Survivor!--The GOP Victory
BARRONS
By JIM MCTAGUE
JUBILANT DEMOCRATS SHOULD RECONSIDER their order for confetti and noisemakers. The Democrats, as widely reported, are expecting GOP-weary voters to flock to the polls in two weeks and hand them control of the House for the first time in 12 years -- and perhaps the Senate, as well. Even some Republicans privately confess that they are anticipating the election-day equivalent of Little Big Horn. Pardon our hubris, but we just don't see it.
[pols]
Our analysis -- based on a race-by-race examination of campaign-finance data -- suggests that the GOP will hang on to both chambers, at least nominally. We expect the Republican majority in the House to fall by eight seats, to 224 of the chamber's 435. At the very worst, our analysis suggests, the party's loss could be as large as 14 seats, leaving a one-seat majority. But that is still a far cry from the 20-seat loss some are predicting. In the Senate, with 100 seats, we see the GOP winding up with 52, down three
We studied every single race -- all 435 House seats and 33 in the Senate -- and based our predictions about the outcome in almost every race on which candidate had the largest campaign war chest, a sign of superior grass-roots support. We ignore the polls. Thus, our conclusions about individual races often differ from the conventional wisdom. Pollsters, for instance, have upstate New York Republican Rep. Tom Reynolds trailing Democratic challenger Jack Davis, who owns a manufacturing plant. But Reynolds raised $3.3 million in campaign contributions versus $1.6 million for Davis, so we score him the winner.
Likewise, we disagree with pollsters of both parties who see Indiana Republican Rep. Chris Chocola getting whomped by Democratic challenger Joe Donnelly, a lawyer and business owner from South Bend. Chocola has raised $2.7 million, versus $1.1 million for Donnelly. Ditto in North Carolina, where we see Republican Rep. Charles Taylor beating Democrat Heath Shuler, a former NFL quarterback, because of better financing. Analysts from both parties predict a Shuler upset.
Our method isn't quite as accurate in Senate races: The cash advantage has spelled victory about 89% of the time since 1996. The reason appears to be that with more money spent on Senate races, you need a multi-million-dollar advantage to really dominate in advertising, and that's hard to come by.
Though the current economy is slowing, unemployment remains relatively low, at 4.6%, and disposable-income growth is positive. While GDP figures will be revised downward in coming weeks and unemployment figures could edge up, it may not matter. Those numbers are "interesting stuff for economists, but voters will continue to focus on pocketbook issues like the price of gas and the value of their 401(k)s," says GOP insider Rick Hohlt. Pump prices have been falling and the Dow Jones Industrial Average has been on a tear, reaching 12,000 last week.
IF WE'RE EVEN HALF right, and the GOP retains control of the Senate but loses the House, then there would be important ramifications for the stock market. Since traders often have disdain for Democrats, there could well be a relief rally, at least in the short term. "It would force investors to rethink some overzealous discounting of stocks," says Chuck Gabriel, chief political analyst for Prudential Equity Group.
Fear of Democrats, he suggests, may be playing a role in the weakness in energy and pharmaceutical stocks, with investors bracing for a populist backlash against profits. "Elections may or may not be a driver, but it would not hurt to remove that headwind," says Gabriel.
Even the "investors" who buy contracts on the Iowa Electronics Market are down on the Republicans for the first time in memory. Contracts that will be worth $1 if Hastert & Co. end up retaining control of the House on Nov. 7 are trading for around 30 cents -- hardly a vote of confidence.
There's no denying that the Democrats have fielded stronger candidates this time around. The effects of that will be on display throughout Election Day in close races around the country. Here's a rundown on some of the tightest.
In Connecticut's fourth congressional district, Republican Rep. Chris Shays is in a bruising rematch against Diane Goss Farrell, whom he narrowly beat in 2004. He's raised $3.2 million to her $2.5 million. That puts her within reach of an upset, but we reckon Shays' funding advantage will help him keep his seat, even though the district voted against Bush in the past two presidential elections.
In Pennsylvania, pundits have written off Republican Sen. Rick Santorum, who has raised $17.3 million. His Democratic challenger, Bob Casey, who has raised $15 million, has a large lead in the polls. This is the first serious challenge for Santorum since he was elected in 1994. We see him defying the pollsters on Nov. 7 and hanging on to his seat, with voters from the Western part of the state riding to his rescue.
Take a look at how Jim McTague did with his picks in 2004.
In Rhode Island, we predict Republican Lincoln Chafee will lose to democratic challenger Sheldon Whitehouse, a former U.S. attorney. Whitehouse has raised more than $4 million versus about $3.5 million for Chafee. According to the Center for Responsive politics, nearly 80% of the challenger's money comes from individuals as opposed to political committees. Chafee has raised about 50% from individuals. Clearly Whitehouse has a better organization.
With only two weeks to go, a barrage of contradictory poll findings is apt to confuse the oddsmakers, not to mention voters. But we're sticking with our numbers, and they say one thing: The Democrats don't have quite enough heft to push aside the elephant.
|
