Monday, January 4, 2010

An In-Depth Look at Obama's Numbers Heading Into 2010, Terrorism Back in Focus, What To Look For In The Coming Weeks and Months, Predictions for 2010

Taking the "Long View"
It has become conventional wisdom in Washington that President Barack Obama is known for "taking the long view", virtually ignoring the short-term political ramifications of decisions and focusing instead on building a portfolio of policies that he believes will lead him to success over time. Sticking by Tim Geithner, expending massive political capital seeking health care reform, defending a stimulus plan that did little to defray unemployment in the near term are all part of the President's bigger plan, which will pay off over the long term, we are told.

You may believe or not believe that the President's policies will ultimately be successful in achieving their goals. And, frankly, you may agree or disagree with the underlying values that are implied by those goals. But one thing is for sure - while the President himself may have the luxury of taking a long view as he is not on the ballot again for almost 3 years, many of his Democratic partners in Congress do not have the same luxury, as all of Democratic House seats and 19 of the 58 Senate seats controlled by Democrats face elections this year.

So what can we glean of the President's current numbers? Let's start by grounding ourselves in them again. Below is the trend from his past month in his approve minus disapprove. As you can see, the President has remained in the channel between the zero line (an equal split between approval and disapproval) and the 7.2% margin of victory he achieved in 2008. Please note that the recent trends (since December 20th) have been impacted by a lack of available polling data. Gallup and Rasmussen both suspended their polling for a few days each around Christmas and New Year's and no other major national polls have come out in the past two weeks. So, the next few weeks will show if these numbers are still good, but below is what we have as of now.

Looking at the President's monthly numbers, he finished December with at +4.5%, his lowest number to date, down 42.4% from his massive numbers when he took office. This means, essentially, that 21.2% of the population or more than 1 in 5 people have changed their view of the President's performance from positive to negative since early in his term. This is a concerning, but not yet damning trend.

In total for 2009, the President averaged +23.1%, which would be an above-average year for a new President. But that was impacted, obviously, by his very high numbers early in his term and we are nowhere near those big numbers now.

In total, being +4 to +5% wouldn't be too horribly bad under ordinary circumstances. I'm sure that the President would be happy to take a 4 or 5 percentage point win in 2012. But, these are not ordinary circumstances. These are circumstances where Democrats have to defend massive majorities in both houses of congress.

Bear in mind, the House that is up for re-election in 2010 was elected in November 2008, when the President won by a 7.2% margin. Therefore, any Presidential approval numbers below that 7.2% spread imply losses in the fall for Democrats in the House. And there were a number of very close races in 2008 -- 6 within 1 percentage point, 11 within 2% and 23 within the President's margin of victory of 7.2%. Worse yet, Congressional Democrats, while they actually outperformed the President in total in 2008 (their aggregate vote margin in the House was about 9%) are underperforming him in current polling.

The Senate is a more complicated situation. Certainly Democrats are being hurt by the drag on their polls in close, open races such as Ohio and Missouri. But they are also a victim of individual failings, such as Chris Dodd's situation with AIG which may cost them a race that they should be winning easily, even in a down year, in Connecticut or the Blago/Roland Burris scandal, which has made a race in Illinois that should be a no-brainer a pick 'em. Republicans have also drafted some good candidates, such as Rep. Mike Castle in Delaware, a true Northeastern moderate, who has a real chance at claiming that seat for the GOP.

So, circumstances are conspiring against the Democrats. But all is not lost. If you look at how much ground the President lost in year one, amidst bloody battles on the stimulus bill and health care and while the economy continued to sag, it could all reverse just as quickly if unemployment turns upward, which it appears poised to do. The problem that they will face is that public perception about the economy tends to lag reality -- just ask former President George Herbert-Walker Bush, who got destroyed, receiving only 38% of the vote right as the economy was roaring back to life in 1992.

It seems inevitable that the Democrats will lose seats, certainly in the House and most likely in the Senate in November. Whether it is simply a minor correction (say 3 or 4 seats in the Senate and 20 or 25 seats in the House) or a 1994-style blood-letting (say 10 seats in the Senate and 40 to 50 seats in the House) remains to be seen. The best thing the Democrats can do is get healthcare down fast and move on to other issues, mainly the economy.

The National Security Dialogue Resumes
For a while in 2009, you could have forgotten that we were fighting two wars in Iraq and Afghanistan and that the focus of the political world from 2001 through the first half of 2008 had been all about terrorism, radical Islam and Al Qaeda. The focus of the political world was on the economy and health care. Two things have brought this issue back to being front and center: the President's decision to commit additional troops to Afghanistan and the attempted bombing of a Northwest / Delta flight from Amsterdam to Detroit.

We have been reminded again that people are still trying to kill Americans. We are also reminded of just how tricky fighting Al Qaeda radicals is. They were based out of Afghanistan. Now, while they are still there in small numbers, they are based in Pakistan but also operate camps in Yemen, Somalia and many, many other pockets throughout the middle east and Africa. Clearly, we can't win this by fighting them country by country, as we have been more or less attempting.

Nor can we realistically put in place security protocols that preclude a future attack. Sure, we are stepping up procedures in response to the attempted bombing. But, once again, we are chasing what Al Qaeda has already attempted, not what they will attempt next. Who is to say that the next attempt won't be on a train? A chemical factory? A nuclear power plant? A hazmat truck? How good do you feel about the security in these places?

The simple truth, that nobody wants to hear, but that I've said many times is that you CANNOT prevent terrorist attacks while retaining a free society. The shear volume of people that move through commercial airports, trains and roads precludes it. Not that we shouldn't attempt to put common sense security protocols in place, but let's not give the false sense that we can ever be in complete control. And let's not overplay the risk....on September 11th, the worst day in aviation history, you were still more likely to be killed driving a car a mile than flying a mile.

Things to Look for Upcoming
Health Care -- negotiations between the House and the Senate get kicked off in earnest in about a week. Look first to what process is going to be used -- a formal conference committee or something less formal. Also, look to see how the pressure from other states on the sweetheart deal Ben Nelson got for Nebraska impacts the final deal, keeping in mind that the Dems must retain Nelson in order to win final passage. If you don't see a vote by early February, the bill is in trouble.

State of the Union -- look for the President to focus on two themes -- the economy and terrorism. He has to. They are what is on everyone's mind. Also, look to see if he signals a willingness to drop Cap and Trade this year or if he forges ahead with another ambitious year.

Special Election in Massachusetts -- looks to see if it is closer than expected. Nobody seriously expects the GOP to win, but if they are within 15 points, it is a dangerous sign for the Dems heading into November.

Predictions for 2010
I've been known to get these horribly wrong, but I'll try anyway:

(1) President Obama will sign a health care bill into law in late February that looks a lot like the version the Senate passed on December 24th.

(2) A Cap and Trade bill will NOT pass the Senate before the mid-term elections, despite a push from the White House.

(3) President Obama's numbers will bottom out in February or March and then rise modestly the rest of the year as unemployment falls, ending the year between 8.5% and 9.0%

(4) Republicans gain ground in both the House and the Senate, but retake neither, picking up 30 House seats and 5 Senate seats. The Blue Dogs gain even more clout and talk the White House into a monthly breakfast to discuss their issues as they now hold the key swing votes.

(5) Tim Pawlenty, Mitt Romney and Sarah Palin all announce their candidacy for President. Palin leads with a plurality in early polling.

(6) Gitmo is still not entirely closed on December 31st.

(7) The President shows that his "deadline" for drawdown in Afghanistan is more flexible than we all thought.

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