National Elections Amidst Increasing Uncertainty / Transcript

Operator: Good morning. My name is (Jody). And I will be your conference operator today.

At this time, I would like to welcome everyone to the National Elections Amidst Increasing Uncertainty Conference Call.

All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw the question, press the pound key.

Thank you.

Mr. Michael Heller you may begin your conference.

Michael Heller: Thank you (Jody) my name is Michael Heller. And I’m the president and executive partner of Cozen 0’Connor and I want to welcome everyone to the call today.

With the election six weeks away, the fiscal cliff looming and serious foreign policy and economic challenges facing the U.S., there are significant questions about the future direction of the country.

Some of the questions being asked across the country and frankly the world include what impact the election will have on the political status quo?

What will it mean for the lame-duck session of Congress and for key policy initiatives such as the health care reform?

And what can the country expect in the 113th Congress?

To discuss these issues, we have three principles of Cozen 0’Connor’s Bipartisan Government Affairs Group, Cozen 0’Connor Public Strategy, who will give us an insider’s view on the unfolding, unprecedented events taking place in Washington

With us today are Mark Alderman, chairman of our Public Strategies Group and the President, Pennsylvania Finance Chairman, Howard Schweitzer, managing partner of our Public Strategies Group, a Presidential Appointee in the George W. Bush Administration and the first Chief Operating Officer of TARP and Rob Freeman, a member of our Public Strategies Group, who was a senior official on the Senate Commerce Committee under Senator John McCain and has played a key role in Republican presidential and congressional campaigns.

We look forward to offering their perspectives to you today.

So with that Mark I turn the call over to you

Mark Alderman: Thanks Michael. And thanks all of you for joining us. We’re going to take 40 to 45 minutes and talk about the issues that Michael outlined and then we hope you’ll have some questions for us.

And we’re going to do this in sequence in three parts. So I’m going to talk about the upcoming election. Howard is going to talk about the lame-duck session of Congress. And Rob’s going to talk with us about the 113th Congress.

So I’ll begin with November 6th, 2012,40 days out and after billions of dollars being spent, after millions of speeches and appearances and handshakes. We expect that when the dust settles on November 7th, we are most likely to see a continuation of the status quo in Congress and in the White House.

So let me walk through how we come to that conclusion. And again, we look forward to your thoughts and questions, when we’re done.

So we’ll take so we’ll take the three pieces in order of easiest to hardest to call, the House the -- White House and then lastly, the Senate.

The United States House of Representatives today, is of course controlled by the Republican Party with John Boehner of course, being Speaker of the House. Today the Republicans have a 241 to 191 seat advantage, with three seats vacant, that’s 435 United States representatives. And it would take 25 seats to change hands, to change parties, for the Democrats to take control.

We think that it is very likely that the Republicans maintain control. We think it’s on the order of 75, 80 percent likely, that the Republicans retain control. You know, of course that all 435 members of the House are elected every two years, so it’s been only two years since the public last pass judgment on these representatives and while we expect the Republicans to lose 15 seats are so, we just don’t see enough of a change to change control, after putting the Republicans in power a mere two years tying thago.

We would look at something like 228 to 207 margin for the Republicans, which is a meaningful margin and will enable Speaker Boehner to continue to govern the House with a footnote, that is intended to be non-editorial, to continue to govern the House to the degree that he was able to govern the House in the last two years. It is proven difficult down there, as everybody knows

Another footnote would be that we expect Speaker Boehner to remain the Speaker. The Speaker is of course selected by the majority caucus, so the Congress would organize itself, the Republicans would convene and we think notwithstanding inside the Beltway chatter about Eric Cantor potentially relate replacing John Boehner, it is a near certainty that John Boehner remain Speaker if the Republicans retain control.

And it is very likely that the Republicans retain control of the House, which brings us in order of increasing difficulty, to call, to the presidential elections.

The presidential election a month or so ago looked very difficult to call. And it may look very difficult to call a month or so from now but right now, today, if this election were held tomorrow, it seems likely that the President would keep his job.

We think that it’s on the order of 57 to 43, that kind of a set of odds that Obama-Biden are reelected. Again 40 days to go, there is certainly time for this race to flip. It flipped back and forth for months and months before this latest separation of the two candidates and many commentators believe that it’s all but over.

We think this is still a volatile race. We think that events could still change the outcome.

