Trump Imperils Economic Gains as GOP Midterm Issue
Republicans have a platter of good economic news to run on in the 2018 elections: a surging stock market, a 4.1 percent unemployment rate, high consumer confidence, and weeks’ worth of headlines showcasing companies handing bonuses to their employees while crediting the newly signed GOP tax bill.
But they also have Donald Trump.
Though so much positive economic data helps Republican congressional candidates counter the traditional midterm headwinds a party in power faces, the president continues to step on his — and his party's — encouraging news.
This dynamic was on full display Friday when the administration and GOP lawmakers were faced with a barrage of questions over Trump’s vulgar denigration of immigration from predominantly black countries.
The day before, Walmart had announced it would slightly increase its minimum wage and also pay employees bonuses up to $1,000. (Other companies, including AT&T, Fifth Third Bank, Southwest Airlines, Wells Fargo, Boeing and American Airlines, have announced similar benefits.) But Democratic Leader Nancy Pelosi called the compensation sweeteners "crumbs" compared to what corporate leaders stand to make under the new tax plan – a comment that exposed the risks Democrats take in downplaying fiscal improvements, and handed Republicans a golden opportunity to paint the opposition party as out of touch with Middle America.
Yet the latest controversy emanating from the White House dominated the news, overshadowing not just Pelosi's comments and the bonuses but word that Fiat Chrysler plans to move a production facility from Mexico to Michigan.
"The problem for these Republicans is, voters are saying, 'I like the outcomes, but I just don't like Trump,'" said former Virginia Rep. Tom Davis, who once chaired the National Republican Campaign Committee. "Midterms are a question of: Do we give the president a blank check or do we want to put a check on the president? And the president has not made his case."
Davis said he also cautioned the GOP conference last month that good economic conditions don't equal electoral success. In the Democratic wave of 2006, he reminded them, unemployment under George W. Bush had declined to 4.4 percent.
Republicans anticipate that the economy will continue to improve and that opinions toward the president on that issue will eventually turn around. They argue that once voters start to see more money in their paychecks in the coming months, they will view the tax bill more favorably and give Trump and his party more credit.
"At the end of the day, [voters] cut through the clutter. They don't focus on the white noise quite as much as they do with the issues affecting their daily lives," Jesse Hunt, spokesman for the NRCC, said of the GOP's Trump conundrum. "Ultimately, everyone in this country knows Democrats aren't going to be responsible for reducing your tax burden."
Thus far, that perception hasn’t sunk in. A recent Quinnipiac poll for example found that 66 percent of American voters say the economy is "excellent" or good" -- up three points from December and the highest positive rating for the economy in the survey's two-decade history. But 49 percent say former President Obama deserves the credit, while 40 percent say Trump does. The same survey found Trump with an underwater approval rating of 36 percent.
Democrats do carry some risks by running against the tax bill if voters start to see tangible benefits. But they don't anticipate Trump's standing improving between now and November, and episodes like the one on display Friday, which have tended to recur since Trump took office, showed why the party holds some advantages.
"Usually, there is a pretty tight relationship between a president's approval rating and his standing on economic matters, but that relationship has broken down in case of Donald Trump," said Bill Galston of the Brookings Institution.
"If you wanted to be optimistic, you could say, 'Well, people are just beginning to notice how good the economy is,'" he continued. "But the other way of telling the story is that as long as Trump doesn't change the way he behaves, the American people are not going to change what they think of him. And if they don't, that's a problem for Republicans."
Democrats anticipate that dynamic will work particularly well for them in swing and suburban districts, especially ones Hillary Clinton either won or narrowly lost in 2016. On Friday, several vulnerable Republicans were eager to weigh in against Trump's most recent controversial remarks.
"President Trump’s comments regarding Haiti and Africa are wrong and deeply offensive," wrote Rep. John Katko, who represents a swing district in New York. "This type of language is counterproductive and undermines the U.S. and our relations around the world." Utah Rep. Mia Love, whose parents are Haitian immigrants, demanded an apology from the president.
And there are already signs that improving economic conditions are not compelling enough for some Republicans in the midterms, even those who would enjoy the advantage of incumbency: Over 30 GOP members of Congress have announced their retirements. Just last week, California Reps. Darrell Issa and Ed Royce, who each represent districts Clinton won, said they planned to retire rather than seek re-election.
Pennsylvania Rep. Charlie Dent, who announced his retirement last year, said Trump is adding to the reasons Republicans like him are opting out. "The party of the president typically loses 32 seats in a situation like this," Dent told CNN. "Of course then, Donald Trump, you know, complicates that because he's a very polarizing figure, and so I suspect our challenges will be even greater just because of that."
But to be successful, Democrats also have to win back competitive districts that swung for Trump, and they face their own liabilities on economic issues. In those areas, operatives plan to focus on lagging economic indicators like wage growth. They are also eager to play up the negative dimensions of economic headlines. For example, the day Walmart announced giving bonuses, it also announced the closing of more than 60 Sam's Club stores and laying off workers.
"We are a state that has many towns … where they are where they were a decade ago in terms of the recession and when it comes to their wages," said Ohio Democratic Chairman David Pepper. "All the happy talk of the stock market or tax cuts for wealthy is not going to impress them at all."
The Quinnipiac Poll showed some ambivalence among some of Trump's core constituencies about the economy. For example, a majority of white voters without a college degree said the president's policies have helped the economy. But when asked whether those policies are helping their personal financial state, 53 percent said no.
Conservative economist Douglas Holtz-Eakin said the economy still has a ways to go in terms of productivity. "There's a whole lot of 'we're not there yet' in the data," he said. Yet Holtz-Eakin argues that when it comes to the political ramifications of the economy, "it doesn't matter what people think right now; it matters what they think up to three months before the election."
That's where the GOP’s big sell will have to come in.
"Republicans have to make sure people associate an improving economic environment with the tax reform bill," said longtime party pollster David Winston. "There are going to be clear moments in the future where that opportunity presents itself, and Republicans need to make sure people see that."
Winston noted that voters' feelings about their personal financial state matter more than overall economic data points. If they don’t feel as if they are living pay check to pay check, then they might be willing to overlook Trump-related controversies and vote for Republicans.
"I don't want to give the impression things will be perfect," Winston cautioned. "But if the economy improves, people can go into the voting booth and say, 'I think I basically got the change I voted for, or at least it’s moving that direction.’"