A Handicapper's Guide to Election '04
By Ryan Brecht
With Election Day less than a month away, where do the major parties stand in their battle to control the White House and both houses of Congress? To help sort things out, we at Action Economics have drawn up a "cheat sheet" for the upcoming Presidential and congressional races: profiles of the seats up for election, tables of the most recent polls for state elections, and links to Web sites with ongoing and up-to-date poll information.
First, let's begin with the contest for control of Capitol Hill. The Republicans currently enjoy a narrow majority in both houses. The GOP holds the Senate by one seat, with 51 in the 100-seat body. The Democrats occupy 48 seats, with one Independent. Only one-third of the Senate is up for grabs every two years, for six-year terms.
Current members are fairly well entrenched, as usual, and incumbent turnover is rare. That's why election prospects tend to focus on open seats. Here, the Republicans are in a good position this election cycle, with only 15 seats up for reelection, compared with the Democrats' 19 seats. Moreover, the GOP only has to defend three open seats, vs. five for the Democrats.
One of the vacant Democratic seats appears to be in the GOP's grasp, with polls showing the Republican candidate for the vacant Georgia seat holding a comfortable lead. Democratic open seats in both South Carolina and Louisiana appear to be leaning to GOP also, although polls suggest narrower leads than in Georgia.
But while the GOP looks on track to pick up at least one Democratic seat, and possibly two more for a total of three, the Democrats look likely to knock one Republican out of office in Alaska and to scoop up a vacant GOP seat in Illinois, thus keeping the Republicans' projected net gain in the Senate at just one seat.
With the margin of control in the Senate so lean, the outcome of the Presidential election could determine which party will hold sway. Indeed, if President Bush is reelected, the Democrats must capture two seats to gain control, as Vice-President Cheney would retain the power to break ties in the Senate. Recall that the one Independent senator in Vermont, James Jeffords, is allied with the Democrats. If, however, the Kerry/Edwards ticket triumphs, the Democrats only need one seat, since as Vice-President, Edwards would control the tie-breaking vote.
Of course, a Kerry victory would mean the loss of his Massachusetts Senate seat. But the state legislature there is crafting a bill that would require a special election in the heavily Democratic state in order to deny the GOP governor the power to appoint a Republican replacement.
As for the House of Representatives, redistricting has further pared the number of competitive seats in this 435-member body. As a result, while all of the seats are up for election to two-year terms, only a handful appear to really be at risk of being seized by the other party.
Among these are several in Texas that were subject to redistricting by a GOP state legislature. Not surprisingly, the changes favor the Republicans and suggest that one current Democratic seat and two new ones will switch parties. However, one GOP incumbent looks likely to lose, while a vacant GOP seat is likely to be captured, leaving the Republicans with a net pickup of just one seat.
Here's another way of tracking the potential outcomes: The Iowa Electronic Markets, real-money futures markets maintained by the University of Iowa Tippie College of Business, which provide probability estimates for events such as elections.
The current Iowa futures are consistent with our forecasts for the outcome of the congressional contest. The futures contracts suggest around a 73% chance of the GOP maintaining control of both houses (see graph). Indeed, the market is priced for either a GOP pickup in House seats or for no change in composition (see graph).
The odds for the Senate aren't quite as strong, with around a 53% chance of a Republican pickup, and the chance of the GOP either holding or losing seats each at 20% to 27% (see graph). In the Presidential contest, the chances of a Bush win have narrowed since the first debate (see graph).
ROLLING THE DICE.
However, the futures contracts still point to a Bush win, which is in contrast to the mixed opinion polls as tracked by pollingreport.com. The most recent polls from these organizations show Bush with a lead: George Washington University Battleground, Rasmussen Reports, and Pew Research.
And finally for gamblers' odds on the election, see ladbrokes.com.
Overall, while these polls leave the Presidential race too close to call, the situation in both the House and the Senate favors the GOP. Check back for an update as Nov. 2 draws closer.
Brecht is senor economist, North America, for Action Economics
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