What is Obama’s Headache in 2013? A Republican Controlled Congress

As I discussed in my previous post (Much Ado About Nothing), excluding some random event or intervention from a higher power, Obama will be the president in 2013.  This, of course, begs the next question: Will Obama be able to govern, or should we expect four years of political gridlock?

Essential to a strong Obama mandate will be ownership of the 113th Congress (House and Senate). If the Democrats control it, Obama will have more latitude in pushing his policy agenda, while one controlled by Republicans (partially and completely) will seriously limit his range of possibilities.

Presently, the Democrats hold a slight advantage in the Senate, with 51 Democratic and 47 Republican senators, with the two Independent senators caucusing with the Democrats. On the House side, Republicans wrestled control from the Democrats in the 2010 mid-term elections and now hold a strong 63-seat advantage over the Democrats

So, who will control the House and Senate in 2013?  For Obama the outlook is not pretty.  Indeed, our own statistical modeling, based on Senate and House elections since 1944, suggest that Republicans have a very good chance of maintaining control of the House (89%) and stealing the Senate (72%).

Probability of Republicans Controlling House or Senate in 2011

Probabilities based upon the posterior predictive distributions of the estimated number Republican seats.

Our models for Senate and House are slightly different, but conceptually both are estimated probabilities as a function of a number of variables both survey based (e.g., presidential approval) and non-survey based (e.g., number of Republican seats).  I will detail the specifications of our models in future posts.

Do our models make sense?  I believe they do as they coincide strongly with historical precedence.

First, the Republicans have a 63 seat advantage in the House currently, meaning that Democrats would have to win 32 seats to take back the House.  Such large swings are rare—occurring only 9 times in the last 70 years (see table). In such instances typically the economy is in the tank or some other crisis has reared its ugly head. 2012 is not a year of crisis but one of hope and increasing optimism—all good signs for incumbents and the Republicans.

Second, on the Senate side, a total of 33 seats are up for election and 23 (approximately two-thirds) of these are Democratic. A simple flip of the coin would give the Senate to the Republicans. This reality coupled with the fact that more incumbent Democrats are retiring (7) than incumbent Republicans (3) is a recipe for Democratic seat loss. (Cook Political Report; Real Clear Politics) .

So from a White House perspective, what are the implications of such a scenario? Is the glass half empty or half full?

For the pessimists, this all is bad news. 2013 and beyond will be one long winter of political gridlock and an increasingly dysfunctional Washington out of touch with the rest of the country. The last 20 years of American national politics has validated this belief.

The optimists have a different take.

First, the Republican gains in the House in 2010 were exaggerated, bucking historical trends. Therefore it only makes sense that the Republicans would lose some steam in 2012. To this point, some argue that Republicans were able to win marginal seats using “Obamacare” as an effective wedge-issue. In 2012, Democrats should have a more efficient answer to healthcare reform, neutralizing the Republican advantage, and being a general election will be able to get more their base out to vote.  The outcome still would be a Republican controlled House, though with a smaller numerical advantage and a more ideologically moderate base.

Second, presidential elections are not only about who will win but also about the policy agenda consolidated through the long campaign. Indeed, here the Republican candidate—most probably Romney—will play an important role in determining what issues will become most salient and ultimately be integrated into Obama’s agenda and the DNA of the 113nd Congress. Central here will be what issues will be debated and which ones have broad-based consensus.

Without a doubt, the overarching electoral theme will revolve around ‘jobs and the economy’.  However, the framing of which will have a distinctly partisan twist.  On the Republican side, the issue will probably be framed as economic viability through ‘debt reduction’ and ‘reduced size of the State’.  In contrast, Obama will most likely make the case for increased State investment and regulation as essential for long-term economic innovation and growth.

Ultimately, can the election forge some sort of consensus on these issues?  I believe, yes, it can but perhaps only a weak mandate around deficit reduction.  Voters do not have an appetite for strong change in 2012 like they did in 2008.

But let’s see what unfolds and keep a close eye on the debate to identify what issues emerge during the 2012 political cycle. Perhaps Obama actually might avoid a headache.