The Other Crucial Election in 2020
Author: Greg Valliere
June 13, 2019
THE SENATE IS A FIREWALL, guarding against progressive House legislation like tax hikes, and its Majority Leader, Mitch McConnell, has prevailed with over 100 confirmations of conservative judges thus far in the Trump era. So control of the Senate is a very big deal — and it looks like Republicans have a decent chance of retaining control of the chamber in the 2020 election.
WATCHING ALABAMA: Republican retention of the Senate depends greatly on their prospects of reclaiming a seat they lost in 2018 when their nominee was the deeply flawed Roy Moore, who lost to Democrat Doug Jones. Alabama is among the most conservative states in the country; assuming Moore isn’t nominated again, this looks like a pickup for the GOP.
IF THAT HAPPENS, THE NUMBERS WOULD BE EXTREMELY DAUNTING for Democrats, who already trail in the Senate by 53-47 (counting two independents who caucus with the Democrats). With Alabama back in the GOP fold, the Democrats would need a net pickup of four seats, if they win the White House — or five, if Donald Trump stays as president.
WHO’S VULNERABLE? Of 34 seats up for re-election, the Republicans have to defend 22 and the Democrats 12. Amazingly, it appears that there aren’t many truly vulnerable incumbents. The Democrats have only one, Jones in Alabama, while the GOP has three: Susan Collins in Maine, still under fire for voting for Bret Kavanaugh’s Supreme Court confirmation; Cory Gardner in Colorado; and Martha McSalley in Arizona. Even if all three of these Republicans lose, the Republicans could still retain the Senate.
COULD THERE BE SURPRISES? There’s always surprises, and the Republicans can’t take for granted their Iowa seat, potentially vulnerable as the Farm Belt reels from high tariffs. And there’s a chance that Republican seats in Georgia and North Carolina could be vulnerable. The Democrats, meanwhile, look like a lock in most all of their races other than the one in Alabama.
BOTTOM LINE: We think there’s a 70% chance the Senate will stay Republican. We’ll predict the Democrats will lose only one seat while the GOP loses two of their own, which would give the GOP an effective 52-48 majority. A “wave” election for the White House could make a huge difference, of course, but a presidential cliffhanger is much more likely.
THE POLICY IMPLICATIONS: Republican control of the Senate means that even if the Democrats retain their majority in the liberal House and win the presidency, progressive legislation would stall — no Green New Deal, no Medicare for all, no tax hikes, etc. And the least appreciated story in Washington — the sharp veer rightward in the judiciary — would persist at least through 2021-22.
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), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. 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.
© 2019 AGF Management Limited. All rights reserved.
