2010 outlook grim for Democrats

Richard White Contributor
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President Obama must have seen the storm clouds brewing when he returned to the mainland after his Hawaiian vacation in January. The close of his first year in office was marked by the infamous Christmas “underwear bomber” and the “hold up” vote by Sen. Ben Nelson on final passage of the health care bill. Not good omens for the new year ahead.

With undeterred optimism, Congressional Democrats and the president returned to Washington with their health care reform initiative, but Democrats saw their hopes of health care reform—and possibly their larger agenda—blown out to sea by an unexpected Nor’easter storm in the form of Sen. Scott Brown (R-Mass.).

President Obama’s first year began with an abundance of promise and several major legislative accomplishments as his administration sought to prevent the economy from sinking after it had been run aground under the previous captain’s watch. Other early accomplishments included a major expansion of a children’s health insurance program, a supplemental spending bill to fund the wars in Iraq and Afghanistan and approval of Sonia Sotomayor as the first Latina Supreme Court justice.

Emboldened by these early legislative victories, the Democratic Leadership set their sights on the complicated and controversial issues of climate change and health care reform. The administration soon found itself being criticized for failing to provide sufficient details on what the president wanted and for not providing adult supervision to prevent Congress from biting off more than they, or the public, could chew. The White House also failed to successfully convey the benefits of the proposed legislation to the public. The administration has acknowledged that it was confusing to tell the public that the government would save money by spending over a trillion dollars on health care. As a result of these and other factors the Democratic health care plan got bogged down in the mud of the legislative process.

Notwithstanding the final outcome of health care reform, Brown’s election has blown the president’s agenda off-course. While grappling to right their ship, Democrats are beginning to see the shadows of the upcoming November midterm Congressional elections and early perilous political headwinds. With his Presidential legacy and control of the House potentially in the balance, the president and Democratic leaders are discussing whether to remain true to their progressive principals or take a page out of President Clinton’s playbook and move to the center and focus on populist measures that tap into the discontent of the electorate that has carried over from the previous administration.

A move to the center may be especially hard to maneuver as several controversial big-ticket items from 2009 will need to be moved, dramatically scaled back, or shelved in 2010. Beyond health care, these items include passing a short-term or permanent fix for the Medicare physician-payment formula (referred to as the sustainable growth rate, or SGR), financial services regulatory reform, climate legislation and, possibly, immigration reform. If Democratic leadership chooses to scale back proposals and focus on the more populist aspects of legislative initiatives, there is a risk of revolt from Democratic progressives who are already feeling disillusioned with President Obama.

Notwithstanding the remaining unfinished business or potential shift in approach, the primary legislative focus in 2010 will be to create jobs through an aptly named “Jobs” bill. With last year’s stimulus package needing a dose of Viagra, the Democratic Congress is poised to attempt to move either a series of job creation bills or one large proposal. The former may be a better path as Democrats, having spent their political capital generously in 2009 on a less than stimulating stimulus bill, are facing the no win situation of seeking to create jobs without appearing to spend like drunken sailors. In 2010, there are a number of legislative issues that Democrats could move through Congress and could be chalked up to “legislative wins” like food safety legislation, highway funding bill, and GSE reform to name just a few. Some of the more controversial items that are unlikely to come to a vote on the floor this year include immigration reform, Employee Free Choice Act (card-check), repeal of “Don’t Ask, Don’t Tell” policy, and reauthorization of PATRIOT Act.

The 2010 legislative year will be extremely challenging for members of Congress for reasons beyond the political maneuverings outlined above. First, Congress must complete its annual appropriations process. The President recently called for a three year freeze of non-security discretionary spending that is expected to save $250 billion over the next 10 years. While the freeze would not affect Defense Department spending, veterans programs, foreign aid and the Homeland Security Department, it will make the already difficult job of passing appropriations bills that much harder and increases the likelihood of a packed lame-duck session of Congress. Second, the Bush tax cuts are set to expire by the end of 2010 and the annual AMT patch and estate tax reform, which is currently set at zero percent, is slated to increase dramatically in 2011.

Finally, 2010 is an election year and members of Congress will want to get back home and campaign by early October, shortening the usual congressional calendar. Looking to the 2010 midterm Congressional elections, many Democrats are justifiably worried about their party’s prospects. Democrats hold majorities in both the Senate and House, but increasing voter discontent and Democratic incumbent retirements, coupled with expected low voter turnout from young and minority voters, make prospects for a significant, if not majority-changing election very real.

