Sunday, February 12, 2012

How Fates Can Rise and Fall in a Week, Can Congress Do Anything?

The Long March to the GOP Nod
Mitt Romney's nothing short of awful finishes in Minnesota, Colorado and Missouri (which didn't really count except for building on the image of a candidate suddenly in trouble, were capped by his (also symbolic, but meaningful from a perception standpoint) win of the straw poll at the hugely influential CPAC convention and his narrow win over Ron Paul in the Maine caucuses.

It seems that every week in this Republican nomination battle has a different storyline and more surprises.  But one thing that hasn't changed in a long time is my belief that Mitt Romney is the strong favorite to take the nomination.  His organization, money, experience and mainstream appeal (granted, this last piece hasn't been doing as well these days) make him the most likely candidate to win.  And he's still the "next guy in line" and I've written extensively on the advantage that provides in Republican nominating contests.

So where are we in the process?  We are now 8 states into the 50 state battles, plus the various territories (Washington DC, Guam, Puerto Rico, the Virgin Islands) that hold nominating contests or 15% of the contests have taken place.  2,118 delegates are awarded through nominating contests (168 are party leaders) and of those, 231 have essentially been awarded to date or 11%.  I say essentially because in most caucus states, the caucuses are technically "non-binding", meaning that actual delegate selection won't take place until the state conventions, but similar to the electoral college, the outcome is all but assured.

Delegate counts through the Maine contest are as follows:
Mitt Romney - 105
Rick Santorum - 43
Newt Gingrich - 42
Ron Paul - 36
Rick Perry (withdrawn) - 3
Jon Huntsman (withdrawn) - 2

Note: As always, my delegate counts will differ from the counts published by major news outlets, as they generally try to include how they believe the 168 party leaders will vote.  Since those endorsements are soft and can change, I don't consider them until very late in the process, when they could make the difference.

Romney has a sizable lead, primarily thanks to his win in Florida.  Florida is the only contest to date that was set up as Winner-Take-All and almost half of Romney's delegates (50 in fact) came from his Florida win.  The size of his campaign wallet and organization really paid off in that important contest (although made half as important as it could be by the RNC penalty for holding its contest early.

But Romney's sizable lead does have one major chink in the armor - he holds less than half the delegates and you need 50% + 1 to win a first a ballot nomination.  His 105 delegates represents 45% of those awarded to date.  If Romney's opponents could keep him below 50% all the way to the convention, they could broker the convention (deadlock it, in layman's terms) and force multiple voting ballots, during which anything could happen relative to the nomination.  Or one of them could cut a deal for their delegates for a VP or cabinet seat, although Romney's three remaining opponents that will continue to accumulate delegates, frankly don't seem to like him very much.

From here, the race takes a bit of a break this week.  After a long break from the debates (is anyone else starting to really miss those events?) there is CNN debate in Arizona on February 22nd.  The next actual nominating contests are primaries in Arizona and Michigan on February 28th.  Romney should win both of them handily.  Michigan is essentially Romney's second home state, where he was born and where his father was Governor.  Arizona has a heavy Mormon population and is far away from the rust belt appeal of Rick Santorum and the Southern appeal of Newt Gingrich.  Arizona's 29 delegates are winner-take-all and Michigan's 30 are proportional, unless Romney gets 50% or more of the vote (which is possible but not a lock), in which case it would become winner-take-all.

So Romney could potentially add significantly to his lead in the next 2 contests.  On March 3rd, Washington's caucuses take place, which have a significant prize, 43 delegates (awarded proportionally.)  Washington could be an interesting bell weather.  It is a moderate state, well outside of Santorum and Gingrich's areas of strength, but it is a caucus state, which have not been good to Romney (his win this weekend in Maine was actually his first caucus win of this cycle.)  Despite its sizable delegate prize, it is not likely to see a ton of campaign, except from Ron Paul, who could do quite well there, primarily because it is so close to Super Tuesday, on March 6th.

Handicapping the Super Tuesday states, it would appear likely that if the race were held today, we'd see a split decision:
Gingrich should do quite well in Georgia, Tennessee, Oklahoma and Virginia.
Santorum will make his mark in Ohio and should fare well in the caucus states of Alaska, Idaho and North Dakota as well as competing strongly in the Gingrich states above.
Paul will likely focus his fire on the 3 caucus states above, which may get less attention from the other candidates.
Romney should do extremely well in Vermont and Massachusetts and will likely focus his fight on trying to beat Santorum in Ohio and try to show up well, if not win, in Virginia.

The big questions between now and the results of Super Tuesday are:
(1) Will Romney emerge from Super Tuesday with more than half of the delegates won?
(2) Will either Gingrich or Santorum be damaged enough after Super Tuesday to drop out (I can't see them dropping out before then)?  I assume Paul will be in it for the long haul.

As the field emerges from Super Tuesday, we look ahead to nominating contests every week in March, and often multiple contests per week.  The big prizes the rest of the month of March are Illinois (69 delegates), Missouri (52 delegates), Alabama (50 delegates), Louisiana (46 delegates), Kansas (40 delegates) and Mississippi (40 delegates).  This looks like awful territory for Romney, so he needs a strong showing through Super Tuesday to carry him in these tougher contests.

This is the most fun Republican race I can remember in some time.

It's February 12th and I Have No Clue What Social Security Tax Will Be on March 1st
What a sorry state of affairs.  I have made no bones about the fact that I am not a fan of the payroll tax cut that was passed for 2011 as part of the deal to extend the Bush Tax cuts and I was not in favor of extending it into 2012.  Reducing Social Security taxes by 2% when there are already serious issues with funding future benefits is imprudent.

But putting aside the policy discussions, we have serious dysfunction with implementation of anything in Washington these days.  Both sides of the political aisle agree that the payroll tax cuts should be extended.  But we went all the way into the December recess before a last-second deal extended the cuts for January and February.

It is now February 12th and there is no deal in sight for the rest of the year.  At issue is how the cut will be paid for.  Democrats wanted to originally pay for it with a tax on millionaires, which was obviously a non-starter with the GOP.  The GOP wants to pay for it with cuts to discretionary spending.  Also at issue is how, if at all, to extend unemployment benefits.

What is so damaging in all of this is the uncertainty it creates.  Companies don't know what to put in their payroll software for tax withholding.  Individuals don't know how much money will be in the March 1st checks.

It's all so sad and embarrassing.  I'm sure the tax cuts will get extended...but we are probably lucky it is a leap year with an extra day between now and March 1st.

If you like this site, tell your friends.

No comments: