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Life Health > Life Insurance

AALU: Will Obama Win in November?

By Bill Coffin

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The upcoming elections in November are not just an important, standalone political contest; they are the fulcrum on which our entire country will fundamentally shift. The big uncertainty is whether Obama and the Democrats are poised to be the big victors.

Such were the questions posed – and addressed by political analysts Peter D. Hart and Bill McInturff, who spoke during the second Tuesday morning keynote session of the AALU’s Annual Meeting, held in Washington, DC.

Hart is a leading analyst of public opinion, and is the chairman of Peter D. Hart Research Associates. McInturff runs Public Opinion Strategies, a leading political consulting firm. Together, Hart and McInturff have provided NBC News and the Wall Street Journal with polling data since 1989, and are regarded as some of the most respected pollsters in Washington.

Hart took the stage first and noted that the United States is in an era of total transformation, and that the power shift that is occurring across the country, but especially in Washington, is permanent. “Everything is moving, from nation-states down to local communities,” Hart said. “it changes how we live.”

In an age where winners and losers rise and fall with alarming speed, Hart said, the riskiest position for any company or organization to be in is that of “biggest, best, first and most.” Citing the significant market and reputational reversals of companies such as Citibank, Goldman Sachs, BP and Wal-Mart, Hart noted that opinions turn quickly, and no position is unassailable.

This was the context in which Hart proceeded to detail what his firm’s polling data suggests about President Obama’s current chances of winning re-election. November, Hart said, would be decided on macro factors that spoke to big issues that affected large numbers of people.

Case in point: Hart noted that it has been a full decade since a majority of Americans polled said consistently that they felt the United States was headed in the right direction. That is the longest period of pessimism in two generations, Hart said. At present, he said only 33% of Americans say things are heading in the right direction.

Optimism regarding the overall economy has improved, “but it remains a long way from upbeat,” Hart said. The key on this factor is whether Americans feel the economy has troughed and is on the way back upward. “In terms of confidence,” Hart said, “we’re not there yet.”

To further underscore that point, Hart noted that Americans feel that America’s place in the world is uncertain against the rising fortunes of world powers such as China, Japan or the European Union. For the first time in 13 generations, Americans feel that they will not have more prosperous lives than their parents. Finally, the public has lost its sense of trust in large institutions, but particularly in the news media and in the financial services industry. [No comment on what that means for news media that cover financial services. -Ed.] All of these negatives constitute the kind of political headwind Obama and the Democrats must face between now and November.

But there are larger Demographic trends that favor Obama, Hart said. Whites comprised 80% of the population in 1980; by 2030, they will be just 55%. Latinos will increase from 6% to 23%. People under the age of 25 are sliding down from 41% of the population to 33%, while people age 65 and over are up from 11% to 21%. Texas, one of the most reliably red states in the Union, will be as reliably blue – “as blue as California” – by 2030 as well, just another bellwether of the deep, context-altering changes afoot in the country and likely to make themselves felt in how the November elections play out. For Obama, Hart noted, the African-American, Hispanic and young vote will all be central.

Hart compared the competing philosophies of Obama and his likely rival, Massachusetts Governor Mitt Romney. Over 70% of Americans polled said that seeing Obama as a candidate that would fight for economic fairness and social equality would make them more likely to vote for him. In contrast, some 65% of polled Americans said that seeing Romney as a candidate of economic freedom and small government would make them more likely to vote for him. Ultimately, however, those with a strong willingness to vote for Obama outnumber those with a strong willingness to vote for Romney. Obama has successfully reached a broad spectrum of Americans with broad ideas, Hart said, which the Romney philosophy tends to resound more with the Republican faithful. Given how much the election is likely to center on undecided voters, Hart suggested, this favors Obama.

“Romney has a good message,” Hart said. “But he needs more from this message than what he currently has.”

