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2014 Midterm Elections

7/30/2014

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by Greg Casey, president and chief executive officer of BIPAC

Strange things can happen in the 90 days before an election.

The plethora of Washington political pundits have done their best to provide us with an endless stream of assessments of the 2014 elections.  By looking at respective war chests of the party
campaign committees and some of the competitive campaigns, they give the financial advantage to the Democrats and their fundraiser-in-chief.  The same pundits, aware of the second term woes of an incumbent President, analyzed the polling data and constructed a fall narrative which leans Republican.  

Emerging from all this is the common understanding the GOP will hold the majority in the U.S. House of Representatives and add a few seats to their margin.  The GOP will gain anywhere from four to eight seats in the U.S. Senate.  Thus, the big question remains unanswered and as of now, is unanswerable.  

The average voter doesn't focus a lot on the fall elections until after summer vacations are over and the kids are back in school.  That makes pre-labor day polling a trailing edge indicator rather than a reliable predictor.  However, the upcoming Congressional August recess signals the beginning of the real fall campaigns.  

Incumbents come face to face with constituents and insurgent candidates come face to face with incumbents.  It is a revealing test for both.  It is a time when the reality of "out there" sets in and begins to replace the party dogma in shaping fall campaigns.  This is the period of time which has given rise to many transformational election dynamics:  the Contract with America, the Tea Party and the ripples of eventual wave elections.  So what should we be looking for in the next few weeks?  

At some point in the next 60 days, public opinion solidifies on the big issues. Already, two thirds of the voters think the country is on the wrong track. Voters are unhappy with the President's handling of just about every current issue, let alone the chronic drag of Obamacare.  Thus, over the next two months, Democrats are going to discover the President's 42% Real Clear Politics national approval rating is inflated.  In perpetual swing states like Iowa, which is attuned to politics as few others, his approval is already at 40% and falling and it is unlikely to get any better.  Democrats will increasingly be swimming against the tide of an unpopular President and an unlikable Senate Majority Leader.  This is going to change the campaign dynamics.  Watch for desperate candidates with troubling internal polling to begin turning toward more provocative positions.   

Although republicans still have a brand problem, Democrats have an increasing base turnout problem.  Currently 38% of voters have a "favorable" impression of Democrats compared to only 29% who feel favorable towards Republicans.  Neither number is particular good.  However, 76% of republican voters say they are "absolutely certain" to vote in November compared to only 67% of the democrats.  

Although unemployment numbers suggest an economic revival, the GDP shrank nearly 3% in the first quarter and the average household wage is about where it was a decade ago.  For the average voter, the economic revival isn't real and national statistics are unlikely to convince them otherwise.  That is why democrats have turned their monetary advantage toward motivating their base by pushing social issues that may not play well in some of the more competitive Senate races: read war on women and gay marriage playing in Arkansas, Georgia, Alaska, Montana, Louisiana, Iowa, Kentucky and North Carolina.  Their push of the impeachment rumor to motivate their base is unlikely to get much traction unless some clueless republican gives it credence, ala Akin and the war on women, 2012.

Moving down the home stretch, the bigger challenge for Senate candidates may have less to do with all this partisan politics than finding ways to appeal to state electorates looking for honest, genuine, level headed leadership.  GOP candidates have to prove to a skeptical public they are ready to govern wisely by showing less intolerance and more positive vision.  Democrats have to prove they aren't going to provide more of the same by blindly following the President and his agenda.  

In the race for the U.S. Senate in Iowa, GOP candidate Joni Ernst will win because she is genuine Iowa.  Congressman Bruce Braley played politics with his comments about Senator Chuck Grassley.  Senator Mitch McConnell made his election more difficult by telling a job hungry electorate "economic development isn't my job."  If Senator Mark Udall loses in Colorado, it will be because Cory Gardner stayed on a positive economic message while Senator Udall pandered to the social issues of the left.  In deep blue Oregon, Dr. Monica Wheby may sneak up on Senator Jeff Merkley because she has a compelling story and his is more about politics. So on it goes.  

