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The latest opinion polls show Democratic candidate Joe Biden is the clear favourite to win the US presidential election on 3 November. An average of national opinion polls from website FiveThirtyEight gives Mr Biden a 6.6 percentage-point lead over Donald Trump, down from 7–10 points over the summer. Pollsters estimate that the Democratic presidential candidate needs a margin of 3–4 points in the popular vote to win the electoral college and take the presidency.

Forecasting models, based on past and current poll data, predict a clear Biden victory. As of last Friday The Economist’s election model gave Mr Biden an 86% chance of victory. Statistician Nate Silver gave Mr Biden a 76% probability of winning.

An alternative approach to gauging the outcome comes from the betting markets and they suggest a tighter race. RealClearPolitics reports that an average of betting odds gives Mr Biden a 53% probability of winning the presidency and Mr Trump a 46% chance of victory.

The discrepancy between the polls and the betting markets probably reflects scepticism about forecasters’ predictive abilities following Mr Trump’s unexpected victory in 2016. The opinion polls were actually not too far off the mark in 2016, giving Hillary Clinton a margin of 3.2 points against her actual margin of 2.1 points over Mr Trump in the popular vote.

Mr Trump won the electoral college thanks to a narrow margin of fewer than 80,000 votes in three swing states (Michigan, Pennsylvania and Wisconsin). Betting markets were, if anything, even more convinced of a Clinton win in 2016 than the polls. On election day betting odds gave Ms Clinton an 88% chance of victory.

US political analyst Charlie Cook wrote earlier this month that the shock of the 2016 election has led to an overcorrection in expectations for the 2020 election: “irrational exuberance has given way, in my mind, to irrational caution”. There are several differences between the forthcoming election and that of 2016.

Mr Biden is polling 5.1 points better than Ms Clinton was against Mr Trump in mid-September 2016. Mr Biden enjoys a net favourability rating of 4.1, against -13.2 for Mr Trump, far ahead of Ms Clinton’s consistently negative approval rating through 2016.

Mr Trump’s job approval rating started low and remained so, even as, in 2018–19, the economy boomed, unemployment fell and the stock market soared. In today’s more trying circumstances Mr Trump is likely to struggle to raise his approval rating.

Mr Biden enjoys large leads over Mr Trump in the three swing states that handed Mr Trump his 2016 victory. Electoral models that assign states as ‘solid’, ‘lean’ or ‘likely’ Democratic or Republican place Mr Biden above the 270 electoral vote threshold needed to win. He would not even need to carry ‘toss-up’ states like Florida, Georgia or North Carolina; Mr Trump would need to win them all.

The polls are, of course, fallible. It is possible that a reviving US economy, an easing of the pandemic and a glittering campaign could boost Mr Trump’s prospects. The three presidential debates, the first on 29 September, give Mr Trump an opportunity to challenge a hitherto low profile Biden campaign in person.

And yet from where we now stand, just six weeks from the election, a Biden victory looks the more likely outcome. So what would a Biden administration mean in terms of policy?

Mr Biden has a track record as a moderate Democrat. However, his presidential platform is to the left of Ms Clinton and Barack Obama, reflecting the shift in the Democratic Party’s thinking driven by figures including Bernie Sanders and Elizabeth Warren.

On the economy the Biden campaign offers higher public spending, a greater focus on the environment and more regulation. Abroad Mr Biden promises more engagement with international institutions and partners coupled with a sceptical approach to China.

Mr Biden would overturn the Trump administration’s stance on the environment by rejoining the Paris climate change accord and launching a major ‘green’ infrastructure spending programme with a target of reducing net emissions to zero by 2050.

Mr Biden has promised a swath of new spending measures – all contingent on securing the support of Congress. New environmental commitments come with a $2tn price tag. Greater support for healthcare, universal pre-school education and the abolition of public university fees for low and middle-income households are major commitments. In a sign of a more interventionist stance the Biden campaign has proposed $300bn of spending on research into high-tech manufacturing, 5G technology and artificial intelligence.

On the revenue side, Mr Biden wants partially to reverse the Trump administration’s corporate tax cuts, broaden the corporate tax base and increase taxes on those earning over $400,000 a year.

