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US midterm elections are about to begin

2022-11-09
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The United States will officially usher in the midterm elections on November 8. Although it does not involve the re-election of the presidency, all 435 seats in the House of Representatives and 35 of the 100 seats in the Senate will participate in the re-election. In addition, 36 governors of the 50 U.S. states will also be re-elected.

Background introduction

The United States is one of the most typical countries that implement the system of separation of powers. The system of separation of powers refers to a system in which the legislative, executive, and judicial powers of the country are exercised independently by three corresponding agencies and check and balance each other. The 1787 U.S. Constitution stipulates that the legislative power belongs to the Congress of the United States, which consists of the Senate and the House of Representatives, the executive power belongs to the President of the United States; the judicial power belongs to the Supreme Court and the lower courts enacted and established by Congress at any time. According to the principle of checks and balances between the three powers, the U.S. Constitution also stipulates that Congress has the right to request the president to adjust policies for consideration, to approve treaties concluded by the president, to recommend and approve the appointment of the president to his executive officers, to remove the president through impeachment, and The President has the power to recommend and approve the appointment of the Supreme Court judges by the President, declare and punish treason, and impeach and try Supreme Court judges; the President has limited veto power over bills passed by Congress, the Vice President concurrently serves as the President of the Senate, and the President also has the power to pardon, to the Supreme Court. Nomination and appointment of court judges; Supreme Court justices chair the trial division of the president in impeachment trials. In addition, by convention, the Supreme Court has the power to interpret laws and declare laws enacted by Congress unconstitutional and void.

The Senate and House of Representatives make up the upper and lower houses of Congress and are the legislative branch of the federal government responsible for making laws. Senators represent the entire state, with two senators from each state, regardless of size, for a total of 100 senators, whose terms are staggered for six years. Currently, the Senate is divided equally between 50 Democrats and 50 Republicans, with the vice president (the president of the Senate) giving Democrats a majority in the Senate. The House of Representatives consists of 435 members, each representing a congressional district for a two-year term. State seats are divided by population, but each state must have at least one member. The House of Representatives currently has 220 Democrats, 212 Republicans and three vacancies. Democrats narrowly control the House and Senate.

In order to win the midterm elections, both Democrats and Republicans have spared no expense. According to foreign media reports, the cumulative advertising expenditures in this year's midterm elections are close to 10 billion US dollars, which may become the "most expensive" midterm elections in history.

Hot topic

1. Inflation and economic problems

According to a new poll jointly conducted by ABC and Ipsos, inflation and economic issues are the most concerned issues for American voters in the mid-term elections, and about half of Americans regard these two issues as their primary criteria for voting. The poll shows that 73% of Republicans prioritize these two economic issues, while 29% of Democrats believe they are a priority.

A CNN poll shows that 78% of the American people believe that the current U.S. economic situation is "bad" or "very bad", half of the people believe that the Biden administration's policies have made the economy worse, and only 32% The public approves of the Biden administration's approach to tackling inflation. Since the beginning of this year, inflation in the United States has reached the highest level in more than 40 years, and rising prices have caused a sharp increase in the cost of living of the American people. In order to curb the continuation of inflation, the Federal Reserve has successively raised interest rates and reduced its balance sheet, and the market's expectations of an economic recession have continued to increase. Affected by the epidemic, the number of job vacancies has remained at a high level, and the US labor market has not yet recovered to pre-epidemic levels. Republicans and their supporters have taken advantage of this, blaming the Biden administration's economic policies in campaign ads. On the contrary, in his latest campaign speech, Biden focused on the threats facing the US electoral system, and his campaign strategy was to divert voters' attention.

US midterm elections are about to begin

2. Taxes

For the past two years, Democrats have pushed for higher taxes and tighter rules. Earlier, Democrats voted in the Senate to support raising the corporate tax rate to 25% and imposing the world's lowest profit tax. Since the beginning of this year, U.S. oil prices have generally risen due to the surge in energy prices triggered by the situation in Ukraine. The U.S. government has already taken steps to lower fuel prices, including the release of massive oil reserves. In late October, Biden announced another release of 15 million barrels of strategic oil reserves. Under this circumstance, instead of cooperating with price cuts, U.S. energy companies took the opportunity to make record-high profits. In response, Biden warned of a "windfall profits tax" and called on Congress to consider imposing punitive taxes on energy companies and formulate other restrictive measures.

Some Republicans on the U.S. House Ways and Means Committee, which currently oversees matters including tax tariffs, have pledged to make the tax cuts permanent, and most Republicans say they will push to extend the 2017 tax cuts signed under the Trump administration The expiring tax cut provisions, some important provisions of the law will expire in 2025 and 2027. In addition, Republicans plan to push to expand U.S. domestic energy production, seek to boost hydrogen project development, simplify licensing and development of nuclear power plants, and speed up approvals for liquefied natural gas export facilities for a variety of projects. In contrast, Republicans are expected to have a clear advantage in the tax vote.

US midterm elections are about to begin

3. Crime rate

Republicans also have a comparative advantage over high crime rates and public safety issues. Historically, big cities dominated by Democrats for a long time, such as New York, Chicago, etc., have indeed had a high crime rate, and the crime rate has continued to surge in recent years. Plus, the current deteriorating social order isn’t limited to big cities, with murder rates soaring in 2020 across red and blue states and cities, according to federal crime statistics. After the outbreak of the epidemic, racial discrimination and hate crimes against Asian Americans have intensified in the context of the intensification of social conflicts in the United States. In addition, on October 28, the husband of U.S. House of Representatives Speaker Pelosi was violently attacked by trespassers at his San Francisco residence, which also attracted great attention from the public.

With crime on the rise, Republicans have long insisted on law and order, at the forefront of their propaganda. But Republicans want to take the Democrats' charge of "poor policing" and avoid the issue of guns, because survey respondents also said gun policy also played an important role in the election, with some voters blaming guns for the surge in crime on management issues.

US midterm elections are about to begin

4. Abortion

Democrats and their supporters talk about abortion the most, and many Democratic candidates have made supporting and protecting abortion one of their core campaign promises. The abortion issue has been under fire for Republicans since the U.S. Supreme Court overturned Roe v. Wade in June. Conservatives in the U.S. Supreme Court ruled by a 6-3 absolute majority that U.S. women no longer have the constitutional right to abortion, a move that has led to protests across the United States. On the other hand, Republicans rarely talk about abortion in the campaign, and even when it does, Republican candidates will denounce their rivals for being too aggressive and disrespecting the right to life, while calling themselves moderate on the topic. Avoid sparking a backlash from pro-abortion rights advocates.

US midterm elections are about to begin

5. Immigration

At present, the two parties in the United States are still fighting each other over immigration issues. Republicans accuse the policies of the Biden administration and the incentives provided by "sanctuary" cities to exacerbate the crisis, while Democrats accuse the previous administration of reducing legal asylum channels. The crisis has renewed calls for a pathway to naturalization for the millions who have already entered the United States illegally.

US midterm elections are about to begin

Impact and Outlook

Taking into account the discussions on the issues that voters are most concerned about, the market expects that the Democratic Party may at least lose control of the first chamber, and the Biden administration will be more difficult to advance the policy in the later period. If the Republicans control Congress, it will undoubtedly increase the chips in the 2024 presidential election. This mid-term election will be more stalemate than in previous years, and the elections of swing states may play a key role.

2022 US Senate election map

US midterm elections are about to begin

2022 U.S. House of Representatives election map

US midterm elections are about to begin



The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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