MNI POLITICAL RISK ANALYSIS - US Midterm Brief 11 Aug ’22

Executive Summary:

• In this regular article we will provide a concise briefing on the upcoming US Congressional midterm elections. We include analysis of the important races that will determine which party holds a majority in the Senate, as well as the outlook for control of the House of Representatives. Data on opinion polling and betting market probabilities, as well as political modelling of the potential election outcomes is all included in the brief.
• The elections taking place on 8 November will have a major impact on the US political landscape. Should the Democrats be able to retain control of the House of Representatives and Senate it will provide a major boost to the Biden administration in terms of passing future legislation, as well as give momentum to the party ahead of the 2024 presidential election.
• Should the Republicans take control of one or both chambers it will significantly limit Biden’s ability to enact policies at a domestic level, limiting his notable interventions to the foreign policy arena.
• Opinion polling in key swing states indicates that the Democrats are on course to maintain control of the Senate, and could even increase their seat total to above 50. The GOP’s prospects may have been harmed by a number of inexperienced Trump-endorsed celebrity candidates that, following primary wins, have failed to gain ground on Democratic incumbents. However, the Republicans are on course to win a majority in the House if polling proves accurate. This would likely see House minority leader Kevin McCarthy (R-CA) take up the Speaker’s gavel from incumbent Nancy Pelosi (D-CA), giving the Republicans a much louder national platform.
• Democrats enter the second half of 2022 with a string of legislative successes and an enhanced political environment. The passage of the CHIPS and Science Act and the Inflation Reduction Act over the summer has dispelled the narrative of legislative gridlock, providing the Democrats with some useful momentum. The redistricting of the House of Representatives has not delivered a clear advantage to either party. The main impact seems to have been in reducing the number of competitive races nationwide, with more districts now shifting to either the safe Republican or safe Democrat category.
• A number of gubernatorial elections are also taking place. In large economically and politically important states such as Texas, Georgia, Florida, Arizona, and Wisconsin the results could prove a useful signal of Democrat and Republican voter appetite two years out from the presidential vote.

MNI POLITICAL RISK ANALYSIS - US Midterm Brief 11 Aug ’22.pdf