What the 2022 Midterms Mean for Convenience Retailers

A Republican House majority signals problematic legislation for the convenience industry is highly unlikely.

November 21, 2022

By Jon Taets

ALEXANDRIA, Va.—While a handful of races are still outstanding, we know that the GOP has gained the majority in the House for the 118th Congress. Republicans needed a net gain of five seats to take control, and they have accomplished a net gain of eight seats so far.

On the Senate side, Democrats successfully held on to their majority, though the exact margin depends on the outcome of the Georgia runoff election. If Senator Warnock is successful in fending off the challenge from Herschel Walker, then Democrats will have added one seat and hold a 51 to 49 margin. If Walker is successful, the Senate elections were a wash, and we will still have a 50 to 50 margin with Vice President Harris continuing to serve as the tie-breaking vote.

Most of the attention had been on the Senate races in Pennsylvania and Georgia. Democrats gained the only Senate seat flip so far in Pennsylvania in a tight race. As noted, Georgia is headed to a runoff. While he finished Election Day in first place, Senator Warnock was just below the 50% threshold required to win outright. Meanwhile, the rest of the competitive Senate races on Election Day were maintained by the incumbent party. Democrats defended their seats in Arizona, Nevada and New Hampshire, while Republicans held North Carolina, Ohio and Wisconsin.

The story in the Senate: ticket splitting

Comparing statewide races in many of the states hosting competitive Senate races has shown a fairly consistent theme: ticket splitting.

  • In Georgia, Republican Governor Brian Kemp handily won his race, but the Senate race is headed for a runoff on December 6, as neither candidate has cracked the 50% threshold.
  • In New Hampshire, Republican Governor John Sununu also won reelection with a large margin, yet Democrat Senator Maggie Hassan won a closer race.
  • In Wisconsin, Democrat Governor Tony Evers narrowly won reelection, and Republican Senator Ron Johnson won a tight race in another example of ticket splitting, though not as dramatic. 
  • In Nevada incumbent Senator Catherine Cortez-Masto (D-NV) won a tight race, while the state’s Democrat Governor, Joe Sisolak, fell to Republican challenger Joe Lombardo.

Another theme was holding serve. There has only been one flipped seat (pending the Georgia runoff result).

  • Democrats targeted Republican-held seats in North Carolina, Ohio, Pennsylvania and Wisconsin.  Republican candidates held the open seats in North Carolina, Ohio and Wisconsin, and Democrats converted Pennsylvania.
  • Republicans primarily targeted Arizona, GeorgiaFn, Nevada and New Hampshire. All but Georgia are confirmed to have been held by the Democrats.

Despite losing the majority in the House, Democrats had a better Election Day than expected.

Republicans started the night with strong numbers coming out of Florida, which was the first state to report widespread results. In addition to Republican Governor Ron DeSantis and Republican Senator Marco Rubio easily winning their reelections, Republicans also picked up four seats in the Sunshine State.

The rest of the night wasn’t nearly as decisive for Republicans across the country. Democrats held on to quite a few competitive seats, where Republicans hoped to make significant gains. The lack of the red wave will make a new Republican leadership’s job difficult over the coming two years. The leadership’s ability to keep the caucus together on major votes will be a challenge.

It’s a similar position that the Democrats have dealt with for the past two years and nearly identical to what former Speakers John Boehner (R-Ohio) and Paul Ryan (R-Wisc.) experienced during parts of their speakerships during the Obama Administration. Former Speakers Boehner and Ryan were forced to negotiate with Democrat Senate majorities and a Democrat White House, while dealing with an aggressive right flank within their own caucus.

What can we forecast from what we know?

The combination of a narrow Republican House majority and a razor thin Democrat majority in the Senate does allow the NACS government relations teams to make predictions on what we may see over the next two years: Gridlock will be the theme.

Both chambers will seek to “jam” the other by using any “must pass” legislation to carry partisan priorities and passing those priorities as close to deadlines as possible. The chambers will have to come to some form of agreement on federal funding legislation and vote on the debt limit at some point during the coming summer. Expect significant partisan bickering and brinkmanship surrounding federal funding legislation and the national debt limit, as each party will seek to force concessions from the other in negotiations. The next two years of legislating may not be for the faint of heart.

Thoughts for the convenience industry:

  • The Republican House majority means much of the most potentially problematic legislation for the convenience industry is highly unlikely to become a reality.
    • Major tax increase legislation is highly unlikely.
    • The organized labor agenda is essentially off the table.
    • Broad climate or pro-electric vehicle legislation is unlikely. Republicans will likely pursue legislation that increases domestic energy production and competition in alternative energy technologies.
    • A Republican majority is also likely to focus on aggressive oversight of how billions of dollars in recently passed infrastructure funding is spent.

What about the Biden Administration?

Amid a more hostile Congress, at least on the House side, President Biden will likely follow the lead of his recent predecessors who faced similar scenarios and focus on what he can do to promote his agenda, primarily through regulatory action.

The administration is likely to ramp up its “whole of government approach” on climate and environment legislation, which may result in a flurry of regulatory activity from of a number of agencies, most notably the Environmental Protection Agency and the Department of the Interior.

The Department of Labor and National Labor Relations Board are also likely to continue their recent uptick in pro-organized labor activity during the final two years of Biden’s current term. Congressional Republicans will have little to no ability to curb regulatory activity, outside of aggressive oversight.

Jon Taets is the NACS director of government relations. He can be reached at jtaets@convenience.org