect Wes Moore (D-MD), Senator Raphael Warnock (D-GA), and Transportation Secretary Pete Buttigieg. But Harris’ position and identity remain a potent power to be the next in line after Biden.

The Year of Moderation and Populism: Biden isn’t publicly announcing a post-midterms “pivot,” but a new election cycle, a new Congress, and changing economic conditions all require some changes from his first two years in office.

• Biden will have to moderate on fiscal stimulus. Democrats don’t have the partisan budget reconciliation process at their disposal with a split Congress and Republicans want to cut spending, something a majority of Americans support after a period of high inflation.
• Biden will attack Republicans for seeking specific unpopular spending cuts, like changes to entitlement programs.
• Biden will continue to empower a progressive regulatory and administrative agenda. From antitrust to market structure, labor, climate, and perhaps even marijuana, the Biden administration will keep progressives engaged, even if the legislative agenda is lacking.

The Year of the Floridians: The future (or “DeFuture“) of the Republican Party looks to be in Florida. It just depends where you’re looking, north to Tallahassee or south to Mar-a-Lago.

• No fewer than five Florida Republicans are running or are looking to run for president in 2024 – former President Trump, Governor Ron DeSantis, Senator Marco Rubio, Senator Rick Scott, and Miami Mayor Francis Suarez. Trump and DeSantis are the two leading contenders by far.
• This year is not about moderating but appealing to the GOP base. The path to success for DeSantis is to out-Trump Trump as Trumpism and the MAGA movement are still very much at the forefront of primary voters.
• Republican presidential aspirants are looking towards a working class, anti-institutionalism agenda. DeSantis is attacking ESG and “woke” corporations, chastising public health officials (and Trump) on pandemic precautions, and also putting forth an agenda of family-focused tax cuts. Rubio was one of six Republican senators who voted for railway workers to get seven days of sick leave to resolve a labor dispute, despite the opposition from the Chamber of Commerce.

The Senate in 2023

What to Expect from the Senate. The Senate’s legislative outlook in the 118th Congress looks very different from the current 117th Congress.

• Under divided government, Senate Majority Leader Chuck Schumer (D-NY) won’t be able to pursue a partisan legislative agenda. GOP control of the House means that reconciliation, the process used to pass the Inflation Reduction Act, won’t be available next year.
• There are prominent must-pass bills requiring bipartisan consensus that will occupy the Senate’s time instead. They include the annual National Defense Authorization Act and appropriations legislation as well as two multi-year packages that need renewal, the Farm Bill and Federal Aviation Administration reauthorization.
• Senator Kyrsten Sinema’s (I-AZ) decision to leave the party won’t substantively change the Democratic majority. “I don’t anticipate that anything will change about the Senate structure,” Sinema said. Though she technically won’t caucus with Democrats, Sinema will continue to get her committee assignments from Schumer. Without reconciliation, Sinema and Senator Joe Manchin (D-WV) are unlikely to wield as much power as they did in the 117th Congress.

Senate Moderates in the 118th Congress. Next year will offer both challenges and opportunities for moderates in the upper chamber.

• Several leading moderates in the Senate Republican conference are retiring at the end of this Congress, including Senators Rob Portman (R-OH), Richard Burr (R-NC), and Roy Blunt (R-MO). These lawmakers often worked in a bipartisan way and struck deals across the aisle. Their replacements – J.D. Vance in Ohio, Rep. Ted Budd (R-NC), and Missouri Attorney General Eric Schmitt (R) – do not appear likely to follow in their footsteps.
• Moreover, a faction of hardline Senate Republicans could make compromise harder. A half-dozen senators including Rand Paul (R-KY), Ted Cruz (R-TX), and Rick Scott (R-FL) are holding regular meetings in an effort to wield greater influence on GOP leadership. Republicans have a strong incentive to deny Manchin any legislative wins, such as permitting reform that would help his re-election bid in a deep-red state, putting up another roadblock to bipartisan legislation.
• Nevertheless, there will still be opportunities for moderates to strike deals next year even beyond must-pass items. In fact, most major legislation that passes each year is done so on a bipartisan basis. There are plenty of policy issues that go under the radar and don’t divide along traditional party lines. Both parties are becoming more hawkish toward China. Republicans and Democrats continue to view crypto policy as abipartisan partnership worthfurther developing, especially in theaftermath of FTX’s collapse. The telehealth industry has foundbroad congressional support for its acceptance and expansion in the healthcare space.