Next page: See which voters favor Obama or Romney

Overall, the election is currently in Obama’s favor across a broad swath of voters:

Men
45% Obama / 45% Romney

Women
53% Obama / 41% Romney

Midwestern voters
47% Obama / 44% Romney

Independent voters
44% Obama / 34% Romney

Suburban voters
44% Obama / 49% Romney

Suburban Women
48% Obama / 45% Romney

Voters under age 35
60% Obama / 34% Romney

Voters over 65
46% Obama / 44% Romney

But, Hart noted, there are still some 200 days until the election, and either campaign could implode near the finish line. More importantly, when polled about their enthusiasm about the upcoming election, Republicans are ahead of Democrats by 10 points, which Hart said means the election will also hinge on turnout and enthusiasm.

As for those next 200 days, the session then turned to Bill McInturff, who focused on how the Congressional landscape might change during the elections, and at a time when, if given the option, 56% of polled Americans would pull the voting booth lever to remove all Congresspeople from their office.

According to McInturff, voters are showing modest movement back toward preferring a Democrat-controlled Congress, but not enough to suggest that actual control of the House will change.

To prove the point, he noted that in the past two generations, no re-elected president has come close to carrying an additional 25 seats in Congress for his party. Nixon picked up 12 in 1972, Reagan picked up 16 in 1984, Clinton picked up 9 in 1996 and George W. Bush picked up three in 2004. moreover, McInturff said, the GOP has redistricting to make the seats its holds slightly more Republican-leaning, and thus, more easy to retain.

McInturff also cited the Cook Political Report, which closely tracks state political contests, and as of April 26, determined that 28 of the GOP’s Congressional seats are vulnerable, and that 18 Democratic seats also are vulnerable. Translation: Not nearly enough of a swing to suggest the Democrats could regain Congress without pulling off a major upset.

Moreover, the Democrats are facing difficult contests in Montana, North Dakota, Nebraska, New mexico, Missouri, Wisconsin, Michigan, Ohio, Virginia, Florida and Hawaii. “There will be too many whack-a-moles for the Democrats to keep down,” McInturff said, for them to win control of Congress.

He noted that if Romney wins the Presidency, the GOP would surely keep the House, since Romney would have to have won Florida, Missouri and Ohio, which would also go Republican in their Congressional elections.

However, if Obama were to win by three to five points, the GOP could lose the House, but would most likely keep the Senate by a narrow margin.

Ultimately, McInturff said, the race is currently a toss-up, and it is entirely likely that either side could win a sweep in November. With such an uncertain outcome, however, he urged the AALU members in attendance to look farther ahead than the November elections and to prepare themselves for challenges to the life industry’s business interests in the months to come. Numerous tax breaks are set to expire between Thanksgiving and Christmas, setting the stage for possible legislative chaos, especially when it comes to the life industry protecting its tax incentives.

Next page: Four key points you should make to Congress

Some 80% of Americans oppose taxing the proceeds form life insurance (55% of whom oppose such taxation strongly). However, when it comes to taxing inside buildup on life insurance and annuities, Americans are far less unanimous, especially for policies that are of $1 million or more. These kinds of benefits, and their tax advantages, are at risk in ways not present for many years, McInturff said. To that end, he suggested that AALU members stress four points when speaking to their representatives on Capitol Hill.

First, the industry needs to bring up the 75 million Americans who depend on the life insurance industry’s products. Two thirds of those 75 million people make less than $100,000 a year…hardly members of the 1%.

Second, the industry should point out how commonly annuities are used by the likes of firefighters, nurses and teachers so they can structure for themselves a paycheck for life.

Third, people do not think that Congress should change the rules when it comes to savings and retirement. Americans will tolerate raising taxes on income, but not on money that has already been saved and set aside for retirement.

Finally, the industry should point out that its products are meant to provide financial security for life. “People know Social Security and Medicare are at risk, and could be laid bare,” McInturff said. “In this kind of climate, people need a private option, and they can build their own financial safety net built by the life insurance industry. Don’t penalize people for using that safety net.”

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