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![© BRUNSWICK | 2014 | 22
Mixed Signals Though Elites see neither party becoming more hostile to business, M&A is expected to be more difficult
Thinking specifically about potential mergers and acquisitions, over the next two years, do you believe the Department of Justice will become more or less aggressive in their attempts to block corporate mergers?
Do you believe that [Republicans/ Democrats] are becoming more or less friendly toward large businesses?
Republicans
Democrats
27%
65%
9%
31%
39%
30%
More friendly
Less friendly
Stay about the same
43%
46%
51%
43%
39%
38%
14%
15%
11%
Less aggressive
Stay about the same
More aggressive
44%
46%
10%
27%
30%
43%
19%
71%
10%
39%
45%
16%
Financial Elites
Republican Policy Elites
Democratic Policy Elites](https://image.slidesharecdn.com/brunswickpostelectionbusinessoutlook2014-141112110441-conversion-gate02/75/US-Post-Election-Business-Outlook-23-2048.jpg)
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US Post-Election Business Outlook
The document presents a survey of political and financial elite responses to the 2014 midterm elections, highlighting unexpected Republican gains in the Senate and House, along with increased control at state levels. It outlines expectations for the next two years, focusing on anticipated policy priorities, economic outlook, and the likelihood of partisan gridlock. Additionally, the survey explores views on the 2016 presidential election, with many expecting continued Republican dominance.
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US Post-Election Business Outlook
- 1. Abu Dhabi Beijing Berlin Brussels Dallas Dubai Frankfurt Hong Kong Johannesburg London Milan Munich New York Paris Rome San Francisco Sao Paulo Shanghai Singapore Stockholm Vienna Washington, D.C. Political and Financial Elite Survey Results November 2014
- 2. © BRUNSWICK |2014 | 1 Electoral Wave Republicans take control of the Senate
- 3. © BRUNSWICK |2014 | 2 Another Midterm Wave Republicans did better than expected, making major gains in the Senate and House House Election Results Senate Election Results Source: The New York Times Net Pickup by Party SENATE +7 -7 HOUSE +12 -12
- 4. © BRUNSWICK |2014 | 3 The party of every two-term President since Reconstruction has lost seats in both chambers of Congress during their second term… …The only exception was Bill Clinton in 1998, after the public backlash against impeachment. Six-Year Itch A pattern continues Grant House Senate Cleveland Wilson Roosevelt Truman Eisenhower Nixon Reagan Bush -93 -1 -107 -4 -22 -5 -72 -7 -28 -5 -48 -13 -48 -4 -5 -8 -30 -6 House Senate +5 0 Obama -13 -7
- 5. © BRUNSWICK |2014 | 4 The Most Important, But Underreported, Outcome The Republican wave led to big gains at the Gubernatorial and state legislature levels Gubernatorial Election Results State Legislature Election Results Republicans picked up 4 Governorships and 10 state legislature chambers. Republicans now control 68 out of 98 state legislature chambers, more than any other point in history. Republicans have full control (Governor’s Mansion and State Legislature) in 23 states. Democrats have full control in 7 states.
- 6. © BRUNSWICK |2014 | 5 1.How are Elites reacting to the midterm election results? 2.What are their expectations for the next two years? 3.What predictions do they have for 2016? Survey Objectives With this backdrop, we launched a survey to answer three questions: D.C., Maryland, and Virginia-based readers of elite policy publications (including Politico, PoliticoPro, Roll Call, National Journal, and The Hill) National readers of elite financial media (including Financial Times, Wall Street Journal, The Economist, Investor Business Daily, and Bloomberg BusinessWeek) Republican Policy Elites Democratic Policy Elites Financial Elites Survey Audiences
- 7. © BRUNSWICK |2014 | 6 Exceeding Expectations: All audiences believe that the Republicans did better than expected in the midterm elections.
