Channel Democracy

Background

The long election season is over – or, as one comedian said, “Our long nightmare is over.” Of course, in Washington the talk of Election 2016 has already begun, with potential candidates planning their Iowa and New Hampshire visits. But before the next cycle begins, DMA brings you analysis Election 2012 – and what it will mean for data-driven marketers over the next four years…

The Administration
The reelection of President Obama signals a status quo with regard to the Administration on the policy issues affecting data-driven marketers. The multi-stakeholder process being led by the Department of Commerce through the National Telecommunications and Information Agency (NTIA) to create codes of conduct for mobile privacy will very likely continue, and DMA will continue to participate actively. While supporting self-regulatory codes of conduct, the Administration is not backing down on its call for Congress to pass a “Consumer Bill of Rights.”

Given the Administration’s stance on the use of consumer data, it is worth noting that President Obama’s re-election campaign relied more heavily on the use of data, including marketing data, for its voter turnout efforts than any in history. Many would argue that the use of consumer data and cutting-edge targeting techniques were key to the campaign’s success.

Although uncertainty remains regarding deals on spending and tax issues to avoid the “fiscal cliff,” DMA expects that the Administration will continue its call to limit federal income tax deductions – particularly the 28% cap on charitable deductions. Since Governor Romney and other Republicans have also called for limitations on charitable and other deductions, there is a strong possibility that any fiscal cliff compromise will include limits on income tax deductions.

There will be changes in the Obama Cabinet in the second term. Secretary of State Hillary Clinton is expected to resign, and one of the leading candidates rumored to replace her is Senator John Kerry (D-MA). Should Senator Kerry become Secretary of State, the vacancy created by his departure would give Senator Scott Brown (R-MA) an opportunity to try to regain a seat in the Senate.

Secretary of the Treasury Tim Geithner is also expected to depart, and the leading candidate to replace him is Jacob Lew, the President’s Chief of Staff. The Secretary of Commerce position, which has been empty for months, will finally be filled as well. While there is not a clear front-runner at present, one of the potential candidates for the role Export-Import Bank President Fred Hochberg, who – as the son of Lillian Vernon – understands the importance of data-driven marketing.

The Agencies
DMA does not expect any change in philosophy or direction at the Federal Trade Commission (FTC) or the Federal Communications Commission (FCC). Both will continue their active enforcement of robocall regulations.

The FTC will continue its strong focus on consumer privacy. It is rumored that FTC Chairman Jon Leibowitz will be leaving the Commission in the near future and either Commissioner Edith Ramirez or Commissioner Julie Brill are expected to be appointed to replace him. In either case, DMA expects that the focus and tenor of the FTC’s regulatory and enforcement action will remain the same.

DMA does not expect changes at the Postal Regulatory Commission (PRC). Since the Postmaster General is not appointed by the President, the election will not necessarily prompt changes in leadership at the U.S. Postal Service (USPS) either.

The Congress
As noted above, the House of Representatives remains under Republican control, though the Democrats picking up approximately 7 seats (some races remain undecided), leaving the chamber with a 242-193 Republican majority. Democrats retained – and slightly expanded – their majority in the Senate with a pickup of 2 seats, giving them a 55-45 majority, assuming that Senator-elect Angus King (I-ME) caucuses with the Democrats.

Changes in committee and chairman assignments in either chamber will not be certain until they hold their organizational meetings in December. Chairmanships usually follow seniority, but not always. Moreover, senior members may wish to change Committee and subcommittee assignments. In addition, the increase in Democratic representation in both the House and Senate may result in slightly greater Democratic representation on Committees.

The Senate
Senate Committees with jurisdiction over privacy and postal issues will see significant changes in the 113th Congress. With the retirement of Senator Kay Bailey Hutchinson (R-TX), Senator Jim DeMint (R-SC) will become the ranking member of the Senate Commerce Committee. Senator DeMint is expected to be a more vocal foil to Chairman Jay Rockefeller (D-WV) than Senator Hutchinson was on privacy matters as he has opposed the Senator Rockefeller at several privacy-related Committee hearings in the 112th Congress. The election of Elizabeth Warren (D-MA) places another strident consumer advocate in the Senate, which may impact privacy debates in that chamber. We do not know what her committee assignments will be, but she will likely be very interested in financial issues covered by the Consumer Financial Protection Bureau (CFPB).