From a realistic standpoint, the barn door is closed on Democrat hopes of retaking the U.S. House.  In the race for control of the US Senate, the GOP has three pickups in the barn with eight tossups in the corral, six of which are Democrat held.  There are another three possible surprises, none of which would accrue to the benefit of Democrats.  All of these latter races will be candidate dependent and in each, signs will soon emerge as to which way they are headed.  We will keep you posted.
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AP:  "U.S. employers post most jobs in 7 years..."

7/8/2014

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Another strong sign that private sector job creators are showing increased confidence in our recovering economy...
U.S. employers advertised more jobs in May than in any month in the past seven years, a sign that this year's strong hiring trend is likely to continue.

More Americans also quit their jobs, a good sign because it usually occurs when workers find new and higher-paying jobs. It also opens up more positions for those out of work.

Employers posted 4.64 million jobs, a 3.8 percent increase from April's total of 4.46 million, the Labor Department said Tuesday.
Learn more in today's Associated Press story, "U.S. employers post most jobs in 7 years in May; more Americans also quit in sign of confidence."
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U.S. Adds 288k Jobs and Unemployment Drops to 6.1%

7/3/2014

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The June jobs report from the BLS is out.  Following a positive ADP report, we see an increase of 288,000 non-farm private sector jobs added to the economy.

The Wall Street Journal also reported that:
May's gain was revised up to 224,000 from 217,000, while April's improvement was upgraded to 304,000 from 282,000. That was the strongest gain since January 2012.
The revised reports from May and April, plus June's official U.S. Department of Labor stats continue to show promise that we are rebounding.  As I write this blog post, CNN also reported that the Dow surpassed the psychological 17,000 today. 

Although job gains are still mostly coming from the traditional low-paying sectors:  retail (+40k) and leisure and hospitality (+39k), economists and analysts continue to show increased confidence due to the skilled laborer increases - such as manufacturing (+16k) and construction (+6k).

To learn more, read WSJ's story from today by Jonathan House and Ben Leubsdorf.
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Business and the Tea Party Insurgency

6/18/2014

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It is understood the GOP will maintain control of the U.S. House of Representatives, which does not speak to "who" will control the House GOP. The exodus of so many senior Democrats is telling. Regarding governors, although the GOP will lose ground, the big gains Democrats hoped to achieve in state houses isn't going to materialize. All eyes are then focused on whether the GOP will regain the U.S. Senate.
 
Washington wisdom suggests outright control of the Senate is the GOP's to lose. The environment seems consistent with that. The public leans towards GOP control of Congress. The President's approval is under water by double digits in key states and some core issues are going south for their party. Historically, the party of the White House doesn't do well in the off year election during a President's second term and given their base historically doesn't show up well in off year elections anyway, therefore Democrats face a potentially toxic political environment in November.
 
The math and the cadre of quality GOP candidates also seems to suggest a GOP advantage. The GOP needs six seats to regain the majority outright. Three of those seem certain, assuming the GOP candidates in Montana, South Dakota and West Virginia keep their eye on the ball. That leaves a target rich environment of another eleven or so potentially competitive Senate races from which the GOP needs to win three, assuming they hold Georgia and Kentucky. In six of those eleven states, Alaska, Arkansas, Colorado, Iowa, Louisiana and North Carolina, the GOP candidate leads in three and the other three are legitimate jump balls. Let's not slice this to fine at this point. They are all close. There are five other races in Oregon, Michigan, Minnesota, New Mexico and Virginia that lean Democratic but with numbers to iffy to provide much comfort. A little push from a legitimate wave and the close seats and anyone of these leaners could move in the GOP direction.

