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Aug 02 2010

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Rogue Wave?

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  • With a little more than 90 days left to go, the question in Washington is whether the Republicans have enough momentum to win back one or both houses of Congress.
  • While it is conventional wisdom now that Republican gains are inevitable, it is worth pointing out that this was anything but sure after President Obama’s election in 2008.
  • With several reliably Republican states switching to the Democrats, and the near mass desertion of Independents from the GOP, it appeared as if the Republicans were in for an extended period of time in the wilderness.
  • Indeed as the Obama transition prepared to take power, incoming Chief of Staff Rahm Emanuel openly speculated about 2010 as a rerun of 1936, with Democratic gains solidified into a genuine realignment in favor of liberal governance.
  • To come from that point, to a place today where the Democratic Party is on the defensive all over the country – in just eighteen months – is nothing short of astonishing.
  • Before popping champagne however, Republicans would do well to remember that the changed dynamics have much more to do with Democratic governance than Republican alternatives.

Midterms in History:

  • So, is 2010 a “swing” election? History may provide context.
  • Looking at the House, the biggest midterm gains by each Party were won during different political periods in our history.
  • In the 1922 midterms, Democrats netted 76 seats. It was their first net gain in seats since 1912.
  • In the previous four election cycles, beginning with the 1914 midterms of the Wilson administration, Democrats had collectively lost 168 seats.
  • Even with the massive gains of 1922, the Democrats still did not have a majority in the House. In that year, Democrats capitalized on voter unhappiness with the economy and large scale budget cuts implemented by the Harding administration. The following general election in 1924 undid Democratic gains, and set a Republican ruling majority in the House until 1930.
  • For the Republicans, the big moment came in 1938.  In the sixth year of Franklin Roosevelt’s “New Deal,” Republicans won 81 seats.  This was not nearly enough to make up for the 182 seats that the GOP had lost since 1930, but it strategically placed the Republicans within reach of their own, short-lived majority in 1946, when they won 54 net seats.
  • Since WWII, the largest swings in House control have been near the 50 seat mark.
  • Democrats won 49 seats in 1958, during Eisenhower’s second term, and 49 seats in 1974, after the resignation of Richard Nixon and the revelations of Watergate.
  • Similarly, beside the 54 seat gain in 1946, the GOP won 47 seats in 1966, after the first full two years of Lyndon Johnson’s Great Society. And Republicans retook control of the House in 1994 – after 40 years of Democratic governance, by winning 54 seats during the first term of President Clinton.
  • Looking at the results over a century later, it becomes clear that midterms are a referendum of the Party in power and on the President’s policies.
  • From that vantage point, the unpopularity of Wilson’s progressive politics were evident from his first midterms through the election of a Republican administration, where the GOP picked up seats in every election, including Wilson’s reelection in 1916.
  • The same rationale holds for Republicans through the 1930s after the stock market crash of 1929 and resulting Depression. In the eight elections between 1930 and 1944, Republicans lost seats in six.  In a testament to their unpopularity, in 1936, there were only 88 Republicans in the House of Representatives.
  • But 1938 not only saw the very controversial Roosevelt “Court Packing” scheme, but also a dip of the US economy back into recession. It was a clear opportunity for the GOP to pick up seats after six years of the New Deal.
  • Large gains after the 1950s were generally a reaction to the politics of the period, with opposition to the Great Society in 1966 and disgust with Watergate in 1974.
  • Not until 1994 would Republicans finally break the Democratic lock on power.
  • By way of historical context, the entrenched Democratic majority in the House can be viewed as even more durable when compared to other political regimes and events of the century. Consider that with two, two year breaks, the Democrats held power in the House constantly between 1933 and 1995.
  • That period of power was a longer stretch of time than the regimes of Hitler and Mussolini, longer than the rule of Stalin (31 years), and longer than the actual existence – from beginning to end – of South Vietnam. Indeed, the Democrats’ 58 years of control compares on par with the 74 years of the Soviet Union itself, which collapsed four years before the Democratic majority was voted out.

The Mechanics of Midterms – Money:

  • Money is the oxygen that fuels campaigns, frightens off challengers and demonstrates competitiveness.  That said, it does not always decide elections.
  • The table below shows Party fundraising in recent, key midterm elections with the result, in comparison to this year:

Historical Fundraising Comparison1

Year Campaign Organization Fund Raising Advantage: By Party Cash on Hand Seats Won
         
2002 DNC v. RNC GOP + 122MM    
DCCC v. NRCC GOP + 107MM   GOP +8
DSCC v NRSC DEM + 17MM   GOP +2
       
2006 DNC v. RNC GOP +112MM    
DCCC v. NRCC GOP + 39MM   DEM +31
DSCC v NRSC DEM + 33MM   DEM + 6
       
2010* DNC v. RNC GOP + 3MM DEM +790K  
  DCCC v. NRCC DEM +18MM DEM +16MM ???
  DSCC v NRSC DEM + 5MM DEM +  2MM ???

