Texas was arguably ground zero when it came to the shocking blue wave that washed over Republican red strongholds nationwide after U.S. polls closed Tuesday night.
Not only did the Democrat James Talarico flip a U.S. Senate seat by defeating Republican Ken Paxton two years after President Donald Trump won Texas by double digits, but the Lone Star State elected Gina Hinojosa to be its first Democratic governor in 30 years, according to the Associated Press.
So Nick Araco Jr., CEO and founder of the CFO Alliance professional networking group, was curious to learn how business leaders were thinking about the changed landscape when he showed up Wednesday morning at Houston’s Royal Oaks Country Club to lead a roundtable discussion on leadership.
The gathering, made up of finance leaders from midmarket public and private companies as well as nonprofits, held their cards close to the vest: Trump’s actual name never came up in the discussions but Araco said he inferred that Trump and the check on his power that the midterms delivered was at times the unspoken elephant in the room.
CFO Dive spoke with Araco and Casey Janick, an operating partner with the CFO Alliance, in an interview Wednesday about how Texas executives are strategizing after the election and the potential impact the changed political balance of power may have on everything from scenario planning to oil prices and tariffs.
The following Q&A was edited for brevity and clarity.
CFO Dive: Nick, you’re fresh from facilitating a CFO Alliance roundtable in Houston on the morning after Democrats swept the elections. How would you describe their reaction to the results?
Nick Araco Jr.: They’re processing what it all means...I would tell you the state-level change may matter more day-to-day than the Washington change. With a new [Texas] governor who has talked about things like pausing new data center projects, energy and data center decisions are all back in play here now.
CFO Dive: Did they say how the election will change their plans?
Nick Araco Jr.: I said, ‘let’s get through the jaw drop moment…next Monday morning, what are you doing?’
And they said, ‘Same thing I do this time of year anyway, it’s November. I'm checking my credit lines, rerunning the 2027 budget under scenarios and I’m trying to speak plain English to everyone because the last thing I want to do is complicate things any further.’
Look, you and I would agree the midmarket is different; they don’t have lobbyists, they tend to feel policy changes a bit later, but they have less cushion when they do take the hit.
I did press them a bit. We’re in budget and planning season, timing is everything; does this mean you’re going to pause hiring or capex yet? And they were like, ‘No, we may slow down and stress test but we’re always doing that. We’re not going to stop anything, this is what we do.’
CFO Dive: I want to dig in a bit on the predictability CFOs want that you flagged earlier in an email. You said CFOs want a stable trade framework and help on costs related to healthcare and energy and no debt-ceiling drama. Are executives potentially relieved that Trump may now be prevented from doing unpredictable things?
Nick Araco Jr.: I don’t know if they were specifically alluding to him, but as one CFO said, they’ll take boring and predictable over bold and unpredictable anytime. I just smiled and laughed as that may have been a reference to who is in that seat in the White House right now. I don’t know. It does at least potentially rein in the unpredictable and bold because now you’ve got another side to this that could potentially keep him in check.
CFO Dive: But they didn’t say his name?
Nick Araco Jr.: They didn’t say his name.
CFO Dive: Trump has been a leader that people have gotten used to, but some CFOs I’ve talked to say they are careful about what they say because they’ve become aware that they could become a target, for example in earnings calls. Is it a change to even talk about politics at all in your CFO Alliance meetings?
Casey Janick: Yes. An election changes the political landscape overnight. I would say in the last two to four weeks [the election] has started to develop a little bit of its own momentum. Meaning, I have not had any political conversations with clients until two to four weeks ago.
CFO Dive: Did you get a sense of the pros and cons they see regarding this new political landscape and its potential impact on businesses?
Nick Araco Jr.: They raised the government shutdown risk. A number of our members do sell to the government or rely on government data or capital. They need to be and are planning for delays now, not in December. Because…there’s not a good track record. Yes, the shutdown risk is real in their minds.
I will say there is some skepticism about whether Washington will work together. They said they’ll believe it when they see it. and the first test may be Dec. 11 [the date the current temporary federal funding bill expires].
CFO Dive: And how about oil prices? You were in deep Texas, was there a sense that Congress could take a stand on the war in Iran and an end to that conflict could bring oil prices down?
Nick Araco Jr.: Nobody came as far as to state it that way, but the inference is there. You’re even seeing a fracture today. You saw the Vice President [JD Vance] come out and say the reasons the Republican results were so clear was the war.
CFO Dive: Do the Texas executives you talked to view lower oil prices favorably? I’m asking because that could hurt the Texas economy if oil prices come down.
Nick Araco Jr.: I don’t think they were speaking as key stakeholders in the oil and gas industry. It was more the idea that lower oil helps every P&L other than oil and gas. That was more the attitude.
CFO Dive: And what about taxes, what was their view on the impact there?
Nick Araco Jr.: Tax changes are likely off the table with the divided government. One of the CFOs said that’s actually a certainty we can plan around.
CFO Dive: Finally, tariffs. If the Trump administration faces challenging voices that push back a little more on tariffs, what does that mean for the companies?
Nick Araco Jr.: I [asked them], is this going to dramatically change the approach to scenario planning you’ve done around tariffs, the modeling you’ve done? The answer was, no. They said, ‘We think it’s going to continue to be, at least for some period of time, fought pretty hard out of the White House.’
Can I offer you something just to paint a picture of the vibe? CFOs don’t get to pick the environment, they just have to be ready for it. That actually is a direct quote from one of my members a few weeks ago. Our job is to ensure the enterprises that we serve are ready for anything that can or will happen.
