You are here

Democrats aim to rein in Trump after seizing US House

Washington could be in store for even deeper political polarisation and legislative gridlock

BT_20181108_NAHPOLLS8_3611044.jpg
Jubilant Democratic supporters after news that Democrats have control of the US House of Representatives. "Today is more than about Democrats and Republicans, it's about restoring the Constitution's checks and balances to the Trump administration," says Nancy Pelosi, leader of the House Democrats.

Washington

DONALD Trump faced greater restraints on his presidency after Democrats won control of the US House of Representatives and pledged to hold the Republican accountable after a tumultuous two years in the White House.

Mr Trump and his fellow Republicans expanded their control of the US Senate in Tuesday's midterm elections, following a divisive campaign marked by fierce clashes over race and immigration.

But they lost their majority in the House, a setback for Mr Trump after a campaign that became a referendum on his leadership.

sentifi.com

Market voices on:

With some races still undecided, Democrats were headed for a gain of more than 30 seats, beyond the 23 they needed to claim their first majority in the 435-member House in eight years.

Seizing the Senate had never looked a likely prospect for the Democrats, and in the event they fell short of a tidal wave of voter support that would have given them control of both chambers of Congress.

Winning a Senate majority would have allowed Democrats to apply the brakes even more firmly on Mr Trump's policy agenda and given them the ability to block any future Supreme Court nominees.

However, the Democrats will now head House committees that can investigate the president's tax returns, possible business conflicts of interest and possible links between his 2016 election campaign and Russia.

The Democrats could also force Mr Trump to scale back his legislative ambitions, possibly dooming his promises to fund a border wall with Mexico, pass a second major tax-cut package, or carry out his hardline policies on trade.

"Today is more than about Democrats and Republicans, it's about restoring the Constitution's checks and balances to the Trump administration," Nancy Pelosi, leader of the House Democrats, told supporters at the victory party.

Despite the Republican loss of the House, Mr Trump wrote on Twitter, "Tremendous success tonight." Early on Wednesday, he added: "Received so many Congratulations from so many on our Big Victory last night, including from foreign nations (friends) that were waiting me out, and hoping, on Trade Deals. Now we can all get back to work and get things done!"

It was not clear what Mr Trump meant by his reference to trade deals. In pressing for what he views as better trade terms for America, he has imposed import tariffs and pushed Canada and Mexico into agreeing an overhaul of the Nafta trade accord.

Mr Trump, 72, had hardened his rhetoric in recent weeks on issues that appealed to his conservative core supporters. He threw himself into the campaign, issuing warnings about a caravan of Latin American migrants headed to the border with Mexico and condemnations of liberal American "mobs" he says oppose him.

The party with the presidency often loses House seats in midterm elections. Former President Barack Obama's Democrats suffered what he called a "shellacking" in congressional elections in 2010.

With divided leadership in Congress and a president who has taken an expansive view of executive power, Washington could be in store for even deeper political polarisation and legislative gridlock.

Financial markets often favour Washington gridlock because it preserves the status quo and reduces uncertainty, even though many in the market this time around had been hoping for a continuation of the Republican agenda.

The Dow rose 153.45 points to open at 25,788.46. The S&P 500 was up 18.68 points at 2,774.13. The Nasdaq Composite gained 70.13 points, to 7,446.09.

The fact that House gains for Democrats may rule out further tax cuts sent the dollar and Treasury yields sharply lower.

"With the Democrats taking over the House we will now have to see what gridlock in Congress means for policy. As for the market impact, a split Congress has historically been bullish for equities and we expect to see the same pattern again," said Torsten Slok, Chief International Economist of Deutsche Bank.

Losing the House will test Mr Trump's ability to compromise, something he has shown little interest in over the last two years with Republicans controlling both chambers of Congress.

There may be some room to work with Democrats on issues with bipartisan support such as an infrastructure improvement package or protections against prescription drug price increases.

"We will have a responsibility to find our common ground where we can, stand our ground where we can't," said Ms Pelosi, who has been one of the most frequent targets for Mr Trump's scathing attacks on his critics and political opponents.

Foreign policy has been an area that Mr Trump has approached in a very personal way, sometimes antagonising allies such as Canada while making what critics see as unduly warm overtures to traditional rivals or foes.

But House Democrats are expected to try to harden US policy toward Saudi Arabia, Russia and North Korea, and maintain the status quo on areas like China and Iran. The Kremlin said on Wednesday it saw no prospects for an improvement in relations following the elections.

"We can say with a large amount of confidence that of course no bright prospects for normalising Russian-American relations can be seen on the horizon," Kremlin spokesman Dmitry Peskov said.

Mr Trump has sought better ties with Russia but the two countries are at odds over the civil war in Syria, a nuclear arms treaty and the US allegations of election meddling.

In Germany, Foreign Minister Heiko Maas said on Wednesday it would be wrong to expect policy change from Mr Trump.

Every seat in the House was up for grabs on Tuesday. The Republicans had an advantage in Senate races because elections were held for only 35 seats in the 100-member chamber and many of them were in states that often lean Republican.

Republicans built on their slim Senate majority by several seats and ousted four incumbent Democrats: Bill Nelson in Florida, Joe Donnelly in Indiana, Heidi Heitkamp in North Dakota and Claire McCaskill in Missouri.

Those gains are sure to bolster Republicans' efforts to get conservative federal judges through confirmation proceedings during a "lame duck" session that starts next week, as well as from January when the new Congress convenes.

Democrats could make life difficult for Mr Trump by launching another congressional investigation into allegations of Russian interference on his behalf in the 2016 election. A federal probe by US Special Counsel Robert Mueller into Russia's role in that election is ongoing.

A House majority would be enough to impeach Mr Trump if evidence surfaced of collusion by his campaign, or of obstruction by the president of the federal investigation. But Congress could not remove him from office without a conviction by a two-thirds majority in the Republican-controlled Senate, an unlikely scenario.

The Democratic gains were fuelled by women, young and Hispanic voters, a Reuters/Ipsos Election Day poll found. Fifty-five per cent of women said they backed a Democrat for the House this year, compared with 49 per cent in the 2014 midterm congressional election. REUTERS

READ MORE: Mixed views on Wall Street as poll results turn out as expected