But today it is looking much better for the President than it has for really the cycle, for a couple of reasons. One is something that not everyone would be tuned into if they didn’t live and breathe this stuff like we do but there is a growing phenomenon in American elections of early voting. You’ve probably heard right now about the swing states. The so-called states that are in play and will determine this election. There are depending on whose list you look at, there are roughly eight of them, Colorado, Florida, Iowa, Ohio, Nevada, New Hampshire, North Carolina and Virginia.

Early voting is already occurring in half of those states and early voting will occur in the other half, they all have some form of it, before November 6th and the estimates are in both sides that by election day, probably 25 percent of the votes in those eight states will already have been cast, which means of course that if one side is ahead today, as the President pretty clearly is, every day that votes are cast, it gets harder and harder to reverse that result.

And this early voting is as we say, taking place and it’s a factor in this.

The much more significant factor is the map. The electoral map. Everybody of course knows the election is a popular vote and the electoral college. Ask Al Gore what you get for winning the popular vote. This popular vote is much closer than the electoral map.

The electoral map involves 538 electors, that’s 435 for the House, 100 for the Senate and there are three for the District of Columbia, actually. You need 270 electoral votes to win.

The consensus is that right now the President is somewhere in the 240s and Governor Romney is somewhere in the 190s and that is including Ohio, as a swing state. Ohio has recently so long hard, the President’s way. It can swing back but if you give Ohio to the President, he’s in the 260s and Governor Romney has to run the table, has to win everything else to get to 270 first.

So the map is daunting today for Governor Romney and the President simply has more paths to 270.

But again where 40 days out, we’re six days out from the first debate, which is an opportunity for this to tighten and stay tuned. It is, we think, likely that the President keeps his job but it is -- it is not by any means certain...

Howard Schweitzer: Mark.

Mark Alderman: ... which brings us to...

... excuse me

Howard Schweitzer: It’s Howard

Mark Alderman: Yes.

Howard Schweitzer: Just a question to throw into the mix here. I think you’re going into the elections, six months or eight months to go. One would have thought that the economy would be kind of dictating the outcome here.

Economic data is all over the place these days, consumer spending is showing signs, of picking up. Housing is showing signs of improvement.

But this morning GDP were revised downward and durable goods orders were down. The economic data is all over the place. How do think the economy is plane into the Administration?

Your -- you have an inside view from Camp Obama?

How do you think the economic situation is playing into the election at this point?

Mark Alderman: Well it’s a great question because of course the election began with everybody agreeing, ‘it’s the economy stupid’ and it sort of turns out at this point that it may not be the economy alone that drives this.

I think that the view from the president’s reelection campaign, with which I am very familiar but I have to be very clear, for which I do not speak but being familiar with it, the view there, is that the economy got baked into this cake very early on. That everybody knows that the economy is not great. That everybody formed his or her opinion of the President’s handling of the economy early on. And that the electorate is not following the monthly jobs numbers or GDP numbers or housing starts in the way that some of us do.

A catastrophic economic event good flip this thing on its head overnight but it would have to be something of an enormous magnitude.

The remaining monthly reports as the President’s campaign sees it, as I earlier said, have been making to this cake and while the economy was very significant in making this much closer than 2008, it is not at the end of the game, as active an issue in moving remaining voters, as a lot of people thought it would be.

And that is, if I may continue, that is true in the down ticket races also, which brings us as I say, to the Senate where if it were the economy alone, one would expect the Republicans to be looking better than they fact seem to be today.

The Senate today is Democratic controlled. It’s 53, 47 again, a footnote there, couple independents who caucus with the Democrats but for control purposes, it’s 53, 47.

We think you can flip a coin here. This is a coin toss, the slightest advantage goes to the Democrats because if it ends up 50-50. If the Republicans were to take three seats, the Democrats lose those three seats, it’s 50-50, the Constitution calls for the Vice President to preside over the Senate and passed a tie breaking vote.

If we are right that Joe Biden will be the vice president in the next Congress, then a 50-50 draw goes to the Democrats. And we think that gives them the slightest edge in in maintaining control of the Senate.

We expect them to lose a seat or two. It’s going to be very close.

The map there is a mess. Nothing has gone according to plan in the Senate campaign.

Missouri was supposed to be an easy seat for the Republicans, knocking Claire McCaskill out. Todd Akin made it a closer race. Connecticut was supposed to be an easy seat for the Democrats to hold, that’s Joe Lieberman’s seat but Linda McMahon is making that a much closer race. John Tester in Montana, Elizabeth Warren and Scott Brown in Massachusetts, Indiana, Nevada there are six, eight states that are just too close to call and that’s why we think this could go either way but again a slight edge to the Democrats.

