The post-election shuffle is well underway

Welcome back to the Golden Apple.  We have officially closed out election season and the post-election shuffle is well under way. While we wait for the last two California House races to be called, which will dictate the final ratio in the lower chamber, anyone government-adjacent is reorganizing their outlook to prepare for a unified government next term.  This week we’ll be sharing updates on cabinet appointments and the leadership shuffle in the House and Senate, as well as a brief outlook for the 119th Congress. 

Administration Update

Over the weekend, President-elect Trump named Scott Bessent of the Key Square Group as his pick for Treasury Secretary. Bessent’s name was floated early and though Trump appeared to waver, his nomination is seen as a boon for Wall Street.  Bessent, if confirmed, will oversee the implementation of the forthcoming tax package, and will also be expected to support any action the President-elect takes on tariffs. 

Federal Reserve
Federal Reserve Chairman Jerome Powell’s term expires in May 2026, and he has publicly stated that he will not step down prior to that date.  He has not indicated whether he would remain at the Fed as a board member after his term ends.

FDIC
FDIC Chair Martin Gruenberg plans to step down on January 19th, 2025.  The top spot at the agency is expected to shift to Travis Hill, currently Vice Chair and under consideration for the permanent position.

OCC
With the agency currently helmed by Acting-Comptroller Hsu, Trump has not yet named a successor but is rumored to favor Jonathan Gould, who previously served as Senior Deputy Comptroller and Chief Counsel.

CFPB
President-elect Trump has similarly not yet chosen who will lead the consumer protection agency, but two names said to be in the mix are Brian Johnson, who served previously as Deputy Director, and Todd Zywicki, who in 2020-2021 chaired the CFPB’s Taskforce on Consumer Financial Law.

SEC
SEC Chair Gary Gensler will step down on January 20th, 2025. Three contenders for this position are Paul Atkins, Robert Stebbins, and Brian Brooks.  Atkins served as a Commissioner under President George W. Bush; Stebbins served previously as the agency’s General Counsel; Brian Brooks served as Acting Director of the OCC during President Trump’s first term.

Congressional Update

The House and Senate are both in recess for the Thanksgiving holiday.  However, leadership discussions continue on both sides of the aisle.  Republicans named their Steering Committee members last week and are expected to move on to Committee Chairs when they return next week.

House Financial Services Race
In the House Financial Services Committee, Reps. Andy Barr and French Hill have emerged as the two frontrunners.  Barr is seen as a close ally of House Majority Leader Steve Scalise, whose holds significant influence on the Steering Committee.  That said, both candidates have deep backing within their conference. 

Democrat Ranking Member Shuffle
Within the Democratic Caucus, Ranking Member Maxine Waters will retain the stop spot on the Committee.  However, other Committees are seeing potential shakeups in their leadership, with Ranking Members Raul Grijalva of Natural Resources and David Scott of Agriculture facing challenges from more junior members.  Both leaders have faced criticisms over their ability to lead their respective committees.  As Democrats have typically leaned heavily on the seniority system, these races are sending a strong signal that not all members are satisfied to let aging members control the agenda. 

Senate Banking Committee
And on the Senate side, Sen. Tim Scott will ascend to chair the Banking Committee and Elizabeth Warren is assumed to take the Ranking Member seat.  Warren is known for her sharp questioning of private sector executives and is expected to conduct rigorous oversight from her new position.  But she has also proven herself to be a dealmaker on issues like CEO pay claw backs and crypto AML, so don’t rule out bipartisan legislation just yet.

Biden Regulators Commit to Stop Rulemaking
Testifying before the House Financial Services Committee last week, prudential regulators committed to Congress that they would pause on any new rulemakings until next year.  Regulators at the FDIC, Fed, and OCC appeared to agree that their agencies would not put forth new proposals before the end of the year and would allow new agency heads to weigh in before finalizing any outstanding rules.

Reconciliation Talks Underway
Though agency and Congressional leaders have yet to take their seats, discussions on budget reconciliation have already commenced with members lobbying on what is in and what is out.  More to come in future weeks, but we expect a fast start in early 2025.

Weekly Political Synopsis from Jim Ellis

PRESIDENT
National:  Echelon Insights conducted a national poll shortly after the 2024 election (11/11-14; 1,010 US registered voters; 394 self-identified Democrats; 394 self-identified Republicans; online) and while the results don’t have much relevance for a nomination election four years in the future, the post-election survey does provide some interesting data points.

First, the partisan sample sizes are too low for a national poll to draw major conclusions, but the respective leading candidates for the 2028 party nominations are so large as to give us a snapshot into what people believe just after the current election.  For the Republicans, Vice President-Elect J.D. Vance is out to a big lead, capturing 37% support.  His closest rivals, former presidential candidates Vivek Ramaswamy and Nicky Haley, each capture 9% support.  Florida Gov. Ron DeSantis is next with 8%, as Sens. Ted Cruz (R-TX) and Marco Rubio (R-FL) follow with 5% apiece.

