Midterm Takeways From a D.C. Insider

Jeff Buchbinder [0:10] Hello, everyone, and welcome to LPL Market Signals. Jeff Buchbinder here, your host for this week, with a special guest. He's a special guest for a few reasons. But one reason he's a special guest is because he's never been on Market Signals before. Cameron Ricker is joining us from the LPL government relations team. How are you today, Cam? Have you recovered from the election night craziness?

Cameron Ricker [0:39] It's glad to, I'm glad to be here. Thank you so much for having me on. And to answer your question, no. It's only getting crazy around here.

Jeff Buchbinder [0:48] In other words, no change over the past, oh, decade or two.

Cameron Ricker [0:53] Exactly. Yes.

Jeff Buchbinder [0:54] I get it. I get it. So it's Monday, November 9th, 2026 as we're recording this. So we're just six days past election day. So I'm really glad Cam is here, as a DC insider to help us really frame out what implications investors should be thinking about, what's maybe real and what might be wishful thinking. Where might we get bipartisan agreement? What could potentially be relevant for the economy and for the markets? All of that, in, as much as we can get into the next 30 minutes. So let's jump right into it, Cam. I just want to start high level. What was your reaction to the election results? Kind of, you know, set it up for us and then we'll maybe get into some more implications.

Cameron Ricker [1:47] Yeah, my reaction was wow. You know, while I was expecting the Democrats to win in the House of Representatives and be very competitive in the Senate, I think it was the margins that the Democrats won their elections that really surprised me and a lot of folks around here. So just to kind of recap what happened, in the Senate, the Democrats flipped the Senate now have the majority. You know, it was 53 Republicans, 47 Democrats. Now we're at 54 Democrats and counting. We're still waiting on election results in Mississippi and Alaska. Both of those are trending blue. They did this by holding onto states like Michigan and Georgia, but they also flipped battleground states in Ohio, Maine, North Carolina. And what really surprised me was they put deeply conservative states like South Carolina, Texas, Kansas, some of which have not held a Democrat senator in over, you know, 100 years.

Cameron Ricker [2:49] So it's been a really long time since that's happened, and this is certainly a big swing. In the House, you know, as I mentioned, Democrats were expected to win. Republicans had a very narrow majority. But now as the election results are coming in, you know, they have more, Democrats have more than 250 members in the majority, and it's trending up towards 260. So that gives the new incoming likely speaker, Jeffries, a lot of cushion to pass things in the House. And then also surprisingly on the state side, the same kind of blue wave, they're calling it the Blue Nami came over and it hit all the gubernatorial races. So Democrats won the governorship in Georgia, Texas, Ohio, among other states. So, you know, that's going to have a significant role in shaping the state level politics, including some of those that we will touch on later.

Cameron Ricker [3:48] But I do want to say, as impressive as this Blue Nami was in Democrat victory, it's still important to note that we still have President Trump in the White House. We still have a Republican in the White House. So he can have veto power, he has veto power over any legislation coming out of Congress, and it's a really high threshold to overcome any sort of veto. Even if he doesn't actually use a veto, the implicit threat of a veto is often enough to stop partisan legislation and foment compromise.

So think of, you should think about it, the market should think about it. In a divided government, we might see less legislation coming through, but that legislation's going to be more bipartisan. So whenever the bills pass, they tend to be more stable, longer term and longer lasting bills. So that from my perspective is a very positive thing.

Cameron Ricker [4:44] You know, for Republicans, they now have lost their chairmanships over committees. They no longer in Congress, I should say, are going to set the oversight agenda. They cannot pass nominees through the committee or through the Senate without Democrat support, and they're not going to set the legislative priorities. So, you know, in plain terms, they're playing defense instead of offense now. The flip side is for Democrats, so they now have significantly more influence on federal spending. They get to set their legislative priorities and they have a say in nominations. So I do think that the most immediate change is actually going to be the oversight role, the administration, its scrutiny over the agency's agenda and investigations, but I think we'll also see a lot of concessions in the nominee space as well. So the other aspect we'll see because of, you know, how large the victory was for Democrats is there's going to be new leadership in both parties.

