The Economy, Midterm Elections & Personal Finance: What’s in Store for Your Wallet?
With midterm elections just around the corner and the economic recovery finally gaining steam, the big question confronting America is whether Washington will still be gridlocked in 2015.
In the past few years, we’ve witnessed incessant quarreling in Congress that’s hampered worthwhile legislative action. 2013 was an especially rough year. Remember the government shutdown in October? The fiscal cliff scare that lifted us all from our seats the very first day of the year? Let’s not forget the historic altering of filibuster rules. So many memorable moments. So many lurching halts to the economic recovery.
Such a cold political climate in Washington has left midterm voters mistrustful of both parties in Congress. But because neither side gleams over the other in the eyes of its constituents, experts disagree on whether tensions will ease as well as what effects they’ll have on our wallets.
“I expect that [Congressional infighting] will take a somewhat different, less dramatic and highly visible form through the next year,” said John W. Cioffi, an associate professor of political science at the University of California at Riverside. “However, if there is a wave of successful primary challenges to GOP incumbents, this dynamic will likely shift back quickly to scorched-earth budget warfare.”
It wasn’t always this bad in Washington. But it may be getting worse, according to some experts.
“In 1976, when I was a Congressional Fellow, Democrats and Republicans could and did find common ground on legislation that was good for the country, their state, their region or their congressional district,” said Al Shockley, a professor of political science at Los Angeles Valley College. “Today, it seems there is genuine anger and dislike for members of the other party, which may reduce civility and with it the chance for widespread cooperation.”
Economic Impact of the Current Political Climate
Recently, we’ve seen a rise in payroll figures and fall in unemployment numbers. But many Americans are still worried about their wallets and employment prospects. In light of the upcoming midterm elections, a Pew Research-USA Today survey released in late April highlighted the top voting issues: Jobs are their number one priority.
And though the Great Recession is officially behind us, its effects evidently are still being felt today. The general sentiment among experts is that economic recovery efforts have not operated at full capacity and will dominate both parties’ platforms in the midterms.
“Partisanship will continue to be a factor as both parties try to win points against each other,” Shockely said. “However, if, as I believe, economics will be the dominant theme for this election year, Republicans and Democrats alike need to pass legislation they can both claim as good for the country. This could lead to positive legislation that does not do damage to either party’s ideological base.”
With that hopeful message, we can expect to see less soap opera and more legislating from all sides come 2015.
Ask The Experts: Expectations of the 2014 Midterm Elections
Given the political tensions that have escalated in Washington in recent years, one can’t help but wonder just how particularly dynamic, or perhaps disruptive, the 2014 midterm elections will be.
Below, we’ve expanded the discussion with predictions and reflections from various experts in the fields of politics and public affairs. Will Americans continue to witness debilitating infighting in Congress? To what extent will political partisanship continue to hamper the economic recovery? Our experts share which issues they anticipate to be the biggest points of contention among politicians. And finally, they respond to the possible impacts that the midterm elections can have on our lawmakers’ conduct. Check out their bios and comments below.
- Partisanship Effects on Economic Recovery
- Midterm Elections’ Effects on Politicians’ Behavior
I believe 2014 will be defined by how well the economy performs. After five-plus years of President Obama’s stewardship, Americans have a right to expect 2014 to be better. The President was careful to keep economic expectations low in this year’s State of the Union message, but he — rightly and proudly — pointed to ‘four years of economic growth’ and high corporate profits and stock prices.
Shortly after those words were uttered, the stock market went into apparent freefall, dropping 300 points in less than a week. Economists provided mixed analyses of this drop. To some, it was the much anticipated temporary ‘market adjustment’ bringing things back to a more normal performance level. Others saw the drop-off as a more worrying ‘crisis of confidence’ that presaged further losses and increased volatility.
Partisanship will continue to be a factor as both parties try to win points against each other. However, if, as I believe, economics will be the dominant theme for this election year, Republicans and Democrats alike need to pass legislation they can both claim as good for the country. This could lead to positive legislation that does not do damage to either party’s ideological base.
Midterm Elections’ Effects on Politicians’ Behavior
Republicans are not likely to ease pressure on the President or on their Democratic nemesis in the Senate. If economic recovery is slowed, it will redound to the Democrats and add to their discomfort as they approach the fall elections.
It is likely that the infighting will continue, but in my view there may be some room for optimism. Harry Reid’s five years of consistent inflexibility toward Republican initiatives has been key to maintaining party discipline, passing critical legislation and, as a side benefit, painting Republicans as obstructionists.
Things have now changed. Democrats are faced with the task of defending 21 Senate seats to 14 for their Republican colleagues. Democrat Senators cannot afford to sit on what has been a rather thin set of legislation, most of which came through two or three years ago. If they are to be competitive in the 2014 elections — and the 2016 Presidential elections — they need to tackle long-standing Presidential imperatives like immigration reform while dealing with such unpopular tasks as downsizing the U.S. military, closing bases and easing service personnel into civilian life.
