GOP warns economy will tank if Dems win
Republicans are turning positive economic news into attacks on Democratic candidates, warning of dire consequences if the minority party wins control of Congress in the midterm elections.
GOP candidates for months have touted the booming economy in their pitch to voters, highlighting historically low unemployment and GDP expanding at a healthy clip.
President TrumpDonald John TrumpDemocrats slide in battle for Senate Trump believes Kushner relationship with Saudi crown prince a liability: report Christine Blasey Ford to be honored by Palo Alto City Council MORE this week credited his administration for spurring that growth.
“One of the reasons the economy is so strong is that we’re not hampered by the ridiculous regulations that we were getting rid of and are getting rid of,” he said at a Cabinet meeting.
But GOP rhetoric now includes doomsday predictions about what would happen if Democrats win the House or Senate on Election Day.
When asked about the stock market on Fox News last week, Trump said, “The Democrats, you look at what they would do to it. They would knock it down, you’d — instead of being up 50 percent, you’d be down 50 percent.”
He’s not the only one painting a picture of a potential downturn if Democrats get a chance to pursue their economic policies on Capitol Hill. Republicans running for reelection have made similar arguments, often linking them to House Minority Leader Nancy PelosiNancy Patricia D'Alesandro PelosiPelosi heckled by Miami Republicans, Proud Boys at campaign event Pelosi, Schumer: Trump ‘desperate’ to put focus on immigration, not health care Trump urges Dems to help craft new immigration laws: ‘Chuck & Nancy, call me!’ MORE (D-Calif.), who is favored to be Speaker if Democrats retake the House.
“It’s no time to turn back to the failed Obama era and economy,” said Rep. Dave Brat (R-Va.) at a debate this week with his Democratic challenger, Abigail Spanberger. “If you vote for my opponent tonight, you will get the liberal Nancy Pelosi agenda across the board. You will get large companies running our economy instead of small people and small firms competing.”
Conservative commentator Hugh Hewitt took a similar approach this week when he tweeted a story on strong manufacturing numbers and added, “If we are tired of this we can just give the Speaker’s Gavel back to @NancyPelosi folks.”
Sen. Ted CruzRafael (Ted) Edward CruzDemocrats slide in battle for Senate O’Rourke’s rise raises hopes for Texas Dems down ballot Election Countdown: Small-donor donations explode | Russian woman charged with midterm interference | Takeaways from North Dakota Senate debate | O’Rourke gives ‘definitive no’ to 2020 run | Dems hope Latino voters turn Arizona blue MORE (R-Texas) warned that a Democratic majority in the House would impeach Trump, creating political chaos that would spook markets and drown the economy.
“If we had impeachment next year, we’d see utter chaos,” Cruz said in his debate with Rep. Beto O’Rourke (D) this week. “We would see an end to the repeal of the job-killing regulations that’s fueling our economic growth.”
“I want to keep the economic boom we’re experiencing right now going, moving forward,” he added. “Congressman O’Rourke wants the next two years to be drawn into the partisan circus of impeachment proceedings against President Trump.”
In Iowa, Rep. David YoungDavid Edmund YoungSanders, Harris set to criss-cross Iowa The Hill’s 12:30 Report — Trump seizes on immigrant ‘caravan’ for midterms | WHCA criticizes Trump for praising lawmaker who assaulted reporter | Trump takes harder line on Saudis Vulnerable Republicans throw ‘Hail Mary’ on pre-existing conditions MORE (R) combined the two arguments.
“We do not need to go backwards with Nancy Pelosi as Speaker raising taxes, over-regulating our economy. And that side of the aisle, Speaker Pelosi is talking about impeaching,” he said in a debate this month with Democrat Cindy Axne. “We need to go forward to make sure that this tax relief continues and economic opportunity continues and freedom keeps continuing.”
Data analysis site FiveThirtyEight said Friday that Democrats have an 84 percent chance of winning the House, but just a 21 percent chance of taking the Senate.
Betsy McCaughey, a GOP commentator and former lieutenant governor of New York, said regulatory changes sought by the left would lead to a market sell-off.
“These changes will tank the economy and hurt the very workers the party claims to represent,” she wrote in Investor’s Business Daily, calling the election a “referendum on capitalism.”
Democrats have said they will make oversight of the Trump administration a key priority if they take over the House, though Pelosi has batted away suggestions that impeachment would be on their agenda.
House Democrats have also expressed interest in bolstering financial regulatory bodies such as the Consumer Financial Protection Bureau and scaling back some of the benefits from the GOP tax cuts that went to the wealthy and to corporations. They would need bipartisan agreement in the Senate and a signature from Trump to turn any legislative initiatives into law.
Internal Republican polling found that, by a 2-to-1 margin, Americans think the law helped corporations and the wealthy more than the middle class. A Gallup poll found that 64 percent of respondents didn’t notice an increase in their take-home pay after the tax cuts took effect.
Some economists say stocks could see a slowdown, but not because of Democratic policies per se.
An analysis by the Goldman Sachs Investment Strategy Group found that share prices grow more slowly under divided government, according to MarketWatch.
Other have noted that stocks tend to rise right after a midterm election, regardless of who wins.
But there’s little reason to think the Nov. 6 election will result in a fundamental economic turnaround. Economists like to remind the public that the business cycle has a life of its own, and policy can only do so much to affect it.
One economic model followed by JPMorgan Chase says there’s already a 60 percent chance that the economy will tip into recession in 2020. That model is based on economic indicators such as labor participation among certain demographics and components of GDP, not which party controls what chamber of Congress.
Others note that as long as Trump is in the White House, Democrats have very little chance at seeing any of their economic policies becoming law.
“Democrats have not had any say for the past two years, and even if they control the House, they still don’t have much of a say,” said Mark Zandi, chief economist at Moody’s Analytics.
When Trump was elected, Zandi noted, stock markets reacted favorably to the prospect that a unified Republican government would cut taxes and regulation. None of that is likely to change after the midterm election.
“I don’t think there’s any prospect if the Democrats win the House or even the whole Congress that there will be a tax increase, so I think that’s a stretched argument,” he said.
If anything, there might a chance for a bipartisan deal on infrastructure spending. That, Zandi said, would further stimulate the economy.
firstname.lastname@example.org (Niv Elis)
More at https://thehill.com/policy/finance/412274-gop-warns-economy-will-tank-if-dems-win