About Last Night

If it feels eerily quiet today, it might be because Vice President Harris and/or former President Trump have stopped texting you to ask for campaign contributions. The 2024 election cycle is mercifully over.

It was a very good night for the GOP. The presidential race was called early this morning for former President Trump, who will become the first person since Grover Cleveland to win two non-consecutive terms in the White House. Republicans have claimed the Senate, flipping seats in West Virginia, Montana, and Ohio – and with races in Wisconsin, Pennsylvania, Michigan, Arizona, and Nevada currently too close to call. When the dust settles on the 2024 Senate election cycle, the GOP could find itself with its largest majority in the upper chamber of Congress in a century. And in the House, with more than 100 races still not called, Decision Desk HQ gives the GOP a better-than-even chance of narrowly holding the chamber.

So what happened last night?

2024 Presidential Race: Donald Trump Prevails
On Election Day, the final RealClearPolitics (RCP) average of national polls could not have been any closer. Vice President Kamala Harris led the average by just 0.1 percentage points. RCP began providing polling averages for the presidential race in 2024. The final gap had never been that narrow. Previously, the closest final average was in 2016 when Hillary Clinton led Donald Trump by 2.1 percentage points. (Trump won that race, of course.)

Vice President Harris’s narrow lead did not hold Election Night. Donald Trump was declared the winner early this morning. It appears President-elect Trump has won the national popular vote by three to four percentage points.

Turning to the Electoral College, RCP listed seven states as battlegrounds: Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin. Former President Trump was ahead in five of these states, according to the RCP averages: Arizona, Georgia, Nevada, North Carolina, and Pennsylvania. Harris was up in Michigan and Wisconsin. None of the averages was well outside the margin of error, however. In fact, with the exception of Arizona, the margin was less than 1.5 percentage points.

As of early this morning:

• President-elect Trump won Georgia.
• President-elect Trump won North Carolina.
• President-elect Trump won Pennsylvania.
• President-elect Trump won Michigan.

While we still do not know whether Trump or Harris won Arizona, Michigan, or Nevada, Trump’s ability to topple the so-called blue wall in Wisconsin and Pennsylvania assures him an Electoral College victory.

Over the weekend a late-breaking poll in Iowa gave the Harris campaign hope in that state, which has not voted for a Democrat for president since 2012 when Barack Obama was at the top of the ticket. As of early this morning, President-elect Trump was ahead of Vice President Harris by about four percentage points.

According to exit polls, President-elect Trump improved his standing with Independent voters. Independent voters also turned out in larger numbers than they did in 2020, actually matching the number of Democrats who went to the polls. Meanwhile, Harris lost ground with younger voters, women, and Black and Hispanic voters.

In his victory speech early this morning, President-elect Trump said his victory provided a clear mandate for the advancement of his policies. Victories in key Senate races will help him with that argument. Let’s turn now to the upper chamber of Congress.

2024 Senate Race: Republicans Take Control
Democrats controlled the Senate going into Election Day, but only by one vote. If they lost one seat, there would be a tie in the chamber. If they lost two, Republicans would control the Senate in the 119th Congress, which convenes in January 2025.

As of this morning, Democrats have lost three seats, giving the GOP a decisive victory in the race for control of the Senate.

For months, Republicans had been expected to win the Senate seat Joe Manchin (I-W.Va.) is vacating, ensuring them at least a tie in the upper chamber. This race has indeed been called for the GOP. Sitting Gov. Jim Justice won about 69 percent of the vote to Democrat Glenn Elliott’s 25 percent.

In the weeks leading up to Election Day Republicans also appeared poised to unseat incumbent Sen. Jon Tester (D) in Montana. They did. Republican Tim Sheehy appears to have beaten Sen. Tester by eight percentage points.

Republicans also have defeated Banking Committee Chair Sen. Sherrod Brown (D) in Ohio. With about 89 percent of the vote counted, GOP candidate Bernie Moreno is ahead of Sen. Brown by about four percentage points. Sen. Brown’s loss will open up a race for ranking member on the Banking Committee. (Sen. Tim Scott, Republican, is now likely to chair that committee.)

Yesterday, the GOP also was hoping to wrest control of seats in five other states from Democrats: Arizona, Michigan, Nevada, Pennsylvania, and Wisconsin. Here is where those races stand as of early this morning:

• In Arizona, Democrat Ruben Gallego leads Republican Kari Lake by about three points, but this race is still too close to call.
• In Michigan, the race between Elissa Slotkin and Republican Mike Rogers is tied with 95 percent of the vote counted.
• The Nevada race also is virtually tied. With 88 percent of the votes counted, Republican Sam Brown leads incumbent Sen. Jacky Rosen (D) by just 0.1 percentage points.
• In Pennsylvania, Republican Dave McCormick and incumbent Sen. Bob Casey (D) are locked in a heated battle. McCormick leads by just one percentage point with 96 percent of the vote counted.
• In Wisconsin, incumbent Sen. Tammy Baldwin (D) has a narrow lead over her Republican challenger Eric Hovde. With 99 percent of the vote counted, Sen. Baldwin is up by 0.7 percentage points. Recounts in Wisconsin are not automatic, but can be requested within three days of the election. In races where more than 4,000 votes were cast, the margin needs to be less than one percent on the initial tally for a recount to be granted.

Democrats, meanwhile, had an opportunity to take back two battleground seats from Republicans, Nebraska and Texas. Neither bid was successful.

