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High stakes US midterm elections loom | RiskMap2022

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High stakes US midterm elections loom

Allison Wood | Director

You may still be recovering from the historic drama of the 2020 election, but the US electoral cycle waits for no one. By the time our next RiskMap is published, a new crop of Congressional representatives will be in Washington.

Midterm elections are traditionally seen as a litmus test of the current President’s performance, particularly for first term presidents. History will be on the side of Republicans – since the 1930s, the opposition party has made gains in the House of Representatives in midterm elections in all but two years. The President’s approval rating has flagged in recent months, battered by a sputtering economic recovery, chaotic withdraw from Afghanistan, and a stalled legislative agenda.

The stakes will be high in 2022. A Democratic gain would give the Biden administration much-needed breathing room to advance its domestic agenda, though crystalizing divisions between progressive and centrist wings of the party will continue to require some expert maneuvering.  Businesses could expect more attention to climate change, tech regulation, healthcare, voting rights and foreign policy.   

A flip in favor of Republicans – presently the more likely scenario - would undoubtedly thwart the Biden agenda but could more significantly be a harbinger of 2024. If former president Donald Trump-endorsed candidates perform well, it will signal the durability of his base and further embolden a second Trump run – or his anointed successor - at the White House. The implications for business in this scenario are potentially significant: in bracing for a possible flip-flop across a range of policies and a return to the mercurial style of the Trump White House, corporate leaders may think twice about leaning into Biden-era changes. Hardening partisanship may give foreign interlocutors some pause, amid perceptions that US commitments are less credible and subject to reversal in a future administration.  

The elections themselves will act as a test for the health of the American electoral system, put under unprecedented stress and scrutiny in 2021. Since Biden was sworn into office 18 states have rewritten laws related to voting, most in ways that hinder Democratic-leaning voters. Former President Trump continues to actively perpetuate false claims that the election was fraudulent and “stolen,” seemingly priming his supporters to question any unfavorable results in future elections. While the national stage will dominate, businesses should also note that 36 governors’ races and 26 Secretaries of State will also be contested in 2022 – all critical roles in formulating both state policy and potential adjudicators in electoral disputes.

 

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