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Tiptoeing Towards November

Tiptoeing Towards November

Democrats have reasons to be optimistic come November. Dropping gas pricesare slowing inflation (despite this month’s slight uptick) and COVID anxiety is reduced. Biden and Congress can point to recent "wins" on gun control, health care and student loan debt forgiveness. 

On the other hand, Republicans have historical and institutional advantages going into 2022 with redistricting and midterm election patterns.

FGS experts from both side of the aisle share their outlook on what each party needs to do to control Congress for the next two years:

Gregg Rothschild, FGS Global Partner:
"Democrats can hold the Senate and minimize Republican gains in the House if they can keep voters focused on reproductive freedom and on Democrats’ ability to achieve results on popular issues.

But there’s always a risk that gas prices will again rise and inflation worsens. If that happens, we’ll see Republicans running both the House and Senate in January."

Lindsay Plack, FGS Global Managing Director:

"The political and economic environment going into a midterm election has never been so good for Republicans, but some self-inflicted wounds have dampened the outlook. Republicans should stay focused on the future and pocketbook issues, not the past and personality wars. 

The abortion debate seems to be driving Democratic voters to the polls but abortion politics motivates Republicans just as much as Democrats so the net advantage isn’t as big as one would think."

Read our Research and Insights team’s full analysis here.

By the Numbers

Eastern Front

Russia's attack on Ukraine six months ago has initiated dramatic changes in the global geopolitical landscape in a brief period of time. The ongoing conflict has impacted companies' day-to-day operations less in recent months, but major global shifts will continue to shape the business environment for years to come.

Our European colleagues offer five theses for what the future of the conflict will look like. 

1. It’s most likely this war of attrition between Russia and Ukraine—and by extension the West’s proxy war with Russia—will continue deep into 2023, at least. 

  • Ukraine’s recent success on the battlefield has surprised most analysts, but it’s unclear whether this marks a turning point in the war. 

2. The war will accelerate competition and distrust between the West and China, which other non-Western states will attempt to use to their advantage in different policy fields without choosing sides.

  • The war has reenergized Western alliances. At the same time, the current energy crisis and supply chain shortages have revealed how interdependent the world economy is, and how costly it is to unwind existing links.

3. This war will go down in history as a geopolitical turning point in the energy markets, rewriting past certainties about supply and demand.

  • The supply of affordable energy has become a security policy issue for many states, especially in Europe. Within just six months, this has resulted in a reordering of international energy relations.

4. Navigating corporate reputations will remain a top priority, with public demand for ethics-driven decision-making here to stay.

  • The ethical dimension of globalization has gained unprecedented relevance.

  • Further regulation to protect human rights along businesses’ supply chains is on the horizon. 

5. Global food security will remain a key challenge for policymakers – businesses that can increase output while also promoting sustainability are best placed to succeed in this environment.

Read our full analysis on the current state of the conflict here.

Show Me the Money

With just three weeks remaining until the federal government’s funding runs out, debate over a stopgap spending bill is set to dominate Congress’ September agenda.

Both Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) last week reiterated their intent to attach a "permitting reform bill" – a key to their previous agreement to pass the Inflation Reduction Act – to a continuing resolution (CR) to keep the government funded through mid-December. 

The permitting measure, which would speed environmental reviews on energy projects, has drawn strong opposition from progressive Democrats, and some Republicans have indicated they would oppose attaching it to the CR despite their support for permitting reform. 

AdditionallyRepublicans are likely to oppose much of the Biden administration’s $47 billion emergency supplemental requestwhich Democrats are also attempting to include in the CR. It includes $22 billion for COVID-19 response efforts, $4.5 billion for monkeypox, $12 billion for Ukraine-related aid, and $6.5 billion for disaster assistance.

Though GOP lawmakers may not object to certain pieces of the request – such as disaster relief for Senate Minority Leader Mitch McConnell’s home state of Kentucky – most continue to call for a clean stopgap spending measure.

September 13, 2022
By Nedra Pickler and Irene Moskowitz
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