The state of Maine also still has not declared a winner in its Senate race, but it appears incumbent Sen. Angus King, an Independent who caucuses with the Democratic party, will easily hold onto his seat.

What all of these numbers add up to is that, as of early this morning, Republicans have control of 52 Senate seats while Democrats control 42.

Now, let’s turn to the U.S. House of Representatives.

U.S. House Of Representatives: Still Unknown
For most of the year, Democrats had been very optimistic about their chances of winning back control of the lower chamber of Congress.

As of this morning, it still is not clear whether those predictions will come true. According to the elections website, 270ToWin, based on races where a winner already has been determined, Republicans will control 199 seats and Democrats will control 188. As a reminder, a party needs 218 seats to retain the majority.

Republicans were able to pick up three seats in North Carolina due to favorably redrawn districts. GOP lawmakers will now occupy the state’s 6th, 13th, and 14th Congressional Districts. Republicans also picked up: Michigan’s 7th Congressional District, which was vacated by Rep. Elissa Slotkin who, as noted above, is running for a U.S. Senate seat.

Democrats were able to pick up the newly created congressional seat in Alabama, the state’s 2nd Congressional District and New York’s 22nd Congressional District.

There are still 48 races where no candidate has yet been declared a winner, and they are evenly split between Republicans and Democrats. Each party holds 24 of these yet-to-be-determined races. As a reminder, Democrats needed to net four seats in order to take control from the current GOP majority. To take control of the U.S. House, Democrats need to hold all of their outstanding seats and convert six GOP-held seats. That task is a tall one, and the outcome may not be known for a few hours. (Though, to be sure, President-elect Donald Trump has declared victory in the House.)

And what does it all mean for policy?

Taxes and Tariffs
Many provisions of the 2017 tax law enacted during President-elect Trump’s first term will expire next year. Trump pledged during the campaign to not only extend many of the personal and corporate tax cuts included in the 2017 package, but to expand them. The president-elect would like to further reduce the corporate tax rate, from 21 percent to 20 percent, and to create an even lower corporate tax rate for domestic manufacturers. Trump’s tax platform also included a commitment to enact a “no federal income tax on tips” policy, and to reduce, or even eliminate altogether, the federal income tax on blue-collar workers’ overtime pay. Finally, like his Democratic opponent, Vice President Kamala Harris, Trump pledged during the campaign to expand the Child Tax Credit, though the details of his plan on this score remain a bit murky.

Of course, enacting tariffs to protect American manufacturing was a tenet of President-elect Trump’s campaign. From China to Europe and Canada to Mexico, America’s trading partners are preparing for significant U.S. tariffs to be imposed on goods including apparel, toys, furniture, appliances, and footwear, among many others.

Republican majorities in the Senate and House will grease the skids for Trump’s tax and tariff policy.

Consumer Financial Services
It’s been said that there’s never any certainty in Washington, but we’ll offer you the easiest bet you’ll ever make: President-elect Trump will fire Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra very shortly after he takes office on January 20, 2025. A GOP majority in the Senate all but assures that the 47th president will be able to confirm his pick to lead the agency for the next four years (or longer, depending on the outcome of the 2028 elections), who will seek to reverse many of the rulemakings and policies of the Biden-era CFPB.

The CFPB’s rules on bank overdraft fees, credit card late fees, Buy Now/Pay Later, and Earned Wage Access are highly likely to be rescinded or simply not enforced. The staying power of the Bureau’s just-finalized open banking rulemaking is a real question: will the Trump-era CFPB defend the rule against litigation filed by the Bank Policy Institute? Or, despite the bipartisan support for the rule, will the second Trump administration agree in principle with the banking industry that the Bureau overstepped its legal authority in a post-Chevron deference environment and, just as it did with the Obama administration’s fiduciary rule, decide to simply stop defending against industry’s litigation?

The tenor of CFPB investigations and enforcement will also change, likely dramatically. While industry shouldn’t expect the Bureau to ignore its legal mandate to protect consumers in the financial services industry, Republicans have long been sympathetic to banking and fintech market stakeholders’ complaints that the CFPB’s investigations are often overly broad and demand significant time and resources. The next director of the CFPB will almost certainly seek to reign in the agency’s examiners and enforcement officials.

The SEC
It was a good night for the crypto industry, which has found in the GOP – and in President-elect Trump specifically – an ally in its crusade against the Gary Gensler-led Securities and Exchange Commission (SEC). Trump will have the ability early next year to select a new chair of the commission, who will approach the role with a much more business-friendly view than the SEC has taken over the last four years. Trump’s SEC will significantly step back from enforcement of existing securities laws in the crypto markets, and is expected to consider a litany of proposals to make it easier for public and private companies to raise capital.

The SEC will, over the next four years, likely consider loosening the existing accredited investor thresholds and ease rules the GOP believes are forcing companies to stay private longer. The SEC is also highly likely to consider whether rules issued or amended under the Gensler era make it difficult for companies to go or stay public. The SEC’s ESG rule will almost certainly be eliminated. A GOP-led commission is likely to also walk back Gensler’s market structure rules, which, like several CFPB rules, have been the subject of industry litigation.

So, while it will take a few more hours, or even days, until we know the final tallies in the U.S. Senate and the U.S. House, it’s clear that 2025 will usher in a sea change for tax, tariff, and financial services policy.