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Get Ready For Another Divided Government

Republican candidate Troy Balderson with crowd
Ohio congressional candidate Troy Balderson, August 2018. Photo by Flickr user Becker1999.

If you liked the way America was run between 2011 and 2014, with the opposition in control of the House while the president – backed by a narrow but self-empowered Senate majority – governed mainly by executive order and appointment, I have good news.

We are probably going to get the same kind of governance next year. Of course, with the parties’ positions reversed, the results will be very different, but that’s politics.

With this week’s off-season elections behind us and the calendar almost clear until November, we now know pretty much all we are going to know about the outlook for the upcoming midterms. If you are a Democrat, the news is good, though probably not good enough to make you truly happy.

More likely than not, Democrats will take a majority of the House of Representatives in the upcoming 116th Congress. Also more likely than not, San Francisco’s Rep. Nancy Pelosi will celebrate her 79th birthday next March in the Speaker of the House’s office, a prospect that alarms some Democrats and motivates many Republicans, although not enough to change the outcome.

Yet in the Senate, where Democrats are defending 10 seats in states that President Donald Trump won in 2016 and where only a couple of Republican-held seats are in play, the prospect of a similar shift in control is small. This is true even through the GOP currently holds a bare 51-49 working majority – actually just 50 votes in reality, due to Sen. John McCain’s ill health.

I think a fair guess is that the Republicans will net between one and three Senate seats in November. They stand to gain another functioning seat when illness eventually forces McCain from office, allowing Arizona’s Republican Gov. Doug Ducey to appoint a replacement who would serve through 2020.

And then there is Sen. Doug Jones of Alabama, a Democrat who improbably won last year’s special election to succeed now-Attorney General Jeff Sessions when the GOP nominated an impossibly toxic candidate. Jones faces another election in 2020, and probably the only way he can hold the seat is if he changes his party affiliation. I would not be surprised to see Jones do exactly that sometime in 2019 if Republicans retain the majority, or in 2020 even if they don’t. People who make it to the Senate tend to want to remain there. Jones could give Republicans another vote; if he does not, his opponent probably will in the 117th Congress.

Trump’s election, and many of the things he has said and done since taking office, have energized Democrats and demoralized a small but strategically important slice of well-educated Republicans. This provides a fertile environment for Democrats this year. Analyst Nate Silver and his colleagues at FiveThirtyEight calculate that in special elections since Trump took office, the net swing in favor of Democrats has been around 13 percentage points. This makes previously safe Republican territory vulnerable and puts Democrats in a commanding position to flip GOP-held seats in more competitive terrain. Still, apart from Jones’ victory in Alabama, Democrats have thus far only managed to gain a single House seat, in a former GOP district in Pennsylvania.

Another seat is in doubt following this week’s special election in Ohio’s 12th congressional district, around Columbus. This longtime GOP stronghold remains undecided pending a count of provisional and absentee ballots next week, possibly followed by a recount. Right now, it appears Republican Troy Balderson should squeak out a victory over Democrat Danny O’Connor, largely thanks to a Green Party candidate who siphoned off a small slice of critical votes. Regardless of the outcome, Balderson and O’Connor will face each other again in November, and either man’s brief incumbency probably won’t make much difference to that race. In Ohio’s 12th District, and nationwide, Republicans will have to fight hard this year just to hold House terrain that should almost be their birthright.

The GOP faces other headwinds, notably a decision by Pennsylvania’s Democrat-dominated state Supreme Court to redraw congressional district boundaries that previously favored Republicans. Between Pennsylvania and California, where House Republicans are almost an endangered species, Democrats already have a big head start toward gaining the 23 seats they need to take control of the lower chamber.

But Senate elections are run statewide, rather than in carefully crafted districts, and the states in play this year are generally Republican terrain. Most frequently cited vulnerable Democrats include Joe Manchin of West Virginia, Joe Donnelly of Indiana and Claire McCaskill of Missouri. I believe it is likely at least two of them will fall, which would add to the GOP cushion. The Republicans could then lose a seat in Nevada, which seems possible, and Arizona, which is less realistic but also possible, and still keep a Senate majority. This presupposes that Heidi Heitkamp of North Dakota and Jon Tester of Montana hang on as Democrats in generally Republican states. I think they will, but neither is a lock.

Florida is not often mentioned in these calculations, but it should be. Term-limited GOP Gov. Rick Scott will face incumbent Democrat Bill Nelson. (My home state’s Aug. 28 primary is a mere formality as far as this race is concerned.) Though often rated a tossup, I don’t like Nelson’s chances at all.

Nelson is almost a nonpresence in Florida, while Scott has been ubiquitous for the past eight years relentlessly promoting what he called his pro-jobs agenda. The result: A state whose economy was flatlining in 2010 following the mortgage bust is now in the midst of an amazing construction boom. Taxes remain low, employment and income are generally high, and Scott has an enormous personal fortune that he is not shy about deploying in service of his political career. Much of the state’s press detests the governor, and both of his previous statewide races were close, but he has emerged on top both times. I expect he will do so again.

Nelson may be pinning his hopes on the large Puerto Rican diaspora that settled in Florida after recent hurricanes battered the island. Puerto Ricans are citizens and are eligible to vote; back home, they typically voted with Democrats. But they are also eligible to work. Practically every displaced Puerto Rican who wants a job has been able to find one in Scott’s Florida, and a lot of them are well-paid construction jobs. Puerto Ricans may not vote for Scott in droves, but I would not bet on them voting for Nelson merely to protest Trump.

If events play out as I expect, we may see a lame-duck Congress take another pass at tax reform, or even at repealing the Affordable Care Act. Next year a Democrat-controlled House will pass many bills that will be dead on arrival in the Senate, but which will stake out a campaign platform for 2020. The Senate, meanwhile, will occupy itself confirming Trump nominees to the bureaucracy and to the federal bench.

What if I’m wrong? I think it is more likely that Republicans hold the House than that the Senate falls to the Democrats. Continuing GOP control of Congress would look much like the current term, but with less influence for sometimes-renegade Senate Republicans including Maine’s Susan Collins, Alaska’s Lisa Murkowski and Kentucky’s Rand Paul. A Democrat-controlled Senate would put Trump’s remake of the judiciary on ice, while the party’s control of both houses could allow Democrats to negate more lenient regulatory actions by the Trump administration.

Much is at stake in this year’s federal elections, but that is true of every federal election. The way things are shaping up reminds me of what I like best about the American system: It tends to force us to meet in the middle, no matter how polarized we get. A divided government gives everyone a seat at the table. It may not be the outcome we individually prefer, but there are many worse things.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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