As has been noted in past Finance articles, politics trump economics.  What the President and Congress do affects your well-being.  

If you were a new President, what would you do?  Democrat or Republican, the answer is often the same. 

As soon as a new President is sworn in, he begins working with his Party’s Congressmen – Senators and Representatives – to pass legislation which reflects his campaign promises and political goals.  

That legislation may have aspects which are harmful to the economy; i.e., harmful to some individuals – even though it is popular with those people who supported and voted for the President.  

With the President’s re-election campaign more than three years distant, his first weeks in office are the time to press for the passage of the most radical pieces of his agenda.  Three years from now, what happened in the President’s first six months will be forgotten ancient history.  

Too, never is a President as powerful as in his first months in office.  He has no negative history as President for critics to berate.  People who will dislike him in the future are at present more likely to ride on the President’s coattails, to garner some of the President’s wave of popular support for their own benefit.

Particularly for members of the House, that wave of support is crucial.  They have no time to relax; their next election is only two years away; that time will pass quickly.  Their return to the campaign trail is less than twelve months away.  

The U.S. Constitution was written to assure that House Representatives feel compelled to maintain close contact with voters.  So if the President is enjoying a wave of popularity, Representatives who are in his Party will do their best to be associated with it.  And again, a new President often enjoys a comparatively higher level of popularity.  

By the end of the President’s first year, the impact of his policies is beginning to be felt.  Not everyone – in either party – likes the repercussions they see.  Certainly those in the other Party will not approve; it is to their benefit to point out alternatives which they can claim would have been better choices.  But some members of the President’s own party will believe it is to their advantage to suggest alternatives; to avoid being labelled as me-tooers.  Particularly in swing-states, Congressmen will start to distance themselves from the President, trying to convince voters that they are independent enough to act in their constituents’ best interest regardless of Party.

In the President’s second year, all the members of the House and one-third of the members of the Senate must now give their attention to campaigning for their upcoming re-election in November.  The impediments in Congress to the President’s desired political goals increase as attention and rhetoric focuses more on catering to the voters’ interests and less on the President’s interests.  

The mid-term election results can – and often are – disastrous for the President.  The President’s Party may lose control of one or both Houses of Congress.  Suddenly, the passage of any legislation must be approved by both Parties.  The President’s third year tends to include few notable accomplishments.

The 2022 November elections were a classic example:  the Republicans won the majority of House elections.  The Republicans took control of the House, dashing any Democrat hopes to further their agenda – as well as any such plans held by the Democrat President.

Economically – which is to say, with regard to the financial impact on voters and their families – a Congress which neither Party controls is the best news of all.  New legislation has to be amenable to both Parties, and so is not likely to contain politically-radical components.  That means its impact on the lives and financial well-being of voters will be relatively minimal.

The agenda of the President and the Democrats stalls in the House, but the agenda of the Republicans stall in the Senate – and even if Republican legislation somehow passes in the Senate, it will be vetoed by the President.  

The fourth year of a President’s term in office is dominated by one simple fact:  November is only months away.  Not only will all members of the House and one-third of the Senators be running for re-election, but the President will be hitting the campaign trail as well – not only for his own re-election, but also to support members of his Party running for election to Congress.  Little time remains for the political process of passing legislation.

Primary elections, state and national Party conventions, and the national election in November dominate the President’s fourth year in office.  Legislation takes a back burner as each Party does its utmost to assure it wins the upcoming Presidential race and as many of the Congressional races as possible.

Politics trumps economics, and for good or bad, each Party wants control of the politics.

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