GOP Takeover of the House is Likely — Could the Senate Fall as Well?
December 14, 2021
GOP Takeover of the House is Likely —
Could the Senate Fall as Well?
December 14, 2021
DEMOCRATS WE’VE TALKED WITH recently concede that the House is likely to fall to the GOP next year — but Democrats are holding out hope for keeping their razor-thin Senate majority.
THE NUMBERS: The Senate is 50-50, with Kamala Harris breaking ties. Democrats will be defending 14 seats — two or three of which look vulnerable — while Republicans will be defending 20 seats, with one or two looking vulnerable. How’s that for a close call?
THE KEY WILL BE WHETHER THERE’S ANYTHING CLOSE TO A “WAVE” ELECTION: If Joe Biden’s polling numbers stay weak amid concerns over inflation, crime and illegal immigration, there could be a wave, with Republicans easily taking the House and the Senate as well.
BUT IF INFLATION SUBSIDES by summer and the economy continues to surprise to the upside, the Democrats have a chance — and Republican nominees, many of whom are tied to Donald Trump, could begin to view him as an albatross.
THE KEY RACES: Democrats have three vulnerable candidates, headed by Raphael Warnock of Georgia, with Catherine Cortez Masto looking shaky in Nevada and Mark Kelly possibly vulnerable in in Arizona. Sen. Maggie Hassan (D) looked vulnerable a few weeks ago in New Hampshire but her strongest potential opponent — Gov. Chris Sununu — dropped out.
VULNERABLE REPUBLICANS: They have to defend the Pennsylvania seat vacated by Pat Toomey, perhaps the marquee race of 2022, and the GOP could be vulnerable in Wisconsin, whether or not Sen. Ron Johnson runs. Republicans also face tough races in Ohio, North Carolina and Florida, but we think those three states lean GOP.
SO WE CONCLUDE THE DEMOCRATS will lose two or three Senate seats, with Republicans losing only one or two. It’s a close call but our early take is that the Republicans will take the Senate by one seat, 51-49. This assumes no major comeback by Biden.
THE BIG POLITICAL STORY of 2022 may be the Republican takeover of the House; they need a net gain of three or four seats and are likely to win 20 or more. Even if the Democrats narrowly keep the Senate in a 50-50 tie, the climate on Capitol Hill would change dramatically if the GOP takes the House.
BIDEN WOULD STILL HAVE HIS VETO POWER, but with one — or both — of the houses flipping back to the Republicans, he would have no chance to win more spending or tax hikes. Biden would have regulatory power via executive action, but first the Senate has to confirm his nominees, a glacial process that has winnowed out progressives.
THE GREAT WILD CARD IS TRUMP: Yesterday’s stunning release of Jan. 6 emails from Fox TV stars to Chief of Staff Mark Meadows was a reminder that the riot will stay in the headlines. Laura Ingraham, Sean Hannity and others at Fox begged Trump to call off his troops, but he ignored them for hours.
THE BIGGEST ISSUE, AS USUAL, WILL BE THE ECONOMY: GDP and employment look solid, but the huge spike of inflation dominates this debate. If prices level off by summer, the Democrats could have a chance to retain the Senate, but keeping the House looks like a very steep climb.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2022 AGF Management Limited. All rights reserved.