And then this significant footnote, in fact, I’m going to elevate it to the text. Because of the rules of the United States Senate, everybody is familiar with the filibuster, that’s a result of the Senate closure rules. It requires 60 votes for anything to pass the Senate, with again, some footnote exceptions, and, neither side is going to come anywhere near 60 votes. So the Senate is likely to remain a largely, deadlocked, institution with, we think, the Democrats slightly a little more likely to retain control.

All of which means, Howard, as I turned to you, to tell us what’s going to happen but come the 113th Congress and come inauguration day for the new president, we think we are very likely to see the status quo.

And we would now very much welcome Howard’s thoughts on what the status quo can mean in the lame duck and Rob’s on what it would mean in the new Congress.

Howard Schweitzer: Thanks Mark. To say that Washington under the current status quo has been gridlocked for quite a while now, is an understatement.

But we think that’s partially and understandably a political reaction to where we have been as a country, to the great recession and the struggling economy and frankly the bailout from several years back.

This too shall pass and we think it begins in the lame-duck. You know, ordinarily lame-duck sessions of Congress are about clean up, while you’re waiting for the new political order to take hold in the next Congress. Not this year, Congress and the President intentionally kicked major fiscal and economic issues to after the election. They didn’t want to deal with it.

The president particularly didn’t want to deal with it in the context of the final months of the campaign and he insisted, went to the mat on postponing some of the major issues, into the lame-duck session of Congress. So we see this lame duck being different than, you would see it in ordinary times.

What’s on the table?

The Bush tax cuts for one, as you’ll recall in 2001 and 2003, Congress passed and President Bush signed, a series of tax cuts across the board tax cuts that (inaudible) periodically and they were most recently extended by President Obama and the Congress in 2010 for two years.

So the Bush tax cuts are on the table. The President has drawn a line in the sand and saying, at least while campaigning, he will not extend the Bush tax cuts for people earning more than $250,000 but he very much wants to extend the tax cuts for those earning less than $250,000.

Budget sequestration is the other major, major issue on the table in the lame-duck session of Congress. Everyone will recall the 2011 divisive debt ceiling fight, which set off a series of discussions in Washington about the fiscal future of the country.

And those ultimately broke down and resulted in automatic budget cuts that begin to take effect January 1st, 2013.

Congress is very concerned, both sides of the aisle, about sequestration particularly ardent defense supporters like, John McCain feel very strongly that these cuts which amount to about $100 billion of government spending cuts and again it’s across the board, defense and nondefense, they are very concerned that that would have a devastating impact on the Defense Department.

Those would come on top of cuts the Administration, serious cuts that the Administration has already proposed to the to the Defense Budget and they apply to other forms of government spending as well, to accept for certain mandatory programs like, Medicaid, they apply to nondefense equally, so it’s about $100 billion of government spending coming out of the of the economy.

The other thing that’s looming, is another fight over the debt ceiling. Sometime in early 2013 and Treasury can probably manage it for a period of time but early in 2013, we again hit that debt ceiling, which would prevent the Treasury from raising additional -- raising additional funds through that debt markets and tying the President’s hands as far as our ability to borrow.

And there are also a series of other temporary tax breaks on the agenda for the lame duck. But the Bush tax cuts, the debt ceiling and budget sequestration are front and center.

It’s important to stress that these are all automatic. That they are the law of the land, that sequestration begins January 1st, that the Bush tax cuts expire, that we hit the debt ceiling and so you need affirmative-action from Congress and the President in order to change the laws that dictate these things, as going to happen right now

This affect -- the effect of all these fiscal changes happening at the same time, is referred to, in the media, as the fiscal cliff. And it’s called the fiscal cliff because of the prediction that if these things take hold, as currently planned, the economy will be severely impacted, that GDP next year will be dramatically impacted and that we’ll go back into recession, that the U.S. economy will go into recession, at least according to the Congressional Budget Office, in 2013.

Now, do we think the economy is going over the cliff?

The short answer is no.

But how does the President and the Congress address the situation and preserve their credibility. They’ve put these mechanisms in place to hold their own feet to the fire and now we’re talking about them scaling them back, how do they do that?

Again, the President has gone to the mat, drawn a line in the sand on extending some of the Bush tax cuts.

Jim DeMint, perhaps the most conservative Republican in the entire United States Senate, a senator from South Carolina, he said that if the President wins, the Republicans who’ve drawn a line in the sand on revenue increases, will have to deal with the President and taxes. They’ll have to negotiate.

