What the GOP sweep will mean for business, economy

GOP key issues

The Republican breakthrough in midterm elections represents a major setback for President Barack Obama and changes the outlook for action in Washington on issues important to business and the economy.

New Senate Majority Leader Mitch McConnell, himself re-elected easily in Kentucky, will command at least 52 seats when the next Congress convenes in January. That could rise to 54 pending vote-counting in Alaska, where Democratic incumbent Mark Begich trails, and a December runoff in Louisiana, where Democratic incumbent Mary Landrieu will be the underdog.

U.S. Senator Mitch McConnell (R-Ky.) during his election night victory rally with his wife, former United States Secretary of Labor Elaine Chao.
Shannon Stapleton | Reuters

In the House, Speaker John Boehner is on track to lead the largest Republican majority since before the Great Depression. When all races are decided, his caucus is expected to include roughly 250 members.

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Those solid majorities could curb President Obama's range of action on immigration and Environmental Protection Agency regulations to limit carbon emissions in hopes of slowing climate change. On both issues, Obama hopes to move unilaterally without action by Congress; on both, Republicans will set out to block him,

The GOP sweep makes it more likely Obama will approve the Keystone pipeline, something he has delayed for two years in deference to objections from environmentalists. That represents one area where the White House may seek common ground with partisan adversaries.

Another is modest infrastructure improvements, a priority of GOP traditionalist that tea party Republicans have thwarted. A third is free-trade deals with European and Asian allies, which Democratic backers in organized labor have resisted.

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Winning so many races, including in states Obama carried such as Iowa and Colorado, will embolden some of the staunch conservatives who have provoked government shutdowns and debt ceiling confrontations in recent years. But it also provides more maneuvering room for GOP leaders who have vowed not to repeat those politically costly strategies.

Yet no one should bet on the big-ticket compromises many in business and elsewhere have sought: On tax reform, and on a long-term budget deal. Both thorny issues are likely to stay stuck in partisan gridlock, at least until the 2016 presidential races is settled. Differences between the two parties remain simply too deep.

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