*As of July 30, 2010

  • Republican fundraising dominance in 2002, with President Bush in the White House, helped the GOP to a gain in seats, even though the Democratic Senatorial Campaign Committee outraised its Republican counterpart.
  • Incumbency in the Executive Branch and control of Congress led to a significant, but less overwhelming Republican cash advantage in 2006.  But this did not prevent the Democrats from picking up the seats necessary to take back the House. And significant money raised by the DSCC enabled Democrats to take back the Senate.
  • The picture for 2010, as of July, is more muddled. The RNC has outraised the DNC – odd when the Democrats control the levers of government. But Democrats have a slight advantage in cash-on-hand.
  • For the Committees, Democrats have slight advantages overall, and have obviously been strategic in husbanding those resources for use en masse in the campaign’s closing weeks.
  • As far as the Party apparatus is concerned, historically, current fund raising is mostly a wash, with a slight advantage to the Democrats.
  • But what of the individual campaigns for House and Senate?
Party Total Raised Cash on Hand
House Democrat Cte. $323MM $237MM
House Republicans Cite. $304MM $168MM
ADVANTAGE D+ $19MM D+ $69MM

 

Party Total Raised Cash on Hand
Senate Democrats Cite. $159MM $103MM
Senate Republicans Cite. $216MM $116MM
ADVANTAGE R+ $57MM R+ $13MM
  • As with the formal Committees, Democratic House candidates are carefully managing their resources, and husbanding dollars to maximum impact in the final 90 days.
  • Will it be enough?
  • A $227 million cash advantage between the RNC and RNCC augmented the GOP majority by eight seats in the House in 2002. Yet despite a $151 million cash advantage in the same Committees in 2006, Republicans lost control of Congress. Will a cash advantage smaller than that be enough for Democrats to hold on? Odds are that it helps, but that it is not enough by itself.

The Mechanics of Midterms – The Economy:

    • Elections don’t occur in a vacuum, thus can economic performance be an indicator for the midterms? As a snapshot of voter attitudes on a continuum, quarterly Gross Domestic Product (GDP) statistics are historically informative:

    Selected Quarterly GDP – Mid-Term Election Years

    Year & Party in WH QI QII QIII Differential QII v. QIII House Seats Gained/Lost
    1982 (R) -6.4 2.2 -1.5 -3.7 R-26
    1994 (D) 4.0 5.6 2.6 -2.0 D-54
    2002 (R) 3.5 2.1 2.0 -.1 R +8
    2006 (R) 5.4 1.4 0.1 -1.3 R-31
    2010 (D) 3.7 2.4 ??    

    *Bureau of Economic Analysis, Department of Commerce.

    • The data compare four election cycles to correlate economic growth with midterm election results. Of specific relevance here is the comparison between QII and QIII, the last reports that are received before the election.
    • The data suggests that declining GDP, particularly startling optical drops, correlate for a loss of seats in the House for the Party in the White House.
    • Growth figures for QII were just announced by the Commerce Department, and were lower than even some of the pessimistic estimates. With the Stimulus spending having run its course, with the home purchase tax credit expired, and with one-time restocking of inventory having already occurred, it is not likely that QIII growth will meet or exceed QII.
    • Such a result would support Democratic losses in November.

    The Mechanics of Midterms – The Generic Ballot:

    • Since 1950, the Gallup organization has polled the American people on their voting preferences, simply asking whether they would support the Democrat or Republican candidate for the House.
    • Only twice in nearly 60 years of polling have Republicans led in the generic ballot. Those years were 1994, when the GOP took control of the House, and 2002, when, contrary to historical trends, Republicans maintained control of the House and Senate and gained seats.
    • The following table shows Gallup’s polling for key midterm election years, and the actual results:

    Historical Generic Ballot Poll vs. Actual Results

    Year Predicted % Democrat Predicted % GOP % Difference Seat Change
    +/-
    1994 46 53 R+ 7 +54 GOP
    2002 45 51 R+ 6 + 8 GOP
    2006 51 44 D+7 +31 DEM
             
    2010 41 46 R+5 ???
    • If Republicans maintain their current generic ballot lead, history suggests that the GOP will enjoy sizable gains in the House and Senate.

    The Mechanics of Midterms – Presidential Popularity

    • As goes the President so goes the Congress?  Recent history suggests a parallel.

