Print Print | Email Facebook Twitter Share ThisShareThis

The New Math

NAMIC Prepares for Democrat Control of Congress

By Marliss Browder

Former Chief Justice of the United States Earl Warren once said, "The right to vote freely for the candidate of one's choice is the essence of a democratic society." One of our nation's oldest and most important principles is that we vote representatives into office to make our laws. If we as citizens do not like the laws, we have the power to vote those representatives out of office, and this was the case in the November midterm elections.

Voter turnout in non-presidential elections is usually driven by statewide races, but it appears that voters were motivated by races in the U.S. House of Representatives. Despite a low unemployment rate, falling gas prices, and a booming stock market, it seems that the major factor in the election was the war in Iraq.

After spending 12 years in the minority, the Democrats will control both the U.S. House of Representatives and the U.S. Senate when Congress convenes for the 110th Congress in January 2007.

In the House, Democrats picked up 30 seats with the balance of power at 233 Democrats and 201 Republicans with one seat still undecided as of Dec. 15. In the leadership of the House of Representatives, Rep. Nancy Pelosi, D-Calif., is the successor to the speakership; Rep. Steny Hoyer, D-Md., will be the majority leader; and James Clyburn, D-S.C., will be the next majority whip.

On the Republican side, Rep. John Boehner of Ohio will be the next minority leader; Rep. Roy Blunt of Missouri will be the minority whip; and Rep. Adam Putnam of Florida will serve as head of the Republican Conference. Also serving will be Rep. Kay Granger of Texas as conference vice chairman; Rep. John Carter of Texas as conference secretary; Thaddeus McCotter of Michigan as chairman of the policy committee; and Rep. Tom Cole of Oklahoma as chairman of the National Republican Congressional Committee.

Pelosi frustrated many Democrats by announcing that she would not move to impeach the President, however, she has vowed to instead establish an agenda focusing on strengthening homeland security, resolving the situation in Iraq, increasing the minimum wage, promoting stem cell research, and strengthening education.

A Democrat-controlled House will face many of the same challenges that have plagued Republicans in recent years, namely challenges from the fringes of the caucus (in the case of the Democrats, from "Blue Dogs" and "New Democrats"). Budget issues and oversight of the President's administration will prove to be immediate challenges for the leadership team. The narrow majority coupled with a Republican White House will place obstacles in the path of moving serious and controversial legislation.

In the U.S. Senate, the Democrats will have a 51-49 majority. The Democrats needed a net gain of six seats which they accomplished. There are two Independents, Connecticut Sen. Joe Lieberman and Vermont Sen. Bernie Sanders, who have announced that they will align themselves with the Democrats.

Current Minority Leader Harry Reid, D-Nev., was elected to assume the position of majority leader. Margins in the Senate will be razor thin presenting a particularly unique challenge to the leadership given the wide latitude that any single senator has in thwarting a legislative agenda. The role of majority leader will prove difficult even under the best of circumstances given the wide variance in political ideology within the Democrat caucus. Procedural rules of the Senate, including points of order and filibusters, virtually ensure the need to secure 60 votes for any major piece of legislation, necessitating coalition building and raising the specter of essential gridlock.

Also serving in Democrat leadership positions, Minority Whip Richard Durbin of Illinois will ascend to the majority whip. Sen. Charles Schumer of New York will continue to chair the National Democratic Senatorial Committee but has also been elected to serve as the third in leadership as vice chairman. Sen. Patty Murray of Washington will serve as conference secretary; Sen. Debbie Stabenow of Michigan will chair the steering committee; and Sen. Byron Dorgan of South Dakota will serve as chairman of the Democratic Policy Committee.

Serving on the Republican side, Sen. Mitch McConnell of Kentucky was elected to be the minority leader; Sen. Trent Lott of Mississippi beat Sen. Lamar Alexander of Tennessee by a vote of 25-24 to be the next minority whip; Sen. Jon Kyl of Arizona will be the Republican Conference chairman; Sen. Kay Bailey Hutchison of Texas will chair the Republican Policy Committee; and Sen. John Ensign of Nevada will take over the National Republican Senatorial Committee.

Not only were the Democrats the big winner in the November midtern elections, but money was a true victor as well. According to the Center for Responsive Politics, in 93 percent of the races in the House of Representatives and 67 percent of the Senate races, the candidate who spent the most money won.

