Trump just might be able to defy the historical odds and win re-election. Or, he might not. But searching for signals by examining past election results is likely pointless this year. The COVID-19 election is a unicorn. This election is like nothing we’ve seen before. So, rather than look to the past, let’s determine what could be at stake in the future by examining the candidates’ expected policy agendas.
The Odd Couple
The presidential candidates represent a stark contrast in policy choices and leadership styles.
If elected to a second term, President Trump would continue to advance America First principles. And his isolationist approach would intentionally undermine global institutions like NATO, while simultaneously accelerating deglobalization trends. Tough trade talks and the use of tariffs as a crude policy tool are likely to persist during a second Trump term. Making permanent reductions from the Tax Cuts and Jobs Act of 2017 would be a policy goal. Ambitious immigration reform with an increased focus on building more of the wall along the US-Mexico border is expected in a second term. And finally, if re-elected, Trump may take another crack at significantly curtailing Obamacare.
A Biden presidency would likely be a throwback to Obama-era policies with a liberal progressive twist. Multilateralism, diplomacy and globalization would likely define the Biden agenda. Sweeping multilateral initiatives similar to the Trans-Pacific Partnership and the Paris Agreement would be more probable under Biden’s leadership. He has pledged to roll back Trump tax cuts, especially for corporations and the wealthy. A more lenient immigration policy, tougher regulations for businesses and an expansion of Obamacare are also expected to come with a Biden win.
Despite significant disagreements on taxes, trade, immigration, climate change and healthcare, Trump and Biden do agree on some matters. There are powerful populist themes coursing through both candidates’ messages. A major rebuild and upgrade of America’s crumbling infrastructure is a shared policy goal. And unlike past elections, concerns about exploding debt and deficits are absent from the debate. Both Trump and Biden plan to expand massive government spending within their respective policy agendas.
Don’t Forget About Me
Perhaps just as important as the outcome of the presidential election are a number of Senate races that will be decided in November. If either presidential candidate wants to be successful in executing their ambitious policy initiatives, control of the Senate will be key. If Trump prevails victorious, the Senate majority is likely to stay in favor of Republicans. However, if Biden wins, the outcome of the Senate races could get a lot more interesting.
Currently, there are nine Senate races that can be considered highly contested. Six of those Senate seats are presently held by Republicans. The Democrats need to gain a net three or four seats ─ depending on which party controls the vice presidency ─ to ensure a Senate majority. The latest polling suggests that Democrats could gain control of the Senate.
A potential blue wave in November poses risks to markets. Investors prefer gridlock. It ensures balance in government policy. In that sense, the outcome of the Senate races may be even more important to investors than who wins the White House in November.
Talk Is Cheap - Let’s Take It to the Polls
The incredible rise of populism combined with the growing divisiveness among voters has contributed to the ineffectiveness of polling results in the past few years. Don’t get fooled again. Biden may have the lead now, but this race is a lot closer than you think. It will likely come down to the wire. Trump will likely lose the popular vote by a noticeable margin, but the presidency will be determined by handful of counties in a few swing states in the electoral college. The expected record number of mail-in ballots as a result of the pandemic will add more drama — and potential controversy, too. It might take days, if not weeks, to determine the winner.
There has never been anything like this COVID-19 election. And hopefully, there never will be again. With Trump and Biden offering voters very different paths forward, this election could be a defining moment for the future of America. Choose carefully. And remember ─ if you don’t vote, you lose the right to complain. With less than two months left until Election Day, it’s time to buckle up ─ because this is going to be one helluva ride!