    Presidential Popularity in Midterm Election Years

    Year President Approval Rating
    1982 Reagan 42%
    1994 Clinton 43%
    2002 GW Bush 72%
    2006 GW Bush 42%
    2010 Obama 47%*

    *July aggregated average

    • It appears that any sustained presidential poll rating below 50% spells trouble for the President’s Party in Congress. There is room for the President Obama’s approval to move between today and November, but right now his rating is a sign of trouble for Democrats.
    • What’s more, given that President Obama is the first President since Lyndon Johnson to get more than 51% of the vote, and he is the first candidate to break new ground for the Democratic Party by capturing reliably Red States such as Indiana, North Carolina and Virginia, a review of his new coalition eighteen months on can provide revealing, supporting data.
    • According the RealClearPolitics.com, there are roughly 107 competitive races in the House. By picking out where the concentrations of those competitive races are, and conducting a geographic analysis based on the President’s winning percentage in 2008 versus his approval rating now, is informative.

    Selected Democratic House Seats by State
    by
    2008 Election Result & Current Polling

    State Democrat Seats @ Risk2 Obama % 2008 State Vote3 2009 Obama Approval by State Current Obama Approval by State4 % Difference Election v. Current
    New York 8 63 (67) 57 -6
    Pennsylvania 8 54 (57) 48 -6
    Ohio 6 51 (55) 49 -2
    California 4 61 (63) 56 -5
    Illinois 4 62 (65) 54 -8
    North Carolina 4 49 (55) 48 -1
    Virginia 4 53 (57) 48 -5
    Colorado 3 54 (52) 49 -5
    Georgia 3 47 (56) 47 0
    Indiana 3 49 (55) 45 -4
    Michigan 3 57 (60) 51 -6
    New Mexico 3 57 (56) 51 -6
    Texas 3 44 (51) 47 +3
    Washington 3 57 (58) 51 -6
    Wisconsin 3 56 (58) 48 -8
    TOTAL 62        

    *Bolded state indicates Democratic Senate Race or open seat.

    • To regain control of the House, Republicans must make a net gain of 40 seats. The chart above sets out 62 competitive Democratic races. With the exception of Georgia and Texas, President Obama won all these states in 2008, meaning that these are seats on his home field.
    • Three facts jump out:
      • That the President is seeing a not-insignificant fall in his polling results in core Blue States when compared to his winning percentage from 2008, but even more so worse when compared to his approval ratings from 2009.
      • 37 of the 62 races listed are in states where the President’s approval rating is less than 50%.
      • Of the nine Senate races listed, five are occupied by Democratic incumbents. Of that total, four are in pick ‘em races, including Barbara Boxer in California, Party Murray in Washington, and Russ Feingold in Wisconsin. In the four open races, Republicans are leading. Only in New York is the incumbent apparently safe. So in a mix of states where Obama’s approval is over 50%, Democrats are not winning.

    The Mechanics of Midterms – Voter Enthusiasm:

    • As Republican results from 2006 make clear, no amount of money will make a majority if voters on your side aren’t enthusiastic. Gallup tracks voter enthusiasm, and the following chart lays out the problem for Democrats:

    • The chart expertly captures the ebb and flow of recent elections, with the slight Republican advantage in 2002 and the steep Democratic advantage in 2006. But the story is the comparison between 1994 and today. Now, Republican and Republican leaning voter are significantly more energized to go to the polls than Democrats. Sixteen years ago, that gave the Republicans a majority, and today’s voters are more energized than 1994.

    Judgments:

    • Based on the data presented, the Democrats are in very deep trouble.
    • Yes, there are 90 days left, and that’s a lifetime in politics. Variables, by definition are unknowable.
    • There could be a national crisis that brings Americans together, like the aftermath of 9-11 helped George W. Bush in 2002. American forces could find Osama Bin Laden, jolting national psychology in any number of ways positive to the economy and national mood.
    • In addition, Tea Party activism in Nevada and Kentucky has left the Republicans with two featherweight contenders for seats that should be slam dunks. This will continue to play out until all the primary races are finished.
    • But if anything, issues on-deck work against, not in favor Obama and the Democrats.
    • At home, pressing the lawsuit against Arizona for its immigration law is widely unpopular. The Administration’s handling of the BP oil spill was ham-handed and inept. Continued calls for off-shore oil drilling moratoriums will only drive up short term unemployment, impacting the economy which is the nation’s #1 concern.
    • The trillion dollar stimulus is spent without all that much Stimulus. Unemployment has gone up, growth has petered out and manufacturing has declined, while the housing sector still limps along with a genuine foreclosure crisis on the horizon, which will cascade through the economy once again.
    • The Democratic hallmark, health care reform, is more unpopular now than when it passed. The financial services bill is law, but despite record earnings and almost $2 trillion in potential investment income, corporate America is too uncertain of the regulatory risk – above all the potential for increased taxes – to invest in projects that will generate wealth, jobs and government revenues.
    • Overseas, the surge in Afghanistan is resulting in the highest American casualties of the war, testing the Administration’s resolve to hold the course, even within its own caucus.
    • North Korea and Iran are impervious to the blandishments of the Obama administration, while middling powers scheme to create mischief in Gaza. All the while, the Europeans have embarked on a very un-European economic course of austerity and fiscal belt tightening, firmly at odds with Obama-style big government.
    • And as scandals with Jack Abramoff and Republican House Members set the stage for national disgust with Congress in 2006, so now the Democratic majority will have to deal with two ethics trials for senior Members of the Democratic Caucus; Charlie Rangel and Maxine Waters.
    • It would be hard to create a more politically devastating scenario for September than a public trial of senior Democratic leaders who are out of touch, privileged and conduct themselves as if it were above the law.
    • Vowing to fight instead of resign may cheer the home folks, But Rangel and Waters pressing a public case against ethics violations is slow-drip water torture for Nancy Pelosi.

