Tag: Health Care

Tuesday’s midterm election will be a referendum on Barack Obama’s two year presidency. That verdict will be a historic voter rebuke of catastrophic proportions for the Democratic Party; a result not seen since the early decades of the 20^thcentury.

The underlying rationale for the rebuke is also clear, if fundamentally misunderstood by the Democrats.

The current economy is essentially flat, while meaningful economic indicators paint an uncertain future.

Key sectors of the economy show continued, systemic weakness. Home foreclosures are expected to top one million this year, even with the current foreclosure documentation crisis brewing, which threatens to undermine the housing market as a whole.

Unemployment has spiked, with three million fresh unemployed since 2009. This despite enormous federal fiscal and policy intervention in the private sector over the last two years to stimulate the economy.

Those interventions and spending increases have vastly expanded the public debt. Since 2009, the Obama administration and congressional Democrats have added $3 trillion to the national debt. By way of comparison, this is more debt that the Bush administration ran up in the previous eight years.1

Moreover, during this time of economic uncertainty, Democratic political priorities have focused on non-economic issues – healthcare being the hallmark – in defiance of prevailing voter sentiment.

And in choosing to focus on healthcare, it is noteworthy that Democrats chose to strong arm and shoe-horn the legislation to passage. Historically, no major piece of social legislation has everbecome law in the US on a straight-line partisan vote with a majority of the public in opposition.

The implications for the Democratic approach to health care legislation test the basic legitimacy of the political process, and reverberate negatively, still.

As a result of these developments, a snapshot of voter sentiment from theWashington Post is timely, “A far grimmer mood now pervades the electorate, one shaped not just by the immediacy of the economic distress that has hit virtually every household, but by fears that it might take years for everyone from the average family to the federal government to climb out of the hole.“2

However, having single-mindedly pursued their policy objectives over the objections of critics and even moderate Democrats, President Obama and his congressional leadership team failed completely in developing a compelling narrative that would address voter anxiety, or to fashion a credible argument linking Democratic policy initiatives to recovery and prosperity for the midterm campaign.

Indeed, looking back over the campaign, the irony is that the most successful Democratic candidates this cycle are those that have run against Democratic leadership and Democratic accomplishments; if they voted against them, all the better for the candidate’s electoral chances.

Taken altogether, it spells disaster for the Democrats on Tuesday.

Previous Prediction:

In an August 2^nd post, I predicted that the Republicans would win back the House, with a low end total of 40-50 seats, net.

The post then noted that, “[However] all the ingredients are here for [a “rogue wave”]: a poorly performing economy, public policy at odds with the public’s will. Divisive, polarizing politics, total gridlock…” that could deliver the Republicans 60-75 seats.

In the Senate, the post predicted a gain of seven to nine seats for the Republicans, with control of the Senate – and the arc of the Republican wave – decided by Barbara Boxer’s race against Carly Fiorina in California.

At the time, the prediction was optimistic bordering on hubris. Today, amazingly, it looks closer to reality.

Using the measures included in the original post, here’s the updated reasons why.

The Economy:

Second quarter GDP growth was revised downward from 2.4% to 1.7%. This figure itself was down from a first quarter GDP of 3.7%, indicating a slowing in the economy.3 The Bureau of Economic Research’s first estimate at third quarter GDP at 2% bears out a middling, under-performing economy.4

Since January, unemployment has fluctuated between 9.5% and 9.9%. Unemployment for September up-ticked slightly to 9.6%, representing 14.8 million Americans.  41% of those unemployed had been without a job for seven months or more.

In addition, 11.7 million Americans are either working part time for lack of a full time job, or are available to work, but cannot find jobs, and are not included in the official unemployment figures. If they were included, the unemployment rate would be closer to 17%.

Perhaps the biggest indictment on the economy is not what has happened, but what has not.

The US private sector, which took immediate and drastic steps to survive the 2008-09 down turn through job and program cuts, has been largely restored to profitability, with robust quarterly earnings. As a result, major US companies are now sitting on more than $2 trillion in assets.

But due to the enormous uncertainty created the blizzard of regulatory activity by the Administration and Congress – including healthcare, financial services reform, greenhouse gas caps, to name a few – those flush companies simply won’t invest.

National Democrats have effectively made the private market toxic for investors. No sustainable recovery will occur until some form of certainty has been restored to the market in the form of tax policy, or regulations regarding energy, the environment, healthcare or financial services.

Money:

In a year when the Democrats hold the White House and big majorities in the House and Senate, the Republicans have roughly neutralized the incumbency fundraising advantage.

Despite Democratic hysteria about rivers of “foreign” outside money overwhelming their candidates across the country, the fact is that Democrats have actually outraised Republicans in direct congressional races.

