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What Follows The Blue Ripple

black and white image of voting booths used in the 2018 midterm elections
photo by Mark Gunn

If you want to oversimplify and ask who won Tuesday’s midterm elections overall, and who lost, the stock markets gave you their answer on Wednesday.

The major U.S. averages all posted solid gains of more than 2 percent as it became clear that while Democrats will take control of the House of Representatives next year, Republicans – specifically, Republicans who owe a political debt to President Donald Trump – will be in firm control of the Senate. European markets were also higher. But in Asia, both the Shanghai and Tokyo markets moved lower, reflecting Trump’s tougher stance on trans-Pacific trade. The market reaction brought to mind the jubilation in the financial world that followed Trump’s upset victory two years ago.

As I said, however, it would be oversimplifying to say that while Trump won, the Democrats lost. It’s not that the vaunted “blue wave” failed to appear altogether; it simply turned out to be a political ripple. After all the pre-election excitement, the balloting turned out much like most midterms of the past century, which favored the opposition party. Ultimately it returned Democrats to what looks likely to be a modest majority in the House – a majority that they have held, more often than not, since the days of Franklin D. Roosevelt.

Democrats also captured a handful of state legislative chambers, although they still significantly trail the GOP in that arena. They won a string of gubernatorial races, notably in the Midwest states – Ohio and Michigan – that helped give Trump his 2016 Electoral College victory, as well as in Illinois, Kansas, New Mexico and Nevada. Nevada is also where Democrats scored what may prove to be their lone success in flipping a Republican seat in the Senate (although at this writing late yesterday, the Arizona contest to succeed retiring Sen. Jeff Flake remained too close to call). At this point, it is fair to conclude that Nevada’s political posture has evolved to be more like the solidly Democratic West Coast than the reliably Republican Mountain states. Anyone contemplating Nevada as a tax-friendly domicile for long-term retirement and business planning ought to consider the implications of this change.

But it became clear early on Tuesday night that Republicans were going to have a better night than they feared, and Democrats would accomplish much less than they hoped. Democrats who led in most pre-election polls in the Georgia governor’s race and Florida’s gubernatorial and senate races all lost – although Stacey Abrams in Georgia and Sen. Bill Nelson in Florida were refusing to concede as of late Wednesday, despite having no obvious path to victory in remaining uncounted ballots or via a recount.

With Nelson’s defeat, the flipping of Democratic seats in Indiana, Missouri and North Dakota, and assuming Republican Martha McSally holds on to her small lead in Arizona, the GOP will have 54 seats in the next Senate (the outcome of a December runoff in Mississippi being a foregone conclusion). Even losing the Arizona seat gives them 53. Thus, they can afford to omit the not-always-reliable GOP votes of Sens. Susan Collins of Maine and Lisa Murkowski of Alaska and still succeed in confirming judicial and executive branch appointments. In a divided Congress, this is where much of Trump’s remaining power over domestic policy will rest.

It is possible the GOP will try to pass another tax bill in this year’s remaining lame-duck session; less likely would be one final attempt to repeal the Affordable Care Act before a Democratic House makes that a non-starter. Beginning next year, no partisan legislation is likely to get through Congress for the remainder of Trump’s current term. The House will have blocking power over the president’s legislative priorities, just as it did for the middle four years of former President Barack Obama’s administration.

This is less of a problem for Republicans, who broadly favor limited government and less legislative activity, than it was for Democrats, who generally favor more. Much of Trump and congressional Republicans’ deregulatory agenda can be executed, at least for now, by administrative action or through the courts. The tax overhaul enacted late in 2017 is broadly safe until at least 2021.

There is a chance some significant legislation can make it into law under the next Congress. Immigration offers noteworthy space for compromise. Democrats have put themselves in the position of favoring more open borders (something not universally supported in the past by their labor union base), while the GOP and Trump want more border security. Yet Trump has said he would support increased legal migration to attract immigrants with the sort of skills the United States can gainfully employ. These positions are reconcilable.

However, since Trump’s election, the Democratic base has deemed him unworthy of anything except unremitting opposition. So it is more likely that, rather than use their new legislative powers to try to legislate with Trump and Senate Republicans, the House Democrats will simply seek to investigate, harass and disgrace Trump – to try to disqualify him as a candidate in the minds of voters in 2020, much as Hillary Clinton tried to do in 2016.

Trump had a lot to do with the Republicans’ relative success on Tuesday. He campaigned hard for the Senate candidates in the seats that flipped, and also on behalf of candidates who came close but fell just short. The reaction to Democrats’ treatment of Supreme Court Justice Brett Kavanaugh during confirmation hearings, which energized the Republican base, was also a factor. It may even have cost those Democrats who lost close, high-profile races in Florida and Georgia their victories, which is unfortunate for gubernatorial hopefuls Abrams in Georgia and Andrew Gillum in Florida. They had nothing to do with Kavanaugh’s confirmation.

On Wednesday the president made it perfectly clear that he intends to continue being the Trump that half the country knows and loathes, and that the other half has increasingly come to not necessarily love, but to at least accept for his actions while mainly choosing to overlook his words. Nothing that happened on Tuesday is likely to have much effect on either.

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