    Verdict – House:

    • Based on all available data so far presented, the Republicans will take back the House of Representatives – as of today.  The low end total will be between 40-50 seats, net.
    • But as Michael Barone has pointed out in his column, with 13 Democratic House incumbents current trailing their opponents, incumbents that are otherwise scandal free and effective legislators – from all regions of the country – something deeper may be afoot. A wave election, like 1994, that sweeps away not only marginal seats but unexpected veterans as well. Remember that in 1994, Republicans beat the Speaker of the House, Tom Foley.  This would deliver Republicans between 50-60 seats.
    • And then there is the “Rogue Wave.”
    • All the ingredients are here for it; a poorly performing economy, public policy at odds with the public’s will. Divisive, polarizing politics, total gridlock in Washington.
    • Three elections in 2009-10; the governorships of Virginia and New Jersey, and Ted Kennedy’s Senate seat, were collectively campaigns against the policy agenda of the Democrats, and yet, these warning signs went unheard.
    • Two years into Woodrow Wilson’s progressive agenda nearly a century ago in 1914, voters delivered to Republicans 62 seats. Without the political divisions on the Republican side between Teddy Roosevelt and Taft supporters, the haul can be greater; between 60-75 seats.
    • That’s a rogue wave this year, and it remains possible, if not now the most likely.

    Verdict – Senate:

    • Republicans will make gains, but the hill is just too steep for a Caucus with 41 Members to take control. Right now, seven seats should fall to the GOP. Open seats in Indiana, Delaware, Illinois, Ohio and Pennsylvania, which ironically would put Republicans in both the President and Vice President’s former seats. And incumbents in Arkansas, and either Colorado or Wisconsin. That would give the GOP 48 seats.
    • The selection of Sharon Angle as the Republican nominee in Nevada takes a slam dunk Republican gain and makes it a toss-up at best, against Majority Leader Harry Reid.  Also, Rand Paul’s quixotic candidacy in Kentucky, where every unscripted public statement brings anguish to state and national Republicans, turns an easy Republican hold into a possible Democratic gain.
    • A 1994 style wave would catch other, threatened Democrats, including Patty Murray in Washington, and Reid in Nevada, bringing GOP victories to 9 and making the Senate 50-50 with Vice President Biden keeping the Senate in Democratic hands.
    • If Barbara Boxer goes down in her reelection, then the storm will have breached the retaining walls, meaning that even safe Democrats in NY, Oregon and Connecticut could be washed away, giving the GOP an outright majority.
    • For now, a GOP majority doesn’t seem to be in the cards.
    • I close with a passage from a previous submission.  At the end of the 2008 campaign (October 19, 2008), I wrote the following regarding the implications of a government with Democratic management at both ends of Pennsylvania Avenue:

    “And don’t be fooled. The new agenda won’t be post-partisan.  In fact, it will be the most toxically partisan, liberal agenda since the Great Society or New Deal. If it were to appear post-partisan it would only be by the absence of any legislative method to protest or block its implementation.

    When Obama talks about unity he is not talking about compromise. Indeed, he has no record of compromise; only of towing the Party line. Bringing people together is not intended as an acknowledgement of views at variance with his own, but rather a rhetorical model to bring his supporters together with those that can be convinced. The irony here is that instead of Bush-Cheney partisanship based on small majorities, this is partisanship based on larger majorities”.

    A post-script for the Democrats…and a warning to the Republicans.


    1. OpenSecrets.org

    2. RealCelearPolitics.com – Competitive House Races

    3. David Leip’s Almanac of American Politics

    4. Gallup, Six month tracking, by State

 

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