The State of the Union…. At a Crossroads

By Tom Loranger, TFG Washington, DC

At a time of great uncertainty in the United States and around the world, President Joe Biden will deliver his first State of the Union address on March 1. The President will likely acknowledge the difficulties the country is facing while presenting an argument that his policies are beginning to bear fruit. Given recent poll results showing historically low approval ratings – not to mention polls showing that a significant percentage of Americans believe the country is heading in the wrong direction – the President faces a daunting task.

The President will be quick to point to the recent jobs report that showed the economy added 467,000 jobs in January and that jobs grew 700,000 higher than previously reported in November and December. He will also likely underscore the loosening of COVID-related restrictions as proof that his anti-virus policies are paying off. Finally, he will note that the Democrat-controlled Congress has passed major legislation meant to bolster the economy and combat the virus.

Republicans, of course, view matters differently. They will counter-argue that inflation and federal spending are soaring out of control, chaos reigns at our southern border, crime is escalating in many American cities, and American foreign policy is ineffective and misguided.

All of this is a prelude to the mid-term elections on November 8 when all 435 House seats and 34 Senate seats will be contested. The first mid-term elections following a presidential election have rarely been kind to the Chief Executive’s party. Here is some recent history concerning mid-term House elections:

  • Ronald Reagan saw the GOP lose 26 seats in 1982.
  • Bill Clinton’s Democrats lost 52 seats in 1994.
  • Barack Obama’s party lost 63 seats in 2010.
  • Donald Trump and the Republicans lost 40 seats in 2018.

Will this political phenomenon repeat itself in 2022? If the polls truly reflect the current mood of the country, conventional wisdom suggests that Democrats are facing strong headwinds. This is particularly troublesome for Democrats in that they own a narrow 222-212 margin in the House while the Senate is split 50/50. But in political terms, November is “a life-time away”. There is no question that many significant political, economic, and foreign policy developments will take place between now and the election – developments that could dramatically alter the outcome.

In addition, what transpires in Congress in the coming months could impact the November results. The Democrat-controlled Congress has already successfully passed the $1.9 trillion American Rescue Plan. That package included programs to mitigate the economic impact of the pandemic along with strategies to fight the virus itself. Then, late last fall, Congress passed a $1 trillion infrastructure bill that aims to rebuild crumbling roads and bridges while addressing issues as diverse as broadband expansion and climate change.

While Democrats will trumpet these initiatives, they have fallen short of passing their centerpiece legislation, the so-called Build Back Better (BBB) bill. Democrats claimed that the legislation (designed to fund programs associated with childcare, healthcare and climate change) would cost roughly $2 trillion.  Republicans, however, argued that proponents were using accounting gimmicks to disguise the true costs (which they claimed was close to $5 trillion).

With every Republican opposing BBB in a 50/50 Senate, Democrats couldn’t afford to lose a single vote. They lost that vote in the person of Senator Joe Manchin (D-WV) who expressed concerns about the true cost of the package and how the spending would fuel more inflation. (Arizona Senator Kyrsten Sinema also voiced reservations over several portions of the BBB.) Time will tell if the Democrats can revive BBB in some amended (and reduced) form.

Several questions will be answered on or before November 8: Will President Biden, through diplomatic and military strategic action, be able to avoid armed conflict in Europe? Will he and his economic advisors be able to tame inflation?  Can he improve his poll numbers? Are Republicans capable of setting aside intra-party strife and succeed in presenting a united agenda that appeals to their base and independent voters as well? Can Democrats reverse the mid-term elections trend – perhaps by passing legislation that wins back popular support?  Will Republicans succeed in capturing either or both Houses of Congress?

Questions are mounting. Indeed, the State of the Union is at a crossroads.