That’s actually an incredible statement, given what the political rhetoric has been. So we some willingness on the part of Republicans to negotiate on taxes which is very significant.

Again Congress on both sides of the aisle wants to deal with sequestration, wants to move from a series of automatic cuts, to more carefully thought, out and strategic cuts and the Administration feels the same way.

The Administration has said that sequestration is bad policy. The President signed it into law but they feel that it’s bad policy and what they recently telegraphed, in a recent report to Congress on the impact of sequestration, is that if the Republicans will negotiate on taxes, on revenue increases, that the Administration will agree to delaying sequestration or rethinking the mechanism for this $100 billion budget cut.

So where does that leave us?

You know, I think it’s fair to say that Washington view sequestration, not as a law of unintended consequences but as a law of brutal consequences. And no one wants to go back to the showdown on the debt ceiling that took place in 2011. That was frankly a low point for this Administration, a low point for this Congress and no one wants to go back there.

So how do we see this resolving itself?

Assuming the status quo political prediction that Mark laid out earlier prevails, we think Congress and the President work out a deal that puts off sequestration, allow some of the Bush tax cut still remain in place and extends the debt ceiling for a short period. Congress already has kicked the federal appropriations process well into 2013, just this past week.

And what if the status quo doesn’t prevail?

What if the prediction we laid out earlier doesn’t happen?

Well assuming the Republicans take the Senate but the President wins. That’s tantamount to the status quo for purposes of what I have laid out in the lame duck and if the President loses but the Senate is Democrats, retain control, I say the same thing.

The real change as far as our predictions for the lame-duck, is if the Republican surprise and run the table, if Romney wins and the Senate Republicans are in charge in 2013, then that I think all bets are off. You know, we probably don’t see a deal on the lame-duck and it gets kicked -- it all gets kicked to 2013, when you have a Republican Congress, a Republican president and we’re then headed in a very different direction and it’s possible but again, not what we see as likely.

Again, we think the status quo prevails and then this sets of negotiations in 2013 for a major budget deficit, deficit reduction, tax reform entitle -- entitlement reform and spending deal.

Rob tell, us what the world looks like, when Washington comes back in January?

Robert Freeman: Well, again, we’re going off the assumption, looking at the 113th Congress when they convene in January, really being the status quo. The significant difference will be a reshuffling of the seats, specifically there’ll be changes in who are the chairman and ranking members on the various committees in both the House and the Senate.

That really won’t have, in our view, a significant impact on the action that will take place to address the issues that you laid out Howard, in the 113th Congress, meaning that, we won’t, at least early on in the Congress, see the same level of gridlock that we have seen over the last two years. And in a sense, they will do the cleanup that you referenced, that they would normally do in a lame-duck. They will actually do that early in the 113th Congress early in the year.

The reason for that goes back kind of to the start of their conversation, as Mark laid it out and that goes back to politics. Both sides of the aisle, given that the status quo would remain, will want to do that cleanup, so that they can start afresh in a sense, sometime midyear in looking forward to the midterm elections.

And that’s the reason that we think there’ll be significant action early on in the year. It’s hard to predict exactly what that package will look like and some of this Howard, goes back for the lame-duck.

In essence the agreement that we believe will come together after the election, will in some way have to be locked in. It’s unclear at this point, what legislative vehicle they will use to lock-in that agreement.

We do not think that it is possible in the time given and the amount of work that will be required for them to do the grand bargain in the lame-duck. Very slim possibilities there, probably five, seven percent possibility that they could do that. Much of that if they were able to do it and again that’s a big if, would be based on work that Congress did basically in the fall of 2011, when the Super Committee was meeting and trying to come up with a grand bargain. If they were able to dust that off and clean it up to represent the agreement that struck after the election, there’s a slim chance they could. But we really don’t think that’s likely. We think they’ll pass a limited package, then in the sense, wax in that agreement and look for a major compromise early.

And when we’re saying early in the new year, probably by March, the end of March, early April would tend to be the timeframe for that cleanup to occur. At that point both sides would try and claim victory for addressing the nation’s problems, start with a clean sleet -- slate and prepare themselves for the mid-term elections.

I think that’s really how we see playing out.

Michael Heller: Good. Mark.

Mark Alderman: Well, I think we’re the point where we can take some questions which we hope people will have for us.

Operator: At this time, I would like to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad.

We’ll pause for just a moment, to compile the Q&A roster.

Please hold for your first question.

Again, if you would like to ask a question, please press star then the number one on your telephone keypad.

