Premortem 2010

Ten months ago, I made a few SWAGs about (among other things) politics. Those SWAGs included the following:

Foolishly, Democrats will campaign in 2010 against George W. Bush.  This will fail and result in gains by Republicans, but more in the House than the Senate.  Congressional Republicans will realize a net gain of only two or three seats in the Senate, leaving the Democrats still firmly in control of that body and reviving talks of abolishing the filibuster.  But, net gains in the House of Representatives will be such that the Democrats' majority in the lower chamber will be roughly ten seats and Republicans will optimistically talk of re-taking the House in 2012.

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A reconciled health care "reform" bill will not be passed out of Congress until March or maybe even early April.  Its effect will be to very moderately increase taxes on middle-class Americans, only negligibly affect their actual health care options, and substantially inflate both the governmental deficit and the profits of enterprise-level health care providers.

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California will increase sales taxes to 10.5% or higher, resulting in the highest sales tax in the nation.  Despite this, functionally all incumbents in the Legislature eligible for re-election will be re-elected in November and the Democrat nominee (who right now looks like Jerry Brown) will win the Governorship.

My prediction for California is much closer to what has actually happened than what looks like is about to happen at the Federal level.

California is indeed poised to send back functionally all non-termed members of the Legislature back to Sacramento; those seats for which the incumbent is termed out appear poised for retention by the incumbent's party. There may well be no shift in the partisan makeup of the California Legislature at all.

Federally, I made my prediction believing that the bad general economic conditions present at the end of 2009 would not persist and be mitigated somewhat. I hoped that would be true. Now, where I predicted a gain by Republicans of two or three seats in the Senate, it looks more like seven. That doesn't leave Democrats firmly in control of that body, but they will still be the majority.

The House, however, appears poised for a reversal of control. Right now, Democrats have 255 seats, Republicans 178, and there are two vacancies. The magic number is a net gain of 39 seats for Republicans. My predicted gain of roughly ten seats will be far exceeded; the best predictions available is a shift of fifty-five (!) seats, which would be enough for the GOP to re-take the Speaker's chair.

I think what happened was that the election of Scott Brown earlier this year gave everyone a test of the political waters. Much like I thought, the Republicans found that running a campaign against President Obama and in particular health care reform was potent stuff; the Democrats found that running against President Bush was a non-starter. Why they ever thought to run against Bush during mid-term elections while they controlled the White House is absolutely beyond me.

What happened was that Democrats found that their brand had become toxic and they had no target to point to and say, "But we don't suck as bad as them!" anymore. The best they came up with were the Not-Ready-For-Primetime-Players like Sharron Angle, Christine O'Donnell, and Joe Miller -- but in states with larger populations, even the more conservative of Republican nominees -- Rick Rubio, Pat Toomey, Mark Kirk -- had enough experience and polish to give lie to the idea that cosnervative ideology necessarily means silliness.

I see no reason to think, however, that this election represents an embrace by the electorate of "Republican ideas." Rather, it is a rejection of "Democratic ideas," specifically health care reform. If there is going to be a common thread in the stories at the House level, it will be that Democrats from marginal districts who voted for health care reform get thrown out, while Democrats who can say that they bucked their own party on this one issue stand a reasonable chance of hanging on to their seats.

The result of this will be that the Republicans in office for the 112nd Congress will believe that they have been rewarded for being "The Party Of No" and will double down on doing nothing. The chances that the Obamacare bill will actually get repealed are functionally nil -- the President still holds the veto pen, even if a repeal makes it through the Senate. But there is a reasonable chance, even a probability, that Obamacare will be whittled back incrementally. The political football will be the individual mandate. This strikes me as odd -- the Republicans will realize electoral gains and make political hay during the next cycle, by fighting for the right of people to not have health insurance if they don't have the money to buy it. But there you have it.

Downballot, at least here in California, the real prize is redistricting. Lots of people are focused on Prop. 19, which I predicted a while back and continue to believe will be a very close vote. Right now, I'm pessimistic about whether it will pass. But the big issue is Prop. 20 and Prop. 27.  In the last election, the voters passed Prop. 11, which delegated legislative redistricting to a bipartisan panel of 120 people, 40 Democrats, 40 Republicans, and 40 independents. Prop. 27 would repeal Prop. 11.  Prop. 20 would extend the power of the panel to Congressional districts as well. I have long thought that the heavily-gerrymandered districts are at the root of the political polarization which has effectively paralyzed California's fisc.

This will be somewhat mooted if Prop. 25 passes -- this would reduce the requirement for passage of a budget out of the Legislature from two-thirds to a simple majority. The result of this would be to eliminate the only power that the minority party in the Legislature has, which is to block passage of the budget. Since the 1950's, Democrats have been in charge of the Legislature and for most of that time, Republicans have used the two-thirds rule to slow or mitigate the creep of tax increases which Democrats would have implemented to pay for the expansion of government services that they nevertheless pass. Since Republicans will not allow taxes to be significantly increased to pay for this, the Democrats have financed these things by selling them piecemeal to the voters directly through bond measures and had to content themselves with only incremental increases in taxes and hoping that inflation would catch up with the bonds.

How long could such a thing be sustained?  Fifty-six years, as it turns out, until a national economic crash, hitting particularly hard here, caused existing revenue to drop through the floor.

So these are the big issues and the big forces I see at play right now. I want the Republicans to do better in Sacramento; there is little doubt in my mind that state taxes are already at such heights that California's economy suffers from a drag imposed by the government. This means we need to keep the two-thirds rule and try to fashion more logical and balanced districts in the future so that the Legislature is not run like an old-style Russian Soviet. At the Federal level, I'm not a fan of Obamacare and wouldn't mind seeing it repealed.

All in all, I find reason to be contented and moderately optimistic about the elections today. I don't relish the idea of gridlock and I would like it if the Republicans actually stuck their necks out and proposed actual policies instead of simply saying "Let's go back to the way things were in [mumble mumble]." The gold old days under George W. Bush weren't really all that good, especially from a fiscal perspective. Still, I'm encouraged to see that they are at least paying lip service to the idea of watching our collective money, and I can at least hope, perhaps forlornly, that this ethic by the voters will trickle down to the state level here such that we see institutional steps to keep California's finances in check retained and strengthened.