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Wednesday, July 27, 2011

Political Repercussions of the Debt Crisis

People ask how the current debt ceiling negotiations are going to affect next year's elections.

Speaker of the House John Boehner doesn’t have to worry much about in terms of his personal re-election. He represents the GOP-safe 8th district in Ohio and was returned to office with 66% of the vote in 2010. Barack Obama, on the other hand, is not in a safe political situation. He does have to worry about his re-election, particularly given the parlous state of the U.S. economy -- the economy being, of course, a major predictor of an incumbent president’s chances of re-election. As noted in this analysis, Obama’s job approval rating is not too positive at this point, at 43% for last week, although up slightly at the beginning of this week. That’s way below the 50% threshold where an incumbent would feel comfortable about his chances of winning re-election.

Despite having no personal re-election concerns, Boehner presumably is concerned about whether or not Obama is re-elected, whether or not the GOP is able to maintain control of the House next year, and whether or not the Democrats will maintain control of the Senate.

So there are political concerns on both sides. The question is: Will this current debt ceiling debate have legs and still be an issue by the time Americans go into the voting booths more than 15 months from now? And if so, who will it benefit.

The answers to those questions are still to be determined. The general state of the economy is the major factor underneath all of this. If the economy is perceived by Americans as weak next fall, Obama’s probabilities of being re-elected are low regardless of what happens in this “Summer of '11” debt debate. And if the economy is perceived by Americans as recovering and growing next fall, then Obama will be in a better situation -- again, regardless of how this debt situation plays out.

Of course, if the Republicans are perceived to have gotten their way in this debt ceiling debate and the economy is still in bad shape next year, they may not be in quite as good a position as they would want. If they get their way and the economy is recovering by next year, they will attempt to take credit for the recovery.

But -- most importantly -- we don’t have an agreement yet and therefore projections about the precise impact of this whole situation are speculative. In particular, we don’t know yet how this is going to play out in terms of the atmospherics that accompany any agreement that is reached, and how each entity involved will fare in the minds of average Americans -- the majority of whom are not as tuned into this situation as are those of us who follow the ins and outs of politics for a living.

Every crisis carries with it opportunities. Military officers look for crises to face and problems to solve in order to be able to gain credit and recognition and thus promotion. Crises provide the environment in which significant impressions can be formed, some of which can be long lasting. The frequency with which Obama's team has put him on television in recent weeks clearly indicates that they are looking at this crisis as an opportunity to develop a positioning for the president that will last into next year.

So far, we haven’t seen a great deal of change in Obama's standing as measured by his job approval rating, as noted. He has not lost ground. Nor has he gained ground. We will be further tracking the public’s perception of Obama and Speaker Boehner in the next several days. Stay tuned for that.

We know that, to date, Obama has somewhat more positive positioning than Republicans in Congress, based on available polling. But to be better positioned than the Republican (or Democratic) leaders in Congress is not the point. The president needs to be better positioned than his Republican opponent next year.

Two of his possible Republican opponents -- Michele Bachmann and Ron Paul -- are members of Congress and are therefore going to have to vote (or avoid voting) on some debt ceiling measure or the other here shortly.  They will be on the record, which could help or hurt them if they were to gain their party's nomination. 

A grand total of six of Obama’s possible opponents are former governors -- Rick Perry, Mitt Romney, Sarah Palin, Jon Huntsman, Tim Pawlenty, and Gary Johnson -- and would therefore be in a position, should they gain the nomination, to point out how well they did when they were running the budget process in their state. (Of course, critics will attempt to point out how poorly they did, as is already happening in the case of Romney). One of Obama’s possible opponents is a former Speaker of the House (Newt Gingrich) who went through a similar process in 1995 and 1996, and who would, no doubt, attempt to spin what happened back then (when he was perceived to have lost the battle with President Clinton) in a positive light. One of Obama's possible opponents is a former mayor of a city (Rudy Giuliani) that now has a $66 billion budget -- as large as many states -- and who therefore is in a position to talk about how he personally did when managing these types of fiscal situations. One of his possible opponents is the former CEO of a pizza business (Herman Cain) who can talk about how he had to handle finances and meet payrolls and so forth.

All of this is important because a president's ability to convince voters than he or she can best manage the U.S. economy will almost certainly be of major salience as campaign 2012 unfolds next year.

All in all, there's both potential political opportunity and potential political danger involved for Obama as a result of the current debt ceiling crisis. This situation could be forgotten by this time next year -- or could become a defining moment that helps shape the 2012 election.


Fred said...
July 28, 2011 at 1:20 PM  

I would add a couple dynamics to this. First, the Senate will eventually have to put out a budget, and that's going to be a shocker to most people, especially since the U.S.'s credit may be downgraded by then, so budget projections will have to take into consideration higher interest rates. Also, there will be additional costs from the Healthcare bill that apparently weren't figured into the original equation that'll have to be included, and the rosy GDP growt projections will have to be scaled back, so that budget is going to look hideous unless the Senate Dems actually include some cuts for entitlements, something for which they destroyed Paul Ryan for, and would look foolish doing.

That means the country will be slightly freaked out over mounting debt, which historically makes the Republican candidate a more appealing option, and certainly should in this case, given this administration's spending history.

And, second, if the conflict in Libya is still going strong, then the President will take a hit because he loses one of the inherent advantages of being a Democrat since they are typically seen as less hawkish, unless of course the Republican candidate comes out and declares he/she wants to invade Iraq or something like that. But we could actually have the Republican candidate accusing the Democrat of being too hawkish.

Anonymous said...
July 28, 2011 at 4:12 PM  

It's apparent that the GOP have no intentions on working with President Obama on any legislation, even if it's to their benefit. President Obama has bent over backwards to work with Republicans on spending cuts. He offered 4 trillion in spending cuts to a modest 1 trillion in revenues, that's a 3:1 ratio. Mitch McC onnell mad eit very clear that his goal was to ensure that the President wouldn't get re-elected. We have a political party (GOP) that would rather see the Amaerican people not receive military payments, social security payments, watch interest rates go up, etc., rather than see Obama re-elected. It's clear that they believe in party over country. On the other hand, the President is willing to make concessions to benefit the country and not his party.

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