Capitol Hill

After months of speculation, it now is official. Voters have decided to hand Congress to Democrats, ending the 12-year GOP reign in the House and delivering a sharp rebuke to President Bush. As a result, the business community will be forced to navigate its respective agenda through the turbulent seas of divided government and presidential electoral politics building up to the 2008 election.

Election results

At press time, Democrats had won at least 28 Republican-held seats without losing any of their own. The results gave Democrats a 231-196 majority, with eight races still undecided, and Nancy Pelosi (D-Calif.) will become the first female speaker of the House in January. In the Senate, Democrats picked up six Republican-held seats, giving them a 51-49 advantage and ushering in the era of Senate Majority Leader Harry Reid (D-Nev.). Democrats also gained heavily in gubernatorial races, picking up seven states to claim a majority nationally.

Dissatisfaction with Bush, the war in Iraq and recent Republican scandals turned the campaign into a referendum on the GOP. Corruption proved to be a more salient issue than expected—exit polls found 41 percent of voters rated corruption as being "extremely important" to their decision.

What does it mean?

So what does the change in control mean specifically? When Democrats last enjoyed control of the House, they ruled the chamber with a heavy hand. But given their majority margin isn't as large as during the 1980s, it's more likely they will be forced to work with the minority party. Nonetheless, for those Republicans in the House who never have experienced life in the minority, the turnover will prove an alien and often frustrating grind.

The election turned out to be what many in the GOP had feared: a referendum on the performance of Republicans rather than a contest between competing ideological visions. In fact, the 2006 cycle may have been the least ideological election in modern memory, with voters rejecting Republicans not so much because they object to where Republicans want to take the country but how the Republicans brought us to where we are.

That said, the practical consequences of the election will be a drastic change in the ideological focus of legislation during the next two years. Pelosi and Senate Democrats have indicated they plan to push an agenda that includes an increase in the federal minimum wage; legislation permitting the government to negotiate lower prices for prescription drugs; implementation of the remaining recommendations of the 9-11 commission; expansion of federally sponsored research into embryonic stem cells; and an expedited withdrawal of U.S. troops from Iraq. Plans that should concern the business community include increased employer penalties for worker safety violations, additional Occupational Safety and Health Admin­istration inspectors and a wholesale re-examination of environmental policy.

On a positive note, Pelosi has said she wants to reform Congress and in the past has supported many of the same reforms that have been trumpeted by Republicans. In fact, she and 162 of her colleagues signed onto a package of procedural reforms before the election that includes earmark reform; limits on the leadership's power through the Rules Committee to alter legislation before it reaches the floor; a requirement that members have a full day to read legislation on which they are being asked to vote; and a limit on the amount of time a vote can be kept open. These are serious reforms that will have a palpable effect on legislative progress if they are enacted.

Reasons for caution

The Democrats' newly acquired power in the House and Senate has important consequences for the direction of legislation in the 110th Congress and ensures the next two years sharply will focus the two parties' messages heading into the 2008 elections.

Given the liberal leanings of the Democrats' base, Pelosi and Reid will be tempted to reward party activists by tacking left. But two concerns should give them pause. First, with newfound power comes new responsibilities and accountability. And second, the Dem­ocrats' victory was charted through Republican-leaning waters. If the Dem­ocratic leadership succumbs to the demands of the left, Democratic centrists who won Republican-held seats may find themselves tossed overboard in 2008.

Craig Silvertooth is NRCA's director of federal affairs.