What the Republicans Need This Week; Congress Focuses on the Wrong Issue

Insights and Market Perspectives

Author: Greg Valliere

August 24, 2020

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DONALD TRUMP IS ONLY SLIGHTLY BEHIND in polling numbers compared to four years ago, when he steadily gained momentum in the fall and eventually won 304 electoral votes. His chances look shakier this year, which is why this week’s GOP convention will be crucial. Some major questions:

Can Trump expand his support beyond his base? From what we can tell, the convention will be filled with Trump loyalists who will appeal to his base. His advisers are exasperated that he can’t break through with college-educated women, who overwhelmingly oppose him. Can the party look reasonably moderate this week? This will be crucial.

Can Trump demonize Joe Biden? Going after Biden’s mental acuity seems mean-spirited and, more importantly, inaccurate — in light of Biden’s well-received speech last week. Trump and his surrogates have to focus almost exclusively on Biden’s huge list of tax hikes and the surge of urban violence.

Can Trump gain Hispanic support? A few columnists this weekend noted what we saw last week — Hispanics were virtually invisible at the Democrats’ convention. Hispanics are persuadable on social issues like abortion, and convention organizers will feature Venezuelan and Cuban speakers every night who were driven out of their countries by socialist dictators.

Can Trump stay on message? This is a huge variable; Trump could say something provocative about his relatives, or election fraud, or Q ANON, and that could cost him a full day’s news spin. If he stays on message, he could be trailing by only 6-7 points by Labor Day.

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CONGRESS FOCUSES ON THE WRONG ISSUE: Nancy Pelosi’s troops overwhelmingly passed a postal funding bill this weekend that now looks stalled, while they overlooked a far greater issue: millions of Americans are hurting, facing evictions and falling below the poverty line, as Washington dithers.

THE TRUMP EXECUTIVE ORDER on stopping evictions was a publicity stunt; evictions are increasing. Likewise, his order to increase unemployment relief has had no impact. Only one state — Arizona — has participated in the plan to grant $300 weekly benefits. Without a new stimulus bill, a softening economy seems likely this fall.

YET PELOSI, who said recently that “now is not the time” to move on stimulus, spent political capital on the post office, which processes more junk mail (at 19 cents per piece) than anything else. People’s prescriptions are not at risk; over 90% are picked up at pharmacies. And over 95% of Social Security checks are directly deposited, not mailed.

THE POST OFFICE HAS LOST $83.1 BILLION since 2006 and obviously needs major reforms — or privatization. As for alleged voter suppression, three’s plenty of money available for the post office to step up its handling of ballots this fall. But as the Washington Post wrote this morning, there’s plenty of flaws in mail-in balloting, including lost mail.

PEOLSI THINKS SHE HAS A COMPELLING ISSUE — 90 percent of the public loves the post office — but the bigger issue by far is that neither she nor Mitch McConnell are prepared to help Americans who are rapidly falling into poverty as small businesses close and evictions increase.