WHOLESALE DISTRIBUTION BEST PRACTICES

Leading wholesaler-distributors depend on NAW Institute for Distribution Excellence groundbreaking research studies because they help solve real-world business challenges.

 

YOUR 5-YEAR GROWTH ROADMAP


 

Order copies of Facing the Forces of Change®: Navigating the Seas of Disruption for everyone on your team!

 

NAW News

A look back at the 111th Congress and what has taken shape in the 112th

- April 2011

The Obama Administration and Democratic allies in Congress assumed power in January 2009 after an historic presidential election and with almost unprecedented majorities in both houses of Congress – Republican Congressional losses in 2006 and 2008 had given the Democrats an almost-filibuster-proof majority in the Senate and the biggest majorities in the House in decades.

In January 2010, only a year later, they faced a focused, alarmed and increasingly anti-Washington public concerned about jobs and the economy and angry about the growth in government and skyrocketing spending and debt. The anger manifested itself in a new Tea Party (“Taxed Enough Already”) movement determined to change Washington. Throughout 2010, the diverse elements of the Tea Party movement allied themselves with a united and resolute Republican Congressional minority which successfully blocked much of the liberal agenda the Majority seemed determined to push despite clear voter opposition.

Fast forward to January 2011, and the President found himself dealing with a Republican Speaker of the House leading a solid House GOP Majority and a Senate GOP Minority Leader now armed with 47 Republican senators – more than enough to stop the President’s agenda in its tracks.

By the President’s own acknowledgement, he and his Democrat colleagues took a “shellacking” in the 2010 midterm elections.

(As an aside, the magnitude of Republican electoral gains – and Democrat losses – is easily understated. The GOP gained 6 seats in the U.S. Senate, and picked up 63 seats in the House, the largest switch of House seats since 1938. With 242 seats, the GOP now has their largest majority – and the Democrats hold fewer than 200 seats for the first time – since 1947. But the electoral wave in the states will have more long-term consequences than even those historically significant changes in the U.S. Congress. The GOP gained an astonishing 680+ seats in state legislatures, giving them control of at least 55 state legislative chambers and 29 governorships. With the newly-released Census data suggesting a population gain in GOP-leaning states and districts, redistricting and GOP control of so many legislatures and governors’ mansions paints a bleak picture for the Democrats.)

Democrats argue that their defeat resulted from a failure of communication – that they simply didn’t effectively explain and market their agenda to voters who would actually support the policies if they better understood them. Republicans argue that it wasn’t the message or the messengers that the voters rejected, it was the policies themselves; that the voters shouted “STOP” to bigger government and increasing spending, debt and deficits.

As the 112th Congress opened for business in January, the two sides remained squared off and determined that their side was right; the new Republican House Majority promising to pass legislation to repeal or roll back the legislative accomplishments of the Obama Administration, the Senate Democratic majority vowing to block those efforts. Surprisingly, President Obama seemed content – some would say determined – to participate in the unfolding drama more as observer than leader.

… and what has taken shape in the 112th

With the election last November of 87 new GOP Representatives and 13 new GOP Senators – many of them associated with the fiscally conservative Tea Party movement – it was easy to predict that House Speaker John Boehner and Senate Minority Leader Mitch McConnell would face a challenge managing their large and fiercely independent freshmen classes. There has been endless reporting on whether the GOP leadership will be able to keep their teams united, or face internal divisions and disunity as the new members try to reconcile their demand for more activist conservative policies with the inevitable demand for compromise necessary for successful legislating – all the while learning the arcane processes and procedures of the House and Senate.

The 112th Congress has given whole new meaning to the old clichés that leading a Congressional Republican caucus is like herding cats or keeping frogs in a wheelbarrow. And at the close of the first quarter of the year, defections and internal divisions had in fact already seriously challenged the Leadership in both chambers as they attempted to address budget and fiscal issues (see separate staff report).

On the other side of the aisle, the Democrats are facing their own divisions. While many expected former Speaker of the House Nancy Pelosi to step aside in the wake of their disastrous electoral defeats last November, she surprised most and disappointed many by insisting on standing for election as House Democratic Leader. In an historic demonstration of rebellion, 19 House Democrats declined to vote for her in her symbolic run against Speaker Boehner. That is the largest defection in support for a Party Leader since the 1920’s, and a sure sign of discontent inside the Democrat Party Caucus. We can expect to see continued defections as moderate House Democrats decline to support their Party’s liberal platform, but since the minority in the House has very little power, those defections will be more symbolic than substantive.

On the Senate side, however, where those defections do in fact matter, moderate Democrat Senators facing re-election in 2012 are similarly less likely to simply fall in line behind the liberal policies advocated by their leadership; and in fact have already demonstrated a rebellious streak in breaking with Majority Leader Harry Reid on key votes. And with Democrats holding 23 of the 33 seats up for grabs in the 2012 elections, Senator Reid may well see more members of his caucus defect and contribute to bi-partisan majorities for GOP positions. With only 53 Democrats in his caucus after last year’s defeats, getting to the 60-vote margins he would need to force action on controversial legislation could prove very difficult, if not impossible.

Adding to the confusion is the posture of the White House. President Obama helped pass the bi-partisan tax extender legislation in December – despite outspoken opposition from his left wing base and occasionally sounding hostile to their criticism. And he said in his New Year’s Day radio address that he is “willing to work with anyone of either party who's got a good idea and the commitment to see it through." But compromise and consensus have not materialized, and at this point even dialogue with the President seems to be in short supply. The media and both Republicans and Democrats in Congress have begun commenting on the President’s absence from the battlefield, with complaints about his lack of leadership from Hill Democrats becoming more intense. With the current international crises, the President’s lack of focus on domestic issues is likely to remain an issue.

While the Leadership in both houses of Congress tries to manage their raucous caucuses and the President continues to frustrate both his allies and his opponents with his abdication of leadership, the federal fiscal crisis looms ever larger and the demand for action and solutions grows. The new GOP Speaker and the veteran Senate Republican leader are both keenly aware of the high expectations of the voters that restored the GOP to power, and Tea Party backed candidates now serving in both houses of Congress are committed to changing business as usual in Washington. Based on the events of the first quarter of the year, they all have a steep road ahead.