Prediction: It'll Be A Tie In The Senate And 65+ Republican Seats Gained In The House

Conclusion: It’s not politics for us, but simply maths. The turnout measures for Republicans are very positive and should drive a big Republican win to the tune of a net gain of nine seats in the Senate and more than 65 seats in the House.

We’ve been pretty consistent in our call that the Republicans will do better than even most conservative prognosticators have been touting in the midterm elections coming up tomorrow. The primary reason that
we believe this is so is because of Republican turnout and enthusiasm, which is as high as it has been in generations. Conversely, Democratic enthusiasm and turnout and enthusiasm seems markedly low
versus more recent elections, particularly the 2008 election.

Our favourite poll to highlight broad sentiment is the Generic Congressional Vote poll. Based on the Real Clear Politics poll aggregate, which looks at all of the major polls by all major polling organisations, the Generic Congressional Vote poll is the widest it has been in this cycle on the eve of the election. We have posted a chart of this poll below, but currently the Republicans receive 49.8% of the generic vote versus Democrats receiving 41.8% of the generic vote for a spread of 8.0 points. Interestingly the most recent four
polls show an even wider spread with a spread that averages +11 in favour of the Republicans (this is using Likely Voters). Momentum matters in elections, and the Republicans are clearly exhibiting momentum in this key poll.

political chart

Photo: Hedgeye

The secret sauce of any poll is, of course, its internals.  As we review many of the Generic Congressional Vote polls, the key measures we are analysing are enthusiasm measures, which are a likely leading
indicator for turnout.  While the spread in favour of the Republicans on the Generic Congressional Vote polls outlined above are incredibly significant as it relates to an advantage favouring the Republicans,
the internals are even more so.  To wit:

  • In the Pew poll taken from October 27th to October 30th, 70% of Republicans had given a lot of thought to the election versus 55% of Democrats for a spread of +15 favouring the Republicans.  In 1994, this internal favoured the Republicans by only +5; and
  • In the Gallup poll taken from October 28th to October 31st, 68% of Republicans have given a lot of thought to the election versus 54% of Democrats for a spread of +14 favouring the Republicans.  In 1994, this internal favoured the Republicans by only +9. The fact that these enthusiasm measures are broader than in 1994 is quite telling as it relates to what will happen tomorrow.  In 1994, the Democrats lost 54 seats in the House.  As we will outline below, we think the losses this year will be more substantial than 1994.

As it relates to the Senate, we think that the when the dust settles on Wednesday, we could see a 50 – 50 tie. Currently, if we look at the seats that are not up for election, the Senators that may be independents but typically vote with one party or the other, or the polls that gives us a clear indication of who will win . . .the race for the Senate looks to be 48 seats for the Democrats and 45 for the Republicans with the remain 7 races currently registered by many poll aggregators as “Too Close To Call.”

As we look at the “Too Close To Call” races, it is clear that certain races have momentum towards one party or the other.  As a result, we will cede California to the Democrats at it seems Boxer will beat Fiorina. On the Republican side, we will cede Colorado, Illinois, Nevada, and Pennsylvania to the Republicans as the Republican appear to have the momentum in these races.  This leaves us with two races which will decide the balance of power in the Senate – West Virginia and Washington. On the margin, it looks like Democrats might have a slight advantage in both of these races, but we believe at least one of these races will swing to the Republicans. Most likely it will be West Virginia, which is historically more Republican (McCain won here by 13 points in 2008) and the polling has been less accurate and consistent over time.  In summary, we see the Senate coming in at 50 –50, with Washington and West Virginia being the key races to watch in
the Senate. (Incidentally, in a 50 – 50 tie, the Vice President gets the deciding vote so the Democrats would still have control.)

In the House, a Republican majority is all but a foregone conclusion. Based on the polls that are leaning or safe as it relates to either party, the Republicans are at 224 seats and the Democrats are at 168 seats, which suggests a net 46 seat gain for the Republicans.  Outside of this are the remaining 43 seats that are “Too Close To Call.” While we could easily make the argument that these seats too will go on a high percentage basis to the Republicans, we will make a more conservative projection and suggest that half of the “Too Close To Calls” will go Republicans.  So, this is an incremental ~21 seats going Republican, which makes for a net Republican gain for 67 seats. A Republican gain of 70 seats seems to be in the realm of mathematical reality as well. We have to go back to 1938 when the Democrats lost 72 seats to find a point in electoral history when a party has lost this many seats.

As former Congressman from Minnesota Walter Judd famously said:

People often say that, in a democracy, decisions are made by a majority of the people. Of course, that is not true. Decisions are made by a majority of those who make themselves heard and who vote – a
very different thing.

In this election, nothing more could be true as, for better or worse, the Republicans seems overwhelming ready to make their voices heard by voting.

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