What the 2018 Midterm Elections Could Mean for the Future of Wealth Equity
Last week, as a result of a historic midterm election in which voter turnout hit a 50-year high and a record number of women won seats to the U.S. House of Representatives (including the first Muslim and Native American women elected to Congress), Democrats in the House won enough seats to give them control of the House for the first time in almost eight years. At the same time, Republican victories in Tennessee—which elected its first female U.S. Senator—along with Democratic losses in Indiana and Missouri have allowed Senate Republicans to not only retain their control of the Senate, but also add several seats to their existing majority.
Moving forward, what does this all mean for issues that wealth builders care about?
First, we’re likely to see more legislation and proposals introduced that can help families not only get by, but also get ahead. These changes create opportunities for more exciting and ambitious proposals, such as American Opportunity Accounts, which could give every child born in the United States a nest egg and savings platform to grow with. Game-changing policy proposals like this are certain to gain attention in the 2020 presidential campaign, and to attract more interest in our issues for a larger audience both inside and outside the Beltway.
The midterm results also suggest a better climate for right-side up tax policy. Congress, which last year enacted the nearly $2 trillion dollar Tax Cuts and Jobs Act (TCJA), to the great benefit of the wealthy and corporations, will most likely not continue to move forward with Tax Reform 2.0 or other similar proposals. On the other hand tax legislation that supports working families rather than the wealthy, such as the Refund to Rainy Day Savings Act (S. 3220)—a bipartisan bill that would help working families leverage their tax refunds to save for emergencies—could move forward in this new environment.
Other right-side up tax policies, such as the Volunteer Income Tax Assistance program (VITA) (which has had historically bipartisan support), may see progress in the next Congress, or even sooner. Even though there were winners and losers among some of our VITA champions on Capitol Hill during last week’s midterms—with Senator Sherrod Brown (D-OH), a long-term VITA proponent, winning his reelection bid, and Senator Dean Heller (R-NV) and Representative Carlos Curbelo (R-FL-26) losing theirs—there are several opportunities for permanently authorizing the VITA program and increasing its funding during the upcoming lame-duck session (more coming on lame-duck advocacy opportunities soon!).
We expect to see fewer attacks on safety net programs and the Consumer Financial Protection Bureau (CFPB) and less legislation that provides support to wealthy households, while providing very little, if anything, to working families. In addition, the Democratic House can now serve as a legitimate backstop for policies that can hurt vulnerable families.
When it comes to consumer protections, and with Democrats in control of the House, there is greater likelihood that legislation such as the Consumers First Act (HR 6972)—which would undo the harmful actions taken by interim Director Mick Mulvaney since he took charge of the Bureau—will move in that chamber. However, with the confirmation process firmly in favor of Republicans in the Senate, it will be easier for President Trump to push through his nominees to head the CFPB and other regulatory agencies, many of whom might not lead with the best interests of consumers and working families in mind.
In the end, while divided government certainly presents a challenge for helping families achieve economic prosperity, we hope you’ll find that this new political environment carries a lot of silver linings. More importantly, we hope that you’ll join us through Prosperity Now’s Advocacy Center as we work together to ensure that everyone has a clear path to financial stability, wealth and prosperity.