According to POLITICO, Democrats raised $856 million for congressional races, which includes monies raised by all Democratic congressional committees and outside groups.  By the same measure, Republicans have raised only $677 million, giving Democrats a $179 million advantage.5

However, looking more broadly, Republicans have more self-funding candidates and a more robust gubernatorial campaign committee that has reinforced the GOP message indirectly.

The Republican Governor’s Association has outraised its Democratic counterpart by $32 million, $60 million for the GOP to $27 million for the Democrats.6

Additionally, California gubernatorial candidate Meg Whitman and Florida Republican Rick Scott have spent an eye-popping, combined total of $229 million in their respective races.

The sheer volume of that advertising counts down ballot in two of the nation’s most populous states, with a combined 78 House seats and two Senate seats being contested this year.7

Taken altogether, the GOP has fought the Democrats to an effective fundraising draw this year. The true result will not be known until after the election when all final fund raising reports are filed.

Generic Ballot:

Since 1950, the Gallup organization has polled the American people on their voting preferences, asking whether they would support the Democrat or Republican candidate for the House.

Only twice in 60 years of polling have Republicans ever led in the Gallup Generic ballot; in 1994 when the GOP recaptured the House with 54 new seats, and 2002 when the GOP expanded its control in the House.8

This year, Gallup has broken its generic ballot polling into three groups:

Historical Generic Ballot Poll vs. Actual Results

Model	Republicans	Democrats	Difference
Registered Voters	48%	44%	R+4
High Turn Out Model	52%	43%	R+9
Low Turn Out Model (40% or midterm average)	55%	41%	R+14

Those results are nothing short of breathtaking.

In 1994, Gallup had the GOP at +7 and Republicans won 54 seats in the House. There is simply no historical example to correlate an actual result beyond a GOP advantage of seven points, let alone double digits.

But if this holds, it would indicate a GOP seat gain well in excess of the 39 needed to take back control of the House.

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%

It appears that any sustained presidential poll rating below 50% spells trouble for the President’s Party in Congress.

According to the latest Gallup survey, President Obama is polling at 44%, putting him slightly ahead of Reagan, Clinton and George W. Bush (in ’06). Rasmussen has the President at 46%.

However, a large sample Harris poll completed October 25^th shows President Obama with a 37% approval rating (the lowest of any major poll).

Ominously, Harris showed that only 30% of self described independents – the voters that were pivotal to Obama’s win in 2008 – give him a positive rating today, spelling significant trouble for Democratic candidates.

Voter Enthusiasm:

In each midterm election, voter enthusiasm has been a key indicator in the outcome.

This summer, Gallup gave Republicans a 14 point lead in voter enthusiasm. That has tightened to a 12 point lead today, with the GOP at 48% to 36% for Democrats.

The current GOP advantage is consistent with 1994, when the GOP led in enthusiasm by 11 points. Those 11 points added 54 seats for the Republicans.  A similar advantage today, particularly with independents swinging behind the GOP decisively, bodes ill for Speaker Pelosi and her majority.

Current State of Play:

So, the indicators from August have stayed consistent, painting a picture of a steep climb for Democrats to retain their majority. That trend continues with more detailed polling in the last several weeks.

The Hill newspaper has been assessing key congressional races on a rolling basis. They have polled 17,000 voters in 42 swing toss-up districts over four weeks. The districts were broken down as 40 Democratic and 2 Republican. The results were sobering for anyone in Democratic leadership.

Of those districts, 31 had the Republican in the lead, seven had the Democrat in the lead and 4 were tied.  An additional 15 districts that The Hill was going to poll had Republicans so far ahead that the paper decided against it.9

The Hill predicts 46 GOP picks-ups, with additional gains from a pool of seats in the other 40-50 seats in play.10

Congressional handicapper Charlie Cook rooted out this eye-popping fact: “Over a quarter of the entire 255-member House Democratic caucus have trailed GOP opponents in at least one public or private survey, and nearly half have tested under 50 percent of the vote in at least one poll.”11

As if to define the ultimate danger, Chuck Todd, political analyst for NBC News, said that there were 100 Democratic House seats in play.12

In the Senate, Democrats have a fighting chance of holding the chamber, but are playing defense.

Potential opportunities for Democrats to poach from Republican seats in Louisiana, North Carolina, New Hampshire, Missouri and Ohio have all but faded.

Kentucky seemed like a promising opportunity when Tea Party favorite Rand Paul won the Republican nomination, but despite a difficult public introduction, Paul has maintained a consistent lead of around 7 points in the last two weeks of polling, in an otherwise red state.

As we approach Tuesday, Democratic control of the Senate will depend on limiting losses in their own territory.

Three seats are already considered safely in GOP hands; the two Democratic open seats in Indiana and North Dakota, and Senator Blanche Lincoln’s seat, where she is running more than 20 points behind her Republican opponent, John Boozman.

That brings the GOP to 44 seats.

