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Democrats suffer in statehouse races, too

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In February Democrats in Wisconsin celebrated when Tony Evers, the Democratic governor, signed into law new maps for the state legislature and Senate. The maps were the result of Democrat-aligned judges becoming the majority on the state Supreme Court, and the signing undid 13 years in which Republicans won lopsided majorities on thin vote margins. It constituted a “sea change”, said Ben Wikler, the state’s Democratic Party chairman, and on November 5th voters would have a real chance to throw out their Republican legislative leaders for the first time.

They didn’t. With several seats still undetermined, Republicans controlled 52 of the 99 seats in the state legislature—a big drop from their previous 64, but still a solid majority. They lost their supermajority in the state Senate, but retained control. Wisconsin reflected dashed hopes for Democrats down-ballot across America. Whereas in 2022 four state legislatures flipped to Democratic control, this time Republicans clawed some back. Overall, the result was a slight increase in divided government.

In Michigan Democrats lost their narrow trifecta, and that seemed likely in Minnesota as well, where two races are heading for recounts. In Pennsylvania, where the governor is a Democrat and his party controlled the House but not the Senate, they were on track to lose it. In New Hampshire, in one of the few competitive governor’s races, Kelly Ayotte, a Republican, beat her Democratic opponent comfortably, which means the party should retain its trifecta. Democrats also seemed unlikely to make good on hopes of taking the Arizona House of Representatives for the first time since the 1960s.

The news for Democrats was not universally bleak. They won the governorship of North Carolina, where Josh Stein defeated Mark Robinson, who was revealed to have described himself as a “black Nazi”. They also won the offices of the lieutenant-governor, attorney-general and superintendent of public schools and broke the Republican Party’s supermajority there, meaning that the state’s Republicans will have to negotiate with Mr Stein if they want to get legislation passed over his veto. Democrats also held onto their supermajorities in the state legislatures in New York and Illinois, despite the surges for Donald Trump in the presidential races there. Republicans did not add any states to the 22 they already completely control.

What does it mean? State governments are powerful. In Minnesota and Michigan, for example, taking control of governments in 2022 allowed the Democratic governors to pass swathes of legislation—legalising cannabis, introducing free school meals, expanding abortion rights, tightening gun-control laws and giving more power to trade unions. Had Democrats held or increased the number they controlled, they might have been able to mitigate some of Mr Trump’s national policies. Instead, the governors of those two states, Gretchen Whitmer and the losing vice-presidential candidate, Tim Walz, will probably finish their terms with fewer bills to sign.

Elsewhere, expanded Republican majorities may lead to more aggressive legislating. In Texas Greg Abbott, the governor, said he now has “more than enough votes” to pass a school-voucher programme, which he has tried and failed to get through the legislature, stymied by rural Republican holdouts. But Democratic strategists in several Republican-dominated states say the losses could have been far worse: with Joe Biden at the top of the ticket, some expected a “tidal wave” of new supermajorities. Chaz Nuttycombe, the president of State Navigate, which crunches data on state races, reckons that this year there may well have been more ticket-splitting, where voters chose Mr Trump and their local Democrat, than in 2020.

Polling from Pew published in May showed that voters consider the inability of Republicans and Democrats to work together to be the second-worst problem facing America, behind only inflation (which is now easing). In recent decades divided government had in fact been receding. The bounceback is modest, but division is going to be more entrenched.

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Mnuchin says Trump’s top priorities will include tax cuts and tariffs

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Former Treasury Secretary Mnuchin: Tariffs need to be used to get counterparties back to the table

President-elect Donald Trump likely will return to cornerstones of his previous economic platform such as tariffs, lower taxes and sanctions when he assumes office in January, his former Treasury secretary said Thursday.

Steven Mnuchin, who held the post throughout Trump’s first term from 2017-21, told CNBC that he sees those items as critical to the Republican’s agenda.

Tax cuts are “a signature part of his program,” Mnuchin said in a “Squawk Box” interview. “I think that should be easy to pass in Congress, particularly if the Republicans control the House as well, which it looks like it will be.”

