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Voters Frustrated With U.S. Economy Turn to Republicans in Midterm Elections

ElectionOracle / US Presidential Election Nov 02, 2010 - 07:46 AM GMT

By: Money_Morning

ElectionOracle

Best Financial Markets Analysis ArticleKerri Shannon writes: Republicans predicted huge gains before today's (Tuesday) midterm elections, as voters fueled by frustration over the struggling U.S. economy are eager for change in Washington.

A poll in The Wall Street Journal asking voters which party they hoped would be in charge gave the GOP a six-point edge of 49% to 43%. About half of the Republican voters said frustration and protest over Democratic policies fueled their election decisions.


"The Democrats are about to feel the full force of a tidal wave, tsunami or a 7.0 earthquake," said Democratic pollster Peter Hart, who co-directed the survey.

Survey co-director and Republican pollster Bill McInturff called the results a "grim set of data that projects a larger election for Republicans than 1994."

In 1994 the GOP regained Congressional power with a gain of 54 seats in the House of Representatives after 40 years in the minority spot. This year they need a net gain of 39 seats to win the House.

The Cook Political Report predicted Monday that Republicans would gain 50 to 60 House seats, if not more. Republicans have a far less likely shot at winning Senate control, but could gain six to eight seats, giving them a total of 47 to 49 seats out of 100. The report also predicted a six to eight seat gain for Republicans in the state gubernatorial contests.

Another poll published Sunday by The Washington Post reported that more than seven out of 10 voters polled felt that the United States was off course, and 52% were unhappy with U.S. President Barack Obama's job performance as the nation's leader.

Mississippi governor and Republican Haley Barbour described the election as a "referendum" on President Obama's policies that represent the "biggest lurch to the left in American political history."

Democrats are angered at Republicans' continued comments about gunning for a shift in White House power, like Senate Minority Leader Mitch McConnell's, R-KY, recent remarks to the National Journal that "the single most important thing we want to achieve is for President Obama to be a one-term president."

Energized Democrats are optimistic that a last-hour volunteer effort to make calls and knock on potential voters' doors could push the voter turn out in tight races in favor of the Democrats, but most election followers felt it wasn't enough.

President Obama did his part by visiting Connecticut, Pennsylvania, Ohio and Illinois in the final days, trying to appeal to a struggling middle class that he says will not win with Republican policies.

"We have tried what they are selling right now," said President Obama. "We tried it for eight years. It did not work. We are not going back to that. That is the choice in this election."

More Political Gridlock
Some pundits wonder if a Republican majority in Congress with a Democrat president would mean even more political head butting in a year when politicians have made few compromises. Democrats are wary of the Republicans' agenda and attitude toward negotiations.

"Many Republicans appear to be opposed to the very idea of coming [to Washington] to legislate," a top Senate Democratic leadership aide told CNN.

Experts say it's up to President Obama to set the tone in Washington when Congress' lame duck session starts in mid-November and key issues like Bush tax cuts will have to be discussed.

"If the president comes out of the box, in the lame duck, when they're trying to deal with the tax issues and says, 'No way, no how, we're not doing tax cuts for the rich and I'm not changing my tune,' then that puts the prospective new Democratic leadership in a box because they really aren't in a position to say, 'Oh no, Mr. President, you're wrong,'" former Sen. John Sununu, R-N.H., told CNN.

But the Republicans will have to find a way to live up to their pledge to trim the budget deficit by $100 billion next year, whether it is with spending cuts or tax increases.

There's also a lot of speculation over the Tea Party factor: Will new Tea Party-backed senators be able to make headway on their anti-establishment sentiment? Some say their lack of political experience will be a noticeable factor in the tone of Congress.

"You're going to have several noncareer politicians entering as new senators," said Ron Bonjean, a former top aide to House and Senate Republican leaders. "It will be a turbulent few months as they get to know the institution and how it works. They're going to want to shake it up quite a bit. They were elected as outsiders and they will probably act like outsiders in a club atmosphere."

Biggest Issues Facing Lame Duck Session
Whatever happens on Tuesday, Congress will reconvene on Nov. 15 for a lame-duck session where big decisions will be discussed, many of which are focused on the U.S. economy.

Deciding what to do over the Bush tax cuts - specifically, for whom they should be extended and for how long - is a top priority. Republicans want them continued for everyone while President Obama wants to discontinue cuts for households making over $250,000 and individuals above $200,000. Some Democrats have voiced support for a higher income threshold of $500,000.

Lawmakers will also have to decide whether any extension should last for one or two years, or be made permanent.

Other tax issues facing debate include the estate tax, which Republicans and many Democrats want to see altered. A likely change would result in the exemption level set between $3.5 million and $5 million, with a top rate between 35% and 45%.

Congress must also decide on whether or not to enforce an annual Alternative Minimum Tax "patch" that's been passed since 2004, which costs about $70 billion a year and has never been paid for. Getting rid of the AMT altogether is unlikely as it brings in much needed revenue and is usually included on federal budget projections.

Unemployment benefits will also be considered. A program allowing unemployed workers to file for a benefits extension will expire Nov. 30. If Congress doesn't continue the extension, about 2 million jobless workers will lose benefits in December.

And the federal budget needs to be examined and lawmakers must either pass a temporary funding measure or pass spending bills for fiscal year 2011, which started on Oct. 1.

As for after the lame-duck session, Republicans are promising big, effective changes in economic policy and government spending if elected.

In a speech this weekend, House Minority Leader John A. Boehner, R-Ohio, said he would not be partying if he sees GOP victory on election night, but instead going right to work.

"[O]n Tuesday night we are going to have a big win. But it's not a time to celebrate. When one out of 10 of our fellow citizens are out of work, when we have buried our kids and grandkids under a mountain of debt, it's time to roll up our sleeves and go to work."

Source : http://moneymorning.com/2010/11/02/...

Money Morning/The Money Map Report

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