We’ll pause again for just a moment, to compile the Q&A roster.

Please hold for your first question.

Your first question comes from the line of Neil Gilmore.

Neil Gilmore: Hello.

Michael Heller: Hi.

Neil Gilmore: Hi. To what extent do you think that if in the situation where the Republicans take control of the Senate, that the Democrats would use the same kind of filibustering tactics for the next couple of years to basically hamstring all legislation?

Robert Freeman: Well I think without question that would occur. Again, and this is Rob answering the question here, for you. I don’t think that there’s any question that we’ll see that return.

I think the difference will be that we’ll actually see a discussion at least early on in the in the phase where they’re working together to execute the agreement. There’ll be some conversations taking place on how to adjust the rules in the Senate and the use of the filibuster. Depending on how those numbers shift, to the Republican side will really indicate on how serious those conversations have been. There have been over -- probably the last three Congresses, discussions on both sides of the aisle that the filibuster rule is not being used as it was initially intended, that there are problems with it.

It does contribute significantly to the gridlock in Congress on both sides, both in the House and the Senate because the Senate can’t rule, so there’ll be some discussions on that.

My assumptions would be those discussions will occur and they’ll go by the wayside and things will, by middle of next year, returned to normal. Democrats will use the filibuster just as it continues to do.

It’s probably not until we see a major shift in the numbers in control of the Senate, will that issue really be addressed and that’s not in our view, going to happen in this next Congress.

Neil Gilmore: Have they been doing this for very long or is this something fairly recent. I just don’t recall this kind of gridlock going back, years gone by?

Robert Freeman: Look, the filibuster has been around for 170-some odd years and I’m just pulling the number off the top of my head. It is -- the difference has been in that, probably in the last decade we have seen increasing use of the filibuster as things have become more partisan in the Senate. The idea of compromise has not prevailed as often. You’ve seen members use the filibuster over smaller issues, issues that are of personal interest to them to block major pieces of legislation and even the point of just trying to get it considered, meaning, that they of used the filibuster to demand a vote on a specific issue that was of concern to them.

That’s a change, in the last decade. That increasing use has almost made it an everyday occurrence and almost any piece of legislation that you -- that comes up now in the Senate, there is a discussion of whether or not there will be a filibuster.

That’s new. That has definitely increased even in probably the last three congresses meaning, the last six years but ultimately I don’t see a change in the next Congress

Mark Alderman: Well, I’m going to disagree to a limited extent if I may, it’s Mark, Neil.

If, as we think is likely, the President is reelected. If as we think is very narrowly likely, the Democrats retain control of the Senate. I think you could see the President and Majority Leader Reid, taking a run at this filibuster rule.

Not repealing it but scaling it back so that a majority of less than 60 is required for action. I agree with Rob that left to their own devices, the leaders of the Senate would be unlikely to get that done. I don’t hold and the President piling on would get it done either but I know the level of frustration in the Administration with the daily use of the closure rule to frustrate legislation.

And I think you would see the President and Leader Reid taking a run at cutting that back a little.

Robert Freeman: Mark, Rob here I don’t agree with you.

If the Democrats do maintain control and the President is reelected, that they’ll take a run at this.

I don’t think that occurs if the Republicans do, even if we don’t expect they do take control of the Senate because they won’t join with the President in making that run.

And then that’s the reason I believe there’ll be discussions under that circumstance but won’t -- won’t be any real action.

Neil Gilmore: Maybe they should go back to the old rule, where they have to stand up and talk and argue for endless hours instead of just cutting it off without having to do any work.

Rob Freeman: Well Neil, it’s interesting that you say that, there have been there some members who have, not on the floor, but have actually made that point, that they should require the members to maintain the floor if they are going to conduct a filibuster. That would certainly change the dynamics of it. You know, a lot of folks don’t know that often a filibuster is done, simply by a polling, an informal polling of members on both sides of the aisle and somebody going to the floor on their behalf and objecting. So it’s not -- it’s not the old days, that’s for sure.

Neil Gilmore: Thank you.

Michael Heller: Good question.

Operator: Our next question comes from the line of Daniel Wagner.

Daniel Wagner: Gentlemen, it’s a good presentation. I just had a quick follow-up and I’m just wondering, akin to what was just asked about the divisiveness that we find in our political process. Do you think going forward, that this is a short-term trend or do you think it’s a long-term trend in the sense that there is such divisiveness along economic, as well as political lines?

My own view is that this is probably going to be a long-term process and it doesn’t bode well for our political process, would you agree?

