As awful as the last 15 months have been for Democrats since they completed the electoral trifecta of winning control of the White House, the House, and the Senate, there is a strong chance that things get a lot worse. Last summer it was Afghanistan that began to weigh down President Biden’s previously satisfactory job-approval ratings. Then inflation began to take its toll on his numbers. Now an even more dreaded "R" word (recession) looks like more and more of a threat.
Harvard economist and former Treasury Secretary Larry Summers has more than his share of detractors, but let’s face it: He began warning about inflation more than a year ago, and has proven to be right when the overwhelming majority of economists, particularly those in the Biden administration and at the Fed, were dead wrong. Sunday, on NBC’s Meet the Press with Chuck Todd,” Summers said, “The painful fact, though, is that historically when we've had inflation above 4 percent and we've had unemployment below 4 percent, essentially always, since World War II, that's been followed by a recession within the next two years."
Last week this column pointed to an analysis by the Federal Reserve Bank of San Francisco showing that U.S. inflation is much higher than similar Organisation for Economic Co-operation and Development countries because, quite simply, we overheated the economy with too much stimulus.
Simply put, the treatment for rampant inflation is to jack up interest rates in order to slow down and cool off the economy, and that all too often triggers a recession. On Friday, in his weekly segment on Bloomberg Television’s Wall Street Week, Summers told host David Westin that he thought the chances of a recession in the next two years was over 2 in 3. Compare that to a Bloomberg News survey of 72 economists a few days earlier, which had 27.5 percent predicting a recession in the next 12 months, up from 15 percent in February and 20 percent in March.
In terms of politics, what’s worse than a train wreck? Democrats may be about to find out. Few argue that Democrats will keep their House majority next year. In my judgment, the over-under is a 20-seat net loss for Democrats. A loss of just five seats would hand the speaker’s gavel to current House Minority Leader Kevin McCarthy.
The chances of Democrats losing their Senate majority are very high as well, in my mind, although the over-under is a more modest two or three seats. While most analysts agree that Mark Kelly in Arizona, Catherine Cortez Masto in Nevada, and Raphael Warnock in Georgia hold the three most vulnerable Democratic Senate seats, personally I think that Maggie Hassan in New Hampshire is just as vulnerable, even with GOP Gov. Chris Sununu’s announcement that he would not jump into the race.
New Hampshire is arguably the most volatile state in the country. It’s highly sensitive to the ebb and flow of national politics, with nine of its House incumbents losing general elections since 1990—a lot in a state with only two congressional districts! Just since 2008, two GOP Senate incumbents, John Sununu and Kelly Ayotte, have lost their reelection bids. Just the slightest gust of wind in New Hampshire has proven to be deadly for incumbents facing any kind of headwind.
In some ways, the challenges for the two parties in the Senate this year are mirror opposites. Republicans might well have some highly problematic Senate nominees in key states, candidates whose past words and deeds could become serious problems. The four most vulnerable Democratic incumbents are in pretty good shape on that dimension. But those four Democrats have both geographic and environmental challenges. Kelly and Warnock are seeking reelection in transitional states, where Democrats were not even competitive until very recently and of late have won only under optimal political conditions. Cortez Masto and Hassan are not in transitional states; they are in knife’s-edge states, which have remained purple for many cycles. And in an electoral system that is increasingly becoming more parliamentary, candidate quality means less and less. Geography and environment mean much more than the strengths and weaknesses of specific candidates.
If a recession does come to pass, Democrats would be headed into the 2024 cycle with a lousy economy and their president still at the helm. Worse yet, they’ll have 23 Senate seats up for reelection to just 10 for the GOP. Seven of those Democratic seats are in states that Donald Trump carried in 2016, 2020, or both, while there are no Republican seats up in states that either Hillary Clinton won in 2016 or Biden did in 2020. If Democrats go into the 2024 cycle in a hole, it could be a much deeper one coming out of that election.
At the risk of sounding like a broken record, Democrats may well be paying a very steep price for many of the decisions they have made over the last 15 months, learning that policy mandates are earned on Election Day, not self-proclaimed after just barely winning unified control of the government.
The article was originally published for the National Journal on April 12, 2022.
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