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Monday, April 1, 2013

No Grand Bargain: The Democrats Seen as Underdogs for Senate 2014

     There are after all a lot of moving parts to this. The consensus right now seems to see them as underdogs right now. In part this is natural as the in power party-the party that has the White House in other words-is considered the underdog and usually loses at least a few Congressional seats in both Houses.

    The off year election of 1998 was a very notable exception where the Dems picked up 5 seats. There were a few reasons for that. One, the economy was in the midst of the largest peacetime expansion in history. Then the GOP had really gone off the deep end with the impeachment fiasco.

    Then there's the fact that the Republicans usually do better in off year elections in terms of turn out. Of course, the Republicans do worse in on year elections so part of why the do so well in off year elections is that over the last 20 years they've been the out of power party more often, though even factoring this their performance has been stronger.

    In reality, all things being equal you wouldn't expect the Dems to do great. However, things are rarely equal, and already they're being hurt by some factors specific to this cycle. One problem is that you have a number of notable Senate Dems retiring. Another is that you have 20 Democratic seats being up for election as opposed to just 13 for Republicans. To be sure, the numbers were even more against the Democrats in 2012 with 21 seats up with only 10 Republicans, yet they managed to have a net gain of 2 seats.

    This time, however, most pundits don't expect the Dems to get as lucky as last time in terms of poor GOP candidates, etc.

      Greg Sargent lists Dem pickup opportunities as "almost nonexistent."

       "Almost nonexistent. The top three would be the open seat in Georgia, Mitch McConnell’s seat in Kentucky, and Susan Collins’s seat in Maine. In Georgia, Democrats depend on both recruiting a good candidate and having a Republican primary failure, with a very weak candidate emerging. That’s possible, making this the most likely pickup. McConnell isn’t the most popular politician, but Kentucky is trending Republican enough that it probably won’t imperil his chances. And Collins will likely escape (again) without a strong challenger."

       http://www.washingtonpost.com/blogs/plum-line/wp/2013/03/29/so-hows-the-senate-map-shaping-up-not-great-for-dems/

       On the other hand he lists a number of races as strong pickup chances for Republicans and other races as "good" and then others still as "slimmer" for them to pickup.

       Overall he thinks the most likely outcome is 2-5 seats for the GOP which will enable Dems to hold on barely, though the chance of the GOP taking the Senate is a possibility.

       The one asset the Democrats do have is the ongoing unpopularity of the Republicans. The GOP's problem here is long term and demographics are a large part of the problem. In the long term things don't look good for them and nothing suggests they've learned very much from their 2012 debacle. Still, in the short term they do have gerrymandered districts on their side and through opportunism and bad short term Dem luck they might be able to do pretty well in the next few election cycles.

      A key question is whether the Dems will be quite unpopular themselves in 2014 as they were in 2010. On this line of thought, Robert Kuttner had a clever piece today that warned the Dems about 2014 by way of an illustration. He wrote the piece as if it were after the Dems had just suffered big losses in 2014. The GOP takes the Senate; they add 10 more seats in the House:

     "Jubilant Republicans took back the Senate in yesterday's mid-term election, and appeared to have increased their majority in the House by about ten seats."