For the Democrats, and the data point attracting the most attention, Vice President Kamala Harris, despite her clear loss to President-Elect Trump, still commands the Democratic field with 41% support for another run.  Trailing way behind with 8% support are California Gov. Gavin Newsom and Pennsylvania Gov. Josh Shapiro who posts 7%, while Transportation Secretary Pete Buttigieg and 2024 Vice Presidential nominee Tim Walz draw 5% apiece. 

SENATE
Massachusetts:  Sen. Ed Markey (D-MA), who has been in Congress since his first election to the House in 1976, announced that he will seek re-election to the Senate in 2026.  Mr. Markey first won the Senate seat in a special election in 2013 replacing appointed Sen. Mo Cowan (D) who served as an interim after then-Sen. John Kerry (D) resigned to become Secretary of State in the second Obama Administration. 

Sen. Markey’s biggest potential obstacle to re-election would be the Democratic primary.  In 2020, he repelled a challenge from then-Rep. Joseph Kennedy, III, a race Mr. Markey won with a 55-45% margin.  Otherwise, expect Sen. Markey, who will be 80 years of age at the time of the 2026 election, to breeze through another re-election campaign.

Nebraska:  Independent Dan Osborn attracted a great deal of national political attention in his race against Sen. Deb Fischer (R).  He ran hard and polling even showed him leading the Senator in several surveys.  In the end, he would lose 53-47%.  Without a Democratic nominee, Mr. Osborn was able to build a coalition that Democratic leaders backed, which helped make him a viable candidate.

When asked this week whether he might return to challenge Sen. Pete Ricketts (R) or Rep. Don Bacon (R-Papillion/Omaha), Mr. Osborn indicated that that he would consider running again, but first must “return to work tomorrow and start paying bills.” 

Sen. Ricketts, who won the 2024 special election to serve the balance of the current term by a 63-37% margin, will be on the ballot again in 2026 as he runs for the full six-year term.  With Democratic state Senator Tony Vargas losing consecutive close elections to Rep. Bacon, the Democratic leadership will very likely look for a new candidate to oppose the five-term Congressman in 2026.

Pennsylvania:  The Pennsylvania Senate initial vote count is complete, and the unofficial final tally finds Republican David McCormick leading Sen. Bob Casey, Jr. (D) by a total of 16,404 votes which is a considerable reduction from the first reported count of just under 30,000. 

After the recount got underway and the state Supreme Court reaffirmed its ruling that certain ballots not meeting the legal standards would be disqualified along with Gov. Josh Shapiro (D) publicly affirming the court’s decision led to Sen. Casey conceding the race to Mr. McCormick.  Thus, the recount ends, and Mr. McCormick officially becomes the state’s Senator-Elect.  The new Senate will now divide as 53R – 47D.

HOUSE
AK-AL:  The final Alaska votes, including the Ranked Choice Voting rounds, were released Wednesday night and Republican Nick Begich, III defeated two-term at-large Rep. Mary Peltola (D-Bethel).  In the current Congress, the Alaska seat is the most Republican House constituency to elect a Democratic Representative.

Before moving to the RCV rounds, Mr. Begich finished the initial count with 157,331 votes for 48.7% as opposed to Rep. Peltola’s 149,763 votes that translated into 46.3% support.  The third and fourth place finishers, Alaska Independence Party nominee John Howe and Democrat Eric Hafner, attracted 12,751 votes (4.0%) and 3,323 (1.0%), respectively.

In the second Ranked Choice round, with both minor candidates eliminated, the new votes went hard for Begich by a 64-33% margin.  This pushed the challenger to 51.3% as compared to the incumbent’s 48.7%.  Thus, Mr. Begich clinched the election and fulfilled his victory declaration from over the weekend.  The result will become final at the state’s official certification deadline, which is November 30th.

California:  The final two uncalled US House races lie in the Golden State.  In northern California’s 13th District, Rep. John Duarte (R-Modesto) continues to hold a small lead over former state Assemblyman Adam Gray (D).  The current published totals give Duarte a slight 194 vote edge, which is up from 227, but more votes will be added to the final tally under California’s laborious vote counting system that verifies every mail ballot.

In the Orange County 45th District, two-term Rep. Michelle Steel (R) has fallen behind Democratic attorney Derek Tran by a 480 vote margin.  This district, too, has an undetermined number of outstanding ballots still to count.  The fact that the Congresswoman is now behind is certainly not a good sign for her, thus Mr. Tran will probably be declared the winner, and then a recount will begin.

CA-21:  Another race was called as Rep. Jim Costa (D-Fresno) was again declared the winner over former FBI agent Michael Maher (R).  This is the second consecutive election in which the two have faced each other and the second time the final decision has gone into political overtime. 

With an estimated 4,500+ ballots left to count, Rep. Costa has a 52.4 – 47.6% lead for a vote margin of 9,047.  Hence, the Costa projection.

FL-1:  Now that ex-Rep. Matt Gaetz (R) has withdrawn from consideration for Attorney General, there is some chance he could return to take the congressional seat in the next term because he was duly elected in November.  Though he stated that he “intends” not to take the oath of office in the new Congress, his resignation only applies to the current Congress.  Therefore, he could return to the House.

