Overview

* Democrats are marginally likely (55% probability) to win the net three+ seats required for a majority in the House.  The primary arguments for Democrats winning a House majority are the strong historical trend against the President’s party in midterm elections; President Trump’s low approval rating, particularly on his handling of the economy; and what appears to be the higher level of enthusiasm that exists among Democrats.  However, our conviction is limited on this House outlook given gains Republicans are likely to make via redistricting and some indicators that there is discontent within the Democratic party and poor general perception of it.

* Democrats are marginally unlikely (45%) to win the net four+ seats required for a majority in the Senate.  The partisan orientation of the Senate map is relatively even, which could limit Democratic gains.  But Senate Democrats will benefit from the somewhat more favorable macro political environment as their House colleagues, and history also indicates that the President’s party typically loses Senate seats in the midterm elections.  In addition, Democrats are thus far having more success recruiting strong candidates in key states than are Republicans.

* It does not appear that the Republican economic message and key accomplishments such as enactment of the One Big Beautiful Bill Act (OBBBA) will be sufficient to give Republicans a clear advantage.  This potentially explains why President Trump is leaning into issues such as crime (i.e., via deployment of the National Guard) and immigration (though the administration’s aggressive tactics are not popular).  If Democrats are successful in elevating health care as an issue, which their tactics related to the government shutdown appear designed to achieve, they will gain a messaging advantage in the midterms, given that they are generally viewed more favorably on this issue.

* The VA and NJ elections (on 11/4), are commonly viewed as bellwethers of the following year’s midterm Congressional elections.  It will be important to watch for how each side’s voters view the economy, as well as whether Republicans will be able to replicate their successful gains in support from minority and younger voters, as occurred in last year’s Presidential and Congressional elections.

* If Democrats gain a majority in one or both chambers, they will be able to conduct more oversight over the Trump administration and have more influence over future nominees for key roles (if they take a Senate majority), but neither of those will have a material impact on the policy agenda.  They will have more leverage to get Republicans to agree to increases in discretionary spending (appropriations), and there will be opportunities for bipartisan legislation to pass in areas where the two parties agree (i.e., energy infrastructure permitting, housing affordability, PBM/other drug pricing reforms (if not already enacted), and re-shoring subsidies) and in areas where the White House might be resistant (e.g., hawkishness on China).

* If Republicans maintain their majorities, it will be highly likely that they again use the partisan “reconciliation” process to enact aggressive fiscal legislation, with a focus on issues that got dropped from OBBBA, such as further limits on Medicaid, as well as additional tax relief.

House Background

* History suggests Democrats are in an advantageous position.  Voters typically view the midterms as an opportunity to hold the President accountable.  The President’s party has lost seats in 18 of the last 20 midterm election cycles.  The average gain for the party out of power is 25 seats.  Democrats won a net 40 seats in 2018, the midterm of President Trump’s first term.  This trend is particularly pronounced when the President’s approval rating is <60% and Trump is current at ~41%.

* The House map is relatively even, with a small advantage for Republicans.  But re-districting could create a more favorable map for Republicans.

– There are only a small number of truly competitive races (i.e., ~18 “Toss Ups” out of 435).  Among the 18 Toss Up races, 10 are in Democratic seats and eight are in Republican seats.  However, in the House overall, President Trump won 13 districts represented by Democrats and VP Harris won only three seats represented by Republicans.

– Redistricting only typically takes place once a decade, but various states are undertaking an unusual mid-decade effort to re-draw Congressional seats.  According to the widely-followed Cook Political Report, this could create a net 4-6 gain for Republicans.  The following are the states with some level of re-districting activity or strong consideration of re-districting underway at the moment.  The likely gain by party is noted.  TX (R +3-5), OH (R +2-3), MO (R +1), UT (D +1-2), CA (D +3-5), MD (D +1), FL (R +2-3), IN (R +1-2).

– The Supreme Court is considering a case on the Voting Rights Act (Louisiana vs. Callais).  The question for the Court is whether creation of a majority-minority district to remedy past vote dilution can itself violate the Equal Protection Clause.  The case could be decided by Spring and if it goes against the defendants, some estimate it could result in 19 seats shifting to safe Republican districts.  States would potentially have time to undertake re-districting in some instances, though a full swing of 19 seats to Republicans is unlikely.