A Biden presidency would unwind Mr Trump’s easing of environmental, emissions and energy efficiency standards. Mr Biden has said little about financial regulation but a role for senior senator Elizabeth Warren in his administration would stoke expectations of a tougher approach to the sector. Mr Biden has expressed support for raising the federal minimum wage from $7.25/hour to $15, although for the many states where the rate is in the $10–$13 range this would be less dramatic than the national increase suggests.

On foreign policy, Mr Biden wants to shift the US back to a more multilateral approach espoused by earlier administrations. The US would take a less confrontational approach with the EU, NATO, the World Health Organization and the World Trade Organization.

The Biden campaign has taken a hawkish stance on China but says it would employ different methods from those of the Trump administration. Mr Biden has proposed a four-year $400bn “Buy American” government procurement programme to support US manufacturing, a “carbon adjustment fee” to ensure imported goods meet US environmental standards and a tax on the foreign earnings of US companies that produce overseas goods for sale in the US.

The US president enjoys significant discretion in pursuing foreign policy objectives. But with the exception of some regulatory actions, most domestic policy objectives hinge on Congressional passage of legislation and approval of judicial appointments. Democratic control of Congress is key to the Biden administration enacting much of its domestic policy agenda, including raising public expenditure.

The Democrats are expected to maintain control of the House of Representatives, but the fate of the Senate is finely balanced. Even if Mr Biden is elected and Democrats take control of the Senate, the recent history of midterm elections (two years after the presidential election) do not bode well for the party of the president. Both Mr Obama and Mr Trump only enjoyed control of Congress for the first two years of their presidencies before one chamber fell to the opposing party, essentially preventing the passage of any further legislation that did not enjoy bipartisan support.

How much of the Biden platform is actually enacted would depend on the power of the Democrats in Congress and the shifting sands of political priorities. While his fiscal platform is more expansionary than Ms Clinton’s, there is nothing in Mr Biden’s past to suggest he is a fiscal radical in the Bernie Sanders mould. A Biden administration, like so many of its predecessors, may in reality prove less radical on domestic policy, especially on taxes and spending, than its campaign promises suggest.

Mr Biden is the front runner at the moment but there are increasing signs that this may become a contested election, one in which neither side admits defeat. The result could be a political crisis that lasts for weeks or possibly months.

The pandemic means that many more Americans will vote by post. Mr Trump has criticised mail-in voting as susceptible to fraud and repeatedly suggested that he might reject the election results. Mr Biden has said that Mr Trump may try to “steal” the election.

Some states have long had high rates of mail-in voting, but many have not, and it could take days or even weeks to count mail-in votes in all states. This creates the possibility of a narrow Trump win on election night on the basis of the in-person vote which is reversed in the following days or weeks as mail-in votes are counted.

If Mr Trump were to refuse to accept defeat by mail-in votes the Supreme Court could be called on to determine the winner, as was the case in the Bush-Gore election in 2000. That election was ultimately resolved by Al Gore’s concession, not by the Supreme Court or congressional intervention. Mr Trump’s combativeness, and his criticisms of the voting process, raise the risks of a contested election – and of deep political uncertainty in the period up to the 20 January inauguration.

PS: The arrival of the flu season adds to the risks of a new wave of COVID-19 cases in Europe. It is to be hoped that Europe will follow the experience of the southern hemisphere, where lockdowns have contributed to a mild flu season. Surveys and tests indicated that flu cases and deaths were unusually low in Argentina, Australia, Chile, New Zealand, South Africa and Paraguay. The northern hemisphere should also benefit from the containment of the flu in the south, with fewer cases in circulation and reduced travel limiting the risk of transmission. Much will depend on continued adherence to social distancing and the uptake of flu vaccinations, but a reduction in flu deaths could offer a rare positive for health amid the pandemic. The World Health Organization estimates that the seasonal flu causes 290,000–650,000 deaths globally every year. COVID-19 has so far claimed 950,000 lives worldwide.

For the latest charts and data on health and economics, visit our COVID-19 Economics Monitor:
https://www2.deloitte.com/uk/en/pages/finance/articles/covid-19-economics-monitor.html