More cold takes and a look at what lies ahead

The future isn't what it used to be

We’re now down to just one uncalled race in the House, but the Democrat is almost certainly going to win. Republicans will have a 220-215 majority, which is the narrowest since 1931. For the first few months of next year, because of resignations, the Republicans’ majority could be as small as 217-215, meaning they can’t lose a single member if they try to pass anything on a party-line vote. Like I’ve said before, the election was a lot of things, but a red wave was not one of them.

In 2016 and 2020, congressional Republicans did better than Trump, but this year it was the opposite. That was good for Trump, but bad for the Republican Party. Trump is on track to win ~231 House districts, but House Democrats largely managed to hold their own. How did that happen? There’s never one answer, but it was probably a combination of House Democratic incumbents running very good campaigns, having a financial advantage, being good fits for their districts, successfully distancing themselves from the national party when needed and drawing weak opponents.

Looking at the popular vote for the House, Republicans won it by roughly three points, 51-48. They will wind up with just a little under that percentage of seats. Looking at how the presidential race went, House Democrats’ performance is very impressive. I’m not popping a champagne cork, but I think they had a good night considering the huge headwinds they were facing. If the states and districts had voted like they did in the last two presidential elections, Republicans would have won a much bigger majority in the House and Senate. Compared to incumbent parties in other countries, Democrats did quite well, including in the presidential race.

I think it’s best to view the election as like a split screen. On one screen is the presidential race and on the other is everything else. Just looking at the presidential race one could be forgiven for thinking it was a red wave. Looking at everything else tells a different story.

New York is a case in point. Harris won it by twelve points, the worst showing for a Democrat since 1988. At the same time, Democrats flipped three House seats and kept a fourth seat they had flipped earlier this year. Republicans now have a coalition that is very inefficiently distributed. They made some big gains in blue districts, but they still lost them. In swing districts, they made very little progress and even lost some ground. Their total vote share increased, but not in the places where it counted.

That Democrats are only three seats away from a majority despite losing the popular vote by three points is an exclamation point on how radically the parties’ coalitions have shifted since Trump showed up. It used to be Democrats who had a problem with their voters being inefficiently distributed. What would often happen is they would win huge majorities of the vote in blue districts, but struggle everywhere else. Even when their total share of the popular vote was close to 50-50, they had significantly fewer seats.

For example, in the 2016 House popular vote, Republicans won by one point, but they had 241 seats. In 2012, Democrats won the House popular vote by one point, but only had 201 seats. The shift in party coalitions really started to show in 2020 when Democrats won the popular vote by three points and had 222 seats. The pattern repeated in reverse in 2022 with Republicans winning the popular vote by three points and having 222 seats.

The key to the shift in coalitions is in suburban districts. Democrats used to struggle there, but now it’s Republicans who are having problems. This cycle, Republicans, especially Trump, made big inroads in solidly blue districts in big cities such as New York City. The problem for Republicans is those districts are still blue and are still represented by Democrats.

In districts that are light blue/red or purple, where control of the House is decided, Republicans made very little progress. They managed to flip a few seats, but Democrats also flipped a few seats, largely cancelling each other out. Plenty of races were decided by narrow margins, but, overall, incumbents hung on very well.

Had you told someone just a short while ago that Democrats would lose the House popular vote by three points, but have 215 seats they would have reported you to the police. It was thought for years that because of gerrymandering by Republicans and Democratic voters being so inefficiently distributed, Democrats would have to win the House popular vote by high single digits just to have a shot of taking control.

That was always overstated, but it has been completely debunked over the last few cycles. A regular theme of my writings is we have no idea what the future holds. That very much includes political party electoral fortunes. What’s happened with respect to the House since 2016 is one more piece of evidence for that.

Looking at the Senate, Republicans won the majority by gaining four seats, but three of those seats were gimmies. West Virginia was long gone even if Democrats had a perfect night. Montana was always going to be very hard and would’ve required almost every star to line up just right. Ohio was winnable, but was going to be a tough slog. Only Pennsylvania was very winnable and is somewhat puzzling given how other Senate races went.

Although Republicans gained four seats, Trump won eight states where Democrats were defending Senate seats. In Michigan, Wisconsin, Nevada and Arizona, Democrats won the Senate races even though Trump won there. Part of how that happened is Republicans have another problem Democrats used to have, which is people voting for president and leaving the rest of the ballot blank.

Nevada is the best example. The Democrat got around 4,000 fewer votes than Harris, but still won. That’s because the Republican got more than 70,000 fewer votes than Trump. The same thing looks like it happened in Michigan. I’m sure it happened in plenty of House and state legislative races, too.

In 2016 and 2020, in every state Trump won Republicans also won the Senate race. It wasn’t long ago, when some forecasters were predicting Republicans would have as many as 62 Senate seats after this cycle. Like I’ve said, we can’t predict the future, no matter how sophisticated we think our models are.

