A Blue Wave...and a Blue Firewall

Nov 15

Forget the snide comments about a “blue ripple”. The Democrats won a large majority in the House, picking up 30-40 seats, despite a red-hot economy that should have helped many Republican incumbents hang onto their seats. The Democrats benefited from a backlash against Donald Trump, but they also followed a smart, pragmatic strategy. They will hold 229 seats in the House versus 198 for the Republicans. The number of Democratic Governors rose to 23, compared to 25 Republicans, with two races still undecided.

The party did not lurch to the left, as Minority Leader Nancy Pelosi kept most of the troops in line. Most Democratic candidates, both incumbents and challengers, took a moderate, centrist approach. They focused their campaigns on protecting access to health care, the #1 issue for many voters, and creating more jobs.

Thanks to Pelosi and other senior party leaders, most Democratic candidates did not:

Talk about impeaching Trump
Demand “Medicare for All”
Call for abolishing the Immigration and Customs Enforcement (ICE) agency

These may be feel-good topics for some Democrats, but their merits are debatable and they are guaranteed to turn off many independents and moderate Republicans.

Pelosi also admonished Democrats to remain civil. She criticized protesters who harassed Republican politicians such as Ted Cruz and cabinet officers when they were dining in restaurants with their families. When Rep. Maxine Waters (D-CA) praised some demonstrators for such behavior, Pelosi quickly and publicly reprimanded Waters (though not by name). This was not only common decency but also smart politics, a sharp contrast to you-know-who.

Focus on Pocketbook Issues Pays Off

In many cases, the Democratic candidates did not focus on immigration issues or even mention them. That may not have been a profile in courage, but it was astute. Trump’s race-baiting alienated many moderate Republican voters in the suburbs, particularly in the Northeast, but also in other regions. In any case, voters know that Democrats are more sympathetic to immigration reform.

The Democrats were wise to focus on pocketbook issues. Trump talked a good populist game during his campaign, but he has not delivered for most working-class or middle-class voters. Democrats bashed Trump’s tax cuts as a benefit only for very wealthy Americans. This had the distinct advantage of being accurate, and most Republican candidates tried to avoid the topic.

Democrats swept Republican Congress members out of office in the Northeast partly because Trump’s tax law changes hurt Republicans and independent voters, as well as Democrats, in those states. The new law has effectively raised taxes for voters in states such as New Jersey, New York and Connecticut that have high income taxes or property taxes. The law limits deductions for state and local taxes to only $10,000, far below many voters’ actual costs, and it also curtailed deductions for mortgage interest. That has caused house prices to decline—a double whammy for many voters. (The law also affects residents of California and some other West Coast states.)

We should expect the Democratic House to pass legislation repealing those provisions. That would reverse a grossly unfair policy move, and some Republican and independent voters might be very grateful.

Bouncing Back in the Midwest…but not Ohio

Democrats also made a surprisingly strong comeback in several Midwestern states that had voted for Trump in 2016. Hillary Clinton’s losses in Michigan, Ohio, Pennsylvania and Wisconsin cost her the Presidency. This time, Democrats did well in Congressional and local races in Michigan, Minnesota, Pennsylvania, and Wisconsin, while Ohio remained hostile territory.

Female candidates fared well, generally, and a Democratic woman won the governor’s race in Michigan. Gov. Scott Walker, one of the Koch brothers’ favorite politicians, lost his bid for a third term in Wisconsin. Democratic incumbent Governors won in Pennsylvania and Minnesota.

These wins are important, because they may indicate that voters in these states have become more receptive to Democratic themes…and women candidates who are not Hillary Clinton. Senators Kamala Harris and Kirsten Gillibrand have noticed, no doubt, and will spread the word. In addition, friendly governors can be very helpful to presidential candidates.

The Democrats’ success in these states may also reflect Trump’s failure to deliver on pocketbook issues, as well as the enthusiasm and fundraising that Democratic candidates enjoyed. Trump’s talk of an infrastructure program has turned out to be hot air. His misguided trade war and tariffs are causing huge problems for auto makers and other manufacturers, as well as farmers. The U.S. economy is expanding, to be sure, but there’s ample cause for concern than Trump’s policies could hurt our growth prospects.

It would be logical for Democrats to push for an infrastructure program, even though that would increase the deficit in the short-term. Well-designed infrastructure programs generally increase economic activity and tax revenues over time, unlike most tax cuts.

What Comes Next?

Taking a middle of the road approach led the Democrats to score some impressive gains, but they still face many challenges as we head toward 2020. Will they stick with a centrist approach, or will the Warren/Sanders wing of the party push them to the left? Will Pelosi become the majority leader, or will she step aside to let a younger member take over? Or will she fail to win election as majority leader?

You can understand why the Republicans attack Pelosi so much—she is a formidable opponent. She’s also 78, though, and there are growing calls for a younger group of leaders in the House.

The Republicans did increase their majority in the Senate, to 53-47, but the odds were heavily in their favor. There were many more Democratic seats in play in this election than Republic ones, with several in red states. The Democrats lost some key races, including those of moderates such as Claire McCaskill (Missouri) and Phil Bredesen (Tennessee). That was disappointing but hardly a cause for despair, and a Democrat won a Senate seat in Arizona for the first time in decades.

With control of the Senate, the Republicans will control judicial nominations, and they will undoubtedly ram through very conservative appointees. However, the Democrats can seize control of the legislative agenda. In some respects, this adverse situation might be good for the party’s DNA. Liberals have sometimes relied too much on the judiciary to achieve policy changes, rather than passing laws.

Furthermore, since the Democrats will now chair House committees, through their power of oversight they can challenge and publicize this Administration’s excesses.

Building A Blue Firewall

The Democrats can construct a blue firewall to protect democratic norms and limit the damage from Trump’s increasingly authoritarian tendencies. They can conduct hearings and pass resolutions criticizing executive orders of dubious legality. If they are wise, Democrats will not abuse their power, as chairs such as Devin Nunes (Intelligence Committee) and Trey Gowdy (Oversight) have. In any event, they will certainly provide more oversight. Nunes acted as though he were a member of the White House staff.

Trump probably won’t change the way he operates. But his Cabinet officers, who will have to testify before Congress, may become more careful/less brazen in their approach to their duties. They will have to face Adam Schiff as chair of the Intelligence Committee and competent leaders of other committees. Schiff is well-versed in intelligence and generally takes moderate stances, and he is no pushover.

Unfortunately, Maxine Waters may head the House Banking Committee. Waters has not demonstrated a keen grasp of the banking industry, and she tends to grandstand on issues.

Obamacare Strikes Back

Ironically, many Democrats won election or re-election this year based on voters’ support for the Affordable Care Act and their fears that the Republicans would gut the law if they kept control of the House. The Democrats paid a very steep price in 2010, losing control of Congress because President Obama had insisted on health care reform. Americans have clearly decided that they like Obamacare.

The Affordable Care Act now appears safe from repeal, at least for the next two years. However, presumably one Democratic priority will be to pressure the Administration to stop sabotaging the program through administrative maneuvers like making it more difficult to enroll.

Even more importantly, these election results mean that Republicans can’t try to unravel Social Security and Medicare. That’s good news for all Americans.

The Wall Street Democrat

Ryan O’Connell