Disputed Election is Still a Genuine Threat; Update on Stimulus Bill; Surprising New Polls

Insights and Market Perspectives

Author: Greg Valliere

September 9, 2020

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THERE’S A GROWING CONSENSUS IN WASHINGTON that a disputed election looms, perhaps delaying the outcome of the Nov. 3 vote until a Supreme Court ruling just before Christmas. There are three scenarios, two of which cannot be ruled out:

Low risk: President Trump floated a trial balloon this summer that the election might have to be postponed. Even if Covid-19 cases are still rising, chances of a postponement are close to nil. Congress is in charge of election logistics, and there’s no sentiment on Capitol Hill to delay the vote.

High risk: We think there’s at least a 30% chance that the election winner won’t be clear on the morning of Nov. 4. It might not be clear for several days, since officials in many states — including Pennsylvania — are warning that they will not be able to quickly count a tidal wave of absentee ballots. It took officials in New York over a month to declare victors in this summer’s primaries.

Meltdown risk: What if Trump appears to have lost the election narrowly, thanks to his defeat in, say, Arizona and Pennsylvania. It’s likely that he would declare it was a “rigged” election, blaming voting irregularities and fraudulent mail-in ballots. Would Trump instruct Attorney General William Barr to challenge the election results in court? What do you think?

THE SUPREME COURT decided the outcome of the 2000 presidential election, ruling on Dec. 12 that George W. Bush won in Florida against Al Gore. What if the increasingly moderate Chief Justice John Roberts rules in favor of Biden? Would Trump gracefully exit? He’s loathed at the Pentagon; the generals would gladly remove him.
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SENATE TO VOTE TOMORROW ON STIMULUS: Imminent signs of progress on passing a stimulus bill will be a fake-out. Republicans are prepared to pass a bill that would spend $650 billion (including about $350 billion in unspent aid that has been previously approved). This “skinny” bill would give GOP Senators political cover back home, but it has no chance of enactment.

THAT’S BECAUSE THE DEMOCRATS are unwilling to consider a bill that costs less than their final offer of about $2.2 trillion. The Republican version, which contains no stimulus checks or aid to state and local governments, is a non-starter for Democrats.

WHERE’S JOE BIDEN ON THIS? Many Democrats on Capitol Hill would take anything they can get, including $300 weekly unemployment checks and aid to schools, and they’re grumbling that Nancy Pelosi has dug in her heels. They also wonder why Joe Biden — the party’s theoretical leader — hasn’t weighed in on a possible compromise.

WE DON’T ALWAYS AGREE WITH TRUMP, but there’s some truth to his claim that the Democrats don’t want a bill because it would help the economy and thus help Trump’s re-election prospects. Pelosi and most of the Democrats are in no mood to do him any favors; financially struggling families and businesses are a convenient pre-election prop.
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TIGHTENING POLLS: More evidence yesterday that the presidential race is tightening — a new poll in Pennsylvania shows Biden’s lead there has shrunk to 2 points; his once solid lead in Michigan is now 5 points; in Florida, where Biden had led by 4-5 points, the race is now tied. The only good news for the former Vice President — he’s ahead, surprisingly, by 4 points in Ohio, according to a Rasmussen poll.