Advisors and their clients in the midterm election focused on races for the U.S. Senate and House of Representatives, of course, but issues like taxes and budgets weighed on their minds as well, and the results from Tuesday present some interesting developments on the state level.
In a televised interview on Election Night, Haley Barbour, the Republican Party chairman in the 1990s and now two-term governor of Mississippi, predicted that the GOP election landslide would result in the states having a bigger voice in Washington and taking more of a leadership role in practicing fiscal restraint.
“The American people want control of spending to reduce deficits,” Barbour said, noting that he has cut spending by 13% over the past two years in Mississippi. “The federal government must understand that spending can be cut a considerable amount without the public knowing the difference on services…You’ve just got to manage better.”
Moreover, Barbour told Brian Williams of NBC News, “There’s going to be a really strong relationship between the 30-something Republican governors and Republicans in Congress,” suggesting that like-minded and like-managed states would lead the way in the new political landscape after the Nov. 2 midterm elections.
To be sure, those state leaders will play a key role in the redistricting that will follow upon the 2010 U.S. Census data. The New York Times reports that governors will have a say in congressional redistricting in at least 36 states, and in 39 states they will have a role in state redistricting.
David Tittsworth (left), who spent years on Capitol Hill before becoming executive director of the Investment Adviser Association (IAA), said the “big deal” on Republicans gaining so many governorships will be the effect on redistricting, though he doesn’t think the states will have a big effect on the congressional legislative agenda.
Many states are fiscal basket cases, of course, including but not limited to big states with many wealthy people—and thus many advisors—such as California, Illinois, New Jersey and New York. (In a Nov. 3 op-ed in The Wall Street Journal, financial services advisor Meredith Whitney detailed
how the federal government is already subsidizing many states’ budgets, especially through the use of Build America Bonds.)
Here’s a look at how state elections played out in the midterm elections, in which Republicans gained control of the U.S. House and picked up at least six senatorships from the Democrats—not enough for a majority, much less a veto-proof majority.