November 7, 2012

A National Election with Some Wrinkles

Political pundits and political scientists are fond of saying that in the U.S we don’t have national elections – we have 50 state elections.  While the electoral college does set up a dynamic that gives focus to state elections, last night’s results point to some important national trends.  President Obama’s surprisingly strong showing in the electoral college and the Democrat’s apparent gains in the Senate point to some important national trends.  Of greatest interest is the conclusion being drawn from exit polling that the GOP’s strength among white males is more than offset by its weaknesses among unmarried women, young voters and non-white voters in general.  The bad news for the GOP is that white males are declining as a share of voters and the other groups mentioned are growing.

There were a few key elections that truly were not “national” in terms of the reasons for the results.  Three Senate races in particular turned on issues that were not featured in the national campaign.  Those races allowed the Democrats to actually gain seats in the Senate.

The National Election

President Obama’s victory last night may well have given him more of a substantive mandate than his first,somewhat more comfortable, victory.  That’s because this time around, the campaign was about substance – not just an amorphous sense of the need for change. Obama ran on preserving “Obamacare”, Romney ran on “repeal and replace.” Obama ran on raising taxes on high earners, Romney ran against that. Obama ran on tightening the sanction regime on Iran before rattling the saber and on getting out of Afghanistan by the end of 2014 and Romney agreed on both counts.  Unlike the 2008 election, this one featured remarkably little in the way of character attacks and scurrilous questioning of a candidate’s religion, place of birth, patriotism, mental state, etc.  Unlike the 2004 election, this one was not fought out (at least on the presidential level) on hot-button social issues such as faith, abortion, gun control, and same-sex marriage.  The parties are divided on all of those issues (except, apparently, gun control) but they did not creep into the presidential campaign in a meaningful way.

Of course, GOP congressional leaders and conservative pundits were quick last night to say that the president does not have a mandate to do anything.  In particular, Sen. Mitch McConnell (R-KY) threw down the gauntlet with a statement challenging the President to make proposals that can pass the GOP House and a closely divided U.S. Senate.   Speaker John Boehner’s statement last night was somewhat more conciliatory.  Those statements don’t change the fact that the issues were very clear in this election and the people – even if by a slim majority – chose President’s Obama’s course of Governor Romney’s.

So as odd as it may seem after such a bitter  campaign – and one (unlike last time) where the candidates clearly disliked one another – the winner emerges with the ability to claim a substantive mandate on some key domestic and foreign policy issues.

If Obama claims the mandate, here is what we might expect in the near future:

• The Bush era tax cuts will expire and be replaced by a continuation of those rates for most taxpayers and a tax increase for high earners – however those are defined.
• Obama will double down on “Obamacare” and you’ll see a robust push on health insurance exchanges.
• A highly visible push by the President to ratchet up Iran sanctions – possible borrowing some ideas from Romney’s campaign – will be a major feature of the new Administration.

While few business leaders acknowledged it before the election, another impact of the Obama victory is that business leaders now have a much better sense of what the deal is on taxes and regulations than they would have after a Romney victory. Given the fact that the Senate remains in Democratic hands, Romney would have been hard pressed to carry out much of his agenda and – at the very least – it would have been a long struggle. So what business can expect is that there is likely to be a cut in the corporate tax rate with some tightening up of certain tax breaks.  Depending on the industry they are in, executives today have a pretty good idea what to expect in that regard. If they own a small business as a sole proprietor and are high earners, they can expect a tax increase.  They cannot expect significant relaxation of regulations.

So, can Obama credibly claim a mandate after such a close election?  His model should be George W. Bush, who just barely won the electoral college and  lost the popular vote by 500,000 votes and successfully claimed a mandate to cut taxes and reform education.

The State Elections

In the elections for Senate, Democrats and an independent likely to organize with them won seven of the eight most hotly contested races.  The fact that the Democrats gained seats as opposed to just barely hanging on to their majority can laid to the positions of two GOP candidates’ positions on rape and a third’s position on birth control.

In Missouri, Rep. Todd Akin was in a comfortable position until he used the term “legitimate rape” in connection with a disquisition on the ability of a woman’s body to “shut down” the process of impregnation in certain circumstances, thereby making moot the whole issue of allowing abortion in the case of rape. Sen. Claire McCaskill then went on to defeat Akin.

In Indiana, State Treasurer Richard Mourdock was on a comfortable path to taking the seat now held by Sen. Richard Lugar until he said that he opposed abortion even in the case of rape.  Now Rep. Joe Donnelly is poised to take the seat as a Democrat.

In Massachusetts, the causes of Sen. Scott Brown’s defeat are not quite as clear as in the other two states, but the standout vote in his brief career was his vote to support the Blunt Amendment to allow employers to deny coverage for birth control to their employees at their own discretion.

What do all three of these candidates have in common? They all rode into political prominence on the strength of the Tea Party movement. In the cases of Akin and Mourdock, their experience in their primary victories emboldened them to speak their minds on the relationship of rape to abortion rights. In Brown’s case, his vote on the Blunt Amendment most likely was a result of how beholden he felt to his Tea Party base.

So unlike in the case of the presidential election, it can be credibly asserted that control of the Senate DID ,in fact, turn on social issues.

In the House, the Democrats appear to have gained six to eight seats.  We’re still looking at results in specific races, but of particular note is that two of the most visible Tea Party House Members had surprising results.  Rep. Allen West (R-FL) was defeated for re-election and Rep. Michelle Bachmann (R-MN) narrowly escaped defeated.

Conclusion

So what did the American people tell us at the polls yesterday? First of all, they told us nothing by a resounding margin.  But by a narrow margin they seem to have said the following:

• Solve the debt and deficit crisis with a mix of spending cuts and tax increases.
• Back off extreme social policy positions.
• Carry on with health care reform.
• Follow through on the plan to get out of Afghanistan by the end of 2014.

Another conclusion that may emerge from this election is that the Super Pacs may have had much less influence than expected.  In the top five Senate races in which they invested, Virginia, Wisconsin, Ohio, Indiana and Missouri, reportable “independent expenditures” all heavily favored Republican candidates. In all five cases the Democrat won.  On the national scene, of the more than $ 630 million in independent expenditures reported before the election, more than 69% supported the Romney campaign.

More detail will emerge in the days ahead.  Stay tuned for further analysis.