Though speculation will be running rampant about what may happen in this congressional seat, several candidates are making moves to enter what they believe will be a special election.  The three main candidates are state CFO Jimmy Petronis (R) and state Reps. Michelle Salzman (R-Pensacola) and Joel Rudman (R-Navarre).  The battle to succeed Mr. Gaetz, if one comes to fruition, will be decided in the Republican primary.  The FiveThirtyEight data organization rates FL-1 as R+38, which is the safest Republican seat in the Sunshine State.

FL-6:  Rep. Mike Waltz (R-St. Augustine Beach) has been announced as President-Elect Trump’s National Security Advisor.  Since his position does not require Senate confirmation, Mr. Waltz can assume his duties as soon as Mr. Trump is sworn into office.  At that point, Gov. Ron DeSantis (R) can call a special election to replace Mr. Waltz who will resign his seat before assuming his new position.

This week, Rep. Waltz’s District Director, retired Army Brigadier General Ernie Audino, announced that he will compete in the special election.  We can expect a crowded GOP primary field for the safe Republican seat which the FiveThirtyEight data organization rates as R+28.

IA-1:  Eastern Iowa election officials are dealing with congressional candidate Christina Bohannan’s (D) request for a recount of the Iowa 1st District results that found Rep. Mariannette Miller-Meeks (R-LeClaire) projected as an 801 vote winner.  It is unlikely that a recount will drastically change such a margin, but the Congresswoman is no stranger to close elections resulting in recounts.  She first won the seat in 2020 with a six vote margin.  The Iowa election certification deadline is December 2nd, so we will likely see final numbers shortly before then.

OH-9:  The final votes have been counted in Ohio’s 9th Congressional District, and veteran Rep. Marcy Kaptur (D-Toledo) has been re-elected to a 22nd term.  Under Ohio law, an automatic recount is ordered for any election result within ½ percent.  Until the final batch of votes were added to the total, the Congresswoman and her Republican opponent were separated by 0.3%. 

The unofficial final tally now finds Rep. Kaptur outpacing state Rep. Derek Merrin (R) by a margin of 0.7%, or 2,382 votes (48.3 – 47.6%).  Another recount, this one involving Rep. Mariannette Miller-Meeks (R-IA) continues, and the incumbent in that situation is likewise expected to prevail.

GOVERNOR
California:  The University of California at Berkeley’s Institute of Governmental Studies conducted one of their regular surveys of the Golden State electorate and interestingly asked a question about whether the respondents would support Vice President Kamala Harris for Governor of California in 2026 even before the 2024 election had concluded.  The survey was conducted during the 10/22-29 period and included 4,341 registered voters who participated through an online questionnaire.

It is possible that Ms. Harris’ numbers today would be less than reported here considering her subsequent defeat at the national level, though she did earn 58.7% of the vote in California. 

In any event, Rep. Katie Porter (D-Irvine), an unsuccessful 2022 US Senate candidate, leads the 2026 gubernatorial jungle primary ballot test that did not directly include Ms. Harris. 

Within the tightly bunched group, Rep. Porter places first with 13% preference over Republican Riverside County Sheriff Chad Bianco and GOP state Senator and former gubernatorial candidate Brian Dahle.  The two have 12 and 11% support, respectively.  In third place, all with 7% support, are a trio of Democrats: Lt. Gov. Eleni Kounalakis, former Los Angeles Mayor Antonio Villaraigosa, and US Health and Human Services Secretary Xavier Becerra.

When asked if the respondents would consider supporting Ms. Harris, 46% said they would be likely (33%) or somewhat likely (13%) to do so.  A total of 42%, said not too likely (6%) or not at all likely (36%).   

New Jersey:  Garden State US Rep. Mikie Sherrill (D-Montclair) officially announced her gubernatorial candidacy this week for the New Jersey open 2025 campaign. 

Already in the Democratic primary are US Rep. Josh Gottheimer (D-Wycoff), Newark Mayor Ras Baraka, Jersey City Mayor Stephen Fulop, Montclair Mayor Stephen Spiller, and former state Senate President Steve Sweeney.  Since the New Jersey elections are held in the odd-numbered years, neither US House member will have to risk his or her seat to run for Governor.

For the Republicans, 2021 nominee Jack Ciattarelli, who held Gov. Phil Murphy (D) to a close 51-48% victory is running again as is state Sen. John Bramnick (R-Plainfield), ex-state Sen. Ed Durr, and radio talk show host Bill Spadea. 

STATES
Ranked Choice Voting:  The final Alaska vote tallies found that the supporters of the state’s current Top Four Ranked Choice Voting system turned the election around and defeated a ballot initiative to repeal the system.  The RCV proponents prevailed by just 664 votes statewide after trailing throughout the counting process.  This means Alaska’s current system will remain in place.

Nationally, however, Ranked Choice Voting initiatives did not fare well.  The system was defeated in ballot propositions in four states: Colorado, Idaho, Montana, and Nevada.  The idea was adopted by a vote of the people in Washington, DC, however.