Also on the agenda would be tariffs, which Trump implemented on multiple items during his first term and promised to do again.

“I think that tariffs do need to be used to get counterparties back to the table, especially China, which is not living up to all of the agreements they made,” Mnuchin said.

Finally, he indicated that nations such as Iran and Russia can expect to see sanctions again. The Trump administration levied measures against petroleum producers in Iran in 2019 because they were owned by the Revolutionary Guard.

“The sanctions on Iran and Russia were very impactful. In the case of Iran, they’re now selling millions of barrels of oil, which needs to be stopped,” Mnuchin said.

Outside of those issues, Mnuchin, who said he likely would not take an official role in the Trump administration but would “be happy to serve from the outside,” expects Trump to take on other issues such as steep deficit spending.

“I think he’s in a position now, particularly with this overwhelming result, to take on difficult issues, and I think that’s got to be part of government spending,” he said.

Mnuchin is the founder of Liberty Strategic Capital.

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What a Republican trifecta will mean for governing

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DONALD TRUMP won a decisive victory in the presidential contest and is on track to become the first Republican in two decades to win the popular vote. His party also won the Senate and is favoured to regain full control of Congress by retaining the House of Representatives. It could take weeks before his party knows the size of its Senate majority and whether its apparent House victory is confirmed. The final margins in both chambers will set the scope of Mr Trump’s freedom to enact his second-term agenda.

In any event, Mr Trump’s leeway to appoint cabinet members, confirm judges, and influence spending and tax legislation in Congress is likely to be expansive. His victory ratified his iron grip on the Republican Party and the potency of his MAGA ideology and coalition. During his first term and in exile after his defeat in 2020, Mr Trump struggled at times to impose his will; his second term from January will begin with fewer constraints.

Yet sharing power with independent-minded senators and fractious congressmen is a fact of presidential life that even Mr Trump cannot wave away. The Senate has welcomed a slate of Trumpish Republican members in recent years, but remains a bastion of pre-Trump conservatism. The size of the Republican majority in the upper chamber will determine whether moderates like Susan Collins of Maine and Lisa Murkowski of Alaska are able to stifle Mr Trump’s worst impulses, particularly on staffing. In addition to the cabinet, senators must approve more than 1,000 senior jobs, from deputy department heads to generals and ambassadors.

Mr Trump’s campaign to reshape the federal judiciary will also require Senate endorsement. Nothing united Republicans during Mr Trump’s first term quite like his judicial nominations. He enjoyed a Republican-controlled Senate for four years, and under the leadership of Mitch McConnell the body approved 234 of his nominees, including three Supreme Court justices. It is now plausible that an outright majority of the high court will have been chosen by Mr Trump by the time his second term ends.

Mr McConnell, however, will not be leading Republicans next year. On November 13th the Senate will vote in what is currently a three-way race to replace him. John Thune, Mr McConnell’s leadership deputy, is the front-runner. John Cornyn of Texas represents Mr Thune’s biggest threat. Rick Scott of Florida is running a long-shot race from the right. Mr Thune, an establishment figure close to Mr McConnell, once had a rocky relationship with Mr Trump but has since patched it up. He looks likely to become a big figure in haggling between the White House, the House and the Senate.

Key provisions of Mr Trump’s 2017 tax-cutting law will expire in the absence of legislative action next year. Negotiations have yet to begin in earnest, but some battle lines are already being drawn. A Republican-controlled Senate is likely to fight to keep a contentious cap on tax deductions in high-tax states, but if Republicans secure a House majority because of wins in the high-tax states of California and New York, that would prompt a showdown between the two chambers. Congress will also have a say on whether to expand the child tax credit; whether to increase or cut corporate and individual rates; whether to fulfil campaign promises such as removing taxes on tips; and many other measures. On these matters the margins in both chambers will be as important as Mr Trump’s preferences.