- 8. © BRUNSWICK |2014 | 7 Election Reaction Republicans outperformed Elites’ expectations this cycle Financial Elites Republican Policy Elites Democratic Policy Elites Republicans did better than I expected The result was what I expected Democrats did better than I expected In your own words, what do you believe led to this year’s election outcomes? Which one of the following best describes your reaction to this year’s election results? 44% 63% 46% 30% 24% 28% 27% 13% 26%
- 9. © BRUNSWICK |2014 | 8 What’s Behind the Results? Republicans point to disapproval with Obama, while Democrats cite low turnout Financial Elites Republican Policy Elites Democratic Policy Elites 54% Voters who disapprove of President Obama’s job performance. SOURCE: ABC exit polls, November 4, 2014 36.4% 2014 voter turnout, the lowest level in 72 years. SOURCE: PBS News, November 10, 2014
- 10. © BRUNSWICK |2014 | 9 Setting the Agenda President Obama and Congressional Republicans are making an early push to set the policy agenda “And whether it's immigration or climate change, or making sure our kids are going to the best possible schools, to making sure that our communities are creating jobs; whether it's stopping the spread of terror and disease, to opening up doors of opportunity to everybody who’s willing to work hard and take responsibility -- the United States has big things to do.”
- 11. © BRUNSWICK |2014 | 10 Policy Priorities: When thinking about what is most likely to be achieved over the next two years, raising the debt ceiling, limiting the deficit, and reforming immigration policies top the list.
- 12. © BRUNSWICK |2014 | 11 Policy Priorities Elite see raising the debt limit, limiting the deficit, and reforming immigration as likely to be achieved before 2016 Limiting the federal budget deficit 25% 28% 23% 23% 20% 20% 18% 16% 14% 17% 16% 13% 18% 13% 15% 14% 10% 12% Raising the debt limit Comprehensive immigration reform Allowing US crude oil exports Reforming Social Security Addressing the student debt issue Comprehensive corporate tax reform Blocking companies from relocating their headquarters overseas for tax purposes Free trade agreements with Europe Comprehensive individual income tax reform Legalizing marijuana Large-scale infrastructure investments Free trade agreements with Asia Ending national Common Core education standards An end to quantitative easing Consumer privacy protection Creating a national exchange for greenhouse gas emitters Improving access to H1-B visas for highly-skilled working professionals 39% 41% 24% 25% 20% 17% 24% 19% 16% 17% 21% 22% 18% 19% 9% 14% 9% 8% 35% 23% 25% 23% 24% 21% 16% 21% 25% 21% 15% 15% 13% 13% 15% 6% 15% 9% Comprehensive immigration reform is seen as being twice as likely as a special deal for highly-skilled workers seeking H1-B visas. Financial Elites Republican Policy Elites Democratic Policy Elites
- 13. © BRUNSWICK |2014 | 12 K Street lobbying More of the Same Majorities expect K Street lobbying to rise over the next two years Over the next two years, do you believe the following will increase, decrease, or stay about the same? 59% 59% 76% 35% 36% 19% 6% 6% 4% Decrease Stay about the same Increase Financial Elites Republican Policy Elites Democratic Policy Elites
- 14. © BRUNSWICK |2014 | 13 Number of executive orders More of the Same With governmental powers divided, an uptick in executive orders is expected Over the next two years, do you believe the following will increase, decrease, or stay about the same? 60% 61% 64% 32% 18% 27% 9% 21% 9% Decrease Stay about the same Increase Financial Elites Republican Policy Elites Democratic Policy Elites
- 15. © BRUNSWICK |2014 | 14 Overall government spending More of the Same Overall government spending is predicted to grow Over the next two years, do you believe the following will increase, decrease, or stay about the same? 52% 48% 62% 31% 28% 24% 17% 24% 14% Decrease Stay about the same Increase Financial Elites Republican Policy Elites Democratic Policy Elites
- 16. © BRUNSWICK |2014 | 15 Defense spending Change of Course Despite reductions to the Pentagon’s 2015 budget, Elites anticipate increased defense spending Over the next two years, do you believe the following will increase, decrease, or stay about the same? 65% 56% 70% 26% 32% 19% 9% 12% 11% Decrease Stay about the same Increase Financial Elites Republican Policy Elites Democratic Policy Elites
- 17. © BRUNSWICK |2014 | 16 Fight Club: Although Elites agree on upcoming policy priorities, they expect little cooperation between President Obama and a Republican Congress and foresee an increase in executive orders from the White House.