Robert Freeman: Mark.

Mark Alderman: Well it’s Mark. Let me give you my perspective again. I have to emphasize I’m speaking for myself, certainly not any official capacity and certainly not for Rob and Howard as Rob just proved.

So my perspective is that if this election turns out as today predicted and Governor Romney is defeated. I think you’re going to see and Rob can speak to this much more knowledgeably than I. You are going to see a debate in the Republican Party about whether to move towards the center or towards the right.

It is an unstable coalition at the moment. Should it prove unsuccessful in an election, that I think a lot of Republicans and a lot of Democrats thought was going to be very, very hard for the President to win. Should Governor Romney come up short, I think you’re going to see a real debate about the direction of the Republican Party.

And I think the resolution of that debate, Daniel, goes directly to your question.

If the party purges itself of those who would move more to the middle, it’s going to be very hard to -- for the fever to break down there.

If the Republican Party should move more towards the middle, I think -- I think you could see a lot more compromise and a lot more cooperation.

So that that is one dynamic. A different dynamic by the way, is just a demographics of this country which whatever the result of this election, are going to continue to move in the Democrats favor and could put more pressure again, on the Republican Party to redirect itself.

But Rob, your views with a more knowledgeable on that score than mine.

Robert Freeman: Well Mark, I really agree with what you’re saying there.

It’s going to defend on a discussion within the Republican Party but I think it’s also going to depend on a discussion within the Democratic Party.

What we’ve seeing and going back to my answer on the last question, with regards to the use of the filibuster, we’ve seeing both sides become more, partisan in Congress.

And I think and that’s the reason again, the prediction of what will happen early in the 113th Congress is kind of this, let’s work together and clean up. Both sides want to do it.

It is unclear what it will look like after they finish that cleanup and return to preparing for those mid-term elections.

I think there’ll be discussions on both sides.

I would say, I believe the Republicans have a problem on how partisan they’ve become. How partisan the party outside the legislature has become and they’ve got to have a serious discussion on whether or not they want to, in a sense, work to really address problems and I think become more of the party of we can, as opposed to the party of no. Which is we’re they’ve really been, at least for the last two years.

That discussion is going to have to occur, if the election comes out as we’re predicting. I think there’ll be a serious discussion on that but a lot of it will have to do with the overall control of the party and that might take some time to shake out.

So to try and answer your question Daniel, about over what period of time this will last, I think that’s really hard to predict.

I don’t think we’re going to see a quick turnaround in it. There may be a number of very difficult elections ahead, depending on how the economy turns around and who is better at taking credit for that, will have an impact on how quick that is. Otherwise, I think this will probably be take several elections cycles.

Howard Schweitzer: I’m going to jump in here, it’s Howard and offer --come at this from a slightly different perspective. And that is, you know, while Mark and Rob are certainly talking about the political reality of the parties and where they stand, there is also a reality as far as what this country is facing.

Just look at the last decade, everything from 9/11, to the financial crisis, two wars, three wars, the Great Recession. It’s been a brutal period for the country and I think if you look back at history, that it’s very natural, coming out of this kind of a challenging period, that the type of political division we’ve had arises.

Now, the question is what’s the path away from that and it’s on both sides of the aisle, well understood in Washington that we are staring becoming Greece in the face, that we need a sustainable debt policy that gets this country back on an even keel and while there are differences about how to get there is unanimity as far as the need to get there, the need to for some entitlement reform, the need for tax reform and the need for spending reform.

And so, I think we are entering a period where it’s do or die in a sense and the leadership in Washington, on both sides of the aisle, understands that and wants to get there and so I’m bullish on some bipartisanship breaking out and the country getting back to -- Washington getting back to governing in a more typical fashion, beginning in 2013.

Robert Freeman: Rob here, Howard I agree. I think we might see some sense of how quickly that’s going to turn around, in general, by or from, I should say from leadership and that is who steps up to provide leadership on really trying to address those.

And that could come from the President, that could be -- that could come from the members of the House or Senate. It could come from the outside. I think that’s a very significant thing to watch. Is really who provides the leadership and who really ultimately gets credit for providing that leadership.

And I don’t necessarily mean for addressing the problems. I think it’s the leadership for getting it done, finding the solutions will be up to the group, getting it done will be the leadership that folks will be looking for.

Again that could come from either side.

Operator: Your next question comes from the line of Joseph DiStefano.

