The 2010 Election and Financial Services

A few conclusions and observations from Roundtable President and CEO Steve Bartlett for the day after:

1. This was, in fact, the “wave” election that many were predicting.  Because of that, we should expect changes in Washington.

2. Washington is still a two-party town, but the smaller majorities in the House and Senate over the next two years means that neither party is in control.   As a result, any legislative policy change will require a bi-partisan approach or it won’t happen.

3. The Tea Party will have its biggest influence within the Senate Republican caucus.  Given the GOP’s numbers in the Senate, it may hold the balance of power on some issues, especially those involving spending, taxing, and government borrowing.

4. By contrast, the House Republican caucus is decidedly mainstream conservative.

5. The newly elected Republican representatives tend to be the most seasoned, mature, experienced group of newcomers I have seen in a while.

6. Led by Joe Crowley, the “New Democrats” will continue to be an influence in the House.

7. The potential loss of Melissa Bean (D-IL) will be painful for the financial services community.

8. The coming changes in the House and Senate Republican and Democratic leadership will be complete by the second week in December.

9.  Four big jobs-related issues will dominate Congress in the coming months:

  • Maintaining the existing income, dividends, and capital gains tax rates.
  • Estate taxes, which are not taxed at all in 2010 but will be taxed at 55 percent starting in 2011
  • Trade agreements
  • The budget deficit

10.   The highly destructive vilification of business by Washington will likely now be significantly moderated.

11. It is way too soon to tell whether any revisions to Dodd-Frank will be considered or, if they are, approved. In the meantime, our job remains to make it work.

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