- 18. © BRUNSWICK |2014 | 17 Partisan Gridlock Elites forecast disagreement between the President and Congress and expect another government shutdown Over the next two years, how likely or unlikely is it that there will be a government shut-down due to a policy impasse? Over the next two years, which ONE of the following do you believe is likely to happen? 20% 17% 19% 39% 31% 41% 35% 36% 33% 6% 17% 7% Very likely Somewhat likely Not too likely Not at all likely 44% 38% 46% 37% 50% 36% 19% 12% 18% The President and Congress will generally work together to pass legislation that helps to rebuild trust in both parties The President and Congress will generally spend most of their time fighting along partisan lines to build up an advantage for the 2016 presidential elections The President and Congress will generally fight over policy, but find a few opportunities to pass popular legislation Financial Elites Republican Policy Elites Democratic Policy Elites
- 19. © BRUNSWICK |2014 | 18 Business & Economic Impact: Although Elites anticipate divided government will have a positive effect on the economy, all audiences expect slow economic growth.
- 20. © BRUNSWICK |2014 | 19 44% 25% 14% 13% 0% 10% 20% 30% 40% 50% 60% Better Same Worse Top concerns among voters The economy Healthcare Immigration policy Foreign policy Life for the next generation Do you think the future of the next generation of Americans will be better, worse, or about the same as life today? Worse Same Better 48% Worse SOURCES: NBC News, ABC News exit polls, November 4, 2014. This is the most to say “worse off” since 1996. 22% 27% Economy as Priority The economy tops voter concerns in exit polls; Half believe that future generations will be worse off
- 21. © BRUNSWICK |2014 | 20 Boom or Bust? Financial Elites & Republicans expect economic growth from divided government; Democrats are more skeptical Positive effect Negative effect No effect 62% Positive 18% 33% 49% Positive 14% 44% 42% Positive 11% 26% Do you believe that divided government – a Democratic-controlled White House and a Republican-controlled Congress – will have a positive or negative effect on the economy? Financial Elites Republican Policy Elites Democratic Policy Elites
- 22. © BRUNSWICK |2014 | 21 Little Economic Growth Elites predict economic growth to continue, but most predict less growth than IMF forecasts Over the next two years, do you believe the US economy will… According to the International Monetary Fund, growth in the United States is projected to be 3% in 2015. 8% 17% 26% 19% 20% 4% 2% 1% 4% Grow 5% per year or more Grow 3%-4% per year Grow 2% per year Grow 1% per year Stagnate Contract 1% per year Contract 3%-4% per year Contract 2% per year Contract 5% per year or more 7% 9% 33% 22% 18% 4% 4% 3% 1% 6% 20% 28% 15% 19% 7% 2% 2% 1% Financial Elites Republican Policy Elites Democratic Policy Elites
- 23. © BRUNSWICK |2014 | 22 Mixed Signals Though Elites see neither party becoming more hostile to business, M&A is expected to be more difficult Thinking specifically about potential mergers and acquisitions, over the next two years, do you believe the Department of Justice will become more or less aggressive in their attempts to block corporate mergers? Do you believe that [Republicans/ Democrats] are becoming more or less friendly toward large businesses? Republicans Democrats 27% 65% 9% 31% 39% 30% More friendly Less friendly Stay about the same 43% 46% 51% 43% 39% 38% 14% 15% 11% Less aggressive Stay about the same More aggressive 44% 46% 10% 27% 30% 43% 19% 71% 10% 39% 45% 16% Financial Elites Republican Policy Elites Democratic Policy Elites
- 24. © BRUNSWICK |2014 | 23 Business Priorities Elite see allowing crude exports and corporate tax reform as the most likely business issues to be tackled before 2016 23% 18% 14% 17% 13% 18% 10% Allowing US crude oil exports Comprehensive corporate tax reform Blocking companies from relocating their headquarters overseas for tax purposes Free trade agreements with Europe Free trade agreements with Asia An end to quantitative easing 25% 24% 16% 17% 22% 18% 9% 23% 16% 25% 21% 15% 13% 15% Improving access to H1-B visas for highly-skilled working professionals Financial Elites Republican Policy Elites Democratic Policy Elites
- 25. © BRUNSWICK |2014 | 24 727 Days Away: Financial and Republican Elites anticipate Republican control of the White House and Congress in 2016, but Democratic Elites disagree.
