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Economic Woes Dim GOP Chances

In late September 2006, Republicans knew they faced a difficult political landscape, though few anticipated the party would lose as many seats as they did. Then, on September 29, Florida Congressman Mark Foley abruptly resigned amid charges of inappropriate relations with young House pages, a moment many call a tipping point that cost the GOP majorities in both chambers.

This September, Republicans were feeling much better about their chances, anticipating only a few losses as John McCain ran neck and neck with Barack Obama and the party plotted offensives against House Democrats. But the collapse and sell off of several large investment banks, followed, on September 29, by a 777-point drop in the Dow Jones Industrial Average has put Republicans back on defense and McCain at a distinct disadvantage. With a month to go before Election Day, the GOP could be forgiven from having horrifying flashbacks.

The last week's focus on the economy, with three high-profile Congressional votes on an economic stabilization plan has amplified voter jitters about their jobs, their investments and their retirement. Fully 59% of Americans say the economy is the most important issue facing the country; few, if any, issues have ever reached such an apex (The next most important issue in voters' minds, the war in Iraq, is cited by just 5% of voters).

Whether voters trust Democrats to better handle the economy or just blame Republicans for economic woes, the issue being at the fore in voters' minds clearly benefits Democrats. From the presidential contest to races for Senate and the House, the economic downturn has set up Democrats for more big gains.

A month ago, with Sarah Palin having joined the Republican ticket, the presidential contest was essentially even, and in some polls McCain even held a lead. The Arizona senator was on offense in several states John Kerry won in 2004, including Michigan, Wisconsin and Minnesota.

Now, McCain's campaign has acknowledged they will pull out of Michigan, instead shifting resources to Ohio, Florida and perhaps Maine's Second Congressional District, where they may be able to pick up a single electoral vote. Obama has a clear and seemingly growing lead nationwide, and at least two states President Bush won in 2004 -- Iowa and New Mexico -- look like they will flip to the Democrat.

The national battleground is no better for McCain's campaign. Of the eight states largely considered toss up states -- Nevada, Colorado, Missouri, Indiana, Ohio, Virginia, North Carolina and Florida -- all went to President Bush twice. With Obama holding a clear electoral map advantage, McCain needs to carry all eight toss-up states to win.

Given what is expected to be a dramatic shift in voter turnout, especially among African Americans and in rapidly growing areas like Northern Virginia, metropolitan Las Vegas and parts of southern Florida, McCain's ability to run the table looks increasingly in doubt. And even as Republicans make noise about competing in Democratic territory in Maine, Palin spent Sunday at a rally in staunchly conservative Omaha, Nebraska, suggesting to some the campaign is more worried about holding Nebraska's Second District than it is optimistic about winning Maine's Second District.

At the Congressional level, things look just as bad for Republicans. Shortly after the GOP convention, Democrats led the generic Congressional ballot by just a few points; the latest RCP Generic Ballot Average shows Democrats now leading by nearly ten points. That Democratic lead has shown up in recent polls as well, virtually all of which show even once-safe Republicans facing increasingly tightening races.

Democrats start off in a dominating position in the races for several Republican-held seats. Candidates in Virginia and New Mexico are far ahead of their GOP foes, while candidates in New Hampshire and Colorado lead by significant margins. Alaska Senator Ted Stevens remains on trial on seven federal felony counts and has run behind his Democratic opponent all year. But beyond those five seats, Democrats are increasingly optimistic about other seats.

In Minnesota, few challengers have faced as difficult a year as satirist Al Franken. But a poll out this weekend for the Minneapolis Star Tribune showed Franken with a shocking nine-point lead over Republican Senator Norm Coleman (Independence Party candidate Dean Barkley is earning nearly 20% in polls). Republicans will argue that the Star Tribune frequently oversamples Democrats, though the paper has hired a new pollster, Princeton Survey Research, since the 2006 election.

Polls in Oregon have long showed a tight race between Republican Senator Gordon Smith and state House Speaker Jeff Merkley. But in an increasingly liberal state, the most recent independent survey shows Merkley leading despite trailing in the money race, and pollsters in the state say Smith's once-sky high approval rating has tanked.

And in North Carolina, Senator Elizabeth Dole has emerged as yet another vulnerable Republican. With Obama competing on a presidential level and Democratic turnout expected to rise, state Senator Kay Hagan has kept the race close and even led in several surveys.

Even Republican incumbents in Georgia and Mississippi have seen recent polls suggesting tightening races. Perhaps most disturbing, a reputable poll conducted for the Louisville Courier-Journal last week showed Kentucky Senator Mitch McConnell holding on to a 45%-44% lead over Democratic businessman Bruce Lunsford even though McConnell, the Republican leader in the Senate, has vastly outspent the Democrat and has been running television ads for almost a year.

The late-breaking races are disturbing to Republicans for another reason: In recent years, competitive Senate races have ended in one party's favor save one. Two years ago, Republicans held on by a hair in Tennessee. In 2002, a year that favored the GOP, Democrats lost several key races and barely held Louisiana. This year, the more seats that are in play, the more Democrats will benefit. Some party strategists have quietly revived talk of achieving a filibuster-proof majority of 60 or more seats.

In the House, Republicans have faced a nearly impossible environment all cycle. With Democrats seriously outraising the GOP, the National Republican Congressional Committee has only run television advertisements against one Democrat; in the past two weeks, the Democratic Congressional Campaign Committee has outspent the NRCC by an 80 to one margin.

That gap will shrink as Republicans target more seats, but the sheer number of GOP incumbents facing tough races, plus the number of open seats vacated by retiring Republicans, will force the party to stay largely on defense. Even if the GOP focuses all its resources on defense, it remains likely that Democrats will make double-digit gains.

Republicans, who just a month ago felt increasingly optimistic about their chances in November, are now struggling as a renewed focus on the economy has shifted the national landscape in dramatic fashion. With only four weeks to go, it looks as if there may be little the GOP can do to prevent a repeat of 2006.

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