While Georgia’s Senate runoff election today won’t determine which party will control the U.S. Senate, the contest still could have a real impact.
If Republican challenger Herschel Walker defeats incumbent Democratic Sen. Raphael Warnock, then the Senate will be split 50-50 next year, as it has been for the past two years, with Democrats in control of the chamber only because Vice President Kamala Harris can cast tiebreaking votes.
But if Warnock wins, that would change ratios on Senate committees, which are currently set at 50-50 to reflect the chamber’s split. That might make a difference for investors in some sectors, according to Stifel’s chief Washington policy strategist, Brian Gardner.
“If Democrats win Georgia, then they would hold a 51-49 majority and would adjust committee ratios so Democrats would have a one-vote majority on each committee,” Gardner said in a note.
“That would allow Senate committees to issue subpoenas without Republican support. This is something investors will likely overlook but it could increase headline risk for some sectors such as technology
and social media
as Senate committee chairmen would have increased flexibility to call witnesses to testify before the committees.”
A 51-49 Democratic majority also would be expected to lessen the influence of two moderate Democratic senators — West Virginia’s Joe Manchin and Arizona’s Kyrsten Sinema.
Manchin derailed President Joe Biden’s Build Back Better package a year ago, and Democratic-run Washington ended up passing a scaled-back measure in August. Sinema’s recent moves, meanwhile, have included successfully opposing changes to the so-called carried-interest loophole that allows private-equity firms to pay lower tax rates.
Having a Georgia runoff is a case of déjà vu for investors and other election watchers. After the November 2020 elections, the Peach State ran two Senate runoffs in January 2021 that Democrats won to take control of that chamber of Congress.
Georgia law requires a runoff election when no candidate scores a majority — often described as 50% plus one vote.
Warnock is currently favored to win by betting markets, with PredictIt giving the senator around a 90% chance of scoring re-election. Early voting already has been underway in the race.
Related: How gambling markets got the midterms wrong, and why Biden’s a ‘great bet’ for 2024
For Walker, a football legend backed by former President Donald Trump, “questions about his readiness for office really seem to be what’s giving a lot of voters pause, even if they are more Republican-leaning voters,” said Jessica Taylor, Cook Political Report’s editor for Senate and gubernatorial races, during a media briefing last week.
See: Second woman claims Herschel Walker pressured her to have abortion
But Taylor also stressed that she expects the contest to be close, and that’s why her organization continues to rate it as a toss-up.
“I think there are many fundamentals that work in Warnock’s behalf, but I don’t think this is going to be a blowout either way,” she said.
“This was a very close race — a little over 1% differential — when they voted the first time.”
A CNN poll released Friday found 52% of likely voters plan to back Warnock, while 48% support Walker. The survey, conducted by SSRS, has an error margin of 3.8 points.
In the Nov. 8 midterm elections, Democrats maintained their grip on the Senate by winning crucial races in Arizona, Nevada and Pennsylvania. The GOP took control of the House of Representatives, but will have a slim majority in that chamber.
Analysts had said voters appeared increasingly focused on issues on which Republicans claimed high ground such as inflation. But exit polls suggested that Republicans performed worse than expected because many Democrats and independents voted partly to show their disapproval of Trump — and those voters were energized by the Supreme Court’s June decision that overturned Roe v. Wade.
See: Anti-Trump vote and Dobbs abortion ruling boost Democrats in 2022 election
Also read: ‘The Twitter files’ show company’s internal debate on how to handle Hunter Biden laptop story