9.20.2022 Washington Update

“I’m certainly not minimizing the impact that inflation, that the cost of food, that the cost of gas and all of those things obviously have a very significant impact on an individual or on a family, but losing your right to reproductive freedom. I mean, once that’s gone, it’s gone.”Dana Nessel, Michigan Attorney General, September 13, 2022

It’s the economy, stupid.”  James Carville, 1992

Let them eat cake.” Marie Antoinette, 1789 

Outlook: Michigan AG Dana Nessel’s framing of the choice voters will make in about 50 days seems to be the byword for the mid-term elections—at least for the Democrats.  We don’t minimize abortion as an issue in November, but will it trump (to use a word) the economic concerns of everyday Americans, especially those in states that matter electorally, and who continue to be burned by high inflation?  Or for that matter, crime?

Forgive the generalization, but it captures political reality: Democrats are the party of the coasts (L.A., New York, D.C.) and Republicans the party of fly-over country (Tulsa, Omaha, Wapakoneta).  To put it mildly, voters in these regions have different priorities.  How are these respective constituencies thinking about the issues most important to them?

Here’s one relevant example from the heartland: the results of a September 6-12 YouGov poll of likely voters in Pennsylvania.  Here is the breakdown of the “most important issues”:

  • Economy – 80%
  • Inflation – 77%
  • Crime – 65%
  • Election issues – 64%
  • Guns – 61%
  • Abortion – 56%

Economy, inflation, crime—to us, these priorities will likely persist for the next 7 weeks.  Again, this is not to say, as the above numbers suggest, that abortion can be ignored.  Far from it: Republicans’ tone and messaging on the issue is confused, at best.

Post Dobbs, the GOP’s positions, on some aspects of the issue, have significant popular support (e.g., opposition to partial-birth abortion, parental notification, etc.).  But they aren’t conveying them well—in many cases, they’re simply not conveying them at all.  Republicans must get their act together on this issue, or else it could prove an albatross that will cost them some key races, especially in the Senate.

But as we look at the data, in the areas of the country that really matter—by which we mean those areas that will determine which party will control Congress in 2023—Dana Nessel’s message could seem, at least to some voters, as a bit off the mark.  That, at least, is what Republican members and staff tell us.

Nessel’s attitude, in the GOP view, creates an opening.  In our conversations, Republicans say that Democrats are making a fundamental mistake: they are telling voters what their priority ought to be—abortion rights—rather than listening to their concerns and responding with policies to reduce exorbitant rent, grocery, and electricity bills and keep criminals off the streets.  In other words, Republicans repeatedly tell us, Democrats are living in a Marie Antoinette moment, and it can be summed up as: “Let them eat cake, if they can afford it.”

All this may be true.  Yet Republicans are not immune to this tendency.  One need only recall Sen. Lindsey Graham’s (R-SC) press conference announcing a national abortion ban after 15 weeks—a stance that collides directly with the GOP message on inflation and the economy (not to mention the longtime GOP policy that abortion policy should be left to the states).  This could be characterized as, “Let them eat cake, but only after they take their medicine first.”

Beyond Pennsylvania, we wonder how inflation is playing in key battlegrounds.  Certainly, the overall inflation number in August—8.3 percent—was bad news for the party in power.  But dig deeper and you’ll find something even more telling.  As Bloomberg reported, inflation in Phoenix soared to 13 percent in August, “a record for any city in data going back 20 years.”  Also significant: this figure is more than twice as high as San Francisco.

“Other cities across the South and Southwest,” Bloomberg found, “saw double-digit increases in consumer prices, with the Atlanta metropolitan area posting annual inflation of 11.7% and Miami reaching 10.7%, according to Bureau of Labor Statistics data.”

Yes, 8.3% is bad, but these numbers are much worse.  Inflation is positively crushing voters in Arizona, Georgia, and Florida, all states with important Senate races.  It’s hard to think that inflation won’t be a dominant issue there.  Of course, all three Senate races are hotly contested, with the GOP behind in Arizona and neck-and-neck in Georgia and Florida.  Will anger over inflation eventually win the day for Republicans?

Right now, it’s hard to tell.  So, let’s drill deeper.  Sometimes the Consumer Price Index doesn’t quite capture the reality on the ground.  Consider Cleveland, Ohio.  As Jess Morgan of the Greater Cleveland Food Bank lamented in August, “We’re serving more people right now than we did at the height of pandemic in calendar year 2020, and a lot of that has to do with the fact that gas is more expensive, food is more expensive, utilities are more expensive.”  Morgan said a case of green beans used to be $9.99, now the Food Bank is paying almost $20.

The coasts aren’t feeling quite this level of pain.  In San Francisco, “consumer prices rose 5.7% in the 12 months through August,” while in Los Angeles “the rate was 7.6%.” In the New York city metro area, “prices rose 6.6%, a slight acceleration from 6.5% in July.”

We don’t mean to diminish these numbers.  But the point is that the disparate inflationary impacts between the coasts and the rest of the country help explain the difference in tone, approach, and messaging the two parties are taking as November approaches.  One party emphasizes inflation and crime, the other abortion.  Which will matter more?

Of course, Democrats point to momentum in the past few months, especially around passage of the Inflation Reduction Act (IRA).  But, as Republicans tell us, voters will be skeptical to indifferent about a prescription drug policy that won’t show results until well beyond November, while $380 billion in climate change spending will prove Democrats are “out of touch.”  By the same token, the Democratic base is clearly enthusiastic about this bill.

So how will the IRA play in November?  As we’ve observed over the years, after Labor Day, elections typically get boiled down to a few pivotal questions, focused on a few key issues.  The rest is noise.  For us, then, the foregoing questions are what we’re focused on.  How they get answered will largely determine the outcome in November.

Congress: Congress returns this week and will continue working towards passing a continuing resolution (CR) ahead of the September 30th deadline next Friday. The CR will fund the government through December 16th. A big question remains: What else will be hitching a ride?

Funding for the war in Ukraine, most likely.  The Biden Administration proposed $13.7 billion ($11.7 billion for Ukraine, $2 billion for domestic energy needs as a result of the Ukraine war), while Senate Majority Leader Chuck Schumer (D-NY) on Sunday called for $12 billion. Senate Republican Leader Mitch McConnell (R-KY) signaled conditional support, cautioning that the GOP will have to see how much is geared to helping Ukraine.

Disaster relief is still under consideration. However, the Biden Administration’s request for COVID and Monkeypox funding is encountering Republican resistance, with many Republicans calling on the Administration to repurpose unused COVID funding, especially since President Biden this week declared on 60 Minutes, “The pandemic is over.”

What of Sen. Manchin’s permitting reform bill?  Not likely, in our view.  Manchin can’t seem to overcome progressive opposition in the House, while few if any Republicans in the Senate appear willing to help.  As Sen. John Barrasso (R-WY), ranking member of the Senate Energy and Natural Resources Committee, put it, “If you [Sen. Manchin] are now looking for Republicans to support and give you more cover than you have right now, you are not going to find it with us.” Meanwhile, Manchin has lost Sen. Ed Markey (D-MA) and Sen. Bernie Sanders (I-VT).

National Defense Authorization Act (NDAA): Both leaders of the Senate Armed Services Committee want to see the 2023 NDAA move this month. However, they face long odds given the Senate’s focus on the CR. The limited window for action along with the desire of members to get home for the final stretch of campaigning will most likely punt NDAA until after the November elections.