How a recession will louse up 2023 for both parties

A shopping cart at a San Francisco grocery store on May 2. (David Paul Morris/Bloomberg News)

Jim Geraghty is the senior political correspondent of National Review.

The 2022 midterms aren’t quite a poisoned chalice; a political party would always rather win an election than lose one. Republicans are poised to win the House of Representatives and perhaps the Senate as well, in addition to a bunch of governors’ races. The problem for the GOP — and everyone else — is that the already not-so-hot U.S. economy is projected to worsen. And it could happen shortly after the new Republican majorities, if they take both houses, are sworn into office.

Many financial analysts regard Thursday’s news of 2.6 percent third-quarter U.S. growth as a pause on the way to a 2023 recession. Those expectations have been steadily building — Bloomberg declared this month that there is a 100 percent chance of a recession in the coming year.

The Conference Board, a business organization, similarly forecast in recent weeks that “economic weakness will intensify and spread more broadly throughout the U.S. economy over the coming months with a recession to begin before the end of 2022. This outlook is associated with persistent inflation and rising hawkishness by the Federal Reserve. We forecast that 2022 real gross domestic product growth will come in at 1.5 percent year-over-year and 2023 growth will slow to zero percent year-over-year.”

For Republicans, that’s a dark lining in the silver cloud of a congressional takeover: Shortly after they step into office, the already pessimistic and angry American electorate will feel like things are getting worse instead of better. It’s mostly economic dissatisfaction and high inflation that are driving expectations of GOP midterm success. Voters are going to the polls in the expectation of improved economic prospects under new representation.

House Minority Leader Kevin McCarthy (R-Calif.) said this month that if Republicans win control of the House, the GOP will use raising the debt limit as leverage to force spending cuts — which could include cuts to Medicare and Social Security — and limit additional funding to Ukraine.

Just how warmly do you think the public will greet high-stakes brinkmanship on budget and spending battles, if unemployment is rising and the country is enduring another recession?

Those of us who remember the Obama years will recall similar fights about the debt ceiling that rarely worked out well for Republicans. Debt-ceiling fights are like high-stakes, quickly forgotten Kabuki theater; they freak out the financial markets and give each side a chance to accuse the other of being reckless and irresponsible before agreeing at the 11th hour to more or less the status quo.

Democrats want to win this year’s midterms, but if they lose big, they’ll quickly remember the upside of being in the minority — you’re powerless, but you’re unified. In early 2019, after Democrats had retaken control of the House, I asked a GOP staffer on Capitol Hill how it felt to be in the minority again. He was surprisingly cheerful: “We’re back to throwing grenades instead of catching them.”

The other side of the coin is that a recession might make Democrats extraordinarily wary about nominating President Biden for another term. Biden will turn 80 on Nov. 20, which means that if he follows through on his intention to seek reelection, he would be running at age 81. It would be extremely difficult to generate enthusiasm for an octogenarian president who has been rebuked in the midterms, while the country is experiencing a recession.

If Biden doesn’t run, or if he faces a serious primary challenge, Democrats will have a long-overdue debate about what kinds of economic policies will achieve their goals and not exacerbate inflation. Biden and company began 2021 with a sense that they could spend as much as they liked, and that any increased inflation would be, in the president’s infamous July 2021 prediction, temporary. Inflation was 8.2 percent last month.

It turned out, as Biden and a free-spending Democratic-controlled Congress learned (or maybe they haven’t), that if the federal government spends too much, too quickly, when the economy is already recovering, too much money ends up chasing too few goods, and inflation worsens.

Right now, Republicans are hoping the 2024 presidential election can be turned into a referendum on Biden’s performance, and Democrats are hoping the 2024 presidential election can be turned into a referendum on the return of Donald Trump. But when the campaigns kick into a higher gear in late 2023, the biggest question on the minds of the American people for Democrats and Republicans alike may well be, “Which one of you is going to get us out of this recession, and how are you going to do it?”