Still, the GOP has recently squandered similar opportunities. This time, however, it may be less about bad candidates than outdated campaigns. The recent upset of House Majority Leader Eric Cantor in Virginia teaches us three obvious lessons; keeping your eye on the ball back home matters, money alone is no cure for taking your eye off the ball and the electorate everywhere is pretty angry at Washington arrogance. Maybe not so obvious, however, was the oft stated disdain for Leader Cantor's cozy relationship with "corporate influence."   While anti-big business, "crony capitalism" has been part of the Tea Party line for some time, it was full-throated the day after this unknown and underfunded candidate upset the Majority Leader even after being outspent 5 to 1.
 
As I was preparing my thoughts for this newsletter, Red State published an article entitled "Big Business is afraid of conservatives - and they should be." Although I don't buy the full narrative, it does speak to a growing belief among many that "corporate" America is as much a part of the problem as "big government" and hints that big, overt corporate support of candidates may not always be as helpful as it once was.
 
This carries a significant warning, less related to the rhetoric of the extreme right than it to the tactics used to defend against their insurgency. Congressman Ralph Hall (R-TX) had the support of the business "establishment" and lost in a run off.  Senator Thad Cochran (R-MS) had the support of the establishment too and came in a close second in his primary and is forced to a runoff. Conversely, Tea Party targets Congressman Mike Simpson (R-ID) and Senator Lindsey Graham (R-SC) made the ground game and personal voter contact mainstays of their campaigns and won handily. While it is obvious there was a significant difference in the capability of these candidates, it does suggest there is no substitute for real grassroots in this environment, even by, or especially by, business. Maybe we should keep our eye on the same ball.
 
Brad Dayspring, a former Cantor aide and NRSC Communications Director said last week, "one of the extremely valuable, must follow lessons is you have to adapt and run a modern campaign. Doing things the same old way in the current environment and with the current electorate isn't going to cut it anymore." Good advice for the GOP and for the business community.
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USA Today - "Job openings soar to highest since 2007"

6/17/2014

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Good news from the U.S. Department of Labor, via today's USA Today story, "Job Openings Soar to Highest Since 2007" by Doug Carroll:
Tuesday's report comes from Labor's monthly Job Openings and Labor Turnover Survey, which is closely followed by economists and Federal Reserve policymakers for its insights into labor market trends.

The report shows openings grew in every region of the country in April. The sharpest improvement was in the Midwest, where openings increased 13% from March and topped a seasonally adjusted 1 million for the first time since August 2001.

The South led in total openings, as it always does, with 1.6 million seasonally adjusted. In the West, openings were about 1 million and in the Northeast, 771,000.
To learn more about this report, please visit http://www.bls.gov/jlt/.
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The Fight for (Exports and) Jobs

6/12/2014

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Exports supported 11.3 million U.S. jobs in 2013.  This is an increase of 1.6 million since 2009. Learn about the fight for jobs, supported by exports, from the CNH Industrial Digital Trade Toolbox and CNH Industrial’s Joseph Samora.
The CNH Industrial Digital Trade Toolbox includes a tool so you can make your voice heard in the fight for jobs that are supported by exports.  Visit www.cnhindustrialtrade.com and click on the “Write to your Congressperson” link to help support the re-authorization of the U.S. Export-Import Bank (Ex-Im) before its authorization expires on September 30.  In 2013, Ex-Im helped to finance $37 billion in U.S. export sales, supporting approximately 205,00-0 export-related American jobs.
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Forbes - "Jobs Report: U.S. Economy Added 217K Jobs In May, Unemployment Remains Unchanged At 6.3%"

6/6/2014

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The U.S. Department of Labor's Bureau of Labor Statistics (BLS) released the May Jobs report this morning, saying:
Total nonfarm payroll employment rose by 217,000 in May, and the unemployment rate was unchanged at 6.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, health care and social assistance, food services and drinking places, and transportation and warehousing.
To learn more, read the Forbes ongoing story, "Jobs Report: U.S. Economy Added 217K Jobs In May, Unemployment Remains Unchanged At 6.3%" by Maggie McGrath.
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Primary Results for GA, ID, AR, KY, PA and OR

5/21/2014

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It was a big day for primaries around the country and the business community should be very pleased with the results as favored candidates won or advanced to runoffs in almost all cases.