Cameron Ricker [5:46] So the current Speaker of the House, Mike Johnson, is now stepping down. There's a race between, you know, Jim Jordan, who's more of a firebrand, and Steve Scalise who offers a little bit more continuity from the last leadership résumé that are going up against each other for that leadership role. So we'll see how that turns out, what their individual styles are as they move into the minority. We're also seeing turnover at the White House, whether that be a new White House chief of staff, it's possible that the Secretary of Defense is also going to be replaced. So there's a lot going on there. And on the same time, we have a new incoming speaker, Jeffries, Hakeem Jeffries, and we'll see how he is able to hold the Democratic caucus together. So I'll just button it up by saying there's a lot going on, very exciting results.

Cameron Ricker [6:37] But we're also going to start seeing members on both sides of the aisle already looking to 2028, shifting their political agendas. How are they going to position themselves? Are Republicans going to stay, you know, in a lockstep with President Trump? Are they going to distance themselves a little bit? Are Democrats going to pass messaging bills? Are they going to be looking for compromise? So there's a lot happening and a lot of unanswered questions, but that's what is exciting in this space.

Jeff Buchbinder [7:11] Yeah. Well, I'll share your surprise on some of those conservative states. I grew up in the great state of Kansas, and not only have I never seen a Democratic Senator, my parents who are in their 80s have never seen [laughs] a Democratic Senator in Kansas either. That was quite a surprise. I think it's clear that affordability resonated with voters and certainly the data center issue is related to affordability because, I mean, whether it increases your utility costs or not, people thought it did. The messaging clearly worked for the Democrats to run on that. So I want your take on that. I mean, you mentioned that this, the governor races, the local elections really mattered. How much is this going to slow the data center build out, do you think? Or are these, let's call them more moderate states like Texas really just going to try to do it maybe more smartly, but they're still going to do it?

Cameron Ricker [8:12] Yeah, I mean, that's a really great question. This was something that was really important during the campaign cycle. You mentioned Texas, but also Georgia and Ohio in the governor races, those were really, you know, high, hot topics for their campaigns. So we'll see how they actually react now that they're in office if, you know, they do continue their resistance to data centers or not. And as you mentioned, you know, the governor races and statewide down ballot races all shifted left. So I do think that it, I don't want to say slows down, you know, the progress for, you know, building these out, but I do think there will be more deliberate approach in how, you know, AI and data centers are being treated on the state level and also on the federal level. I think there will be a larger shift towards data protection, AI safety, transparency, consumer protection.

Cameron Ricker [9:13] And so it's possible that that slows down any of the policy, you know, making there. I will say on the federal side, there is a large recognition that something needs to happen in this space. So the House, you know, passed a bill on AI just this last Congress that was near unanimous. It was 417 to three. So, you know, that to me in an environment, political environment that we're in now, to have something that was so unanimously worked towards and voted in support of shows that there will be, you know, a lot of support moving forward. I would expect on the federal side, though, to be more, there to be more scrutiny over the Trump administration's policies when it comes to AI, but ultimately, there will be some sort of package or legislation that is going to bring Republicans and Democrats together to figure out what the rules of the road of this are.

Jeff Buchbinder [10:12] Yeah, even before the election, it felt like AI was an area of bipartisan agreement that some sort of regulation, guardrails, whatever you want to call it, was needed. Clearly both sides have different views on exactly how to do that and how much government involvement is needed in the AI rollout, but there's certainly bipartisan agreement that a framework or guardrails need to be put in place. I'm encouraged, though, to hear you, Cam, say that, you know, you think the data center construction is still going to happen. Like AI, that train has left the station and it's not coming back, right?

Cameron Ricker [10:52] It's not coming back.

Jeff Buchbinder [10:52] I agree with you 100%. The build-out's gonna happen. It's just... And actually, I mean, you've heard some of these local stories of the hyperscalers that want to build these things actually paying people's property taxes.

Jeff Buchbinder [11:05] Right? And actually agreeing to lower utility costs, not just keep them the same and not impact them in a negative way, but actually lower [laughs] utility costs. And so I think once that, really, both sides, once the messaging gets through, that really this is a win for these local communities if they can figure out where to put it and how to do it, because otherwise it's going to be built in Mexico or some other country or it's going to be, you know, done in another state and there's obviously tax revenues associated with those. So I agree with you, this is going to happen. It's just going to be done in a more thoughtful, careful way. And it seems like the hyperscalers have done a bad job with messaging, not only the benefits of AI, but also maybe the benefits of having a data center in your state.