The Homeland Security and Governmental Affairs Committee (HSGAC), which has jurisdiction over postal issues, will see significant leadership changes in the 113th Congress. Chairman Joe Lieberman (I-CT) is retiring, and Senator Tom Carper (D-DE) is expected to become the new Chairman. Moreover, Senator Susan Collins (R-ME) who is the ranking member of the Committee may not, by Republican caucus rules, be able to continue as ranking member in the 113th Congress. In that case, we expect Senator Tom Coburn (R-OK) would become the ranking member; he did not support postal reform legislation during the 112th Congress. Postal reform legislation passed by the Senate in this Congress was championed by Senators Lieberman, Collins, Carper and Scott Brown (R-MA), who lost his seat to Elizabeth Warren. Thus, two of the four sponsors of postal reform legislation will no longer be in the Senate. Thus, passing postal reform legislation will become more difficult in the 113th Congress.

The House
Perhaps the greatest upheaval caused by the election – from the perspective of data-driven marketers – came in the House Energy and Commerce (E&C) Committee. Chairman Fred Upton (R-MI) and Ranking Democrat Henry Waxman (D-CA) won reelection. However, elections will be needed for two new subcommittee chairmen as Representative Cliff Stearns (R-FL), Chairman, Oversight and Investigations (O&I) Subcommittee, and Representative Mary Bono Mack (R-CA), Chairman, Commerce, Manufacturing and Trade (CMT) Subcommittee, have lost their seats in the House. It is rumored that Representative Marsha Blackburn (R-TN) is interested in the O&I chairmanship, and that Representative Lee Terry (R-NE) is interested in the CMT chairmanship. Blackburn has been a strong supporter of DMA’s positions on privacy issues in the current and previous congresses, and Terry is one of only eight Members who voted against granting the establishment of the National Do-Not-Call Registry. Representatives Ed Markey (D-MA) and Joe Barton (R-TX), who oppose DMA’s self-regulatory approach to privacy, remain on the E&C Committee, and we expect both to remain active and continue pursuing their agenda against “data brokers.”

There is little change in the House Oversight and Government Reform (OGR) Committee, which has jurisdiction over the USPS. Thus, the tough road for postal reform in the House has not gotten any easier as a result of the elections.

The States
For state office candidates, Election Day last week was a little rosier if there was a “D” in their party affiliation column. While there was nowhere near the upheaval in terms of the number of chambers changing party control this year as there was in 2010, the night seems to be a net positive for Democrats, although Republicans still hold a majority of state house chambers and governor’s offices. Eighty-six of the nation’s ninety-nine legislative chambers were up for election this year with a total of 6,015 seats at stake.

Democrats have increased the number of legislatures they hold to 19, up from 15 before the election while Republicans still control both chambers in 26 states. Control in four states is split. Party control switched in the Maine, Minnesota and New York Senates from Republican to Democrat. In Alaska, Arkansas and Wisconsin, Republicans took over Senate chambers that were Democrat. House chambers switched from Republican to Democrat in Colorado, Maine, Minnesota, New Hampshire and Oregon. Republicans completed a sweep of Arkansas by claiming the House. In all, Democrats picked up 170 seats across the country.

In the ten Attorneys General races, Democrats snagged Pennsylvania and Washington and Republicans claimed Montana and West Virginia. All four seats had previously been held by the other party. In addition to the numbers, there are some practical results of the Tuesday outcomes. First, with the switch of the New York Senate from Republican to Democrat, there is a greater chance of legislation moving straight through from introduction to passage than there was with a divided legislature. The GOP-controlled Senate was the check on the Democratic Assembly that often passed bills knowing that they would likely die in the upper chamber. That backstop is now gone. Second, California citizens will see next year what it is like to have single party control of the state government and supermajorities in both the Assembly and Senate as California law requires a supermajority (a two-thirds majority) for tax matters, veto overrides and filibusters. There is already some concern that the legislature, not known for its parsimony, could increase spending and look to tax hikes for new sources of revenue.

The 2013 sessions get underway in all 50 states early in January.

For more information, please contact Jerry Cerasale, DMA’s senior vice president of government affairs, or Rachel Thomas, DMA’s vice president of government affairs.