It's true the Senate math for Democrats is hard going forward. In 2026, the most obvious targets will be Maine and North Carolina, which would still leave them short of a majority. While the Senate is tough on paper, it was also tough on paper heading into the 2006 cycle. I remember it very well. It was the first midterm I followed closely. Most everyone thought Democrats would make gains, but they had to win six seats, including in reliably red states. You’ll never guess what happened next.

More recently, after 2018, the Senate map looked daunting. Despite a blue wave in the House, Republicans gained two Senate seats for a majority of 53. Going into 2020, it was obvious Democrats would be favored to win Colorado, but it would be offset by losing Alabama. That would still leave them at 47 seats. The only other clear targets were Arizona, Maine and North Carolina. Nobody I’m aware of thought Georgia was going to be the decider until very late in the game. As we all know, that’s exactly how it unfolded.

Just two years ago, Democrats were supposed to lose the Senate. Their majority was 50 plus the vice president, the bare minimum. Biden’s approval rating was bad, midterms almost always go against the party in the White House and Democratic incumbents were highly vulnerable. Most observers believed Republicans would, at a minimum, win the races in Nevada, Georgia and Pennsylvania. Not only did that not happen, Democrats gained a seat.

None of this is to say things will be wonderful and perfect. I’m just saying things aren’t set in stone. Just because things look a certain way on paper based on recent trends doesn’t mean that’s what will happen. Past might be prologue, but it might not be. As Missing Persons explained, life is so strange, destination unknown.

The next Congress

I don’t know exactly what will happen legislatively over the next two years, but I can make some guesses. What I am confident of is there will be a fight over the expiration of the tax cuts passed in 2017. The narrowness of the Republicans’ House majority will be a big factor in how it plays out. For the last two years, House Republicans have been unable to pass much of anything on their own and have frequently found themselves having to work with Democrats to get things done. Hakeem Jeffries has essentially been the de facto Speaker. My guess is that will continue although it will be easier for Republicans to stay together with control of the Senate and the White House.

Republicans want to extend the tax cuts, but the macroeconomic situation has changed a lot since 2017. Back then, interest rates were low and inflation wasn’t a concern. It didn’t really matter that trillions of tax cuts were enacted while spending was raised, but the situation is very different now. That complicates the easiest path Republicans could take by just extending the tax cuts and not offsetting them in any way.

One idea some Republicans have come up with is to claim that extending the tax cuts doesn’t cost the government anything. The rationale is that it’s just extending current law and not doing anything new. If you find yourself laughing, that’s because it’s hilarious. The biggest sources of federal spending are Medicare, Medicaid, Defense and Social Security. By the logic some Republicans are using, not touching those programs costs the government nothing because it’s just keeping current laws in place. Anyone arguing that would be laughed out of the room.

The absurdity of that argument aside, it doesn’t matter because facts are facts. Having the government forego trillions in revenue is going to mean more money goes into the economy. With interest rates being higher and inflation being a concern, putting more money into the economy is the last thing you want to do. Pretending the government isn’t losing money doesn’t change that. While Trump and Republicans in Congress may be able to fool their partisans into believing nothing is happening, they’re not going to fool the bond market or the Fed.

If Republicans opt to just extend all the tax cuts without any offsets, it will almost certainly mean higher interest rates and/or inflation. To avoid that, they could offset it by making draconian spending cuts to social programs. Here is where their narrow House majority is going to be a problem for them. If they had a majority of 241 seats like they did in 2017, I would be worried. A big worry I and many others had about Republicans winning a trifecta was that they would extend the tax cuts and offset it by slashing Medicaid and possibly the ACA.

Of all the concerns I have about the next Congress, that’s not one of them. I say that not because congressional Republicans no longer want to cut those programs, they do. Mike Johnson would love nothing more than to finish what Paul Ryan started. The problem for him is he doesn’t have the votes to do it. With only 220 seats, if everyone shows up, Republicans can only afford to lose two of their members if they’re going to pass something on a party-line vote. It should go without saying that no Democrat is going to vote to gut the ACA or Medicaid.

There are more than a dozen House Republicans who won their races by a few points or less and represent swing districts. A lot more than two of them are going to want to vote against controversial partisan legislation. They may not realize it yet, but they will have a lot of leverage in negotiations. They will have a chance to be the Republican Joe Manchin.

Not only do they not have the votes to slash Medicaid and the ACA, congressional Republicans may not want to have that misadventure again. Their repeal effort in 2017 was toxic and failed. Healthcare was a dominant issue in the 2018 elections, Republicans lost the House and have wanted nothing to do with the ACA ever since. Many of their elected officials have said the repeal ship has sailed and they want to move on. Since 2017, the ACA has become more popular and Medicaid has been expanded in nine more states. Messing with those programs again would anger way more people than the last time.

