Reviewing the midterm election pre-mortems

October 29, 2010

Let’s assume the Republicans take the House and the Democrats hold the Senate. What will it all mean and what will happen next?  My two cents: I think it will be response by voters who think Obama hasn’t done enough to boost the economy and that the stuff he has done has been ineffective and off-point at best, harmful at worst.  Here’s what are some other folks saying:

1. Passage of unpopular Obamacare represented the high-water mark of progressivism and helped lead to huge midterm losses.

2. Republicans will go to war with White House and not cooperate as they did after 1994 election blowout.

3. With economy weak, there could be agreement on infrastructure spending, payroll tax cut or a unilateral homeowner bailout.

4. Gridlock means U.S. needs to depend more on the Fed to lift economy.

5. Congressional gridlock for next two years other than regulatory action. Obama’s social democratic agenda was rejected by center-right body politic.

6. Public worried about deficit but not ready to accept massive cuts to entitlements.

7. This is a referendum on the Obama agenda. Voters just won’t eat the dog food.

8. GOP will suffer lots of turmoil thanks to Tea Party and fiscal challenges. Gridlock.

Rich Lowry, National Review: Blame Pelosi and Obamacare.

Pelosi needed to flip key moderate Democrats who initially voted “no” on the health bill to “yes.” She might as well have asked them to quit on the spot. The Washington Post finds that in the eight districts where a Democrat switched from “no” to “yes,” a Democrat is favored to win in only one. In the five districts where a Democrat switched the other way, the Democrats look stronger.

She’s been the kind of speaker you’d have expected — indomitably and heedlessly progressive. Moderate and conservative Democrats were her enablers, and she returned the favor by making them cannon fodder. Pickett’s charge reached the Union lines on Cemetery Ridge before falling back. It’s called the high-water mark of the Confederacy. Pelosi’s charge established the high-water mark of progressivism, and she’ll have the bodies to prove it.

Paul Krugman, The New York Times:  GOP will worsen deficit though tax cuts, try to destroy Obama.

After all, that era of partial cooperation in the 1990s came only after Republicans had tried all-out confrontation, actually shutting down the federal government in an effort to force President Bill Clinton to give in to their demands for big cuts in Medicare. … But the lesson current Republicans seem to have drawn from 1995 isn’t that they were too confrontational, it’s that they weren’t confrontational enough.

We might add that should any Republicans in Congress find themselves considering the possibility of acting in a statesmanlike, bipartisan manner, they’ll surely reconsider after looking over their shoulder at the Tea Party-types, who will jump on them if they show any signs of being reasonable.

Right now we very much need active policies on the part of the federal government to get us out of our economic trap. But we won’t get those policies if Republicans control the House. … They’ll refuse to do anything to boost the economy now, claiming to be worried about the deficit, while simultaneously increasing long-run deficits with irresponsible tax cuts.

Noam Scheiber, The New Republic: There are compromises out there if Rs and Ds want them.

Still, a deal on infrastructure spending may not be entirely out of reach, at least if the White House is ruthless enough. One idea along these lines comes care of David Shulman, a senior economist at UCLA’s Anderson Forecast center. Shulman proposes a several-hundred-billion dollar infrastructure package in which the administration agrees to suspend Davis-Bacon, the law requiring contractors for government-funded construction projects to pay locally prevailing wages, as deemed by the Labor Department.

Strike a grand-bargain with Republicans on tax cuts. One obvious basis for discussion here would be a proposal by Larry Lindsey, George W. Bush’s first White House economic adviser. Lindsey has spent the last 20 months urging a two-year halving of the payroll tax for both workers and businesses. This would save each of them about $1,200 on average, and cost about as much overall as the Obama stimulus.

Launch a massive, unilateral homeowner bailout.  The good news is that the administration could do it without congressional approval. Fannie Mae and Freddie Mac basically have an unlimited credit line with the U.S. Treasury, and the government has controlled Fannie and Freddie since it seized them in 2008.

Peter Orszag, The New York Times: U.S. needs more stimulus, delayed deficit reduction and less Washington-business hostility.

To bolster the economy, we need a three-part shift in policy:

· more fiscal expansion (read: more stimulus) now;

· much more deficit reduction, enacted now, to take effect in two to three years; and

· an improvement in the relationship between business and government (the current antagonism, even if not the primary explanation for slow hiring and sluggish investment, does seem to be affecting hiring and other business behavior).

Unfortunately, the necessary shifts in fiscal policy are extremely unlikely to happen, and the strains between business and government are now so deep that they will take time to address. So we’re left relying on monetary policy — and in particular a much-anticipated second round of quantitative easing by the Federal Reserve — which may create more problems than it solves.

Charles Krauthammer, The Washington Post: Obama’s social democratic agenda was rejected by center-right body politic.

Over the next two years, Republicans will not be able to pass anything of importance to them – such as repealing Obamacare – because of the presidential veto. And the Democrats will be too politically weakened to advance, let alone complete, Obama’s broad transformational agenda.

