The Impact of the Mid-Term Elections on the Trucking Industry

All politics is local…This often-heard phrase was first shared 90 years ago. It is originally credited to two political writers of that era, Associated Press Washington Bureau Chief Byron Price and Finley Peter Dunne, a Chicago-based journalist and author. While our country and the world have gone through enormous changes since 1932, a strong case can be made that the political landscape is still very local regarding the issues that matter to you.

At Trucker CFO, we work hard to keep politics out of our business. We understand and respect that politics is personal and what you support is your business. That being said, we also recognize the issues being debated, along with the policies and laws being made by our elected officials, can have a major impact on the trucking industry. Every election cycle brings some form of change. Decisions made by those holding government offices at the local, state, and national levels can make it easier or more challenging for the trucking industry. Going back to the phrase first heard in 1932, the politics impacting trucking are local to those of us in the trucking industry.

Politics and Trucking

If you have been involved in the trucking industry for any length of time, you know that trucking is one of the most heavily-regulated industries in the United States. The majority of regulations are the product of decisions that are made at the federal level. This is why we chose to focus on the national mid-term elections when it comes to what is happening with the U.S House of Representatives, the U.S. Senate, and the White House.

If you are not convinced that politics is local to trucking, consider what has taken place on the federal level for the past 25+ years. The amount of legislation regarding the trucking industry has been substantial. The introduction of truck emission standards, the Hours of Service, and the EDL mandate are some of the examples of how the people holding political office can have a profound impact on the trucking industry.

The 2022 Mid-Term Election Results

As we look at this year’s mid-term results, the U.S. House will be seeing a change in leadership and control with the Republicans regaining a majority following a four-year run of Democrats holding the majority in the House. According to a report from the Associated Press that was updated on December 13, the Republicans have picked up nine seats in this election cycle, holding a 221-213 majority with one Congressional district still to be decided.

The Senate will continue under Democratic control for the next two years. In 2020, the Dems flipped the Senate by reaching 50 seats and the election of a Democratic White House with the Vice President having the tie-breaking vote. The Dec. 6 runoff election in Georgia won by the Democrats initially set up a 51-49 Dem breakout of the Senate. However, the day following the Georgia runoff Arizona Senator Krysten Sinema announced that she was leaving the Democratic party to become an Independent in the next Congress. According to a report from NPR, Sen. Sinema told Democratic leadership that she is going to keep her committee assignments through the Democrats. She will now join two other Senators who regularly caucus with the Democrats.

Trucking Legislation Over the Next Congressional Term

Both the House and Senate will be operating with narrow party majorities, and that could have some impact on the policies that move forward and what could be stalled during the next two years. According to numerous news reports at the time of this blog posting, Rep. Kevin McCarthy (R-CA) may be chosen as the next Speaker of the House. During a recent CNN interview, he promised to secure the border, cut back on government spending, and launch rigorous investigations into the Biden administration.

McCarthy has also shared that, in his position as Speaker, he would work to repeal the controversial Inflation Reduction Act passed in August. In a statement supporting the law released this summer, three former IRS commissioners appointed by Republican and Democratic presidents disputed claims about increased scrutiny. The law would add “the capacity to enforce the tax laws against sophisticated taxpayers who today evade their tax obligations freely,” they said, “because they know that the I.R.S. lacks the tools it needs to pursue them.” In any case, any effort to repeal the Inflation Reduction Act would be subject to the presidential veto, which it would be unlikely to survive given Biden’s public support of the law.

House Ways and Means Committee

Alongside the changes in the House, the House Ways and Means Committee will also change leadership. The Ways and Means Committee is critical to business interests. It handles tax, health care, and trade legislation and oversees some of the government's biggest-spending programs, such as Social Security. With Rep. Richard Dean (D-MA) stepping down from his role as chairman of the committee, there are three potential candidates to replace him: Vern Buchanan, Adrian Smith, and Jason Smith. Each of these candidates would bring different perspectives and priorities to the role.

Rep. Vern Buchanan is pitching a sharp pro-business focus if he wins the top Republican spot on the House Ways and Means Committee, emphasizing his personal experience navigating the tax code as he grew printing and car dealership businesses. Buchanan would bring a traditional conservative view of economic policy — opposition to tax increases, more regulations and unions “that don’t make sense” — to the influential panel overseeing taxes, trade, health care, Social Security and other major benefit programs.

