As the 112th U.S. Congress convenes this month, the shock wave created by the November mid-term elections, which produced the largest turnover of seats in the House of Representatives in decades, continues to roil policymakers, stakeholders in those policies, lobbyists and other intermediaries.
Not only does the new Republican majority in the House of Representatives have a different agenda from the former Democratic majority, but now the U.S. government is divided, with the White House and Senate remaining in Democratic hands. What is the new makeup of the U.S. government likely to mean for the space sector?
Traditionally, Republican majorities have been friendlier to, at least, the space sector’s manufacturing and launch services bases. They usually are more supportive of aerospace and defense spending, and many of the players in those sectors are embedded in aerospace and defense contractors. They also tend to be located in southern states, the Rocky Mountain region and around Orange County, Calif., all of which are Republican strongholds.
The wildcard this year is the mandate — as clear as anything that came out of the election results — from the voters that the federal deficit run up during the past 10 years is out of control and must be reduced. It is a consensus that figures to swamp many economists’ and policymakers’ opinions that additional stimulus is the only way to jump-start the U.S. economy and add jobs to the, so far, jobless recovery. The rise of Tea Party candidates adds to the mix. The common belief of the new representatives and senators claiming Tea Party allegiance, if anything, is that they ran as deficit hawks. Although they will face pressure to accommodate “establishment” Republicans, who like deficit spending as much as Democrats (even if on different things), the newly elected officials were sent to Washington with a mandate to cut government spending and will be loathe to face their constituents in two years with a record of deficit-exploding appropriations votes under their belts. If anything else was made clear by the election results, it was that voters were not exactly enamored with the candidates and party they elected; they were just disgusted with the members of Congress they threw out, and no one is betting on that electoral disposition to soften in the next two years.
All that granted, the new Congress may well try to reinstate part of or the entire Constellation project, cancelled by the Obama administration in its 2011 fiscal year budget and then revived for sharply limited purposes. Republican lawmakers have been vocal critics of the decision to cede NASA’s role in ferrying astronauts to the International Space Station to the emerging commercial human space flight sector and the loss of a critical strategic industrial capacity. The revival of Constellation would be sold on national security grounds.
That same ideology likely will come into play in the new Republican majority’s response to Obama administration attempts to ease the International Traffic in Arms Regulations technology export regime. Reviews by the Committee on Foreign Investment in the United States also likely will stiffen under Congressional pressure in anticipation of the 2012 elections.
The new Congress also will be hostile to net neutrality, the legislative or regulatory implementation of principles to ensure non-discriminatory access to the Internet backed by the Democrat-dominated U.S. Federal Communications Commission (FCC). Net neutrality suffered a blow in April in the U.S. federal court system, and this election may have buried it for the foreseeable future. (Another blow may have come in November, when the U.K. government said it was not in favor of net neutrality laws.)
The FCC now will be overseen by a Republican-chaired House Energy and Commerce Committee. The chair likely will be Rep. Joe Barton (R-Texas), replacing Rep. Henry Waxman (D-Calif). The subcommittee on Communications, Technology and the Internet, chaired by Rep. Rick Boucher (D-Va.), faces wholesale membership change, as 12 members lost their re-election bids. Cliff Stearns (R-Fla.) probably will chair the subcommittee. Incumbent terrestrial broadband providers may have more freedom to operate, tending to make satellite broadband more of a niche market. Other initiatives like the March 2010 National Broadband Plan and efforts to reallocate spectrum from broadcasters to wireless and other users likely will face greater obstacles.
In general, the regulatory pendulum may swing back to a more hands-off attitude.
Owen D. Kurtin is a founder and principal of private investment firm The Vinland Group LLC and a practising attorney in New York City.
He may be reached by e-mail at okurtin@vinlandgroup.com.