Joseph DiStefano: Hi. Thanks for doing this. I had a little bit of a follow-up question and then another question. Just in terms of follow-up, you have a number of Tea Party (inaudible) candidates in the election some of them are not party favorite candidates. Does the success -- does a result of that debate within the Republican Party, that Mr. Freeman and Mr. Schweitzer referenced, does that hinge very much on what happens in Missouri and some of these states.

And the other question I had, was just about the economy and its role in this election. Would you say or would you disagree that there is more consciousness, there is more discussion of these fiscal problems, the kind of very important problems you’re laying out, in this election than there have been in previous presidential elections?

Has it risen to the level of detail that it needs to or are people disappointed that it has not?

Michael Heller: Rob.

Robert Freeman: Joseph on your first question. I don’t think that the outcomes of those elections that are being classified as Tea Party related candidates and their elections are really going to be significantly in the decision on the discussion in the Republican Party. They are simply going to be a part of it.

What I’ve seen coming is that there is a realization that, that wing of the Republican Party or that faction is going to be around. There’s got to be an understanding of how to address them and in a sense bring them along to the understanding that it takes more than just staunch or entrenched views to provide the leadership that we need, especially in these difficult times.

I think a lot of that depends on the party’s elder statesmen and stateswomen to actually talk to those folks and get that addressed.

And that’s really an internal party discussion. In many cases is going to be discussions between former elected officials from the party, newly elected officials from the party, to try and to describe that we’re just not being successful. We understand, we appreciate your views, we understand we should work for them but we’ve really got to provide a better sense of unity within the party and the leadership that’s needed.

So, in that sense they are part of it. I just don’t think they really are part of the ultimate outcome.

(Michael Heller): Joseph on your second question regarding the -- our fiscal challenges have enough of a place in the campaign. You know, I think that neither party wants to talk at any (inaudible) at the, you know, Medicare vouchers versus traditional Medicare kind of debate. We haven’t really had a serious fiscal discussion in the context of the election but that’s not a disappointment as far as where I sit because I think, you know, we’re here in Washington, we’re up on the Hill all the time, we’re talking to the Administration, we see it and hear it every day and they are very, very focused on not becoming Greece, here in D.C.

And, you know, one economy I know says the United States is basically Greece with a printing press and I think there is increasing realization in Washington that, that’s the case and that we need to move in a different direction.

So (inaudible) the fiscal discussion, what we do with Social Security?

What we do with Medicare, tax reform?

It’s very weedy and very wonky and very, very much a detailed discussion and too detailed for a presidential campaign.

But, I think, again, there’s growing realization on both sides that we must do something.

Joseph DiStefano: Thank you.

Operator: Again, I would like to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad.

We’ll pause again for just a moment to compile the Q&A roster.

Your next question comes from the line of (Richard Litchford)

Operator: Excuse me Richard, your line is open.

(Richard Litchford): Oh. Am I on the call?

Male 1: Yes.

Male 2: Yes.

(Richard Litchford): OK, sorry about that. Actually I have two questions. The effect of foreign policy particularly the events, the recent events in the Mideast. And then also the influence of the press on the polls and the outcome of the elections.

Michael Heller: That’s Mark.

Mark Alderman: You want me take a shot?

I’ll go first.

Foreign policy was missing in action for the presidential cycle until very recently, with the events in the Mideast. It is now, I think on the table as an issue but again, it is late in the day for this to be a game changer, absent further development.

Further developments abroad, could well make this a much closer proposition at the presidential level but it is -- it is late for the events we have seen thus far to be that influential, number one.

Number two, the election is of course obviously a choice between these two candidates and even though the Republicans have traditionally had a stronger foreign policy standing among the American people, I think because of the President’s accomplishments in the last four years, I don’t mean that to sound partisan, but there have been accomplishments the country acknowledges, and because of Governor Romney’s relative inexperience in foreign affairs again, nonjudgmental, I think that is unlikely to catch fire as an issue and really mean a whole lot in the next couple of weeks.

Howard Schweitzer: Mark it’s Howard. If I could just comment on that. I think that there have been opportunities in the last, you know, several weeks for the Republicans to gain ground on the President in foreign policy but Romney has missed every opportunity.

He’s, you know, it’s been gaffe, after gaffe , and it really goes back to, I’d say, goes back to December when he went to the Olympics and got into a dispute with our closest ally, in criticizing their readiness for the London games. That I think sent a real signal to the American people about his ability to go abroad and represent the country.

Coming out on television, the -- and look, I worked in a Republican administration, so you know, you know here I come at this from but going on TV, before we’d really had a chance to assess the situation in Libya and criticizing the Administration was a serious misstep.

