No Blue Wave, But Now What?

Markets are hanging onto their post-election day gains, relieved that there was no “blue wave” that will lead to significant anti-growth policy risks. GOP retention of Senate control hinges on winning at least one of the two January 5 run-offs in Georgia. The GOP lost no state legislatures, and is on track to pick up New Hampshire, and gain in others, putting it firmly in control of redistricting after the 2020 census. The GOP is on track to gain five or more seats in the House. Some of the particular districts the GOP has flipped are in states where that is sufficient to also flip delegation control in the House. Today the GOP controls 26 delegations, and in the new Congress it will control 27 or 28, which gives Trump a strong hand if there is a “contingent election” decided in the House under the 12th Amendment. For now, Trump’s best path is to make sufficiently salient vote-fraud allegations to keep enough states tied up in litigation past the December 14 deadline when electors bind their Electoral College votes.