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The fact that we’re going to have a Democratic Senate is going to be incredibly consequential: American Compass Exec. Dir.

Oren Cass, American Compass Executive Director joins the Yahoo Finance Live panel to discuss where the Republican party goes from here after GA Senate runoff results and the recent chaos on Capitol Hill.

Video Transcript

[MUSIC PLAYING]

AKIKO FUJITA: Welcome to the noon Eastern hour of Yahoo Finance Live. I'm Akiko Fujita, along with Zack Guzman. As we look at the markets right now, we're seeing the Dow coming off of its lows in the session but still down about 80 points right now. We're seeing the NASDAQ down 90 and the S&P 500 down 14.

In terms of sectors we're watching, communications services and real estate among those seeing the steepest losses, while energy is seeing a bounce back here. Tech onslaught. Amazon, Facebook, Google, and Apple all facing the heat as they move aggressively to de-platform the president and his followers. Banks joining the calls for calm in Washington, halting all political donations.

But we begin with the efforts over in Washington to remove President Trump from office. House Democrats moving forward with a resolution calling for Vice President Mike Pence to invoke the 25th Amendment. Republican lawmakers, as expected, objecting to that resolution. And that move sets things up for a vote, or full vote on the measure on Tuesday.

Let's bring in Oren Cass, American Compass Executive Director. Oren, it's great to talk to you today. You've talked about President Trump sort of being this earthquake that has really shaken things up but also exposed some of the flaws within Washington right now, as you see the events play out in the final days of his presidency. How are you watching these exposures that we're seeing, and what ultimately is going to be waiting on the other end as we look to a new administration coming into office?

OREN CASS: Well, I think we've always known that President Trump was obviously not a standard figure and certainly a potentially dangerous one, depending on how he chose to behave in the event and when he lost an election. And in the couple of months since the election, I think we've seen that in an escalating way where what started as really, [CLEARS THROAT], excuse me, what started as really a focus on just raising claims of election fraud has now moved into much more aggressively trying to rally supporters, and then what we saw last week, tragically, actual violence.

It looks at this point like that happened and is over and we can hopefully move toward a standard inauguration next week. But I think there are also plenty of reasons to be concerned that Trump has other things he's going to try to do. And so it's really a priority over the next week to just do everything that we can to stabilize the country. As you said, it's like there's an earthquake and you need to stabilize things and make sure we get through to the end of it.

ZACK GUZMAN: That's also kind of proving the point that a lot of moderate Republicans had been stressing about the long-term damage that Trump could impact the Republican Party with, is something we heard from Mitt Romney, as well as John McCain. And when we talk about that, obviously, losing the Senate seems to be the most pressing issue here. How much added benefit do you think now Democrats have to work with IN maybe pressing through some of their more progressive policy agenda items, especially with, it seems like, stimulus being the first one to be tested?

OREN CASS: Well, obviously, the Georgia runoffs are almost forgotten because they happened the day before the mob's ransacking of the Capitol. But in terms of the long-term political consequences, the fact that we're going to have a Democratic Senate in the next couple of years is incredibly consequential for what we're going to see coming out policy wise.

I think people overreact to seeing that the Senate goes Democratic and think that that therefore means whatever we associate as Democratic policies will all just happen. In fact, what it means is it puts an enormous amount of power in the hands of a few very centrist senators, folks like Joe Manchin among the Democrats, Mitt Romney, Susan Collins among the Republicans, who now effectively control what can move forward, at least with a majority, and what can't.

And so I think you're not likely to see all of a sudden a swing toward sort of the full Monty of Democratic proposals, whether that's Green New Deal, Medicare for all, unconstrained stimulus, but you are likely to see more debate on those issues, because Democrats will control the chamber. And ultimately, I think, and I hope that we will see some actual progress on the kinds of policy issues those folks in the middle might be inclined to focus on.

And that could certainly include more spending to address the recovery from the pandemic, hopefully some focus on infrastructure, hopefully some focus on domestic manufacturing and innovation. And those are all areas where we've seen efforts of bipartisan progress in the past and the ones that we're most likely to actually see movement on now.

AKIKO FUJITA: When you think about the moderates holding more power, as you point out, what does that mean for the Republican agenda? If you look back to the conversation prior to the results in Georgia and the Capitol riots, the discussion was about even after President Trump leaves, just how influential he's going to be within the party. Has that fundamentally shifted as a result of the events last week? And what does that ultimately mean for how Republicans prioritize what they push for?

OREN CASS: I think the long-term fallout from last week remains to be seen. I think there's certainly a logical case to be made that President Trump having now lost the White House, lost the House, and then in an especially embarrassing fashion, lost the Senate has obviously not been a political success for the party. On top of that is his total failure of leadership in this pandemic, where we're now at a point where we're losing more Americans every day than we did on 9/11. And yet it isn't seemingly something that our government is giving any attention to.

And now to put on top of that, obviously, the incredible catastrophe that we had in Washington last week. You would think that that would mean less support from Trump or from his followers going forward. But of course, that kind of political logic hasn't always held in the past.

So I think it remains to be seen what his core of support will do in reaction. But I certainly think it's the case that for the Republican Party generally, it is less likely that people will be willing to entertain his role and his leadership going forward. And I think that would be a good thing, if the right of center in this country can move forward with actual policy focus.

AKIKO FUJITA: Yes. Certainly both sides hoping to be able to get things done in this, under this new administration.

Oren Cass, American Compass Executive Director. It's great to have you on today.

OREN CASS: Thanks for having me.