And I think if you just waited and waited for the President to call this a bump in a road, in the road, which he did on “60 MINUTES” I believe, waited for the President to say that they had no idea that it was Al Qaeda, when in fact that they thought it was a spontaneous thing, when in fact now it comes out that they knew 24 hours -- within 24 hours that it was Al Qaeda.

Romney has ceded the opportunity to elevate foreign policy as an issue and has really, really missed his chance.

(Richard Litchford): Thank you,

Howard Schweitzer: On your second question Richard, on the press and the reporting of it. I think what is significant is, really or just over the last couple of days, you’ve see in a hint of discussion about what the influence of the press is having on the election.

Much of it actually centers around the reporting of polling numbers and I think the views from the Republicans that the press is reporting because of adjusting numbers in those polls, that in a sense it’s almost a done deal in some of these swing states, getting really kind of wonky. You get into how those polls are weighted and discussions within -- at least coming from the Republicans that they are weighted wrong, that they are looking at 2008 as an example and because of the elevated turnout, that’s not a good number to use.

So, there those types of questions happening but I think overall, we don’t see a real influence today, coming in the press as to the outcome.

With one caveat, some of that talk is probably having an impact on early voting.

And early voting is already opened in a number of states and it opens in at least one more important state here, in what, 48 hours and that would be I, believe Ohio.

Male 3: Correct.

Howard Schweitzer: And I think -- I think when we look back of this election, we are going to say that social media had a much more significant influence on the outcome, than the press. And even then, the advertising on television the Republicans have a tremendous fundraising advantage. They have a tremendous spending advantage but the Administration or should say the Obama Campaign has been able to do some really interesting things with Social Media, at no cost, to neutralize a lot of the Republican messaging.

So, I think when we look back on the campaign, we’ll say that above the press, beyond the press and the advertising, that it’s really the social media messaging that won this election for the President.

Michael Heller: Well I agree with Howard if I may say this and I recognize that we are a minute or two over time but I just want to follow-up on what Howard said because, I think, when we look back on this election, the question about the press that is going to be asked, is, what the press even was in this election?

Certainly print media, with all due respect to my friend Joe, who is a member of it, print media is not influencing this election. Broadcast media, the networks devoted significantly less time to the conventions for example, than ever before. Cable News, Talk Radio and especially Social Media are, I think as Howard says, having an impact but I don’t know Richard, that that’s even what you had in mind when you said the Press.

The -- it’s -- I think this election is going to contribute to the evolving definition of what the press, even is, in terms of political coverage because I think it is so diffuse at this point, it’s hard to accuse the press of having any bias.

(Richard Litchford): Good point. Good point. Well, thank you gentlemen, very much. It’s -- for me, it’s been very informative and most enjoyable.

Michael Heller: Great.

(Richard Litchford): Thank you.

Operator: (inaudible).

Mark Alderman: I think Howard, did you want to close it up for us?

Howard Schweitzer: Sure. Thanks Mark. Thank you all, again, for joining the call. I think, just in closing, I’ll point out that Rob and Mark and I, come at what we’re said today from three very different perspectives.

Politically and in terms of our involvement in government and politics over the years but we find ourselves in strong agreement on what we predicted today.

We hear all the time that our clients want clarity and consistency from Washington, so you can focus on your businesses, on growing your businesses and we know that Washington (inaudible) has in fact impacted the U.S. economy. Has even resulted in the downgrading of the U.S. government’s credit rating.

But again, we think 2013, with a status quo, political order, is shaping up to be a dramatic year in terms of putting the country on a better long-term path and some of the questions have gone to that, in which the public has a better sense of what to expect from Washington.

That’s what you all need, is consistency and clarity, in order to figure out what to do, in your personal lives, as far as your own economic situation and importantly, with your businesses.

And no one is going to like everything that they hear in the coming months but as Rob has said to me, many times, from his days on the Hill, he knew that he was hitting the mark on a piece of legislation when no -- when everybody complained about it, right, I mean that’s...

Rob, when everybody is mad at you, you’ve done the right thing.

Howard Schweitzer: ... so we’ll back to do more of these calls, in the coming months, before the election and after the election, when we really get deeply into these issues.

But again, that’s we’re we think it’s headed.

We think collectively, that we are headed for a status quo situation, politically in which some of the thorny issues facing this country begin to clarify themselves and we really look forward to continuing to dialogue about those with you, our clients, in the coming months.

Thank you.

Operator: Thank you.

That concludes today’s conference call.

You may now disconnect.