The Never-ending Election Cycle. In some ways, 2023 will be all about 2024 for the Senate.

• Senate Democrats will face a brutal map in 2024, when they will be defending 23 seats, including three in states won by Trump in 2020: Manchin, Jon Tester (D-MT), and Sherrod Brown (D-OH). By comparison, Republicans are defending only 10 seats, all in states won by Trump, and Democrats’ best pickup opportunities are in red states Florida and Texas. Brown has said that he’ll seek re-election, while Manchin and Tester have not yet.
• Sinema’s decision to leave the Democratic Party before she is up for re-election scrambles the 2024 US Senate race in Arizona. A September poll commissioned found her approval with Democrats in the state 20 points underwater, leaving her vulnerable to a potential primary challenge from Rep. Rubén Gallego (D-AZ). Becoming an independent allows her to evade a challenging Democratic primary. In a three-way general election race, Sinema and a Democratic candidate could split support, though, giving a boost to a Republican.
• On the Republican side, several senators will likely spend 2023 trying to set themselves apart and tee up 2024 presidential campaigns. Potential candidates for the White House could include Cruz, Scott, Josh Hawley (R-MO), and Marco Rubio (R-FL). They could all become increasing headaches for McConnell as a result.

The GOP House in 2023

Loud Minorities. Similar to Speaker Nancy Pelosi’s (D-CA) experience for the last few years, the most vocal members of House Minority Leader Kevin McCarthy’s (R-CA) majority will be its fringe members.

• A key difference for McCarthy though will be that the conservative Freedom Caucus is much larger and more united than the progressive Squad. This group’s size is more comparable to that of the Congressional Progressive Caucus, but will be outspoken in a manner akin to the Squad.
• What will embolden this group as well is knowing that the primary focus will be on messaging. In Pelosi’s case, she could pitch the argument that compromise would lead to legislation getting passed. With a divided government there is no similar incentive for these members to settle.

Moderates Make the Majority. While the Freedom Caucus may be the loudest faction of the Republican majority, the moderates in the party secured the seats that won the chamber back for the GOP.

• House Republicans were able to take back the House of Representatives in large part thanks to flipping districts that Biden won in 2020. This was especially true in California and New York where members were able to over perform relative to the GOP’s national showing. These states alone account for nearly half of the 14 districts that voted for Biden in 2020 and a Republican representative in 2022.
• This group tends to be less interested in the culture war issues than other GOP members are pushing. They will look to focus on more traditional Republican issues and try to shift the messaging battle towards issues that they see as being of more interest to the average voter.
• Part of this group’s effort will be to seek areas of compromise with Democrats to be able to notch tangible accomplishments. Anything meaningful that will get done in the next Congress will have to be done on a bipartisan basis and these majority makers will be crucial in those negotiations.

A Tough Road Ahead. The moderates may be McCarthy’s majority makers, but the members on his party’s right flank will make reaching deals a challenge as they look to extract concessions.

• This dynamic is already apparent in McCarthy’s efforts to be elected speaker, where he can only afford four GOP members to oppose him. The vote will be tight and if he is able to garner sufficient support in the end, he will have to make more concessions. In leadership election, 30 members voted against him and six have already said they won’t vote for him on the floor.
• Whoever wields the speaker’s gavel will have to navigate thorny “must-pass” legislation, like raising the debt ceiling to avoid a default and continuing government funding to prevent a shutdown. Following the 2010 midterms, the Tea Party was able to use these issues to score political victories and the House Freedom Caucus is looking to do the same.

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