US Post-Election Business Outlook

Abu Dhabi

Beijing

Berlin

Brussels

Dallas

Dubai

Frankfurt

Hong Kong

Johannesburg

London

Milan

Munich

New York

Paris

Rome

San Francisco

Sao Paulo

Shanghai

Singapore

Stockholm

Vienna

Washington, D.C.

Political and Financial Elite Survey Results

November 2014

Abu Dhabi

Beijing

Berlin

Brussels

Dallas

Dubai

Frankfurt

Hong Kong

Johannesburg

London

Milan

Munich

New York

Paris

Rome

San Francisco

Sao Paulo

Shanghai

Singapore

Stockholm

Vienna

Washington, D.C.

© BRUNSWICK | 2014 | 1

Electoral Wave Republicans take control of the Senate


Another Midterm Wave Republicans did better than expected, making major gains in the Senate and House

House Election Results Senate Election Results

Source: The New York Times

Net Pickup by Party

SENATE +7 -7

HOUSE +12 -12


The party of every two-term President since Reconstruction has lost seats in both chambers of

Congress during their second term…

…The only exception was Bill Clinton in 1998, after the public backlash against impeachment.

Six-Year Itch A pattern continues

Grant

House

Senate

Cleveland Wilson Roosevelt Truman Eisenhower Nixon Reagan Bush

-93

-1

-107

-4

-22

-5

-72

-7

-28

-5

-48

-13

-48

-4

-5

-8

-30

-6

House

Senate

+5

0

Obama

-13

-7


The Most Important, But Underreported, Outcome The Republican wave led to big gains at the Gubernatorial and state legislature levels

Gubernatorial Election Results State Legislature Election Results

Republicans picked up 4 Governorships and 10 state legislature chambers.

Republicans now control 68 out of 98 state legislature chambers, more than any other point in history.

Republicans have full control (Governor’s Mansion and State Legislature) in 23 states.

Democrats have full control in 7 states.


1. How are Elites reacting to the midterm election results?

2. What are their expectations for the next two years?

3. What predictions do they have for 2016?

Survey Objectives With this backdrop, we launched a survey to answer three questions:

D.C., Maryland, and Virginia-based

readers of elite policy publications

(including Politico, PoliticoPro, Roll

Call, National Journal, and The Hill)

National readers of elite financial media

(including Financial Times, Wall Street

Journal, The Economist, Investor

Business Daily, and Bloomberg

BusinessWeek)

Republican

Policy Elites Democratic

Policy Elites

Financial

Elites

Survey Audiences


Exceeding Expectations:

All audiences believe that the

Republicans did better than

expected in the midterm

elections.



Election Reaction Republicans outperformed Elites’ expectations this cycle

Financial Elites

Republican Policy Elites

Democratic Policy Elites

Republicans did better than I

expected

The result was what I expected

Democrats did better than I

expected

In your own words, what do you believe

led to this year’s election outcomes?

Which one of the following best describes

your reaction to this year’s election results?

44%

63%

46%

30%

24%

28%

27%

13%

26%


What’s Behind the Results? Republicans point to disapproval with Obama, while Democrats cite low turnout

Financial Elites



54%

Voters who disapprove of President

Obama’s job performance.

SOURCE: ABC exit polls, November 4, 2014

36.4%

2014 voter turnout, the

lowest level in 72 years.

SOURCE: PBS News, November 10, 2014


Setting the Agenda President Obama and Congressional Republicans are making an early push to set the policy agenda

“And whether it's immigration or climate change, or making

sure our kids are going to the best possible schools, to making

sure that our communities are creating jobs; whether it's

stopping the spread of terror and disease, to opening up doors of

opportunity to everybody who’s willing to work hard and take

responsibility -- the United States has big things to do.”

© BRUNSWICK | 2014 | 10

Policy Priorities: When thinking about

what is most likely to be achieved over the

next two years, raising the debt ceiling,

limiting the deficit, and reforming

immigration policies top the list.

© BRUNSWICK | 2014 | 10

© BRUNSWICK | 2014 | 11

Policy Priorities Elite see raising the debt limit, limiting the deficit, and reforming immigration as likely to be achieved before 2016

Limiting the federal budget deficit

25%

28%

23%

23%

20%

20%

18%

16%

14%

17%

16%

13%

18%

13%

15%

14%

10%

12%

Raising the debt limit

Comprehensive immigration reform

Allowing US crude oil exports

Reforming Social Security

Addressing the student debt issue

Comprehensive corporate tax reform

Blocking companies from relocating their headquarters overseas for tax purposes

Free trade agreements with Europe

Comprehensive individual income tax reform

Legalizing marijuana

Large-scale infrastructure investments

Free trade agreements with Asia

Ending national Common Core education standards

An end to quantitative easing

Consumer privacy protection

Creating a national exchange for greenhouse gas emitters

Improving access to H1-B visas for highly-skilled working professionals

39%

41%

24%

25%

20%

17%

24%

19%

16%

17%

21%

22%

18%

19%

9%

14%

9%

8%

35%

23%

25%

23%

24%

21%

16%

21%

25%

21%

15%

15%

13%

13%

15%

6%

15%

9%

Comprehensive immigration

reform is seen as being twice

as likely as a special deal for

highly-skilled workers

seeking H1-B visas.