One way Republicans could try to partially offset extending the tax cuts is by repealing parts of the Inflation Reduction Act. Like with slashing Medicaid and the ACA, their narrow majority is going to be a problem. Very few Republicans in Congress want to repeal all of the IRA. Some are very supportive of the tax credits it provides. One benefit of the IRA’s money going so heavily to red states and districts is it has built support for it in those places. Congressional Republicans all voted against the IRA, but are happy to benefit from it.

There are other pieces of legislation that will need to be dealt with in the next Congress just because they’re passed on an annual basis. The farm bill is one of them as are annual appropriations bills. The debt limit will need to be raised and the government will need to be funded to avoid a shutdown. In all of those cases, my guess is Democrats will wind up doing fairly well. Those are things that can’t be passed on a party-line vote so they will have a seat at the table anyway. Because of Republicans’ narrow House majority, they will still be at the mercy of the hardliners in the Freedom Caucus who will likely vote against everything. If that happens, it will be just like this Congress where Democrats get to determine most of what gets passed.

Other than tax cuts and other must-pass legislation, my guess is the next Congress will be uneventful legislatively unless some new issue pops up. Some individual members have particular interests, which can be good and have bipartisan support. I would certainly love to see permitting reforms enacted like the one being pushed for now. If I could only have one bipartisan thing passed in the next two years that would be it.

Governing is much harder than tweeting and podcasting

Regarding the much hyped Department of Government Efficiency, call me thoroughly unimpressed. That name alone is disqualifying. It’s not a department like the VA or the State Department. Right now, it’s just two people with their own ridiculous and clueless opinions about how the government should work. It will have no authority to do anything, but those involved in it will likely assert that the president can cut spending on their own via impoundment. If that happens, I have no doubt it will wind up at the Supreme Court.

There is one scenario that would be fun to watch. The DOGE is supposed to make recommendations about cutting the size of the government. It would be a sight to behold if their recommendation was to, say, slash Medicare’s budget by half. Every single congressional Republican would have a heart attack and run for cover while Democrats would pound them over the head with it. The bromance between Trump and Elon Musk is going to come crashing down sooner or later, but that would be a really funny end to it.

When the rubber hits the road, the DOGE recommendations are either going to be a total joke or wildly unpopular. Simply cutting some small program(s) that costs very little isn’t remotely going to address the source of the country’s bad fiscal trajectory. Trying to cut programs that do address the source is toxically unpopular. It’s easy to opine and wax poetically about how things should be. It’s not easy to have to deal with tradeoffs and make actual decisions with real world consequences.

God bless Elon, I love him as an entrepreneur, but he has no clue about how different the government is from business. He’s oblivious to how much people like having the government do things for them, never mind his own heavy dependence on it. Everyone loves to say in the abstract that they want to cut waste, fraud and abuse, but no part of the budget is called that. What someone thinks of as waste, fraud and abuse someone else thinks of as their livelihood.

What Elon and his DOGE friends will soon discover is that every little part of the budget has passionate defenders who know Congress inside and out. He and his DOGE friends are new to the scene, but those programs’ defenders have been around for a long time. Congress is who controls spending and they can’t be fired. You can disrupt the market for cars and I’m glad he’s done that, but there is no disrupting the structure of the government and the separation of powers that comes with it.

Sending rockets into space is a big accomplishment and something we should all be glad is happening. That said, it has no relevance to running a government and the many programs it encompasses. He gets to be the sole decider at Tesla, SpaceX and X, but that’s not how the government works.

Another problem those at the DOGE will run into is the consequences of trying to get rid of personnel. There has been a lot of talk about mass firings of federal employees using what is called Schedule F. The legality of that is highly questionable, but it also has many practical problems. The vast majority of federal employees work for the Defense Department, Homeland Security and the VA. Are they all going to be fired? You can imagine the problems that would create.

If federal employees are going to be fired based on the numbers their Social Security numbers end in, is that going to apply across the board? If so, there are a trillion problems that can cause. Think of hospitals that rely heavily on Medicare and Medicaid for revenue not getting paid because the CMS workforce has been gutted. Think of seniors needing help with Social Security and not getting it because there’s nobody working at their local Social Security Administration office. Those are the kinds of things that will be very disruptive and affect normal peoples’ lives. To say the least, that will be extremely unpopular.

For all the post-election talk about what Democrats need to do to win back working class voters, the easiest answer is nothing. If Trump goes through with any of the things he says he wants to do it will make him very unpopular very fast. If Elon and his friends at DOGE start pushing for toxically unpopular ideas and Republicans embrace it, the gains they have made with working class voters will evaporate quickly.

That’s something Trump, for all his vices, has understood well. He disavowed unpopular Republican positions on Medicare and Social Security. That made it hard for Democrats to attack him on something they previously had great success with. Since Trump showed up, those programs have largely not been issues. If those at the DOGE and Republicans in Congress make them issues again, they will do Democrats’ work for them.