Over the next two years, the real action will be not in Congress but in the bowels of the federal bureaucracy. Democrats will advance their agenda on Obamacare, financial reform and energy by means of administrative regulation, such as carbon-emission limits imposed unilaterally by the Environmental Protection Agency. … The direction of the country will be determined in November 2012 when either Obama gets a mandate to finish building his “New Foundation” or the Republicans elect one of their own to repeal it, or what (by then) remains repealable.

Democratic apologists would prefer to pretend otherwise – that it’s all about the economy and the electorate’s anger over its parlous condition. Nice try. The most recent CBS/New York Times poll shows that only one in 12 Americans blames the economy on Obama, and seven in 10 think the downturn is temporary. And yet, the Democratic Party is falling apart. Democrats are four points behind among women, a constituency Democrats had owned for decades; a staggering 20 points behind among independents (a 28-point swing since 2008); and 20 points behind among college graduates, giving lie to the ubiquitous liberal conceit that the Republican surge is the revenge of lumpen know-nothings.

William Gale, The New Republic:  Voters worried about deficit, but are unsure of what to cut.

Three surveys released in the past week—Pew, Bloomberg, and CBS/New York Times—illuminate what the American people want from the new Congress that convenes next January. Taken together, these polls offer a warning to a new Republican majority: If you push your limited government agenda too far or refuse to cooperate with Democrats and the White House, you’ll pay a price.

So what of the Republicans’ agenda? Will it jibe with what the public wants? The people’s message for the Republicans in these responses: We don’t like how Obama has expanded spending, but we don’t like all your plans for shrinking it either. There are parts of government we like, and you’d better leave them alone. Granted, in the CBS/New York Times poll, 55 percent of respondents said they would rather have a smaller government providing fewer services than a bigger government providing more services, while only 36 percent said the opposite.

The new conservative majority will contain up to 80 members who are in sync with the Tea Parties or who owe their seats to Tea Party support, making many of them among 21 percent who think that cutting spending is the single most important thing they can do in Congress. (Some of them have already said that they won’t even vote to increase the debt limit next year.) GOP leaders are going to have to balance this reality on the Hill with the opposing reality of a public that wants more than just budget-slashing—including compromise with the other side of the aisle.

John Podhoretz, The New York Post:  Voters  are simply rejecting the Obama agenda.

This is an election about Barack Obama. It’s a referendum on him and his party. It isn’t about the Republicans. They’re not being anointed. Obama and the Democrats are being scourged. Analogies abound — to the 1994 election, to the 1964 election, to the 1894 election. The appropriate analogy, though not in scale, is to the 2002 election. Only this year is the mirror image of 2002.

In 2002, voters went to the polls after something of great consequence (9/11) had taken place to which George W. Bush and his party had responded. The question was whether voters believed what had been done had been good or bad for the country and for them. … Candidates ran with Bush and ran strongly against Bush. Quickly, the midterm election in 2002 became “nationalized,” unlike most midterms — meaning that voters weren’t only making judgments on individual races but were using their vote to express their support or opposition for the general response of their government to 9/11.

When the dust cleared, in a surprising reversal of historical trends, the Republicans had improved their position in the House and won seven seats in the Senate, which restored the control they’d lost the previous year.

In 2010, Democrats went to the American people with a potent record of accomplishment undertaken in the wake of an event of great consequence — the financial meltdown of September 2008. The difference is that in 2002, Bush and the Republicans ran on their record. In 2010, Obama and the Democrats are running away from theirs. It’s not that they don’t believe in what they did. It’s that the voters don’t believe in it, and they know it.

Bruce Bartlett, Fiscal Times:  GOP will suffer lots of turmoil thanks to Tea Party and fiscal challenges. Gridlock.

Another difference is that the House Republican leader in 1994, Newt Gingrich, had vastly more power over his caucus than his counterpart today, John Boehner, is likely to have. The reason is that every Republican owed Gingrich very heavily for achieving majority status, something many probably never expected to live to see. Therefore, as Speaker, he could get away with doing things and impose discipline in a way that Boehner cannot hope to duplicate

Among the things Newt was able to do once he took control was effectively neuter the committees. The committee chairmen’s roles were diminished, their staffs were slashed, and virtually all power in terms of policy and legislative initiatives was centralized in the speaker’s office. … There’s no way Boehner can hope to get away with that sort of thing. It’s clear that the Republicans in line to be committee chairmen are not prepared to be potted plants.

Another important difference between 1994 and today is that presidents George H.W. Bush and Bill Clinton and Democrats in Congress had already done the heavy lifting of getting the federal budget onto a sustainable path.  … Under these circumstances, gridlock was just what the doctor ordered.

It should be remembered also that Republicans had the very good fortune to take power right on the brink of the 1990s technology boom, which raised the real gross domestic product 4.7 percent in 1995, 5.7 percent in 1996 and 6.3 percent in 1997 — which sent  tax revenues cascading into the Treasury. But today the situation is quite different.  … I hope I am wrong, but I don’t see any prospect of meaningful action by a Republican Congress that would reduce the deficit, and much reason to think it will get worse if they have their way by enacting massive new tax cuts while protecting Medicare from cuts.

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