Cameron Ricker [12:00] It's been terrible PR on this. But to your point, I agree with you that it's going to happen. It's just a matter of where it happens. And, I do think that there will be certain states that are going to start to open up their doors because they do see the benefits of these data centers.

Jeff Buchbinder [12:20] Yeah. See, I mean, even the comments from the government elect in Texas seemed fairly pro-data center. She doesn't want these things to go to Mexico either. So good stuff there, Cam. Let's... So there's some areas maybe where we'll get bipartisan agreement. I think, you know, we talked before about some other areas. Housing seems to be one. Yeah, I think it's bipartisan that both sides want more housing built, and that can help with the affordability problem. Is that the way you see it? Are there other areas that you think could affect the market and the economy where you think we can get bipartisan agreement?

Cameron Ricker [13:04] Before coming to LPL, I worked on the Senate Banking Committee for eight and a half years, and, you know, when Senator Scott and ranking member Warren at the time came together to talk about their legislative priorities, I wasn't sure where they would be able to find some sort of compromise or overlap in their priorities, but housing was exactly the one place that they found that they could work together. And they did that. They passed a road to housing bill last Congress. I think that there is a huge appetite in, you know, more housing projects. So I do think that that is a spot for bipartisan support. I think there is a growing appetite in the retirement space, whether that be Secure 3.0 or some other, you know, large package, helping to support people save their money.

Cameron Ricker [13:56] And that also fits pretty squarely into the affordability theme that we're hearing. But the, you know, the most reliably safe bipartisan package that we have is the NDAA, which is the National Defense Authorization Act. So, I think we'll see defense being a large part of, a large vehicle for bipartisan efforts.

Jeff Buchbinder [14:30] Yeah, I've been hearing trade a reversal of those Medicaid cuts for defense spending, right? Or trade, you know, get, reverse the cuts on SNAP, right, AKA food stamps, and then we'll give you the defense, right? So when you've got a, you know, you don't have the 60 votes in the Senate, you've got to compromise, right? And so, do you agree that those are potential swaps maybe to get a budget done next year? Or are there other things maybe that could be a part of that?

Cameron Ricker [15:04] Yeah, you know, I think with defense, that is a bit of an anomaly where both sides like to support the troops and support, you know, the defense efforts. So that one probably, they can get together just by, you know, just compromises. I think the SNAP benefits and the Medicaid, like, those cuts are kind of a larger issue, so I would be surprised if there's a horse trading in that, because with NDAA in particular, they like to keep it very, they try to keep it as focused as possible because it's already a big bill. They don't want to make it even bigger, right? But certainly I think in the healthcare space, it's a high priority for Democrats, to, you know, get some of those ACA benefits that expired in 2025, to get the, some of the Medicaid provisions that were removed in One Big Beautiful Bill Act.

Cameron Ricker [16:03] I think that they're going to really push for some movement on that. And with that, you know, Republicans can also, you know, make concessions and they can do a little bit of horse trading there on policy priorities. I think the biggest place that we'll see, you know, kind of the horse trading, if you will, is with our nominees. With President Trump, he has not held a member of the minority party in a lot of key regulators, including at the SEC, for example. But now with the Democrats overseeing the nomination process, they're in a position where they can now say, "Hey, we're not going to consider your nominee until you also nominate a Democrat to fill that traditionally held seat." So I could see some, you know, horse trading happening back and forth there, which will ultimately lead to more bipartisan efforts.

Jeff Buchbinder [17:00] How about banking regulation? You mentioned it, certainly your former life, you were deep in it. Do you think that this election changes the path of banking deregulation over the next couple years, or is that more of a 2020 story?

Cameron Ricker [17:18] Yeah, I, you know, I think it's going to continue the pathway that we're going down in a more deregulatory environment, mostly because it's Trump's agenda and he gets to set how the regulators act and what their priorities are. And I think he's, you know, pretty clear that the direction that he wants to go. What I could see is, you know, Senator Warren or Congresswoman Waters, you know, if she becomes chair of the respective committees, holding oversight hearings, you know, introducing legislation, you know, on, on the Basel III, for example, framework. They're going to go and try to slow these things down, but ultimately, they're limited in the levers that they have available to them if the regulators want to move forward, especially because they will have to, if they want to do anything legislatively, they'll have to get Republicans and they have to avoid a veto by the president.

Cameron Ricker [18:20] So that's a very long-winded political way of saying, "No, I think we're headed towards the same pathway that we're on now."