Democrats currently hold a 57-to-41 majority in the Senate with two independents caucusing with the Democrats for a working majority of 59 seats. Early political prognostications see little chance for Republicans to take back control of the Senate in November, with each party defending 18 seats. The Cook Political Report rates seven of those Democratic seats as “competitive” with only four Republican seats falling in the same category. Even if the Republicans were able to “run the table” and win all seven competitive Democrats seats while not losing a single Republican seat, Democrats would still control the Senate 50-to-48 with two independents.

One of the several bellwether Senate races is Sen. Michael Bennet’s Democratic seat in Colorado. Colorado had been trending Democratic based on the 2006 and 2008 elections, but could see a Republican resurgence in 2010 with potential statewide wins in the Governor and Senate races. Two other bellwether races to watch are the Republican open seats in Ohio and New Hampshire where Republicans have been losing ground in the last two elections. Both are rated “toss ups” by Cook Political Report and Republicans enjoy strong candidates in each state with former Republican Congressman and U.S. Trade Representative Rob Portman in Ohio and former Republican state Attorney General Kelly Ayotte in New Hampshire. Another bellwether is Missouri, as it is also one of the nation’s most closely divided states from a political perspective. Democrats and Republicans each have top-tier candidates running in this open Senate seat, formally held Republican Sen. Kit Bond. Republicans could also pick up Democratic Senate seats in Arkansas, Illinois, Nevada and Pennsylvania, but must defend competitive seats in Kentucky, Missouri, New Hampshire and Ohio. Early predictions see Republicans gaining five to seven Senate seats.

While still somewhat beyond reach, the November midterm elections present a slight possibility for a Republican takeover in the House of Representatives. Democrats currently enjoy a 256-to-178-seat majority. Republicans would have to win a net total of 40 seats in order to win the 218 seats needed to take control. While Democrats should be thankful that the elections won’t be held until November, the ghosts of elections past, most notably the 1994 election which saw Republicans gain control of the House after a 40-year drought, remains a very legitimate fear. Without a change in political dynamic or improvement in the economy, Democrats in the House stand to lose 25-35 seats. At the beginning of the year the Cook Political Report put over 40 Democratic House seats in the competitive category with nearly 20 of those as toss-ups. In contrast, Cook only puts 10 Republican House seats in the competitive category and only two of those as toss-ups.

The key factors likely to impact the 2010 midterm elections beyond the state of the economy include future Democratic retirements, Republican candidate recruitment and Congressional ethics issues. One additional factor that cuts both ways is the role of Tea Party efforts and the level of public dislike of anyone perceived as part of the government, i.e. incumbents or front-runners who are shrouded in the cloak of incumbency like Martha Coakley in Massachusetts. Even more ominous for Democrats are early polls showing Republicans with a 15-point lead among those voters most likely to vote. With no Obama on the ticket and the historical negative trends for the incumbent party in a midterm, the early signs are downright frightening for Democrats.

As the president and the Democrat-controlled Congress seek to put their ship back on course, we will have to wait and see if President Obama takes a cue from President Clinton after the disastrous 1994 elections and seeks to move to the center. Historically, presidents have achieved their greatest accomplishments when taking on their base of support and getting them to go along with initiatives outside of their comfort zone. Several examples include Nixon opening up relations with communist China, Lyndon Johnson passing voting and civil rights legislation and, more recently, Clinton passing welfare reform.

It remains to be seen if President Obama has the will or the circumstance to move more to the center. Several factors arguing against a move to the center include the very real threat of a progressive revolt. The base’s increased disillusionment with the escalation of the wars in Iraq and Afghanistan, added to the president’s failure to close the prison in Guantanamo Bay and his retreat on health care reform give President Obama little room to maneuver. He will certainly get no help from the other side of the aisle, as Republicans do not see it in their short-term political interest to work toward bipartisan solutions to bailout Democratic initiatives. As Congress sails toward Election Day, Democrats are seeking to find a way through their agenda to tap into the public anger or at least target it equally on Republicans, while Republicans are focused on not putting themselves in between an angry electorate and the democratically controlled House and Senate.

Richard White is a founding principal of the Alpine Group, a Washington based federal legislative consulting firm, and co-head of the firm’s health care policy practice. His practice areas include Medicare reimbursement coverage and payment issues, FDA and drug approval issues, as well as Medicaid policy.