Election Recap and Impact on New Congress Presentation

Election Recap and Impact on New Congress Presentation for the National Association of State Treasurers November 15, 2016 Established. Informed. Engaged.

Overview • • Republicans had a second consecutive strong election at the federal and state levels National Polls performed better than State Polls – – – • • • Real. Clear. Politics polling average: Clinton +3. 2 (Actual: Clinton +1) Wisconsin: Clinton +6. 5 (Actual: Trump +1) Michigan: Clinton +3. 4 (Actual: Trump +1) Iowa: Trump +3. 0 (Actual: Trump +9) Ohio: Trump +3. 5 (Actual: Trump +8) Pennsylvania: Clinton +1. 9 (Actual: Trump +1) Pundits and Election Forecasters missed badly (GOP primary & General Election) Assumptions about Presidential outcome drove predictions that Democrats would capture Senate Trump and GOP Senate candidate won key races in OH, PA, NC, WI, FL, IN, MO, AZ Trump and GOP Senate candidate lost in key races of NH, NV Little evidence of ticket-splitting Established. Informed. Engaged.

Observations • • Voters Under Age 25: Obama 2008: 66%; Clinton 2016: 56% Trump won many voters that held unfavorable view of both candidates Trump carried approximately 1/3 rd of the 700 Counties that were won twice by Obama Women: Clinton 53, Trump 42 (C+11) – 2012 Obama 56, Romney 44 (O+12) Trump won “most likely to bring change” Trump won “better for the economy” Clinton won “better temperament” Clinton won “better qualified” 2016 was a change election; Trump was ultimately better positioned as the change candidate Established. Informed. Engaged.

The Numbers • Electoral Vote (GOP Pickup) – Trump 306 – Clinton 232 • Senate (GOP Hold) – 52 Republicans (-2) – 48 Democrats (+2)* • House (GOP Hold) – 241 Republicans (-6) – 194 Democrats (+6)** *Assumes GOP holds Louisiana Senate seat on December 10 (Treasurer John Kennedy vs. Foster Campbell) **Two races outstanding in California, and two runoffs in Louisiana held December 10 Established. Informed. Engaged.

Policy Impact – 30, 000 Foot View One party control of Administration, Senate, House (first time since 2008 elections) Last time one party controlled all three chambers: – Stimulus bill (ARRA) – Affordable Care Act (ACA) – Wide ranging and impactful regulatory changes This time… – Infrastructure bill? – Tax reform? – ACA Replacement? – Border security? – Shift in regulatory environment? Important distinction: Republicans lack a filibuster proof majority in the Senate; need Democratic votes except for budget reconciliation Established. Informed. Engaged.

Impact to NAST • Great opportunity for NAST to continue leadership as a bipartisan organization • Treasurers and 529 Administrators have reputation as knowledgeable and trusted policy experts • 2017 will bring to the forefront important legislation that could impact municipal bonds/infrastructure policy, college savings policy, financial literacy and education, and a big shift on financial and domestic policy regulations • Nearly all of the legislative changes will require bipartisan work and buy in from Congressional Leadership on all sides • The key Congressional players are for the most part unchanged, but the major difference is that a new Presidency creates immediate opportunities in year one to pass major legislation Established. Informed. Engaged.

Key Issues and Committee Changes Issue Tax-Exempt Muni Bonds IRC Section 529 ABLE Programs HQLA Securities MSRB, Financial Literacy CFPB Committee/Agency Changes Senate Finance Committee – None House Ways & Means Committee – None New Treasury Secretary (TBD) New Economic Advisors (TBD) Senate Banking Committee – Mike Crapo (R-ID) becomes Chairman House Financial Services Committee – None* New SEC Chair (Mary Jo White stepping down) New CFPB Leadership; Agency likely to be reconfigured Established. Informed. Engaged.

Contact Information Williams & Jensen Matthew Hoekstra mbhoekstra@wms-jen. com National Association of State Treasurers nast@statetreasurers. org Established. Informed. Engaged.