Economic Policy Issues Throughout the 2018 Midterms (November 2)

Update 311: Economic Policy Issues
Throughout the 2018 Midterm Campaign

As we look ahead to next week’s midterms, we take a look back at four of the key economic policy themes that have played out this cycle. Across the country this cycle we have seen common themes and policies resonating with voters in seemingly disparate districts — from Appalachia to rural California.

In a long series of change elections, Democrats in the House have been able to harness the energy of a strong, grassroots movement and advocate for progressive economic policies that throw down the gauntlet to Republicans. On Tuesday we will find out if this diverse, but united freshman class will make it into the 116th Congress.

If you would like to get involved this weekend, click here to see what you can do.

Best,

Dana

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Wall Street and Financial Regulation

2018 saw the passage of the broadest deregulation of financial institutions in the post-Dodd-Frank era. The enactment of S. 2155 in May showed how Republicans in Congress — and some Senate Democrats — are still beholden to the big financial firms on Wall Street and the mega-regionals.  While the issues can be arcane and unfamiliar to voters, many candidates acknowledged the ten-year anniversary of the 2008 financial crisis by campaigning in favor of Dodd-Frank — a refreshing change to the deregulatory drumbeat on the Hill.

Among them:

  • Katie Porter in CA-45 has experience as a consumer protection attorney and has witnessed first-hand some of the unscrupulous practices of banks without proper oversight. If elected, she will be a staunch defender of the imperiled Consumer Financial Protection Bureau.
  • Amy McGrath in KY-06 calls for greater oversight of payday lenders. Her position is in stark contrast to her GOP-opponent, Rep. Andy Barr, who voted for the Financial CHOICE Act, a bill which would repeal many provisions under Dodd-Frank. Rep. Barr has also received nearly $40,000 in campaign contributions from the payday lending industry.

Two-thirds of registered voters say they are more likely to support a candidate who includes regulating Wall Street as a part of their economic agenda and 69 percent agree that weakening regulations on banks that got bailouts after the financial crisis is an example of Washington corruption.

To this end, here at 20/20 Vision, we have put together a Banking Policy Pledge for candidates and incumbents this cycle to commit to protecting the welfare of taxpayers and rejecting the deregulatory banking industry legislative agenda.

Fiscal Policy

At the beginning of the election season, GOP candidates for Congress tried to run on the success of the Tax Cuts and Jobs Act, but quickly found out that message wasn’t playing out as well with voters as expected.  Republicans passed the bill nearly a year ago and many soon realized that the majority of benefits went to corporations, not middle-class Americans. Perhaps most importantly, there is the issue of the pending $1.5 trillion increase in the deficit.

Democrats have been using the TCJA as a successful weapon against their opponents this cycle. In the PA-18 special election, Republican strategists thought the TCJA message would take Conor Lamb down. Instead, voters paid much more attention to other issues like health care, the opioid crisis, and entitlements, propelling Lamb to victory. Specifically in terms of entitlements, Democrats have been able to use the TCJA, and the accompanying hole in the federal budget, to emphasize the risks to Medicare, Medicaid, and Social Security.

Senate Majority Leader Mitch McConnell said in an interview on October 16, “[the debt] is driven by the three big entitlement programs: Medicare, Medicaid, and Social Security.” In the next Congress, Republicans, suddenly and disingenuously promoting a fiscally conservative agenda, may talk about cutting entitlements to make up for the huge increase in the deficit. Fortunately, they won’t be able to pass bills to enact that agenda without a House majority.  

Political Corruption

Though typically not a conventional economic policy issue by definition, political corruption has played an outsized role in this cycle. In a 2015 Gallup poll, 75 percent of Americans saw corruption as “widespread” in Washington. Democrats are pushing hard for voters to see their party as one that will fight corruption and make government work for them:

  • House and Senate Democrats rolled out the Better Deal for Our Democracy in May as a general anti-corruption and citizen empowerment package to capture voters’ attentions early in the midterm cycle. 
  • Sen. Elizabeth Warren exercised leadership by introducing her Anti-Corruption and Public Integrity Act in August about lifetime bans on lobbying for members of Congress.

A large majority of Democratic challenger candidates this cycle have made democracy reform a top issue, with almost 200 Democratic candidates rejecting corporate PAC money. Democrats are also incorporating the GOP tax “scam” into this messaging, which folds in easily, as nearly 83 percent of the bill’s benefits go to the top one percent of income earners.

Progressive candidates have used Republican corruption scandals this cycle, including those of the President and his close colleagues, to bolster their notion that the Democrats will implement real anti-corruption and empowerment solutions.

Democrats have also focused on local corruption issues, such as Rep. Scott Taylor’s third-party fraud in VA-02 and Rep. Duncan Hunter’s misuse of campaign funds CA-50. In these key districts, Democrats are using this platform to win over minority constituents and independents, who are fed up with the status quo and looking for leadership to get government working for people, instead of wealthy special interests.

Healthcare

This election cycle, candidates everywhere are referring to healthcare as the top economic issue for their constituents and therefore, for their campaigns.  For Democratic candidates, protecting what is left of the Affordable Care Act (ACA) has become the baseline priority of the cycle. The repeal of the individual mandate, further attempts to gut the ACA, and Trump’s continued calls for rescinding protections on pre-existing conditions threaten millions of Americans’ coverage and well-being.

In states where the effects of the opioid epidemic are felt, we are seeing Democratic candidates gain ground in typically safe GOP districts, such as PA-01 or VA-05.  In party strongholds, establishment figures have been upended in several primaries by grassroots challengers, like Alexandria Ocasio-Cortez, who advance progressive policies such as Medicare-for-all.

Republicans, in contrast, are divided. Many GOP candidates have found themselves in a bind and have shifted their positions after the failed attempt to repeal the ACA. Their campaigns have turned to focus on other topics, like immigration. GOP support from older constituents is particularly hemorrhaging over the issue of repealing protections against pre-existing conditions. At the party level, there is virtually no consensus by the GOP on healthcare. Candidates find themselves backtracking on earlier calls to repeal the ACA as their voters strongly rely on, or approve of, existing ACA provisions. Facing the prospect of millions of Americans going uninsured, the Republican party and the majority of Americans find themselves at odds.

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