Jeff Buchbinder [18:29] Yeah, and President Trump certainly likes to use his executive power, as we know. And so yeah, if he doesn't have to have somebody slow him down, he won't let them. How about tariffs? You know, there've been refunds, right, on, you know, as the Supreme Court struck down the IEEPA tariffs, of course, Trump, as you know, pivoted to a different legal authority and has got them put back on, essentially, at about the level where he wanted them originally, I think. Do you see anything happening there under the new Congress?

Cameron Ricker [19:06] Yeah, I think that there's going to be a lot of noise in the new Congress and a little bit of finger pointing, you know, the impact that it has on affordability. But ultimately, similarly, the Democrats are constrained in the actual levers that they have to pull on this. You know, the President has broad trade authority and a lot of authority on foreign relations matters in general. And so, I would expect him to continue on the pathway that he's headed now. Yeah, and, but I do expect there to be a lot of finger pointing, a lot of oversight hearings, a lot of grievances being aired, but ultimately, I think this is one area that the president truly can continue on his pathway forward should he choose.

Jeff Buchbinder [19:55] Yeah, I agree with you, although you certainly follow that, the legal side much more closely than I do. So I guess last thing, so the, one of the reasons why oil has been down and rates with it, is because of, I guess hopes from the market that this election means a faster end to the war. Do you see anything happening there? I mean, I guess we don't know anything now. Nothing's happening. But do you agree with the market that maybe the election was sort of a referendum on Trump's foreign policy and that this could potentially push him and the White House to maybe move to a quicker off-ramp?

Cameron Ricker [20:41] So I will couch this by saying I agree with the market that it is a reprimand of Trump's foreign policy, but I don't agree that there will be significant changes. Frankly, I think if there was a graceful off-ramp prior to the elections, I think they probably would have taken that. Now we'll see though, with the impeachment proceedings for Pete Hegseth, that are, you know, likely going to start up tomorrow, you know, what the outcomes of that is, and if that does impact the war in Iran. But ultimately, it's to be determined, but I, you know, I think Congress is going to be limited in what they can do. I think they can shine a light on what's happening, but they can't necessarily stop what is happening. We're, you know, President Trump has taken us down this path, and so I think he needs to be on board for whatever off-ramp comes whenever that does actually come.

Jeff Buchbinder [21:41] Yeah, all right, very good. Last question, wealth tax. I know this has been defeated in California. What are your thoughts there, the likelihood that this happens, and I guess maybe in 2028?

Cameron Ricker [21:57] Yeah, it's a great question. It's a really kind of high profile question that pulls at the heart of, you know, what some Democratic candidates talk about when they talk about, you know, taxing the rich and wealth tax. But that being said, that is not a unified Democratic standpoint. I think that there are many members within the Democratic Party that would not agree with kind of that notion. And so with that, even though there are some high profile members of the party that are pushing forward towards this, and especially the more progressive wing, it's, you know, contentious within the party, and there isn't the reciprocal support for the Republicans in that to offset. So I think that it is highly unlikely that anything, you know, dealing with a wealth tax comes up in the next Congress, or if it does, I think bills will be introduced, but I think it is unlikely that anything will be passed.

Cameron Ricker [22:57] I do think that there could be some messaging around this, some messaging bills, but ultimately, I don't expect or anticipate anything more substantial to come from this.

Jeff Buchbinder [23:09] Well, that's good news. Hey, we'll end on a high note. I don't think the market wants to see a wealth tax, and if you get a democratic sweep in 2028, you're probably going to start to see the market worried about higher taxes, not just on wealthy individuals, but corporations as well. I'm going to go out on a limb, Cam, and say we're still going to have a problem with the debt and the deficit in 2028. [laughs]

Cameron Ricker [23:37] Yes.

Jeff Buchbinder [23:37] That is not a stretch.

Cameron Ricker [23:37] I think that, I think that's the case, yes.

Jeff Buchbinder [23:40] And so higher taxes will be an issue in the next election, but, I'm with you. It's going to be probably pretty quiet on that front here, at least until the 2028 campaign really ramps up. So, really, really great stuff, Cam. Thanks so much for joining Market Signals. Really appreciate your insights as a DC insider, and thanks for what you do for our advisors, lobbying for all of us in DC. Thanks to all of you for listening. Greatly appreciate your joining us for another episode of Market Signals. We'll see you next time. Take care.