With the 2020 presidential campaign ramping up and the Democratic field of presidential hopefuls growing, President Trump’s ability to secure a second term in office could hinge on his ability to weather an economic slowdown in the coming months.
“The biggest concern [for the White House] was not the Russia probe nor the Democrats’ field, but what the state of the economy is in 2020,” Republican strategist Ford O’Connell said. “That’s the biggest determinative of whether they’re going to be reelected.”
Historically, most incumbent presidents have been successful in winning a second term in the White House, with just five exceptions. The common thread shared by those one-term presidents was “either recession or a major economic blip,” O’Connell said.
“That’s what the White House has to guard against,” he said. “In some ways, that’s totally out of their hands. But at the same time, that’s why you see them trying to make end roads on other issues, like immigration and healthcare.”
Trump frequently cites as a key achievement of his presidency the growth in the economy and the low unemployment rate, which he attributes to tax cuts and deregulation.
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“In the last two years, we’ve embarked on an unprecedented economic revival. Unprecedented,” the president said during a rally last month in Grand Rapids, Mich. “America is now the hottest economy anywhere on the planet Earth. There’s nobody close.”
But while growth from the fourth quarter of 2017 to the fourth quarter of 2018 stands at 3%, the president said the U.S. economy would have grown by more than 4% had it not been for the Federal Reserve’s raising of interest rates.
The central bank indicated last week that it would not hike rates at all this year.
While the president is optimistic in his view of the economy, there is daylight between the White House’s expectations for the economy and those of other institutions.
The Commerce Department last month revised its estimates for economic growth in the fourth quarter of 2018 from 2.6% to 2.2%. Additionally, a recent outlook survey from the National Association for Business Economics predicts economic growth will slow from 2019 to 2020. The Federal Reserve predicted late last month the economy would grow at a rate of 2.1%, while the Trump administration predicts 3.2% growth for 2019.
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But the economy could be buoyed by a trade deal between the U.S. and China, which the two countries are in the process of negotiating.
“A deal with China factors into it because what U.S. markets are looking for is stability,” O’Connell said. “It’s something the White House desperately wants to get done, but realizes it has some wiggle room in terms of timing.”
Though the next election remains 19 months away, a number of Democrats have announced their candidacies, and the field is expected to get even more crowded.
Trump, meanwhile, has already begun to differentiate himself from his political opponents, painting them as advocates of socialist policies and declaring Republicans the “party of healthcare.”
O’Connell said those attacks could help the president’s chances of reelection, particularly if economic growth stalls.
“His chance to win and protect himself is between now and when the Democrats have their nominee, and that’s why you’re seeing everything from the socialism versus capitalism debate, the debate about protecting pre-existing conditions while keeping costs down,” he said. “You’re also seeing these different tactics with respect to illegal immigration.”
Though it’s difficult to predict turns in the economy despite forecasters’ best efforts, Adam Michel, a senior policy analyst at the Heritage Foundation, said he expects the tax cuts implemented as part of the GOP’s $1.5 trillion tax package, as well as the Trump administration’s deregulatory push, will continue to have a positive effect on the economy for the foreseeable future.
“The story that’s being most told is the tax cuts are some sort of sugar high, like the government writing a check, and they’re the opposite of that,” Michel said. “They’re a fundamental change to individuals, which have sustained and long-term impact for economic growth, which is very different than simply writing a check.”
Michel acknowledged there are some headwinds, including the failure to address the deficit and national debt, which he said is a “drag on the economy.” Other challenges could be the global economic slowdown currently occurring, as well as the uncertainty surrounding the United Kingdom’s exit from the European Union, Michel added.
But Paul Kellstedt, a professor at Texas A&M University, said the state of the economy is unlikely to move “hard-core partisans,” regardless of how strong it may be, an indication of how polarized the country has become.
“Republicans already approve of [Trump], Democrats already disapprove of him, and no measure of economy prosperity is going to change the way Democrats view this particular president,” he said.
