Economy and Demography Determine the Outcome of Midterms and America’s Future
Valdai Discussion Club Conference Hall, Bolshaya Tatarskaya 42, Moscow, Russia
List of speakers

On Tuesday, November 6, the Valdai Discussion Club hosted debates on the midterm elections to the US Congress held on the same day. At the moderator’s suggestion, the experts – Dmitry Suslov, deputy director of the Center for Comprehensive European and International Studies at the Higher School of Economics, and Maxim Suchkov, senior researcher at the Center for Analysis of International Processes of the MGIMO University – acted as spokesmen for the Republican and Democratic parties respectively, explaining their agendas.

The discussion was centered on three scenarios (it took place hours before the first results emerged): the Republicans maintain the majority in the Senate and lose it in the House of Representatives; Democrats gain majority in both houses; Republicans win the elections both in the Senate and in the House. According to the experts, the latter option was the least likely, but at the same time, the most advantageous for Russia, since it would lead to maintaining the status quo and would make the US administration a little bit more negotiable.

According to Suslov, with the Republican majority in the Senate and the democratic one in the House (this scenario is considered the most realistic), the political decision-making process in the United States will be deadlocked. The administration will not get the approval of two key points on its agenda – tightening the migration policy and dismantling Obamacare, although what has been implemented (i.e. tax reform) will not be revised. Suslov said that the Democrats will get the opportunity for a political counterattack with a view to the 2020 elections. In terms of the foreign policy consequences, the Democrats will resume the “Russian collusion” investigation in Trump’s election, and the contractual capacity of his administration will drop to an even lower degree.

The victory of the Democratic Party in the elections to both houses is possible, Suslov believes, but it will not bring them two-thirds of the senators’ votes necessary for Trump’s impeachment (and this topic is increasingly under discussion among the Democrats). But the political decision-making process will become even more difficult, and the president will probably increasingly use his veto right as the only tool left.

According to the experts, the elections are taking place on the background of an unprecedented polarization of American society. This process, often seen as a new civil war, is unfolding with the active participation of the media. Most American journalists, according to Suslov, a priori hold liberal positions and are part of the traditional establishment. The riot against it was the most important reason for Trump’s electoral success: he presented himself as a leader who challenged the elite and promised to “drain the swamp.”

In the conditions of a divided society identity politics plays an increasingly important role. This is due to objective demographic trends. The topic of illegal migration in Trump’s political rhetoric is not accidental. After a couple of decades, Suslov said, whites in the United States will become an absolute minority, while in the early 1970s they amounted to almost 90% of the population. In this case, about a third of the non-white majority will be Hispanic. During the Cold War, liberal immigration policies led to a reduction in the number of countries which drifted toward the USSR, Suslov emphasized, but today the whites feel that their country is being taken from them. After all, historically the American institutions were created in the conditions of a white majority, and it is difficult to say how they will operate in the conditions of a white minority.

But, according to the Democrats, the policy of entry restrictions will not be efficient, because the United States was always a country of immigrants. Their position, as Maxim Suchkov noted, is that it is wrong to build walls, that it is an illegal and short-sighted policy to separate children from parents. No matter how traumatic it is for the white majority, which will soon become a minority, the process of racial balance changing is underway, and in the long term Trump’s agenda will lose. Suslov shared this point of view: according to him, the ideal of Trump’s white electorate is Eisenhower’s America, but in real life it is unattainable.

These midterm elections are characterized by a high degree of personification, Suslov said. The main mobilizer for the Republicans is the current President Trump, while the Democrats have the former President Obama. At the same time, the Democrats have no positive agenda; the only thing they can offer is to urge not to vote for Trump, which points to a serious crisis of leadership in the party. According to Suchkov, the Democrats realize this problem and expect that the gubernatorial elections, held simultaneously with the elections to Congress, will give “young blood’ to the party.

Perhaps, the economy will determine the outcome of the vote – in accordance with James Carville’s “It's the economy, stupid” slogan, which once helped Bill Clinton win the presidential election. Ivan Timofeev, the discussion moderator, said that Republicans and Democrats presented to the electorate two opposing visions of the economic situation in the country. If the Republicans say that the economy is showing steady growth with capital coming from emerging markets and aggressive trade policy allowing America to achieve favorable conditions in trade with foreign partners, the Democrats indicate that social inequality is growing, the middle class does not benefit from the economic policy, and education costs increase.

According to the Valdai Club experts, the truth is in the statements of both parties. Indeed, the economic situation is quite favorable. But, as Suslov noted, the Trump administration is increasing the budget deficit and overheating the economy through lower taxes and a low base interest rate. Like in the previous Republican administrations, there are “bubbles”, and if they burst by 2020, we can say that the next president will be Democrat. Suchkov agreed with him, saying that in 2020 Trump will not be able to run for presidency on the wave of visible successes in the economy. As for trade wars, they improve the trade conditions for the United States in the short term, but worsen the position of American high-tech companies in the long term, the expert said.

During the discussion, the issue of foreign policy implications of the results of the midterm elections was occasionally raised. As for Russia, the experts agreed that regardless of the results no change in the US deterrence policy is expected. Another round of confrontation is coming – the only question is whether it is manageable or not (the first option is, of course, preferable).

Another issue that was raised during the discussion was the cancellation of the planned meeting between the presidents of Russia and the United States in Paris during the First World War anniversary events. Suchkov agreed with the version that the meeting was canceled at the request of French President Emmanuel Macron, who feared that this event could eclipse the Paris celebrations. But Suslov categorically rejected this vision. He recalled that plans to hold this meeting have been known for several weeks and it is strange to assume that Macron formulated his position only now. The expert believes that the cancellation is associated primarily with the lack of an agenda for negotiations after the announcement of the US withdrawal from the INF Treaty. Neither side has yet an understanding of the consequences of this decision and, accordingly, its further steps. Under these conditions such a meeting simply does not make sense.