Rep. Adrian Smith, a low-key Republican now in his eighth term, has quietly toiled on economic policies that hit home in his rural Nebraska district, like opening up foreign markets to his state’s top exports, including beef, soybeans, and corn. Smith’s largest career financial backers include the Club for Growth, an advocacy group favoring low taxes and limited government, and agricultural interests like the National Cattlemen’s Beef Association and National Rural Electric Cooperative Association. Smith, whose voting record has aligned almost entirely with his party for over a decade, outlined priorities for Ways and Means that align with top Republican aims, with a collaborative vision of how to work toward them.

Rep. Jason Smith characterizes the GOP as the party of the working class, vowing to ingrain that commitment in how he handles tax, trade, and health care policy if he wins the top Republican spot on the House Ways and Means Committee. To Smith, that would mean pursuing policies like a tax code that incentivizes domestic energy production, cutting the trade deficit with China and other countries, aggressive oversight of the IRS, and reconsidering tax breaks for “woke corporations.”

Whoever gets elected chairman will have a major impact on trucking in several ways. The Ways and Means Committee deeply affects trade in the United States, which is the foundation of the trucking industry. Any changes to tax legislation that affect business or industry will have ripple effects that impact trucking. Ways and Means will also directly affect truckers’ finances through their taxes. Everything from per diums to tax codes to write-offs are the purview of ways and means, so keep an eye on this race.

House Transportation and Infrastructure Committee

The House Transportation and Infrastructure Committee will also be under new leadership in January.  The presumptive incoming chairman is Missouri Rep. Sam Graves, the panel's ranking member in the current Congress. Graves was one of the 200 GOP lawmakers to vote against the bipartisan Infrastructure Law in 2021, calling the bill “a vehicle for the administration’s woke agenda.” In his new role, he aims to keep a skeptical eye on the Biden administration’s implementation of the bipartisan infrastructure law after the 118th Congress convenes in January. Graves has also said he would prioritize updates for the federal permitting process and aviation workforce rules in the Federal Aviation Administration reauthorization bill. The current authorization expires at the end of fiscal 2023.

Opposition to the implementation of the Infrastructure Law largely came out of a December 2021 Federal Highway Administration memo that encouraged states to follow a philosophy that Congress trashed in the final iteration of the bill: To focus federal funds on maintaining existing roads before expanding capacity. Graves wrote in a September letter to DOT that the language in the memo went “far beyond the language of the law” and discourages states from choosing projects based on their individual priorities. A spokesperson added that Graves would also likely focus on oversight of the One Federal Decision codified in the package, which requires the Transportation Department to streamline the project permitting process.

The administration has provided $185 billion for nearly 6,900 projects in the first year of the Bipartisan Infrastructure Law. However, state transportation departments, contractors, and other infrastructure providers are still waiting to receive more guidance on the streamlined approval process from the White House. Getting One Federal Decision figured out is the first step of the Infrastructure Law being implemented.

Graves has been critical of the Biden administration’s implementation of permitting streamlining measures, saying in a statement that the White House plan for the process is “just lip service about infrastructure project permitting.” In the Infrastructure Law, $110 billion is earmarked for fixing and building roads, bridges, and other major highway projects. How and when the law is implemented will impact trucking for decades. We’ll all be keeping an eye on Graves as he performs his duties in a critical role in this process.

The Road Ahead

The new Congress will begin its work in January. As we countdown to the new year and as we anticipate what it might bring to our industry, we would like to invite you to listen to our latest podcast about upcoming changes on the political landscape. One of the missions of our team at Trucker CFO is to make sure that we are providing the best information possible on the topics that matter to trucking professionals. Running a business and having a career in this industry requires a serious attention to detail.

The Trucker CFO Team hopes that you will find we shared through this edition of our blog and podcast to be a valued perspective that can assist you in moving your trucking career and your trucking business forward. As always, we have tremendous respect for everyone working within trucking. We want to serve you as a trusted resource as you continue to work to place yourself in the best position for success within an industry that is continually changing. To pay tribute to the time-honored phrase that opened this blog, your interests and the interests of the trucking industry are indeed very local to the Trucker CFO Team.

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