The consensus of pundits, pollsters, industry lobbyists and even Republicans is that Democrats will play a much larger role in Congress in 2007 than they do currently.
Analyst and pollster Charlie Cook of the National Journal said Oct. 25 that under the most likely scenario, Republicans will probably see a net loss of 20 to 35 House seats, and with it, their majority.
In the Senate, the GOP could lose at least 4, but a 5- or 6-seat loss is more likely, Cook said. A 6-seat change tips the chamber into Democratic hands, Cook said, although President Bush cautioned Democrats at a press conference Oct. 25 that they “shouldn’t measure the drapes yet.”
But, privately, industry lobbyists don’t believe a change in control will have much of an impact on the life insurance industry.
In the words of one, a Democratic takeover “has its pluses and minuses.”
The lobbyist said that “with a Democratic majority in the House and with a more remote possibility of one in the Senate, President Bush can be expected to discover the veto pen that he has used once thus far–on stem-cell research.”
Under the most likely scenario, Rep. Barney Frank, D-Mass., will become chairman of the House Financial Services Committee, and Rep. Frank Kanjorski, D-Pa.., will become chairman of the key Capital Markets Subcommittee.
However, the Democratic majority is likely to be slight, ruling out major initiatives by Democrats on that committee, even though the opportunity for greater bipartisan legislative initiatives will improve.
There are 2 key insurance issues facing this Committee. If Democrats are in control of the House, the chances for an extension of the Terrorism Risk Insurance Act increase. The bill currently is scheduled to sunset Dec. 31, 2007. And the chances of group life insurance, which is currently not part of the program, being added also rises.
Since the life insurance industry–far more than the property-casualty insurance industry–has paid more attention to Democrats, there would be increased momentum for an optional federal charter for life insurance companies only.
That’s because opposition to an OFC is much spottier in the life industry than in the p-c industry, and the American Council of Life Insurers, Washington, has made a point of dividing up its contributions equally.
As for taxes, it is anticipated that the key tax post will be held by Rep. Charles Rangel, D-N.Y., as chairman of the House Ways and Means Committee. He is opposed to an expensive repeal of the estate tax, and more amenable to the approach supported by the insurance industry, an exemption of perhaps $2.5 million per person and a top rate of 30% or so.
In order to escape the looming return to the 55% rate, Republicans, both in Congress and the White House, might find themselves forced to accept this approach.
Under Rangel, the key healthcare subcommittee top post will go to Rep. Pete Stark, D-Calif., a liberal who is no fan of Health Savings Accounts and other Republican ideological proposals. Stark is also likely to support government controls on the prices of prescription drugs, which may have the effect of reducing the health insurance industry’s strong commitment to private programs under Part D of the Medicare program.