The 2010 elections may seem to exist only in the distant future, but candidates are already raising money and plotting possible strategies.
And the beleaguered Republicans, with a smaller minority than before last month’s elections, are already wondering how they'll define themselves and how their foes will define them in 2010.
Will voters see the GOP as the party of principled opposition to taxpayer bailouts of mismanaged companies?
Or will it be the party that let General Motors and Chrysler die, allowing millions of jobs to vanish?
There is, of course, a related question for 2010: At what point do president-elect Barack Obama and the Democrats “own” the economy as a campaign issue?
Republican pollster Whit Ayres said that while Democrats will try to portray the Republicans who vote against an auto bailout as job killers, “most Americans will recognize the fault lies more in Detroit than in Washington.”
An anti-Republican backlash?
But Democratic economist and former Clinton administration official Rob Shapiro said, “GOP opposition to the bailout seems to embody the general Republican approach of ‘no matter how bad things are, you’re on your own.’ Even though the public may oppose this bailout, they are going to even more strongly oppose deterioration in the economy without a bailout.” He said, “If the economy turns significantly worse after the failure of the auto companies, the public will blame it on those who helped create the conditions that let the economy deteriorate further.”
The 2010 Kentucky Senate race will be a good test case of how an incumbent Republican defends himself from Democratic attacks on the economy.
When he ran in 2004, Sen. Jim Bunning, a Republican, won his seat by only by only 1.4 percent — and the Cook Political report rates his 2010 race as a “toss-up.”
Although he did not show up for Thursday’s Banking Committee hearing, Bunning said two weeks ago that the essential issue is “whether the federal government should intervene in the private-sector economy. And I believe it should not.”
He added that if Chrysler and General Motors went into bankruptcy or liquidation, “I think that’s probably the best thing that can happen. Then there will be a reorganization and they’ll be able to jettison things they couldn’t ordinarily jettison, like health care benefits, like pension benefits and there will be someone to pick those up like the Pension Benefit Guaranty Corp.”
The firms would “may come out of bankruptcy a heck of a lot better off than they go into it.”
Ohio Republican supports aid
Contrast Bunning with his Republican neighbor from across the river in Ohio, Sen. George Voinovich, who's also up for re-election in 2010.
“Bankruptcy could trigger a deep recession and send us over the cliff. If these companies are allowed to fail, taxpayers will wonder why Congress failed to act,” said Voinovich two weeks ago.
That's when he stood alongside a band of Democrats to introduce legislation that would give carmakers $25 billion in funds which Congress has already appropriated for auto-industry conversion to more fuel efficient vehicles.
His support signals a backing of the parts suppliers and automotive factories in his state.
In fact, Voinovich was one of only two Republican sponsors of the legislation. The other? Pennsylvania's Arlen Specter, who's also running for re-election in 2010.
At Friday’s hearing at which the auto CEOs made their pleas for money, House Republicans were mostly hostile to the loan.
Rep. Jeb Hensarling, R- Texas, said, “Every industry in American is hurting today. Show me one that isn’t. Show me one that couldn’t be assisted and made more viable and more profitable with an additional $34 billion.”
Rep. Don Manzullo, R- Ill., whose Rockford-based district includes machine tool firms which depend on the auto industry, lashed out at the CEOs for not supporting tax incentives for Americans to buy cars.
“I want to make sure the people I represent are helped out, but the plans that you have given us are woefully insufficient because they do not address (consumer) demand,” Manzullo told the CEOs.
The sickly economy has already cost the GOP seats in Congress. One Republican who was defeated last month largely due these troubles is Rep. Phil English, who represents Erie, Pa. and its environs — once a powerhouse of American manufacturing.
As part of his farewell to the Capitol, English showed up Friday at a hearing of the Joint Economic Committee to hear the grim report from the Bureau of Labor Statistics: U.S. employers slashed 533,000 jobs in November.
One of 108 House Republicans who voted against the $700 billion financial industry rescue plan in October, English favors an immediate stimulus bill and is not necessarily opposed to an auto industry loan.
Economy was 'huge, huge' factor in defeat
The economy, English told me after the hearing was “a huge, huge” factor in his defeat by Democrat Kathy Dahlkamper.
“In my district, 85 percent of voters thought the country was on the wrong track. Significant parts of our district haven’t recovered from the last recession. So when they saw people in Washington speculating on whether there was a recession, it created the impression that all people in Washington were completely out of touch.”
English had held his seat since 1995 and — until this year — managed to survive as a pro-tax cut, pro-investment Republican in a Democratic-leaning district.
Even in defeat, English remains a firm advocate of tax cuts. To spark the economy right now, he urges making permanent the current low tax rate on capital gains and suspending the capital gains tax temporarily.
As to the risk of the Detroit-based automakers going bust, English said, “I think there’s a risk here for everybody. If the auto companies die on the Democrats’ watch, I don’t think they are going to have any insulation either. If the Republicans are seen as obstructionist, without framing their concerns on principle, they could very well face a backlash in states like Michigan.”
But part of the political dilemma for the Republicans is that if they vote to subsidize General Motors, Ford, and Chrysler with taxpayer money, they would be voting to aid the United Auto Workers union, which has long been a major source of campaign money and workers for the Democrats.
It was no accident that at both Thursday’s Senate Banking Committee hearing and at Friday’s House Financial Services Committee hearing, where executives from GM, Chrysler, and Ford asked for taxpayer money, Democrats lavished praise on the UAW for giving up some of the benefits it had been promised in its contracts with the automakers.
“Some would like to break the back of the union,” said Sen. Bob Menendez, D-N.J., Thursday, apparently alluding to Republican members of the committee.