Financial Elites



© BRUNSWICK | 2014 | 12

K Street

lobbying

More of the Same Majorities expect K Street lobbying to rise over the next two years

Over the next two years, do you believe the following will increase, decrease, or stay about the same?

59%

59%

76%

35%

36%

19%

6%

6%

4%

Decrease Stay about the same Increase

Financial Elites



© BRUNSWICK | 2014 | 13

Number of

executive orders

More of the Same With governmental powers divided, an uptick in executive orders is expected


60%

61%

64%

32%

18%

27%

9%

21%

9%


Financial Elites



© BRUNSWICK | 2014 | 14

Overall government

spending

More of the Same Overall government spending is predicted to grow


52%

48%

62%

31%

28%

24%

17%

24%

14%


Financial Elites



© BRUNSWICK | 2014 | 15

Defense

spending

Change of Course Despite reductions to the Pentagon’s 2015 budget, Elites anticipate increased defense spending


65%

56%

70%

26%

32%

19%

9%

12%

11%


Financial Elites



© BRUNSWICK | 2014 | 16

Fight Club: Although Elites

agree on upcoming policy

priorities, they expect little

cooperation between President

Obama and a Republican

Congress and foresee an

increase in executive orders

from the White House.

© BRUNSWICK | 2014 | 16

© BRUNSWICK | 2014 | 17

Partisan Gridlock Elites forecast disagreement between the President and Congress and expect another government shutdown

Over the next two years, how likely or unlikely is it that there

will be a government shut-down due to a policy impasse?

Over the next two years, which ONE of the

following do you believe is likely to happen?

20% 17% 19%

39%

31%

41%

35%

36%

33%

6% 17%

7%

Very likely

Somewhat likely

Not too likely

Not at all likely

44% 38%

46%

37% 50% 36%

19% 12%

18%

The President and Congress will

generally work together to

pass legislation that helps to

rebuild trust in both parties

The President and Congress

will generally spend most of

their time fighting along

partisan lines to build up an

advantage for the 2016

presidential elections

The President and Congress will

generally fight over policy, but

find a few opportunities to

pass popular legislation

Financial Elites



© BRUNSWICK | 2014 | 18

Business & Economic Impact:

Although Elites anticipate divided

government will have a positive

effect on the economy, all audiences

expect slow economic growth.

© BRUNSWICK | 2014 | 18

© BRUNSWICK | 2014 | 19

44%

25%

14%

13%

0%

10%

20%

30%

40%

50%

60%

Better

Same

Worse

Top concerns among voters

The economy

Healthcare

Immigration policy

Foreign policy

Life for the next generation

Do you think the future of the next generation of

Americans will be better, worse, or about the same as life today?

Worse

Same

Better 48% Worse

SOURCES: NBC News, ABC News exit polls, November 4, 2014.

This is the most to say “worse off ” since 1996.

22%

27%

Economy as Priority The economy tops voter concerns in exit polls; Half believe that future generations will be worse off

© BRUNSWICK | 2014 | 20

Boom or Bust? Financial Elites & Republicans expect economic growth from divided government; Democrats are more skeptical

Positive effect Negative effect No effect

62% Positive

18%

33% 49% Positive

14%

44%

42% Positive

11%

26%

Do you believe that divided government – a Democratic-controlled White House and a

Republican-controlled Congress – will have a positive or negative effect on the economy?

Financial Elites



© BRUNSWICK | 2014 | 21

Little Economic Growth Elites predict economic growth to continue, but most predict less growth than IMF forecasts

Over the next two years, do you believe the US economy will…

According to the International Monetary

Fund, growth in the United States is

projected to be 3% in 2015.

8%

17%

26%

19%

20%

4%

2%

1%

4%

Grow 5% per year or more

Grow 3%-4% per year

Grow 2% per year

Grow 1% per year

Stagnate

Contract 1% per year

Contract 3%-4% per year

Contract 2% per year

Contract 5% per year or more

7%

9%

33%

22%

18%

4%

4%

3%

1%

6%

20%

28%

15%

19%

7%

2%

2%

1%

Financial Elites



© BRUNSWICK | 2014 | 22

Mixed Signals Though Elites see neither party becoming more hostile to business, M&A is expected to be more difficult

Thinking specifically about potential mergers and

acquisitions, over the next two years, do you believe the

Department of Justice will become more or less aggressive

in their attempts to block corporate mergers?

Do you believe that [Republicans/ Democrats] are

becoming more or less friendly toward large businesses?