Republicans have the hope of taking advantage of Reid’s putative weakened position to push through long-delayed House legislation in an effort to burnish their own images for the election. The Tea Party mini revolt seems to have been blunted somewhat and given the chance of holding the House, and retaking the Senate may lead to tangible Republican unity not recently seen.
The run-up to expected close elections tend to be more productive than in non-election years. Party leaders tend to be more tolerant of members of Congress that stray off the reservation to pursue policies important to their constituents. Harry Reid may be forced to compromise discipline for the good of the party.
If, as I surmise, both political parties need to show some positive legislation to their constituents, behavior may be superficially better. One of the points that strikes me is that in 1976/77, when I was a Congressional Fellow, Democrats and Republicans could and did find common ground on legislation that was good for the country, their state, their region or their congressional district. Today it seems there is genuine anger and dislike for members of the other party, which may reduce civility and with it the chance for widespread cooperation.
[Partisanship will continue to hamper the economic recovery] substantially, given that a more active, and effective, fiscal policy is precluded by partisan politics at present and for the foreseeable future. It isn't clear that the Obama administration would be interested in fiscal stimulus even if it were politically possible. Demand is simply too low to restore employment levels, let alone to drive up pay for the vast majority of employees whose spending accounts for an overwhelming share of economic activity. This dramatic narrowing of policy options is one of the defining features of our current age. And it is all the more important because loose monetary policy has been shown over the course of five long, hard years to be an ineffective policy response to the economic stagnation and high unemployment wrought by the Great Recession. In fact, 'monetary stimulus' has been a driver of intensifying inequality during this period by channeling resources into the financial sector, corporate treasuries, and managerial compensation.
Midterm Elections’ Effects on Politicians’ Behavior
I expect that [Congressional infighting] will take a somewhat different, less dramatic and highly visible form through the next year. The Republicans have finally learned that the repeated game of chicken over the federal budget has been a disaster for them — it has cemented the perception of them as reckless extremists on the part of a sizable majority of the electorate. The GOP leadership in Congress is now willing to buck the Tea Party and its acolytes on budget politics because the strategy of confrontation is now more dangerous to their reelection chances than the risk of getting a primary challenge from the right. It's likely that these grand budgetary battles, government closures and using the federal credit rating as a hostage will be replaced by highly partisan legislative trench warfare in which nothing is accomplished, but in a way that much of the public will blame both sides. However, if there is a wave of successful primary challenges to GOP incumbents, this dynamic will likely shift back quickly to scorched-earth budget warfare.
We have been witnessing, and will continue to see, a long-term slide into political dysfunction driven by increasing polarization and radicalization on the right — that is, the Tea Party faction — a tsunami of corporate and wealthy donor money into campaigns, and a severe erosion of public confidence and the legitimacy of government in the U.S. Nothing is halting any of these dynamics; they are growing worse.
The legislative branch remains extremely gridlocked. The parties are far apart, and, with rare exceptions, they must reach agreement before policy is enacted. Furthermore, the critical moves Congress has made to deinstitutionalize its operations — such as reduced committee staff, reduced seniority influence, a heightened role for leaders in engineering major legislation, minimized member time in Washington and on legislation — mean that Congress' ability to do many things at once is somewhat atrophied.
In this environment, Congress is unlikely to be very productive. Although I expect a modest uptick from the extraordinarily low productivity experienced in 2013, the fundamentals of the legislative situation are such that a burst of innovative policymaking from Congress would be truly remarkable.
Political leaders seeking election or reelection have to appeal to the majority of the voters in their district or state. There are many more moderates in the electorate than conservatives or liberals. Hence, you will find that the vast majority of candidates will ‘move to the center’ on issues. If they stay too far to the right or the left, they will endanger their victory. Hence, we will see a relaxation of tensions on many issues. We will continue to see the Republicans opposing Obamacare, but much of the rhetoric will be toned down.
Politicians will seek to avoid scandals, but expect increased rather than decreased polarization as politicians prepare for the midterm elections, except in districts where doing so would increase their electoral vulnerability.
To the extent the parties perceive themselves to be vulnerable across a number of seats, they may try to get more extreme members of their party to modulate their views. But everyone will be positioning themselves for the upcoming presidential election, with tensions rising within Republican ranks — in particular between those who want to stay the course and those who perceive a need to become more centrist in order to have a chance of beating the presumptive Democratic nominee, Hillary Clinton.
I would say that one of the interesting things will be to see how the recent change in Senate rules plays out. So far it has not been nuclear. And my guess is that the change will be seen by both sides as the way to do business on nominations. My guess is that if the Republicans take charge in 2015, they will happily live with the change and everyone will go about their business. Perhaps other limits to the filibuster will happen and that would be all to the good no matter who is in charge.
Right now, it looks like Congress isn't going to pass any legislation at all that would have the least bit of controversy attached to it. It seems as if the Republicans believe they have a very strong chance to retain control of the House and a good chance to take the Senate. In my view, it is a near certainty they not only hold the House but also are likely to gain seats. Taking the Senate is a distinct possibility. So, why screw that up by doing something controversial like comprehensive immigration reform?