      "Barack Obama is now the lamest of lame ducks," said Sen. Mitch McConnell of Kentucky, now the Majority Leader, who held on to his own Kentucky seat by about three percentage points, the Senate Republicans only close call of the evening.
      "The Senate numbers this year were against the Democrats," said pollster Stan Greenberg, "but what really killed us with the voters was the economy."
      "Going into the election, 11 Democrat-held senate seats were considered at risk, while the only endangered Republican seat was McConnell's. In a quirk of bad luck and timing, almost every red-state Democrat was up, and several veterans had opted to retire. Republicans gained Democrat-held seats in Alaska, Arkansas, Iowa, Louisiana, North Carolina, South Dakota and West Virginia, while Democrats managed to narrowly hold jeopardized seats in Colorado, New Hampshire, Oregon, and Minnesota, leaving Republicans with swing of seven seats and a 52-48 margin."
      "Al Franken, who hung on to his Minnesota seat by just two points, concurred with Greenberg. "Voters were really unhappy that unemployment remained above 7 percent, and that Democrats seemed to be the party of austerity and of Wall Street," he said. "The Democrats' support for cuts in Social Security only made it worse."
      The punch line couldn't be more clear: if Dems don't want to lose the Senate, NO GRAND BARGAIN. 
      "According to the Congressional Budget Office, growth is likely to be under 2 percent this year once again, after clocking in at just 1.7 percent in 2013. Unemployment seems stuck at a permanent plateau of about 7.5 percent."
     "After an aborted recovery in 2013, housing prices remained flat in 2014 because of weak consumer purchasing power."
      "I congratulate the Republicans on their victory, and I will spend my remaining two years continuing my quest for common ground and bipartisan consensus," said President Obama. "There is more that unites than divides us, and I urge Republicans to reciprocate."
       "We are now positioned to crush the socialistic Democrats in 2016," exulted anti-tax crusader Grover Norquist. "We will redouble our efforts to cut back taxing and spending, so that we can at last get a recovery going."
     The implication seems to be that a Grand Bargain will tank the economy and also get the Dems the blame:
      "The road to political and economic ruin for the Democrats began in the late spring of 2013, when President Obama agreed to a budget grand bargain that cut deficits by 2.8 trillion dollars over ten years, deflated a fragile recovery, and left no room for more than token domestic spending on jobs or infrastructure."    
      "The cuts were somewhat "back-loaded" -- bigger later in the decade. But in 2014 they took $200 billion out of the budget. According to CBO, that cut the growth rate by a full percentage point."
       "As part of the deal, more Medicare costs were shifted to patients, and the cost-of-living adjustment for Social Security was cut. Both changes, proposed in Obama's own budget, reduced purchasing power by over $100 billion among the elderly -- who surprised experts by backing Republicans by a margin of 59-41, according to exit polls."
       "The 2013 budget deal, according to Roger Hickey of Campaign for America's Future, "left the Democrats with bragging rights as deficit hawks, but not on the real economy."                                                                                                                                                                                       
      "We should have fought harder for something like the Congressional Progressive Caucus budget, which emphasized jobs and public investment," said Nancy Pelosi, who is stepping down as House Minority Leader. "It was never going to pass, but at least it would have positioned Democrats as the party of jobs, not budget cuts. And the final deal would have been far friendlier to jobs and growth."
       "In the fateful House vote on the deflationary budget, 106 Democrats joined 142 Republicans in voting aye, after intensive lobbying by the White House, by the corporate-backed group, "Fix the Debt," and by the Peter G. Peterson Foundation. House Speaker John Boehner said most of his Republican caucus had voted for the deal only reluctantly, because of the $840 billion in loophole closings. But after the vote Republicans broke out champagne."
      "Congress at long last did the right thing, overcoming partisan gridlock, and voted for a grand bargain in the national interest," said former Citigroup executive chairman Robert Rubin, who has been promoting such a budget bargain for two decades. Rubin was spotted going in and out of the White House and the Capitol during the weeks before the final vote.
      "This election was the Democrats' to lose," wrote blogger Nate Silver, "and they ran true to form. Long term, it's a race between demographic and cultural shifts that favor Democrats, and Republican superiority at tactics. For now, the Republicans maximized their advantage and Democrats didn't."
      Not only is this method of Kuttner clever and rather thought provoking, it of course, gives an insight into what the worst liberal fears we've heard about Obama over the last 4 years. There are many who are absolutely convinced that his goal is to cut Medicare and Social Security and nothing will convince them otherwise. 
      In reality though, would Chained CPI lead to a worst economic outcome than permanent sequestration? I'm asking. 
      At the end of the day, it's early; we're in the 3rd inning and it's pretty premature to declare defeat though it's clear the climb is uphill, it was in 2012 as well. 

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