Apartment Industry Colleagues,
On June 10, there was a collective gasp of surprise and shock inside the Beltway not felt since the betrayal of Robb Stark by Lord Walder Frey during the “Red Wedding.” Sitting House Majority Leader Eric Cantor (R-Va.) lost his primary election to David Brat, an economics professor from Randolph-Macon College, despite outspending him by a reported 26 to 1 margin.
The days that followed saw a messy mix of emotions in the Nation’s Capital. There was outright giddiness from tea party activists who saw the victory as a sign of their resurgence. Lobbyists and other advocates felt dejected at the loss of the man who they thought would lead the charge in the fractured House GOP caucus on issues such as immigration reform, reauthorization of the Export-Import Bank and even extension of the Terrorism Risk Insurance Act (TRIA). Finally, there was a sense of dread and fear from Republican candidates who still faced a tea party primary opponent potentially emboldened with money and grassroots support.
So what did we learn? What does this mean for the future? Never trust a Frey or a Bolton? That is certainly true, but there are other lessons for the political environment outside of the seven kingdoms.
The tea party is not dead, but it is also not necessarily surging again to take over the GOP. I personally believe that the tea party played only a part in Rep. Cantor’s defeat, so we should not read too much into Brat’s victory. Cantor’s loss was a self-inflicted wound. He spent more time being House Majority Leader than he did talking to constituents who were less than 100 miles from Washington, D.C.
And, unfortunately for him, his campaign enabled this behavior. As close as two weeks before primary day, Cantor’s polling firm had him ahead by 34 points. He lost by 11. As one individual tweeted in the days after the primary, “they must have been polling registered voters inside of Cantor’s house.” The Cantor race was unique and the tea party is active in lots of Senate and House races this election cycle. We need to wait for those results before proclaiming their rebirth or death knell.
The Cantor loss has also impacted the future of several high-profile issues. Immigration is widely viewed as dead…or deader than it was before the Virginia primary. That’s bad for the apartment industry as we have pressed hard for a holistic solution that would head off the actions of state and local governments to create their own immigration policies. The Export-Import Bank (or “Ex-Im” as it is called inside the Beltway), an 80-year institution that enjoyed bipartisan support until very recently, is also likely history. While that does not impact us directly, it is a symbol for many House conservatives of improper government involvement in the free market, like say Fannie Mae and Freddie Mac, the National Flood Insurance Program or TRIA. The more of these types of institutions that go down, the more momentum there is to do the same to similar programs. On TRIA, the news may be better as the House Financial Services Committee did move a bill before the July 4 recess. Despite the concerns we have with this legislation, taking that step brings us closer to a finished product which is absolutely critical to our industry.
As a result of Cantor’s loss, there was also a shake-up in the House GOP leadership itself. There is a new majority leader and a new Whip. The races began literally minutes after the news broke of Cantor’s loss and once the politicking was done, Rep. Kevin McCarthy (R-Calif.) rose from Whip to Majority Leader and Rep. Steve Scalise (R-La.) was voted in as Whip.
Generally considered more of an establishment member of the House, McCarthy took steps immediately to burnish his conservative bona fides by announcing he would support the expiration of the Ex-Im Bank. These same bona fides are already established for Scalise, who was previously the chair of the ultra-conservative Republican Study Committee. Together with Speaker John Boehner (R-Ohio), Conference Chair Cathy McMorris Rogers (R-Wash.) and Policy Committee Chairman James Lankford (R-Okla.), it makes for a diverse leadership team. The good news is that the apartment industry has relationships, in some cases long-term relationships, with members of the leadership team nationally and locally.
This slate of Republican leaders is only short-term. All offices will be up for re-election at the end of this Congress and there is wide speculation about who may throw their hat in the ring at that point. One often-discussed candidate is House Financial Services Committee Chairman Jeb Hensarling (R-Texas) who has broad support among conservatives. Much will depend upon the decision of Speaker Boehner who some speculate could step down after this year. Similar to the recent “departure” of Tywin Lannister from King’s Landing, Boehner’s exit would portend major changes in the direction and tone of the House Republican Caucus.
Thanks for reading and talk with you next month. Don’t forget to email me and tell me what you think of this column.
P.S. The opinions expressed here are mine and do not necessary represent the views of the National Apartment Association.