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Will midterms usher in blue wave or tidal wave?

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Polling stationThat is a key question heading into the final countdown to the elections, Mary Moore Hamrick, Grant Thornton’s national managing principal, Public Policy, explained to attendees of a recent Boston event hosted by the firm and Bloomberg Tax as part of a year-long educational series.

Hamrick suggested that there are some tight races that are going to really determine how many congressional seats will change hands. “Everybody agrees that the seats are going to move. But how many are going to move, and will it be a blue wave or a blue tidal wave?” she asked.

She also added, “If you were a betting person, things are trending toward the Democrats.” She cites voter enthusiasm and past history as key reasons. “Voter turnout is up 78% for Democrats heading to the polls in 2018. It’s up 23% for Republicans, so there’s a three-to-one ratio turnout.”

While there may be a number of issues driving voter enthusiasm, Hamrick said the Donald Trump factor is key to energizing the Democratic base. “Democrat voters at the political center may be responding to the negative energy that the president produces. A lot of people may really like his policies, but they’re not really wild about his demeanor or personality. The question for those in the middle has come down to: ‘Do you vote with the policy or do you vote with the personality?’ ”

She also noted that since World War II, during the midterms, 25 seats on average have flipped. For the 2018 elections, Democrats need 23 seats to flip the House and two seats to flip the Senate -- to win control of either or both chambers.

Other factors to consider is the fundraising ability of each political party and turnover rates.

Mary Moore Hamrick “Everybody agrees that the seats are going to move, but how many are going to move and will it be a blue wave or a blue tidal wave?”
Mary Moore Hamrick
National Managing Principal, Public Policy
Grant Thornton LLP
“If you follow the money, 54 Democrats outraised incumbent Republicans, and only three challenger Republicans have outraised incumbent Democrats,” Hamrick explained. In addition, the House is facing an incumbent factor. The House will experience a significant turnover rate, with 17% of seats turning over, many due to retirements. Thirty-seven House retirements will belong to Republicans, compared to 18 for Democrats.

Tight races to watch In terms of which races to watch, of the 60-70 competitive races there are about 30 in which Republicans and Democrats are investing their money. One of those key races involves 15-year incumbent U.S. Rep. Pete Sessions and Democratic challenger Colin Allred for the seat that’s up for grabs in Dallas’ 32nd Congressional District.

“Sessions is in a very tight race,” Hamrick acknowledged. “He has always won that race, but there are changing demographics in that district.

However, the Democrats aren’t counting their chickens just yet. After a conversation with Sen. Debbie Stabenow, Hamrick reported that “Senate Democrats aren’t measuring the drapes. They might be rolling out the fabric, but they’re not measuring them just yet.” She added that Stabenow indicated that Democrats are being thoughtful but do not want to jinx the opportunity to take over the Senate.

Senator Majority Leader Mitch McConnell is being challenged to get the votes to retain seats in the Senate. “He describes the current election as a knife fight in the alley, and that’s a pretty accurate description,” Hamrick said. “There are 10 seats that are really going to go down to the wire. Six are held by Democrats and four are in Republican territory. However, when you hear that Texas is a question mark, that tells me something is going on out there.”

One reason that a number of Republican races may be tight is that the GOP has experienced difficulties in telling their stories effectively to their key constituencies. “The average Republican member will admit they need some coaching in selling,” Hamrick acknowledged. “They’re trying to tell some stories, but they are not connecting the dots quite as much as you might think they would in swing states.”

Trade and taxes top voter issues Two of those important stories relate to trade and tax reform. While Republicans seem unsure of the administration’s overall trade policy and describe it as a “three-dimensional chess game,” farmers and manufacturers are reacting very differently to the trade issue from a voter perspective. For example, soybean farmers in Missouri are getting hit with 25% tariffs but are willing to give President Trump the benefit of the doubt. Hamrick explained, “They are saying if this is really for the long-term best, we’re going to give him the benefit of the doubt.”

On the other hand, manufacturers are very concerned about current trade policies. Many have suppliers in China, while assembly is taking place in Mexico. Consider the case of one large medical device distributor outside of Chicago. “They’re telling the Chinese they’ve got to absorb some of these cuts and they’re thinking of moving to Malaysia or Vietnam,” Hamrick said. “They’re really not happy with the trade situation.”

Trade is a challenging issue for Republican leaders, including many who need to address constituencies facing tariffs on their products. McConnell needs to respond to his Kentucky bourbon manufacturers who are facing tariffs, while Wisconsin is facing similar ones on cheese. In fact, it was recently reported that Domino’s Pizza franchises in Mexico were buying their cheese from Wisconsin cheese producers. But when the new tariffs were levied, they turned to cheese suppliers outside of the U.S.

In addition to tax reform and trade policy, another issue is voters from both parties energized by the confirmation hearings for Supreme Court Justice Brett Kavanaugh. Has the outcome of the hearings further energized progressive, educated women as well as rural and suburban-woman voters? According to Hamrick, “They’re already pretty energized. I don’t think you can energize that group a whole lot more than they are.” However, a countervailing view is there might be some backlash from conservatives who assert the hearings demonstrated a “guilty until proven innocent” mindset.

Should the Democrats prove successful in this midterm election, they will likely be focusing on three core issues. The first is to increase jobs and raise wages. The second is to lower healthcare costs and negotiate with pharmaceutical companies. The third is to address what they consider the “culture of corruption” surrounding the current administration.

“If the House flips, there will be a lot of time spent in oversight hearings,” Hamrick said. “There have been 100 letters of request for different topics asking for inquiries and that will result in much time spent on oversight.”

Regardless of the outcome, Hamrick suggested that both parties should ideally adopt an approach of civility toward each another. “I wish I could say we were moving in the direction of civility, but that doesn’t look to happen, Hamrick said. “Instead, we have a situation in Washington in which one person behaves badly and then everybody feels free license to behave badly. This election should prove to be very interesting.”

Contact: Mary Moore HamrickMary Moore Hamrick
National Managing Principal, Public Policy
T +1 202 521 1545



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