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Elections Do Have Consequences

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When you went to bed, or woke up, on November 9, you learned the shock that Donald Trump was our new President Elect and that the Republican Party had retained the majorities in both the House of Representatives and United States Senate.

Most people questioned how this could happen. While this is being written only 6 days after the election, and with more ballots still to be counted, the following appears to be clear. The belief that there would be a significant increase in the voter turnout did not occur. Currently Hillary Clinton has 61,039,000 votes and Donald Trump 60,371,000 votes. This is almost 5 million fewer votes than 2012. More importantly, most of the voter drop off is for Secretary Clinton, who has received almost 4.5 million votes less that President Obama received in 2012 and 5.8 million fewer votes than 2008. Considering that Trump won Pennsylvania, Wisconsin and Michigan, it is clear that he received tremendous support from rural and blue collar voters. The configuration of the entire electorate will take some time and will be studied closely by both political parties and political scientists.

While, we are clearly almost an evenly split country, the Republican Party will control the Federal Government for at least the next 2 years. Speculation has immediately begun regarding what changes we can expect and how President Trump will govern. While nobody has a crystal ball, I expect there will be unpredictability from our new President due to his lack of political experience and knowledge on how to deal with Congress. However, expect him to start with rescinding some of President Obama's over 900 Executive Orders (the most by far of any President in history) claiming that these were issues which were the responsibility of Congress. This could include the Iran Deal, environmental regulations, and the order not to deport children of undocumented workers, among other issues.

Another main effort will be the changes to the Affordable Care Act. While there has been a lot of discussion about repealing the act, there will be no repeal without a clear direction on how it will be replaced. While the huge insurance rate increases have continued to lead to opposition to this Act, the fact remains that approximately 20 million people now have insurance that were previously uninsured. Making changes will be tricky, but the House Republicans did release a proposal in June, 2016 to do just that. This proposal can be found at abetterway.speaker.gov. Some of the changes include health savings accounts, high risk pools, and sales of insurance across state lines. Also expect the basic protection of those with pre-existing conditions to be retained. If there are changes to the Affordable Care Act, this will be the blue print.

However, in California the election results were starkly different. Mr. Trump received fewer votes than any Republican since 1936, FDR's first re-election. In addition, it appears the Democrats picked up the 3 Assembly seats they needed to regain a two thirds Super Majority in the Assembly, while still falling one seat short in the State Senate of Super Majority status. In Santa Clarita, for the first time in a generation, Democrat candidates not only actively ran campaigns, but the State Democratic Party spent more than $3,000,000.00 to try and win the three locally held Republican Seats. At the end of the day, the Democrats fell short and each seat was won comfortably, albeit by much closer margins than in the past.

This can be expected to continue unless the Republican Party can improve upon its statewide voter registration of 27%, which is at an all-time low.

In addition to the state legislature, there were 17 State Ballot measures and 2 Santa Clarita County ballot Measures. Voters easily extended the temporary state income taxes in Proposition 55 and raised cigarette taxes in proposition 56. The plastic bag ban was confirmed (LA County already had it) and you will now have to pay for paper bags when you shop. Proposition 64 expanded the medical marijuana law and made it legal for those over 21. There are a great deal of issues on how local government can deal with it and how law enforcement and employers will deal with those under the influence.

In Santa Clarita County, voters easily met the 2/3 threshold and passed a new ½ cent sales tax for transportation and a parcel tax for parks.

There will be many issues affecting you and your business during the next two years before the next election. You should continue to monitor what government is doing at the local, state and federal level. Stay informed and aware of the issues which impact you. We will continue to work to provide information and updates in the months ahead.

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