LDN - Business

Hot economy is cold comfort for Republicans in tight U.S. races

[November 05, 2018] By Jonathan Spicer and Ann Saphir

FLEMINGTON, N.J./MODESTO, Calif. (Reuters) - Linda Hults is the sort of Republican who President Donald Trump would expect to reward his party for the hottest U.S. economy in a decade by helping defend its grip on Congress in dozens of tight races across the country.

Instead, the retired teacher says she is "at a loss" deciding who she will vote for in this week's election because of Trump's "deplorable" character.

"I know many people feel good about earning more. But I can't overlook the whole picture," Hults said at an open-air outlet mall in Flemington, New Jersey, where five-term Republican U.S. Representative Leonard Lance faces a stiff challenge from Democrat Tom Malinowski.

"After this, I might just be a plain old independent."

Trump has wagered big that a nearly $1.8-trillion blast in tax cuts and extra spending would leave his party all but invincible at a time when unemployment is at its lowest since the 1960s and the economy is expanding at a robust 3.5 percent.

But Hults' concerns show why Republicans may be vulnerable to losing control of the House of Representatives in Tuesday's midterm elections.

Trump gets high marks for his management of the economy, and in two-thirds of the 60 most competitive House districts incomes were higher than the national median in 2017. Yet even in areas where incomes grew the strongest since Trump's inauguration, such as the central New Jersey district where Hults lives, polls show voters mostly split or leaning toward the Democrats.

(For a graphic of income and job growth in competitive districts, see: https://tmsnrt.rs/2Pp3i1D)

Reuters analysis shows that in 17 of competitive districts median incomes rose by more than 4 percent last year, well above the 2.6 percent nationally. Still, polls analyzed by RealClearPolitics indicate voters favor Republicans only in seven of those districts.

(For a graphic of income and job growth in competitive districts, see: https://tmsnrt.rs/2Pp3i1D )

Interviews with nearly 30 voters in two of the districts with strong income gains suggest Democrats and many independents are keen to punish the incumbents, with some citing Trump's divisive scapegoating and others his disregard of institutions and decorum.

A strong economy usually helps incumbents and with business optimism high and median household income having risen three years running, traditional pocketbook issues may still save some Republicans in competitive races.

"Everyone benefits from the upswing," said Jack McDade, a Republican voter in Lance's district, who says the candidate would have been wiser to fully embrace Trump's policies.

Polls do favor Republicans retaining control of the Senate. They show, however, that Democrats have a good chance of winning 23 more seats and securing a House majority.

Split control of the Congress could stymie further policy stimulus Trump would like to roll out to bolster his re-election bid in 2020. Already, a month-long stock market decline saw Trump shifting blame to the Federal Reserve for tapping too hard on the economy's brakes.

[See: https://tmsnrt.rs/2PlZ6jb]

CHANGING HORSES

In some too-close-to-call districts where polls show better-educated Americans are less supportive of Trump than elsewhere, Republican candidates are distancing themselves from him to survive.

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Posters for candidates competing to represent California’s 10th congressional district are displayed in front of a shopping mall in Manteca, California, U.S., October 29, 2018. REUTERS/Ann Saphir

Lance, the congressman whose district is a tangle of wealthy suburbs and wheat fields, voted against Trump's tax bill because it hurt local homeowners. He told Reuters he was "not afraid to disagree with the President."

Some Republicans interviewed, meanwhile, expressed resignation about the midterm races, in which the party in power often loses congressional seats. "I think people have given up," Nicole Soares, a dental assistant lunching in Turlock, California, last week, said of her fellow Republicans.

Voters in Soares' district of almond and dairy farms, about 70 miles (112.65 km) east of San Francisco, elected Republican Jeff Denham three times since its boundaries were redrawn in 2012. Yet even though jobs grew faster here than in all but two of the 60 battleground districts analyzed by Reuters, polls conducted by the New York Times and UC Berkeley's Institute of Governmental Studies show Denham and Democrat Josh Harder in a close race.

"I haven't seen Denham do anything so far, so at that point in time, all's you can do is change horses and hope the next one runs better than the last one did," David Ablett, 74, a retired car dealer, said. Ablett, who said he was concerned about healthcare costs and a lack of good jobs, spoke after voting early in downtown Modesto.

SUBURBAN BATTLEGROUND

Through October more than 42 percent of those surveyed in a recent Reuters/Ipsos poll said the economy was on the right track, compared to 38 percent who said the opposite. The positive response is twice what Barack Obama received late in his second term as president.

(Graphic: https://bit.ly/2yG2QSY)

Yet the poll showed voters rate Trump lower for his overall performance than for the state of the economy, which poses a challenge for Republicans running outside of Trump's strongholds.

"The difficulty is acute in suburban districts where Trump is very unpopular," said Andy Laperriere, head of U.S. fiscal policy research at Cornerstone Macro, in Washington. "The worry for Republicans is a mismatch of intensity among voters, especially if supporters are holding their nose, while Democrats are out to punish."

While men, and voters that are older, white and wealthier, are the president's biggest backers, according to the Reuters poll, analysts say much will depend on white women with at least a college degree, who are roughly split on the question of the economy.

Zita Heinz, who runs a planning company in the tight New Jersey district, said she had backed both parties in the past, but was now leaning Democratic, worried that Republicans might weaken healthcare.

"I have to vote to cancel out my husband's vote," she said heading to cast an early ballot in the town of Somerville last week.

(For all Reuters election coverage, click: https://www.reuters.
com/politics/election2018)

(Reporting by Jonathan Spicer in Flemington, New Jersey; Ann Saphir in Modesto, California; Additional reporting by Howard Schneider and Jason Lange in Washington.; Editing by Tomasz Janowski)

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