by Greg Valliere, AGF Management Ltd.
DEMOCRATS WE’VE TALKED WITH recently concede that the House is likely to fall to the GOP next year — but Democrats are holding out hope for keeping their razor-thin Senate majority.
THE NUMBERS: The Senate is 50-50, with Kamala Harris breaking ties. Democrats will be defending 14 seats — two or three of which look vulnerable — while Republicans will be defending 20 seats, with one or two looking vulnerable. How’s that for a close call?
THE KEY WILL BE WHETHER THERE’S ANYTHING CLOSE TO A “WAVE” ELECTION: If Joe Biden’s polling numbers stay weak amid concerns over inflation, crime and illegal immigration, there could be a wave, with Republicans easily taking the House and the Senate as well.
BUT IF INFLATION SUBSIDES by summer and the economy continues to surprise to the upside, the Democrats have a chance — and Republican nominees, many of whom are tied to Donald Trump, could begin to view him as an albatross.
THE KEY RACES: Democrats have three vulnerable candidates, headed by Raphael Warnock of Georgia, with Catherine Cortez Masto looking shaky in Nevada and Mark Kelly possibly vulnerable in in Arizona. Sen. Maggie Hassan (D) looked vulnerable a few weeks ago in New Hampshire but her strongest potential opponent — Gov. Chris Sununu — dropped out.
VULNERABLE REPUBLICANS: They have to defend the Pennsylvania seat vacated by Pat Toomey, perhaps the marquee race of 2022, and the GOP could be vulnerable in Wisconsin, whether or not Sen. Ron Johnson runs. Republicans also face tough races in Ohio, North Carolina and Florida, but we think those three states lean GOP.
SO WE CONCLUDE THE DEMOCRATS will lose two or three Senate seats, with Republicans losing only one or two. It’s a close call but our early take is that the Republicans will take the Senate by one seat, 51-49. This assumes no major comeback by Biden.
THE BIG POLITICAL STORY of 2022 may be the Republican takeover of the House; they need a net gain of three or four seats and are likely to win 20 or more. Even if the Democrats narrowly keep the Senate in a 50-50 tie, the climate on Capitol Hill would change dramatically if the GOP takes the House.
BIDEN WOULD STILL HAVE HIS VETO POWER, but with one — or both — of the houses flipping back to the Republicans, he would have no chance to win more spending or tax hikes. Biden would have regulatory power via executive action, but first the Senate has to confirm his nominees, a glacial process that has winnowed out progressives.
THE GREAT WILD CARD IS TRUMP: Yesterday’s stunning release of Jan. 6 emails from Fox TV stars to Chief of Staff Mark Meadows was a reminder that the riot will stay in the headlines. Laura Ingraham, Sean Hannity and others at Fox begged Trump to call off his troops, but he ignored them for hours.
THE BIGGEST ISSUE, AS USUAL, WILL BE THE ECONOMY: GDP and employment look solid, but the huge spike of inflation dominates this debate. If prices level off by summer, the Democrats could have a chance to retain the Senate, but keeping the House looks like a very steep climb.
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This post was first published at the AGF Perspectives Blog.