What the 2022 midterms mean for convenience retailers

By Jon Taet

ALEXANDRIA, Va. — With a handful of races remaining, we know the GOP won a majority for the 118 in the House of Representativesth Congress. It took Republicans a net gain of five seats to take control, and they have had a net gain of eight seats so far.

On the Senate side, the Democrats successfully retained their majority, although the exact lead depends on the outcome of Georgia’s runoff. If Senator Warnock manages to fend off Herschel Walker’s challenge, Democrats will add a seat and have a 51-49 lead. If Walker succeeds, the Senate election was a flop and we’ll still have a 50-50 lead , with Vice President Harris continuing to serve as the casting vote.

Senate races in Pennsylvania and Georgia drew the most attention. The Democrats won the only seat change in the Senate in Pennsylvania in a close race. As previously mentioned, Georgia is headed for a runoff. While ending Election Day in first place, Senator Warnock was just under the 50 percent hurdle required for an outright victory. Meanwhile, the remaining competitive Senate races on Election Day were maintained by the incumbent party. Democrats held seats in Arizona, Nevada and New Hampshire while Republicans held North Carolina, Ohio and Wisconsin.

The Story in the Senate: Ticket Splitting

Comparing statewide races in many of the states that host competitive Senate races has revealed a fairly consistent theme: ticket splitting.

  • In Georgia, Republican Gov. Brian Kemp comfortably won his race, but the Senate race faces a Dec. 6 runoff as neither candidate passed the 50 percent threshold.
  • In New Hampshire, Republican Gov. John Sununu also won re-election by a wide margin, but Democratic Senator Maggie Hassan won a narrower race.
  • In Wisconsin, Democratic Gov. Tony Evers narrowly won re-election, and Republican Senator Ron Johnson won a narrow race in another example of ticket-splitting, though not as dramatically.
  • In Nevada, incumbent Senator Catherine Cortez-Masto (D-NV) won a close race while the state’s Democratic Gov. Joe Sisolak lost to Republican challenger Joe Lombardo.

Another issue was hold serve. There was only one seat turned over (in anticipation of the record date result in Georgia).

  • Democrats targeted Republican seats in North Carolina, Ohio, Pennsylvania and Wisconsin. Republican candidates held the vacancies in North Carolina, Ohio, and Wisconsin, and Democrats converted Pennsylvania.
  • The Republicans primarily targeted Arizona, GeorgiaFn, Nevada and New Hampshire. All but Georgia are said to have been held by the Democrats.

Despite losing a majority in the House of Representatives, Democrats had a better than expected election day.

Republicans started the night with strong numbers from Florida, the first state to report widespread results. Aside from easily winning re-elections for Republican Gov. Ron DeSantis and Republican Senator Marco Rubio, Republicans also won four seats in the Sunshine State.

The rest of the night wasn’t nearly as decisive for Republicans across the country. Democrats held on to some contested seats where Republicans hoped for significant gains. The absence of the red wave will complicate the work of a new Republican leadership over the next two years. The leadership’s ability to keep the faction together on important votes will be a challenge.

It’s a similar position Democrats have grappled with for the past two years, and almost identical to that held by former Speakers John Boehner (R-Ohio) and Paul Ryan (R-Wisc.) during portions of their speaking tenure during the Obama administration have experienced. Former Speakers Boehner and Ryan were forced to negotiate with Democratic Senate majorities and a Democratic White House while dealing with an aggressive right flank within their own faction.

What can we predict from what we know?

The combination of a narrow Republican majority in the House of Representatives and a razor-thin Democratic majority in the Senate allows the NACS government relations teams to make predictions about what we’ll see over the next two years: Gridlock will be the issue.

Both chambers will seek to “block” the other, using any “must-pass” legislation to impose partisan priorities and pass those priorities as close to deadlines as possible. At some point next summer, the chambers will have to agree on the federal subsidy law and vote on the debt limit. Expect significant partisan bickering and brinkmanship over federal funding legislation and the federal debt limit as each party will attempt to force concessions from the other in the negotiations. The next two years of legislation may not be for the faint of heart.

Thoughts for the convenience industry:

  • The Republican majority means many of the potentially most problematic convenience industry laws are highly unlikely.
    • Larger tax increases are highly unlikely.
    • The agenda of the organized labor movement is essentially off the table.
    • Comprehensive climate or pro-EV legislation is unlikely. Republicans are likely to pursue legislation that increases domestic power generation and competition in alternative energy technologies.
    • A Republican majority is also likely to focus on aggressive oversight of how billions of dollars in recently approved infrastructure funding are spent.

What about the Biden administration?

Amid a more hostile Congress, at least on the House side, President Biden is likely to follow the example of his recent predecessors, who have faced similar scenarios, and focus on what he can do to advance his agenda, primarily through regulatory action.

The government is likely to step up its “whole-of-government approach” to climate and environmental legislation, which may trigger a spate of regulatory activity from a number of agencies, most notably the Environmental Protection Agency and the Home Office.

The Department of Labor and the National Labor Relations Board are also likely to continue their recent surge in pro-organized labor activity over the last two years of Biden’s current tenure. Republicans in Congress will have little to no ability to rein in regulatory activity other than aggressive oversight.

Jon Taets is the NACS Director of Government Relations. He can be reached at [email protected]