Georgia: Runoff: July 22

Senate:

David Perdue and Jack Kingston advanced to a July 22 runoff. Vote percentages for all candidates were: David Perdue: 30%, Jack Kingston: 26%, Karen Handel: 22%, Phil Gingrey: 10%, Paul Broun: 10%. In such a crowded primary, paths to victory existed for each candidate in the early going, with the Georgia business community largely supporting former Reebok and Dollar General CEO David Perdue and longtime Congressman Jack Kingston. This is the best possible result for the business community as either candidate would be an excellent advocate. The eventual winner will face Michelle Nunn who secured the Democratic nomination with no real opposition. The general election may be competitive and is a top target of national Democrats.

House:

With three House members running for Senate, there were three open seats in Georgia and Congressman Hank Johnson also faced a tough primary challenge in his heavily Democratic district. All three open seats are in solidly Republican districts and are not expected to be competitive in the general election. The business community will want to be immediately and actively engaged in at least two of the runoffs.

GA-1: Jack Kingston's open seat, centered in Savannah, had a field of six candidates and State Senator Buddy Carter and physician Bob Johnson will advance to a runoff. Carter, a community pharmacist, split business community support with businessman John McCallum who came in third. Johnson, who modeled his candidacy on Ron Paul and courted tea party supporters, attracted controversy last month when he said he would rather experience another 9-11 than put up with TSA search regulations. The general election is not expected to be competitive, so the business community should immediately and actively engage in the runoff in this district, much like the 10th district.

GA-4: Congressman Hank Johnson barely held off primary challenger DeKalb County Sheriff Tom Brown. Brown outraised Johnson financially, but ultimately came up short. This is a solidly Democratic district and not competitive in the general election.

GA-10: In Paul Broun's open seat, covering much of the east-central portion of the state, six candidates vied for the nomination with Mike Collins and Jody Hice headed to a runoff. Jody Hice is an evangelical preacher and radio talk show host who focused his campaign on social issues while local trucking company operator Mike Collins is the son of former Congressman Mac Collins. Collins, who has not held elected office before, is expected to consolidate the support of the business community in the runoff. Hice has actively expressed opposition to several priorities of the business community in Georgia. The general election is not expected to be competitive, so if the business community would like to have a partner in this district, the runoff is the place to engage.

GA-11: Congressman Gingrey's suburban Atlanta district also had six people on the ballot with former Congressman Bob Barr and State Representative Barry Loudermilk advancing to the runoff. Most of the business community here supported State Rep Ed Lindsey and Workforce Development Director Tricia Pridemore and unfortunately neither advanced to the runoff. Loudermilk ran as a champion of tea party values while former member of Congress Bob Barr pointed to his record of conservative activism as reason to return to Congress. The general election is not expected to be competitive.

GA-12: John Barrow is one of the last remaining Blue Dog Democrats in the Congress and will face Augusta businessman Rick Allen who won a crowded Republican primary with over 50% of the vote. The business community here is split between Barrow and Allen and has historically had a good working relationship with Barrow. Allen started and runs a large local construction company and has been an active supporter of local business interests. This top Republican target district went to Romney by 12 points.

All other Congressional incumbents won their primaries and none are expected to be competitive in the general election.

Kentucky

Senate:


Republican Leader Mitch McConnell easily beat tea party challenger Matt Bevin in the GOP primary. Bevin was championed by conservative groups around the country but McConnell's superior fundraising and organizational capacity left him little to worry about. Democrats see this seat as a pick up opportunity with their nominee Secretary of State Alison Lundergan Grimes. Current polling has the race very close despite the outsized Republican performance in Kentucky at the Presidential level.

House:

All House Incumbents won their primaries and none are expected to be competitive in the general election.

