Page 19 - ISQ UK JANUARY 2020

JANUARY 2020

“ The increasingly polarized political climate has generated greater
emphasis on party affiliation/overlap between the outcome of

the Senate and presidential elections in individual states. ”

explain the outcome of the 2018 midterm Senate elections in of Senators Sanders and Warren (and their accompanying
which Democrats won a majority in the House, but Republicans policy positions) should direct more attention on these
were able to flip the Senate seats of incumbent Democrats in elections. Going back to 2006, the most competitive races in
North Dakota, Missouri, Indiana, and Florida – all states won by presidential years have gone decisively in favour of one party in
President Trump in 2016. Democrats were able to pick up a seat the range of 73-80%. If the 2020 cycle continues the 2018 trend
in Nevada (Clinton win) and Arizona (narrow Trump victory). In of a Democratic ‘wave’ election and 80% of the current
light of this factor, Arizona and North Carolina are set to be competitive Senate races are won by Democrats, this produces
highly competitive given that Trump’s 2016 victory in those a 51-49 Democratic Senate. The Senate factor will have
states came with less than 50% of the vote. Doug Jones (D-AL) important market implications in the event of a change in
(Trump +27.7%), Cory Garner (R-CO) (Clinton +4.9%), and Susan administration post-2020, and could serve to temper or amplify
Collins (R-ME) (Clinton +2.9%) could also get caught up in the market concerns around more impactful legislation finding a
national trend. path to becoming law.
The top-tier candidate status of Senators Elizabeth Warren
(Massachusetts) and Bernie Sanders (Vermont) may have a
significant impact on the Senate math should they be elected
as either president or vice president. Massachusetts and KEY TAKEAWAYS:
Vermont do not require a replacement to be of the same party • While the race for the presidency will dominate
as the outgoing Senator, meaning the current Republican the headlines, the ultimate market and economic
Governors of both states could appoint a Republican interim impact will be decided based upon the outcomes of
replacement – taking away a Democratic seat until the special the majorities in the House and Senate.
elections conclude. This could have important consequences
on cabinet appointments and an initial legislative agenda as • The ability for any candidate to enact his or her
late as five months into the first term of a potential Democratic agenda, especially through the confirmations of
administration (if the Democrats net a thin majority in the key cabinet and regulatory posts, runs through the
Senate). Per Massachusetts state law, the outgoing Senator files Senate.
a letter which triggers a 145-160 day period (roughly five • 35 total Senate seats are up for grabs in 2020.
months) until a special election is held for a replacement and Republicans currently hold a 53-47 majority,
the governor makes an interim appointment to fill the vacated which sets up Democrats for an uphill battle in
seat. Vermont’s special election is held within three months of order to make significant gains. Of the 35 races, 6
the vacancy. are considered ‘competitive.’
At this time, we believe the most likely scenario for the Senate • At this time, we believe the most likely scenario for
is a continued Republican majority, but the stable national the Senate is a continued Republican majority.
support for impeachment and the strength of the candidacies

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