Control of the Senate will rest with the election results in eight Democratic seats: California, Colorado, Illinois, Nevada, Pennsylvania, Washington, West Virginia and Wisconsin.  President Obama carried all these states, except West Virginia, by double digits in 2008, demonstrating a breathtaking change in electoral fortunes of Republicans in only two years.

According to Real Clear Politics, Democrats are currently leading outside the margin of error only in California and West Virginia. Republicans are outside the margin in Pennsylvania, Wisconsin and, shockingly, in Nevada, home to Majority Leader Harry Reid, and a state President Obama carried by 12 points in 2008.

The rest of the races are effectively too close to call, and therein is the problem for Democrats. The natural Democratic advantage in these deep blue states is simply not enough.

Indeed, Republican Mark Kirk is in a pick ‘em contest in Illinois, a state President Obama carried by 25 points in 2008, in a race to fill the President’s former Senate seat; a thoroughly improbable situation.

Prediction – Context:

Pundits and political observers (this journal included) have sought historical comparisons as a model for 2010. The fact is, however, that this is not a “model” year. If anything, 2010 will break the mold with the past.

In content, approach and process, President Obama and congressional Democrats governed decisively to the left of where they campaigned – and won – in 2008. The result was a bitterly partisan, highly ideological political environment, where game-changing progressive legislation was passed on party line votes, over the objections of a building majority of Americans.

The most significant, and under-appreciated result of the Democratic approach was the birth of the Tea Party; the first authentic, grass-roots, populist movement since the turn of the 20^th century, organized specifically in response to governing overreach.

That Democrats chose to ignore, miscast, belittle and eventually demonize the movement in 2009-10 was the second major strategic Democratic error of the Obama presidency, and a decision that will be to their collective regret.

The volatile mix of governing deception and resultant populist backlash makes this election unique in its focus on fundamental political legitimacy. Specifically it represents the actual limits that a free people will allow elected leaders to act, without popular consent.

In defending his policy choices, President Obama is fond of saying, “We won the election,” and he is right, he did. But the promises of a campaign are as important as the result of an election.

Democrats were not elected to do as they pleased. They are about to find that out, the hard way.

Final Prediction – House:

Republicans will take back control of the House.

There is better than a 50% chance that the GOP will get more than 60 seats.

My personal prediction is GOP +70 or more.

It will be the largest congressional gain for an American political party since 1938, when, after six years of New Deal policies the US economy slipped back into recession, and American voters turned to Republicans for the first time in a decade.

It will also see the largest number of senior Democrats and committee chairs to lose races since 1994, including John Spratt, Ike Skelton and Earl Pomeroy. It may even be enough to take down the venerable Barney Frank.

The losses for Democrats will fall disproportionately on the “Blue Dogs”; moderate Democrats from conservative leaning districts who were caught in the cross fire between the progressive House leadership and its liberal legislation, and the sensibilities of their home district voters.

Ironically, the voter repudiation of progressive Democratic governance will leave in its wake a smaller, but vastly more cohesive and militant progressive Democratic minority, even less willing to work with Republicans.

Final Prediction – Senate:

The GOP will gain seats in Indiana, Arkansas, North Dakota, Wisconsin, Pennsylvania and Colorado. Sharron Angle, Harry Reid’s hand-picked opponent, will win in Nevada, taking down the Majority Leader and giving the GOP 48 seats.

Republicans will win at least two of the three seats up in Illinois, Washington and West Virginia. That would provide an even split in the Senate, with Vice President Joe Biden breaking the tie.

A GOP majority depends on a clean sweep above, and the results from California and Alaska. Of all the races this year, California is the most likely to go to a recount. Tea Party favorite Joe Miller is stumbling badly in Alaska, providing an opportunity for a Democratic upset there, and raising the bar for a GOP Senate.

To add to the sense of uncertainty, at least one other Senate race – be it in Connecticut, New York, Oregon or Delaware – will be far closer than any of the polls revealed, perhaps flipping an additional seat.

It is a historical fact that the House has never changed parties without the Senate doing the same. In this highly charged political year I predict the GOP will win the Senate by adding +10 seats.

The most compelling post-election parlor game will the race to succeed Harry Reid as Majority Leader, a race that pits NY’s Chuck Shumer against Illinois’ Dick Durbin. It too will be one for the books.

Conclusion:

In sum, November 2^nd will likely be one for the record books for the Republicans; a political win of epic proportions.

But as the champagne flows and the cheers ring out, Republicans must remember that they did not earn this win; they were simply the only alternative.

The Democrats fumbled the ball – colossally – and with the vigor of the Tea Party, an otherwise listless, compromised, directionless and tentative GOP was given a fresh lease on life.

Yet, even as it contemplates governing majorities, the GOP is still liked less than its Democratic counterpart.

If Republicans, in the flush of victory, distort their mandate and overreach the result will be a genuine 3^rd party in 2012.

The political system as we know it is being given its last chance.