On to the next question: can Biden and McConnell work together? As the smoke clears from the elections, it’s becoming clear. Chances are we will have a Democrat White House and Congress, along with a Republican Senate. As of this writing, the final tally is yet unknown. Joe Biden is currently ahead of Donald Trump 264-214 (270 to win), and the Senate deadlocked at 48 apiece. Things can go either way. We examine what happens when Biden wins, but the Senate stays Republican. The question remains: will this pairing work best for everybody?
White House and the Senate: Sharing is Caring
The market says U.S. equities are best when both parties share political power. History shows a power split only brings average stock market returns. This means an annualized 9.8% return for the S&P 500. But here’s where things get more exciting. When a Democrat sits as president amid a split Congress, the market improves to 13.6% annualized.
But why does Wall Street prefer sibling rivalry among politicians? Opposing factions would not allow one party to impose major policy shifts. A Democrat President and a GOP Senate limit the chances of added taxes and regulations.
This pairing also removes the possibility of a runaway stimulus package. Folk might get angry, but a smaller stimulus can reduce future inflationary pressures.
The Odd Couple: It Could Work
Assuming Biden gets the win, and Mitch McConnell leads the Senate, they need to deal with each other. Politico thinks they could happily co-exist, and may actually work well together. People might assume Mitch will revert to his old way as Democratic nemesis, but he may surprise us yet.
Most people forget though, that Biden and McConnell did manage to get work done. Odds are they have a real relationship — personal and professional. McConnell attended Beau Biden’s funeral, and he’s the only GOP Senator to do so. As for Joe’s other son, McConnell stayed away from attacking Hunter during the campaign. Senator Chris Coons (D-Del) said that the two have mutual respect. “I think they’ve managed to stay friends or have a working, professional relationship even in the hardest of times,” he said.
Of course, things aren’t always chummy between them. Biden called out the Senate Majority Leader over the lack of a new stimulus package. He quoted McConnell as saying: “Let the states go bankrupt.” Meanwhile, McConnell said Biden should clear himself from an alleged sexual misconduct case.
Or it Could Not…
The forthcoming political configuration won’t be easy for the Democrats. Apart from the Senate, the Supreme now favors conservatives, 6-3. Reversing any Trump-era policies will meet some form of opposition. Even if progressive changes manage to turn into law, the Supreme Court can step in.
A McConnell source said a Republican Senate would help Biden confirm centrist nominees. As for any progressive nominees, they won't get the nod. This assumes that the Republicans will continue their grip on the Senate. If this gets confirmed in the next few months, it’s goodbye to the Democrat progressive agenda. This early, Senator Coons is waving a bipartisan flag. In an Op-Ed piece in Foreign Affairs titled “A Bipartisan Foreign Policy is Still Possible,” Coons said that America needs to “speak with one voice.” He wrote: “For the United States to play a steady, stabilizing role in world affairs, its allies and adversaries must know that its government speaks with one voice and that its policies won't shift dramatically with changing domestic political winds.”
Deal or No Deal
It helps that both Biden and McConnell both know the nature of lawmaking in America. While they represent different ideologies, they understand how deals get done. Being polar opposites can help bring back the political balance that America needs.
Things can change between now and a few days from now. The Republicans can make a last-minute resurgence and reclaim the White House. Conventional wisdom and electoral math say it’s unlikely. Having a Republican Senate is the next best thing.
The market agrees, and these two gentlemen should, too.
Watch this as MSNBC’s Morning Joe talks about what a Biden-McConnell relationship would look like:
Do you think Biden and McConnell can work together? What do you think about the likely power-sharing dynamic of a Dem White House and a GOP Senate? Let us know what you think by sharing your thoughts below.