Looking Backwards at the Democrat's 2014 Implosion

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Policy Shop Blog / Demos

Looking Backwards at the Democrat's 2014 Implosion

What could happen if Democrats put deficits first, and the economy second

November 5, 2014

Jubilant Republicans took back the Senate in yesterday's mid-term election, and appeared to have increased their majority in the House by about ten seats.

"Barack Obama is now the lamest of lame ducks," said Sen. Mitch McConnell of Kentucky, now the Majority Leader, who held on to his own Kentucky seat by about three percentage points, the Senate Republicans only close call of the evening.

"The Senate numbers this year were against the Democrats," said pollster Stan Greenberg, "but what really killed us with the voters was the economy."

Going into the election, 11 Democrat-held senate seats were considered at risk, while the only endangered Republican seat was McConnell's. In a quirk of bad luck and timing, almost every red-state Democrat was up, and several veterans had opted to retire. Republicans gained Democrat-held seats in Alaska, Arkansas, Iowa, Louisiana, North Carolina, South Dakota and West Virginia, while Democrats managed to narrowly hold jeopardized seats in Colorado, New Hampshire, Oregon, and Minnesota, leaving Republicans with swing of seven seats and a 52-48 margin.

Al Franken, who hung on to his Minnesota seat by just two points, concurred with Greenberg. "Voters were really unhappy that unemployment remained above 7 percent, and that Democrats seemed to be the party of austerity and of Wall Street," he said. "The Democrats' support for cuts in Social Security only made it worse."

According to the Congressional Budget Office, growth is likely to be under 2 percent this year once again, after clocking in at just 1.7 percent in 2013. Unemployment seems stuck at a permanent plateau of about 7.5 percent.

After an aborted recovery in 2013, housing prices remained flat in 2014 because of weak consumer purchasing power.

"I congratulate the Republicans on their victory, and I will spend my remaining two years continuing my quest for common ground and bipartisan consensus," said President Obama. "There is more that unites than divides us, and I urge Republicans to reciprocate."

"We are now positioned to crush the socialistic Democrats in 2016," exulted anti-tax crusader Grover Norquist. "We will redouble our efforts to cut back taxing and spending, so that we can at last get a recovery going."

The road to political and economic ruin for the Democrats began in the late spring of 2013, when President Obama agreed to a budget grand bargain that cut deficits by 2.8 trillion dollars over ten years, deflated a fragile recovery, and left no room for more than token domestic spending on jobs or infrastructure.

The cuts were somewhat "back-loaded" -- bigger later in the decade. But in 2014 they took $200 billion out of the budget. According to CBO, that cut the growth rate by a full percentage point.

As part of the deal, more Medicare costs were shifted to patients, and the cost-of-living adjustment for Social Security was cut. Both changes, proposed in Obama's own budget, reduced purchasing power by over $100 billion among the elderly -- who surprised experts by backing Republicans by a margin of 59-41, according to exit polls.

The 2013 budget deal, according to Roger Hickey of Campaign for America's Future, "left the Democrats with bragging rights as deficit hawks, but not on the real economy."

"We should have fought harder for something like the Congressional Progressive Caucus budget, which emphasized jobs and public investment," said Nancy Pelosi, who is stepping down as House Minority Leader. "It was never going to pass, but at least it would have positioned Democrats as the party of jobs, not budget cuts. And the final deal would have been far friendlier to jobs and growth."

In the fateful House vote on the deflationary budget, 106 Democrats joined 142 Republicans in voting aye, after intensive lobbying by the White House, by the corporate-backed group, "Fix the Debt," and by the Peter G. Peterson Foundation. House Speaker John Boehner said most of his Republican caucus had voted for the deal only reluctantly, because of the $840 billion in loophole closings. But after the vote Republicans broke out champagne.

"Congress at long last did the right thing, overcoming partisan gridlock, and voted for a grand bargain in the national interest," said former Citigroup executive chairman Robert Rubin, who has been promoting such a budget bargain for two decades. Rubin was spotted going in and out of the White House and the Capitol during the weeks before the final vote.

"This election was the Democrats' to lose," wrote blogger Nate Silver, "and they ran true to form. Long term, it's a race between demographic and cultural shifts that favor Democrats, and Republican superiority at tactics. For now, the Republicans maximized their advantage and Democrats didn't."

Massachusetts Senator Elizabeth Warren is considering whether to form an exploratory committee for the 2016 presidential campaign, but is likely to defer to Hillary Clinton if the former secretary of state gets in to the race.

"This fiasco, once again, is why I don't call myself a Democrat," said Vermont independent Senator Bernie Sanders. "Don't progressives get even one party?"

Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe and Huffington Post. He is the author of A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future, Obama's Challenge, and other books.

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