Democrats Know Make-or-Break Year Turns on Jobs: Albert Hunt

This year will be a difficult one for Democrats. The only issue is how tough.

If conditions and circumstances take a negative turn, Democrats could lose 40 seats in the U.S. House of Representatives and more than a half-dozen in the Senate in the November midterm elections. With this prospect, any lingering clout enjoyed by President Barack Obama would evaporate.

If things break the right way for the Democrats, however, the congressional losses might be minimal -- 15 to 20 in the House and several in the Senate -- and the president, while weakened, would still govern with some authority.

As in economics, there are leading indicators in politics. For 2010, they are:

Health Care: If, as expected, Congress gives final approval to a health-care bill over the next few weeks, the public perception will be crucial. Most of these policies won’t take effect for several years, so initial impressions will be politically decisive.

The Obama White House has only mixed success in these communications wars. The administration lost on the stimulus package, which most economists think is successful but the public sees as largely ineffective and ridden with special-interest pork.

‘Short-Term Drag’

The Obama strategy of not advocating specific policies has come at a political cost. Polls show support for the health-care overhaul has dropped; The Democratic Senate Budget Committee’s chairman, Kent Conrad, said in an interview last month that the measure would be a “short-term drag” for Democrats.

Whether the sweeping health-care changes are seen as a long-due step in expanding coverage and controlling costs or as just another costly big government plan will weigh on voters in November.

Jobs: High unemployment punishes the party in power. The levels and direction, however, matter, which is why Democrats were heartened by a better-than-expected report last month that showed the jobless rate dropping to 10 percent.

Ray Fair, an economist at New Haven, Connecticut-based Yale University who for years has forecast elections based on economic models, sees Democrats winning about 50.5 percent of the popular vote in House races this fall, down from 53.4 percent in 2008. That suggests a loss of about 25 to 30 seats.

Maki Forecast

Whether Democrats do better or worse may depend on which of two respected economic forecasters is right. Dean Maki, the chief U.S. economist at Barclays Capital Inc. in New York, sees unemployment dropping steadily this year to a 9.4 percent average in the third quarter and not much above 9 percent on Election Day.

Jan Hatzius, chief U.S. economist at New York-based Goldman Sachs Group Inc., forecast joblessness rising consistently through this year and hitting a peak of 10.75 percent in 2011. If Maki, who was rated the most-accurate forecaster in a Bloomberg News survey, is prescient, the economy may be a wash for Democrats; if Hatzius is closer to the mark, look for big losses.

Casualties: How big an issue Afghanistan is in the off-year elections will hinge on American casualties, how many kids are coming back in body bags.

“It’s much easier to quantify the casualties than the benefits of a war,” says Peter Feaver, a political-science professor at Durham, North Carolina-based Duke University who served on the national security staffs of Presidents Bill Clinton and George H.W. Bush and worked on the Iraq War for George W. Bush. “The American people view each soldier who dies as somewhat of a tragedy.”

Off Radar Screen

The Iraq War went off the radar screen and front pages as casualties dropped to 150 in 2009 from a high of 904 in 2007. Last year, for the first time, American losses in Afghanistan, at 319, exceeded those in Iraq.

If next year U.S. losses in Afghanistan approach the peak level in Iraq, public anxiety and antiwar feelings will escalate.

Retirements: In the House, it’s easier to win an open seat with no incumbent than to topple an officeholder. Democrats currently enjoy a 257 to 178 majority in the House and a 60 to 40 advantage in the Senate, where two independents caucus with the majority party. To date, four House Democrats have announced their retirements, and Republicans like their prospects in each of those contests.

Flurry of Retirements

California Republican Congressman Kevin McCarthy, who is helping direct his party’s campaign to take control of the House, says his “magic number” would be 15 Democratic retirees. He expects the Democratic withdrawals to be “fast and furious” in the next few weeks as filing deadlines approach.

The Republicans’ major impediment, however, may be internal struggles as conservatives mount challenges to front-running, more centrist candidates (and arguably stronger general-election candidates) in a few House districts and in Senate contests in Connecticut, Florida, California and Illinois. If these skirmishes become bitter, Republican prospects will dim.

Crisis: Obama will face one, most likely international; perhaps soon with the al-Qaeda presence in Yemen. How he handles it will affect his party’s performance in November.

Shaping Perceptions

Crises aren’t always major events. President Ronald Reagan’s triumphs over the air-traffic controllers or Obama’s handling of Somalian piracy last April weren’t sweeping historical moments, but helped shape presidential perceptions, or in Obama’s case mitigate concerns about weakness. Conversely, the botched U.S. policy in Somalia haunted Clinton through the first midterm elections.

For all the tragedy of 9-11, it was a political bonanza for President George W. Bush. The country was united and the rally- around-the-flag mindset carried through to the midterm elections in 2002. Republicans were even able to successfully question the patriotism of Georgia Democratic Senator Max Cleland, who lost three limbs in the Vietnam War.

If a major crisis occurs and the president rises to the occasion, it will lift other Democrats. President John F. Kennedy’s deft handling of the Cuban missile crisis in 1962 resonated with the country and helped his fellow Democrats in the congressional elections a few weeks later.

(Albert R. Hunt is the executive editor for Washington at Bloomberg News. The opinions expressed are his own.)

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