Idaho:

Senate:


Incumbent Jim Risch won his primary and the seat is not expected to be competitive in the general election.

House:

In the second district, Congressman Mike Simpson easily defeated tea party financed challenger Bryan Smith. Simpson was endorsed by BIPAC and we actively engaged the local business community through our state partner, the Idaho Association of Commerce and Industry, to share Simpson's record of support for the business community, and sustained job and economic growth. The general election is not expected to be competitive.

Arkansas:

Senate:


Nominations were formalized for incumbent Democrat Mark Pryor and Republican challenger, Congressman Tom Cotton. Neither faced primary opposition. The general election between the two will be among the most closely watched in the country and is a key component to Republican attempts to retake Senate control.

House:

AR-2: Retiring Congressman Tim Griffin's seat is expected to now go to Little Rock banker French Hill who won the Republican primary in this solidly GOP seat. Hill has been a leader in the local business community and received enthusiastic backing from state, local and national business interests. He is expected to be champion of economic growth policies in the next Congress.

AR-4: In the race to fill Tom Cotton's open seat, State Senator Bruce Westerman beat young businessman Tommy Moll in the Republican primary. He will face former FEMA director James Lee Witt in the general election. The seat is solidly Republican, but Witt's high profile makes this a seat to keep an eye on. The local business community split between Westerman and Moll and the race didn't turn heavily on ideological differences.

Incumbents Steve Womack and Rick Crawford both won their primaries and do not expect difficult reelection battles in the general election.

Oregon:

Senate:


In the Republican Primary, physician Monica Wehby defeated State Rep Jason Conger and a handful of minor candidates to win the nomination to challenge Democratic Incumbent Sen. Jeff Merkley. Wehby, a pediatric neurosurgeon, has run close with Merkley in recent polling and is a candidate garnering broad support from the business community in Oregon and nationally. This past weekend, Wehby faced a scandal involving "stalking" a former boyfriend and it remains to be seen how that resolves itself with voters.

House:

All Oregon incumbents won their primaries and none are expected to have difficult reelection fights in the general election.

Pennsylvania:

House:


PA-6: In the race to replace retiring Rep Jim Gerlach, nominations were formalized for Republican Ryan Costello and Democrat Manan Trivedi. Costello is a business-oriented County Commissioner and Trivedi is a physician and Iraq War veteran who previously ran twice against Gerlach. Neither faced primary opposition and though the district leans Republican, Trivedi is an experienced candidate with a strong biography that could make the seat competitive.

PA-8: Rep. Mike Fitzpatrick will face Democratic challenger Kevin Strouse who defeated Shaughnessy Naughton in the Democratic primary 53-46 and presents a potentially serious challenge to Fitzpatrick in this suburban Philadelphia district though Fitzpatrick has consistently outperformed other Republicans in the district.

PA-9: Congressman Bill Shuster easily held off tea party oriented challenger Art Halvorson who partly self-funded a challenge to the incumbent. Shuster is not expected to have a significant general election challenge.

PA-13: In one of the most interesting races of the day, State Rep. Brendan Boyle handily won the Democratic nomination in this heavily Democratic open seat vacated by Allyson Schwartz. With four compelling and talented candidates, each with very different appeals and paths to victory, Boyle gathered almost 55% of the vote. The general election is not expected to be competitive.

All other Pennsylvania incumbents won their primaries and are not expecting difficult re-election fights.
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Stakes in the States: Recall Elections

8/12/2013

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What is a recall election? It is a procedure that allows citizens to remove and replace an elected official before the end of their term. Recalls can be used to rid the office of a corrupt or incompetent leader, for partisan politics, or removing officials for a policy position. It is estimated that a majority, three-fourths, of recall elections are at city council or school board level, though there have been increasing instances of recalls at the state level. Nineteen states (AK, AZ, CA, CO, GA, ID, IL, KS, LA, MI, MN, MT, NV, NJ, ND, OR, RI, WA and WI) and the District of Columbia currently allow recalls of state officials. In the past three years, several states have seen state elected officials face recalls, including WI, AZ, MI and currently, CO.