Senate Background

* As with the House, history suggests Democrats will gain seats, with the party out of power in the White House gaining ~four seats on average in the last 20 midterm elections.

* The Senate map is relatively even.  Among the six most competitive seats (GA, MI, ME, NC, OH, NH), three are represented by Democrats (GA, MI, NH) and Trump won in two of those states (GA, MI).  Among the states represented by Republicans (ME, NC, OH), Harris won in one state (ME).  It’s also possible that another Democratic seat could become competitive (MN), while two Republican seats could become competitive (IA, TX).

* Thus far, Democrats appear to be having slightly more success with candidate recruitment.

– Democrats have a highly competitive candidates in NC (Gov. Cooper) and ME (Gov. Mills).

– Attractive Republican candidates decided not to run in a number of competitive states (Gov. Kemp decided not to run in GA, Gov. Sununu decided not to run in NH).

– Republicans have settled on a candidate in MI (former Rep. Rogers) and Democrats are facing a competitive primary.

Macro Political Environment

* Voters’ views of the economy and the President’s handling of it can have a significant impact on the election.  Both of these variables have turned against President Trump, which could create messaging opportunities for Democrats.

– The Michigan Consumer Sentiment Index is currently at 55.1.  That’s down from 71.8 at the time of last year’s election and almost half of the 97.5, where it stood at the time of the 2018 midterms.

– Trump’s overall approval rating of ~41% is roughly the same as it was around the time of the 2018 midterms (Gallup).  But his approval rating on the economy is lower than it was at that point (~50% then vs. ~35% now) (Reuters/Ipsos).

– Preliminary data suggests that the passage of Republicans most significant economic legislation, the One Big Beautiful Bill Act (OBBBA) may not help shift voter perceptions.  According to a poll by CBS, 47% feel it will hurt them, 28% not have much effect, and 25% feel it will help.  In this same poll, 32% feel it benefits the wealthy, 22% the middle class, and 16% the poor (CBS).

– 61% of those polled disapprove of Trump’s tariffs, whereas 38% approve (Pew).

* While base Republican voters haven’t changed their views of Trump, independent voters, who can be key in a midterm, are becoming more negative about him.

– Just 33% of independents in the Cook Political Report PollTracker average give Trump positive marks for his job as president, while 62% give him a thumbs down.  Independents didn’t always have such a dim view of the president. At the beginning of March, for example, Trump’s approval rating among independents was 41%, with just over 50% disapproving of the job he was doing. But his disapproval rating among independent voters spiked in late April and has stayed in the 59-62% range ever since.

* Turnout is typically lower in a midterm election cycle, so enthusiasm among each party’s voters is a critical variable in determining the outcome.  Democrats appear to have an advantage, though not necessarily a decisive one.

– At the moment, 72% of Democrats are “extremely motivated” vs. 50% for Republicans.  A year ago, just before the election, the difference was 62% vs. 67%.  Source: CNN/SSRS.

– There are a large number of Republicans who go to the polls to support President Trump.  Without Trump on the ballot, Republican turnout may wane.

– GOP midterm-election turnout among low- and mid-propensity Republican voters in 19 swing House districts was from 7% in the 2018 midterms and 24% in the 2022 midterms which is far short of the 59% who showed up to elect Trump last year (WSJ).

– There’s some potential that the Epstein controversy, which is of significant focus for the Republican base, could depress Republican enthusiasm.  However, this could be mitigated by the surge in energy among the Republican base that has emerged in the wake of Charlie Kirk’s assassination.

– While Democrats appear to have an enthusiasm advantage at the moment, there are some signs they may be vulnerable.

– Democratic registration is down more than among Republicans.  A new study from L2 analyzes the 30 states that register voters by party. It shows fewer registered Democrats in all 30 states and more Republicans in 22 than there were on Election Day 2020. In eight states, both parties’ registration totals declined, but Republicans dropped less than Democrats. The combined swing to the GOP in all 30 states was 4.5 million voters.

– 35% of Democrats are enthused about the party’s future vs. 57% at this point last year (AP/NORC).

– The Democratic party has a net -30% favorability rating vs. -10% for the Republican party (WSJ).

– Democrats have an ~2% advantage in the generic ballot (i.e., poll of which party is favored in Congress), which is lower than it was at this point in the last mid-terms under Trump in 2018 (~7%).