- 26. © BRUNSWICK |2014 | 25 Strengthening the nation’s economy and creating jobs Anticipated Voter Priorities Voter priorities for 2016 are expected to include economic growth, immigration, and reducing healthcare costs Top priorities Bottom priorities 42% 37% 40% 32% 35% Reducing the budget deficit Defending the country from terrorism Reducing healthcare costs Dealing with illegal immigration 55% 38% 45% 40% 35% 58% 54% 44% 54% 46% 20% 15% 19% 17% 14% Dealing with global trade issues Reducing the influence of lobbyists Dealing with the nation’s energy problem Consumer privacy protection Reducing crime 20% 20% 21% 20% 13% 15% 18% 13% 12% 10% Financial Elites Republican Policy Elites Democratic Policy Elites
- 27. © BRUNSWICK |2014 | 26 Wild Cards In the next two years, instability in Iraq & Eastern Europe, and a major cyber attack are seen as most likely 37% 24% 25% 23% 20% 26% 26% 21% 22% 14% 12% 11% Russia will annex more territory in Eastern Europe China’s economy goes through a steep drop as the real estate bubble there bursts ISIS captures Baghdad and takes control of Iraq Oil prices fall below $50 per barrel The Federal Reserve raises interest rates The outbreak of a global disease pandemic North Korea collapses 54% 40% 36% 33% 31% 32% 20% 17% 15% 23% 16% 11% 47% 31% 27% 27% 32% 19% 22% 24% 15% 13% 15% 15% Oil prices rise above $120 per barrel There is a major terrorist attack on U.S. soil There is a successful cyber-attack on a major stock exchange China becomes involved in a large-scale armed conflict with another Asian country The Eurozone gives up their single currency and economic union and returns to country-by- country economic and political systems Financial Elites Republican Policy Elites Democratic Policy Elites
- 28. © BRUNSWICK |2014 | 27 Following the next federal election in 2016, which one of the following scenarios do you believe is the most likely? 43% 73% 29% 27% 17% 34% 21% 9% 25% 10% 1% 12% A Republican controlled House and a Republican controlled Senate A Republican controlled House and a Democratic controlled Senate A Democratic controlled House and a Republican controlled Senate A Democratic controlled House and a Democratic controlled Senate 2016 Congressional Control Financial & Republican Elites predict Republicans will keep control; Three in five Democrats expect to take one chamber back Financial Elites Republican Policy Elites Democratic Policy Elites
- 29. © BRUNSWICK |2014 | 28 Which party's candidate do you think will win the 2016 presidential election? Republican Candidate Democratic Candidate 59% 82% 30% 41% 18% 70% Clinton leads recent polling* 43% 42% 42% 52% 51% 53% Hillary Clinton Rand Paul Chris Christie Jeb Bush *SOURCE: McClatchy/Marist poll; October 4, 2014 1988: The last election where a President transferred power to a member of the same party. Road to the White House Financial Elites Republican Policy Elites Democratic Policy Elites
- 30. © BRUNSWICK |2014 | 29 About the Brunswick Group Sparky Zivin Director, Brunswick Insight Washington, DC P: +1.202.393.7337 E: SZivin@BrunswickGroup.com For more information about how Brunswick can help, please contact: The Brunswick Group is an international corporate communications partnership that helps businesses and other organizations address critical communications challenges. Brunswick is an international team of more than 600 people based in 22 offices and 13 countries. This research was conducted by Brunswick Insight, the research and consulting arm of the Brunswick Group. Brunswick Insight provides data-driven strategic communications counsel for Fortune 500 companies, industry organizations, and non-profits. Our team of experts has conducted research in more than 70 markets around the world and has expertise in corporate reputation, issues management, narrative and message development, and thought leadership. Bob Moran Partner, Brunswick Insight Washington, DC P: +1.202.393.7337 E: RMoran@BrunswickGroup.com
- 31. © BRUNSWICK |2014 | 30 Methodology Audience National readers of elite financial media (including Financial Times, Wall Street Journal, The Economist, Investor Business Daily, and Bloomberg BusinessWeek) D.C., Maryland, and Virginia-based readers of elite policy publications (such as Politico, PoliticoPro, Roll Call, National Journal, and The Hill) who voted Republican in the last election D.C., Maryland, and Virginia-based readers of elite policy publications (such as Politico, PoliticoPro, Roll Call, National Journal, and The Hill) who voted Democratic in the last election Sample Size n=300 n=114 n=186 Margin of Error ±5.7 ±9.2 ±7.2 Mode Online Field Dates November 5-9, 2014 Republican Policy Elites Democratic Policy Elites Financial Elites