State Level Recalls since 2010 (according to National Conference of State Legislatures)

  • 2011 Wisconsin: Nine state senators faced recall elections regarding the budget bill proposed by Governor Walker (R). Sens. Robert Cowles (R), Alberta Darling (R), Dave Hansen (D), Sheila Harsdorf (R), Jim Holperin (D), Luther Olsen (R) and Robert Wirch (D) survived recall attempts. Senators Randy Hopper (R) and Dan Kapanke (R) were recalled.
  • 2011 Arizona: Senate President Russell Pearce (R) was recalled over his sponsorship of AZ’s immigration law.
  • 2011 Michigan: State Representative Paul Scott (R) was recalled for supporting Gov. Snyder’s budget and angering teachers unions.
  • 2012 Wisconsin: Gov. Walker and four state senators faced recalls over collective bargaining issues. Gov. Scott Walker, Senate Majority Leader Scott Fitzgerald (R) and Senator Terry Moulton (R) survived recall attempts. Senator Van Wanggaard (R) was recalled. Senator Pam Galloway (R) resigned before her recall election, a recall was still held for her seat.
  • 2013 Colorado: State Senate President John Morse (D) and Senator Angela Giron (D) face recall elections on September 10 for their support of gun control legislation.
In the first ever recall elections of state lawmakers in Colorado, two Democratic senators in Colorado are facing recalls due to their vote on stricter gun control measures, State Senate President John Morse of El Paso County and Senator Angela Giron of Pueblo County. After the Secretary of State deemed there were enough signatures for a recall, Gov. John Hickenlooper (D) set the recall election date for September 10, 2013.

The gun control bills causing such uproar in CO, passed in the 2013 legislative session by the Democratically-controlled CO state legislature, were the first such bills passed in over ten years. This is a hot topic issue in a state that is well known for the Columbine High School and Aurora shootings, but is also known for its bipartisan passion of hunting and sport shooting.

A group behind the recall, the Basic Freedom Defense Fund (501 (c)(4) non-profit), was set up in February in response to the passed gun legislation. The founding members say the main issue is about legislators not listening to their constituents. Originally, four Democrats were targeted to be recalled, including Sen. Evie Hudak (D) of Westminster and Rep. Mike McLachlan (D) of Durango but only the recall attempts for Sens. Morse and Giron gained enough signatures. Former Colorado Springs City Councilman Bernie Herpin (R) is challenging Morse and former police officer Georgia Rivera (R) of Pueblo is challenging Giron.

Money has been pouring into the elections, with Giron and Morse raising nearly a quarter million dollars, and receiving thousands of dollars from Colorado liberal groups. Recall supporters have been sending their funds to the Basic Freedom Defense, and the NRA has helped with mailers and phone banks. According to El Paso and Pueblo county clerks, the elections will cost somewhere between $150,000 and $200,000.

Even if the recall attempts are successful, Democrats will still hold the majority in the Senate, 18-17. However, supporters of the recall still hope this will send messages to legislators in CO and across the country.

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State Unemployment Rates

6/5/2013

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The economy is always a major headline in elections, especially unemployment rates. When looking at the unemployment numbers for the states that have governors up for reelection in 2014, 14 states currently have unemployment rates higher than the national average of 7.5%. How significantly will these numbers affect the elections? While it is true that several of the nation’s most unpopular governors are on this list, including Chafee (I-RI), Quinn (D-IL) and Corbett (R-PA), other governors with high unemployment rates are relatively popular. Nevada has one of the highest unemployment rates right now with 9.6% unemployment, yet Gov. Sandoval (R) has positive approval ratings. While unemployment rates may not predict the outcomes of races, it is certainly a factor to keep in mind going into the 2014 elections.
Unemployment
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