The outcome in the House is the biggest unknown. From Alaska to Maine, there are still House races that remain too close to call. The non-partisan Cook Political Report now predicts a very narrow Republican majority in the lower chamber. A House Republican strategist reckons his party could lose one or two seats from its present five-seat majority.

If Mr Trump’s party does hold the lower chamber, House Republicans will have to appoint a speaker, a task that has repeatedly plunged its divided caucus into disarray. The incumbent, Mike Johnson, took the stage with Mr Trump in Palm Beach, just before 2:30am on Wednesday morning. In between praising the MAGA movement and his wife Melania, Mr Trump added, “I want to thank Mike Johnson, I think he’s doing a terrific job. Terrific job.” Any intraparty attempt to oust Mr Johnson will prompt a direct confrontation with Mr Trump, who will clearly have the upper hand after his thumping win.

Yet the probable Republican sweep in this election was a collective effort. After Republicans picked up an expected seat in West Virginia, networks called the Ohio Senate race—the most expensive in the country—for Bernie Moreno, who unseated Sherrod Brown, a three-term Democratic incumbent. The defeat of Jon Tester, a long-serving Democrat in deeply Republican Montana, secured their 52nd seat. And Republicans still have room to increase this new majority. Democratic incumbents remain within one point of their Republican challengers in Nevada and Pennsylvania. The Republicans could have 53 or 54 senators in the 100-seat body once all the votes are counted.

At the time of writing 412 of 435 House races have been called, with Republicans still five seats short of the 218 they need to maintain control of the chamber. At least one race seems destined for a recount, and others will be difficult to call soon.

Once the election is settled, in addition to tax legislation, other fights loom. The lame-duck Congress could pass another in a succession of short-term government-funding bills, but at some point in 2025 Congress will be responsible for a proper budget. And the Senate Armed Services Committee will now be led by a Republican who wants to increase defence spending to 5% of GDP.

Mr Trump has been endowed with plenty of political capital. How to spend it will be a subject of factional arguments, but the direction of travel is clear.

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Economics

What role might Trump give Robert F. Kennedy junior?

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AS DONALD Trump returns to power, several colourful characters surround him. One is Elon Musk. Another is Robert F. Kennedy junior, a vaccine-sceptic, conspiracy-theorist and excommunicated member of the Kennedy clan, who says he has “so many skeletons in my closet that if they could vote, I could be king of the world”.

Mr Kennedy joined the Trump campaign in August, after dropping out as an independent candidate. Since then Mr Trump has promised to let him “go wild” on health, food and medicine. In his victory speech on November 6th he singled Mr Kennedy out as the man who would help “Make America Healthy Again”. Although Mr Trump has been vague about what role he has in mind, Mr Kennedy claims he was promised “control of the public health agencies”.

This possibility has spooked those working in related fields. Mr Kennedy’s history of repeating debunked health claims, most damningly about linking childhood vaccines to autism, has been particularly damaging in a country where science has become deeply politicised. Even Mr Trump’s former surgeon-general has warned against appointing him to a senior post.

In a sign of what might lie ahead, Mr Kennedy warned on October 25th, on X, that the Food and Drug Administration’s “war on public health is about to end”, accusing it of suppressing psychedelics, stem cells, raw milk, hydroxychloroquine, sunshine and “anything else that advances human health and can’t be patented by Pharma”. On November 2nd he posted that the Trump White House would on its first day “advise all US water systems to remove fluoride from public water”.

What job, if any, might Mr Trump give him? That of secretary of health or FDA chief would require Senate confirmation, a spectacle Mr Trump may want to avoid. More likely might be an informal “health tsar” role. This could leave Mr Kennedy stuck in the White House basement with a meaningless title, or at the heart of power with the president’s ear. Much will depend on whether his boss gets sick of him.

Stay on top of American politics with The US in brief, our daily newsletter with fast analysis of the most important electoral stories, and Checks and Balance, a weekly note from our Lexington columnist that examines the state of American democracy and the issues that matter to voters.

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