Republicans Democrats

27%

65%

9% 31%

39%

30%

More friendly Less friendly Stay about the same

43% 46% 51%

43% 39% 38%

14% 15% 11%

Less aggressive

Stay about the same

More aggressive

44% 46%

10% 27%

30%

43%

19%

71%

10%

39%

45%

16%

Financial Elites



© BRUNSWICK | 2014 | 23

Business Priorities Elite see allowing crude exports and corporate tax reform as the most likely business issues to be tackled before 2016

23%

18%

14%

17%

13%

18%

10%

Allowing US crude oil exports

Comprehensive corporate tax reform

Blocking companies from relocating their headquarters overseas for tax purposes

Free trade agreements with Europe

Free trade agreements with Asia

An end to quantitative easing

25%

24%

16%

17%

22%

18%

9%

23%

16%

25%

21%

15%

13%

15% Improving access to H1-B visas for highly-skilled working professionals

Financial Elites



© BRUNSWICK | 2014 | 24

727 Days Away: Financial and

Republican Elites anticipate

Republican control of the White

House and Congress in 2016, but

Democratic Elites disagree.

© BRUNSWICK | 2014 | 24

© BRUNSWICK | 2014 | 25

Strengthening the nation’s

economy and creating jobs

Anticipated Voter Priorities Voter priorities for 2016 are expected to include economic growth, immigration, and reducing healthcare costs

Top

priorities

Bottom

priorities

42%

37%

40%

32%

35% Reducing the budget deficit

Defending the country from terrorism

Reducing healthcare costs

Dealing with illegal immigration

55%

38%

45%

40%

35%

58%

54%

44%

54%

46%

20%

15%

19%

17%

14%

Dealing with global trade issues

Reducing the influence of lobbyists

Dealing with the nation’s energy problem

Consumer privacy protection

Reducing crime

20%

20%

21%

20%

13%

15%

18%

13%

12%

10%

Financial Elites



© BRUNSWICK | 2014 | 26

Wild Cards In the next two years, instability in Iraq & Eastern Europe, and a major cyber attack are seen as most likely

37%

24%

25%

23%

20%

26%

26%

21%

22%

14%

12%

11%

Russia will annex more territory in Eastern Europe

China’s economy goes through a steep drop as the real estate bubble there bursts

ISIS captures Baghdad and takes control of Iraq

Oil prices fall below $50 per barrel

The Federal Reserve raises interest rates

The outbreak of a global disease pandemic

North Korea collapses

54%

40%

36%

33%

31%

32%

20%

17%

15%

23%

16%

11%

47%

31%

27%

27%

32%

19%

22%

24%

15%

13%

15%

15%

Oil prices rise above $120 per barrel

There is a major terrorist attack on U.S. soil

There is a successful cyber-attack on a major stock exchange

China becomes involved in a large-scale armed conflict with another Asian country

The Eurozone gives up their single currency and economic union and returns to country-by-

country economic and political systems

Financial Elites



© BRUNSWICK | 2014 | 27

Following the next federal election in 2016, which one of the following scenarios do you believe is the most likely?

43%

73%

29%

27%

17%

34%

21%

9%

25%

10%

1%

12%

A Republican controlled

House and a Republican

controlled Senate

A Republican controlled

House and a Democratic

controlled Senate

A Democratic controlled

House and a Republican

controlled Senate

A Democratic controlled

House and a Democratic

controlled Senate

2016 Congressional Control Financial & Republican Elites predict Republicans will keep control; Three in five Democrats expect to take one chamber back

Financial Elites



© BRUNSWICK | 2014 | 28

Which party's candidate do you think will win the 2016 presidential election?

Republican

Candidate

Democratic

Candidate

59%

82%

30%

41%

18%

70%

Clinton leads recent polling*

43%

42%

42%

52%

51%

53% Hillary

Clinton

Rand Paul

Chris Christie

Jeb Bush

*SOURCE: McClatchy/Marist poll; October 4, 2014

1988: The last election where a President

transferred power to a member of the same party.

Road to the White House

Financial Elites



© BRUNSWICK | 2014 | 29

About the Brunswick Group

Sparky Zivin Director, Brunswick Insight Washington, DC P: +1.202.393.7337 E: [email protected]

For more information about how Brunswick can help, please contact:

The Brunswick Group is an international corporate communications partnership that helps businesses and other organizations address critical communications challenges. Brunswick is an international team of more than 600 people based in 22 offices and 13 countries. This research was conducted by Brunswick Insight, the research and consulting arm of the Brunswick Group. Brunswick Insight provides data-driven strategic communications counsel for Fortune 500 companies, industry organizations, and non-profits. Our team of experts has conducted research in more than 70 markets around the world and has expertise in corporate reputation, issues management, narrative and message development, and thought leadership.

Bob Moran Partner, Brunswick Insight Washington, DC P: +1.202.393.7337 E: [email protected]

© BRUNSWICK | 2014 | 30

Methodology

Audience

National readers of elite financial

media (including Financial Times,

Wall Street Journal, The Economist,

Investor Business Daily, and

Bloomberg BusinessWeek)



(such as Politico, PoliticoPro, Roll


who voted Republican in the last

election



(such as Politico, PoliticoPro, Roll


who voted Democratic in the last

election

Sample Size n=300 n=114 n=186

Margin of Error ±5.7 ±9.2 ±7.2

Mode Online

Field Dates November 5-9, 2014

Republican

Policy Elites

Democratic

Policy Elites Financial

Elites

Date post:	04-Jul-2015
Category:	News & Politics
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US Post-Election Business Outlook

News & Politics