The average cost of winning a seat in the House was approximately $966,000 and approximately $7.8 million for a seat in the Senate. In total, 27 House candidates and 11 Senate candidates were able to win their elections despite being outspent by their opponents.

According to the latest report to the Federal Election Commission, the national party committees spent nearly $710 million. The Republican national party committees reported spending $404.6 million and $304.9 million by the Democratic national committees. Issue advocacy groups, more commonly known as 527 committees, reported spending approximately $157.4 million to help influence the elections.

During the 2005-06 election cycle, the insurance industry ranks just eighth among the top industries donating to members of Congress. Ranked at the top of the list is the lawyers/law firms industry and just below is the real estate industry. Also, seven out of the top 20 political action committee contributions come from the labor unions.

In today's political environment, voting is not enough to ensure that your voice will be heard. Voting may help you elect the right people, but it is no guarantee that the elected officials know about the important issues facing the property/casualty industry or understand the impact that specific legislation will have on your company and your community.

The good news is that most property/casualty insurance issues that are likely to be considered in the new Congress are not partisan, political issues, although the philosophies and core constituent groups in some cases will drive the approach. There will be many new congressional members who will be unfamiliar with our industry. Participating in NAMIC's Political Action Committee and Congressional Contact Program (CCP) are excellent ways to reach out to legislators and be heard by those who will ultimately make decisions about the legislative initiatives important to you and the property/casualty insurance industry.

With your help, NAMIC will aggressively reach out to those newest members of Congress to educate and offer information on the most critical and complex insurance issues. One of the key ways we will do this is through NAMIC's premier grassroots program, the CCP.

Just completing its twenty-first season, the central role of the CCP is to educate legislators. The CCP offers representatives of NAMIC-member companies the opportunity to visit face-to-face with key legislators on Capitol Hill in order to build bipartisan relationships. This ongoing process permits NAMIC and its member companies to have a significant impact on legislation affecting the property/casualty insurance industry.

During the 2006 CCP season, more than 290 participants held meetings in more than 350 House and Senate offices. Through CCP, NAMIC was able to educate more than three-quarters of the United States Congress. As a democracy, we should never underestimate the power of our collective constituent voices on legislation impacting the property/casualty industry.

Through the CCP, those who participate become more aware of the effects of establishing and building relationships with elected officials, and the tremendous impact that can make especially with the new Congress.

Each time NAMIC meets with members of Congress and their key staff, we are securing a seat at the negotiation table for our members. However, NAMIC is not the only organization trying to secure a seat at the table. There are more than 86,000 trade and professional associations, which include local, state, regional, national, and international associations.

To put it in perspective, one association that is competing against NAMIC for the attention of Congress is the American Association of Justice (AAJ), formerly the Association of Trial Lawyers of America. AAJ spent more than $2.5 million to support 296 candidates who ran for the House and Senate during the November midterm elections. In their press release after the elections, "voters chose trial attorneys to represent them in Washington."

As you can see, there is much at stake in the next Congress for NAMIC-member companies and the property/casualty insurance industry. NAMIC is just one of many organizations trying to its voices heard on Capitol Hill, and will be facing issues such as the Terrorism Risk Insurance Act, federal versus state regulation of insurance, legal reform, and taxation of small property/casualty insurance companies.

For a more in-depth analysis of the elections and the impact on the property/casualty industry, please visit NAMIC Online.

Top Fifteen Industries Donating to Members of Congress

  1. Lawyers/Law Firms $92,983,708
  2. Retired $89,427,456
  3. Real Estate $55,696,698
  4. Securities/Investment $48,276,563
  5. Health Professionals $38,582,404
  6. Candidate Committees $37,484,437
  7. Leadership PACs $32,545,654
  8. Insurance $23,830,947
  9. Commercial Banks $19,960,262
  10. Business Services $19,294,817
  11. Lobbyists $18,051,910
  12. TV/Movies/Music $17,872,199
  13. Pharm/Health Products $14,802,926
  14. Oil & Gas $14,257,547
  15. General Contractors $14,193,049

Marliss Browder is federal affairs director at NAMIC. She can be reached at mbrowder@namic.org.

Posted: Thursday, January 18, 2007 12:00:00 AM. Modified: Thursday, January 18, 2007 1:57:49 PM.

317.875.5250 - Indianapolis  |  202.628.1558 - Washington, D.C.

NAMIC | Where the future of insurance has its voice TM