Democrats Brace for Year of Living Dangerously

From Afghanistan to jobs, there are big risks ahead for the ruling party and President Obama, says Bloomberg's Al Hunt

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Commentary by Albert R. Hunt

(Bloomberg) — This year will be a difficult one for Democrats. The only issue is how tough.

If conditions and circumstances take a negative turn, Democrats could lose 40 seats in the U.S. House of Representatives and more than a half-dozen in the Senate in the November midterm elections. With this prospect, any lingering clout enjoyed by President Barack Obama would evaporate.

If things break the right way for the Democrats, however, the congressional losses might be minimal — 15 to 20 in the House and several in the Senate — and the president, while weakened, would still govern with some authority.

As in economics, there are leading indicators in politics. For 2010, they are:

Health Care: If, as expected, Congress gives final approval to a health-care bill over the next few weeks, the public perception will be crucial. Most of these policies won't take effect for several years, so initial impressions will be politically decisive.

The Obama White House has only mixed success in these communications wars. The administration lost on the stimulus package, which most economists think is successful but the public sees as largely ineffective and ridden with special- interest pork.

'Short-Term Drag'

The Obama strategy of not advocating specific policies has come at a political cost. Polls show support for the health-care overhaul has dropped; The Democratic Senate Budget Committee's chairman, Kent Conrad, said in an interview last month that the measure would be a "short-term drag" for Democrats.

Whether the sweeping health-care changes are seen as a long-due step in expanding coverage and controlling costs or as just another costly big government plan will weigh on voters in November.

Jobs: High unemployment punishes the party in power. The levels and direction, however, matter, which is why Democrats were heartened by a better-than-expected report last month that showed the jobless rate dropping to 10 percent.

Ray Fair, an economist at New Haven, Connecticut-based Yale University who for years has forecast elections based on economic models, sees Democrats winning about 50.5 percent of the popular vote in House races this fall, down from 53.4 percent in 2008. That suggests a loss of about 25 to 30 seats.

Maki Forecast

Whether Democrats do better or worse may depend on which of two respected economic forecasters is right. Dean Maki, the chief U.S. economist at Barclays Capital Inc. in New York, sees unemployment dropping steadily this year to a 9.4 percent average in the third quarter and not much above 9 percent on Election Day.

Jan Hatzius, chief U.S. economist at New York-based Goldman Sachs Group Inc., forecast joblessness rising consistently through this year and hitting a peak of 10.75 percent in 2011. If Maki, who was rated the most-accurate forecaster in a Bloomberg News survey, is prescient, the economy may be a wash for Democrats; if Hatzius is closer to the mark, look for big losses.

Casualties: How big an issue Afghanistan is in the off-year elections will hinge on American casualties, how many kids are coming back in body bags.

"It's much easier to quantify the casualties than the benefits of a war," says Peter Feaver, a political-science professor at Durham, North Carolina-based Duke University who served on the national security staffs of Presidents Bill Clinton and George H.W. Bush and worked on the Iraq War for George W. Bush. "The American people view each soldier who dies as somewhat of a tragedy."

Off Radar Screen

The Iraq War went off the radar screen and front pages as casualties dropped to 150 in 2009 from a high of 904 in 2007. Last year, for the first time, American losses in Afghanistan, at 319, exceeded those in Iraq.

If next year U.S. losses in Afghanistan approach the peak level in Iraq, public anxiety and antiwar feelings will escalate.

Retirements: In the House, it's easier to win an open seat with no incumbent than to topple an officeholder.