Are we there yet?

What has seemed like an interminably long presidential election cycle is just a few short weeks from being over. Voters—who likely feel like the proverbial kids in the back seat of the family car asking "Are we there yet?"—will reach their destination Nov. 4. What that destination means for the U.S. and the roofing industry depends heavily on whether voters elect Illinois Sen. Barack Obama (D) or Arizona Sen. John McCain (R).

By all conventional measures, this should be the Democrats' year to capture the White House.

Democrats won the U.S. House of Representatives and Senate in 2006 with an 18-point edge in the exit polls, and despite their minimal performance during this Congress, generic ballot tests since then (in which pollsters ask respondents which party they would vote for absent specific candidate names) have continued to give Democrats the edge.

Compounding the Republicans' problems is President Bush's consistently low approval ratings. And rarely has voter satisfaction with the country's direction been so low, with those believing the U.S. is on the "right track" polling only in the midteens. The last two times this measure was so low—in 1980 and 1992—the White House changed parties.

Historical precedents favor the Democrats, too. Only four times during the past 172 years has a president elected to two terms been succeeded by a president of his own party. And this has happened only once during the past 50 years, with the election of former President George H.W. Bush.

One would think, therefore, that Obama would be a shoo-in for next U.S. president. And according to the betting odds on www.Intrade.com, a Republic of Ireland company owned and operated by Trade Exchange Network Ltd., Obama was a strong favorite up to the nominating conventions.

But McCain routinely has run ahead of his party's numbers, and polls have shown him running about even with Obama for months. This can be explained to some extent by voter unease regarding Obama's inexperience and McCain's ability to attract independent voters. Additionally, high gas prices have become a "wedge" issue reminding voters of major differences between the parties, benefitting McCain and Republican candidates for the House and Senate.

Energy crisis

Until June, polls had shown Democrats having an advantage over Republicans on almost every domestic issue. This included the economy, of course, but with crude oil prices skyrocketing from $65 per barrel to $147 per barrel in just one year and gas spiking at more than $4 per gallon, Americans have designated energy as their greatest economic concern.

Popular majorities now side with the Republican approach to energy development, which includes more domestic exploration and drilling, and that has provided McCain and congressional Republicans an opportunity to use the energy issue to their advantage.

Simply put, McCain and the Republicans support a comprehensive "all of the above" approach to energy in which every energy-producing option available is used to solve the crisis. Obama and most Democrats are hesitant to support—if not adamantly opposed to—more domestic drilling and nuclear energy.

McCain supports repealing the federal moratorium on offshore oil and gas drilling and has proposed an ambitious plan to build 45 additional nuclear power plants by 2030. However, Obama has expressed doubts about nuclear power's safety and has given it only lukewarm support even though France produces 80 percent of its electricity through nuclear power and the former head of Greenpeace supports nuclear power for its environmental benefits.

Also, though Obama recently accepted a highly restricted version of new offshore drilling, he did so only as part of a package that includes tax increases on energy exploration companies and new mandates on power companies to generate 25 percent of their electricity from sustainable sources by 2025. Ironically, most experts believe such qualifications would increase consumers' energy costs.

Obama's and Democrats' reluctance to fully embrace the public's newfound support for domestic drilling could be pivotal to the outcome of the Nov. 4 election.

A poll conducted for ABC News and reported in The Washington Post found nearly two-thirds of the U.S. voting-age population now prioritize "finding new sources of energy" over conservation, which is a huge shift. I spoke with one House Democrat who was working to convince House Speaker Nancy Pelosi (D-Calif.) to change her position and allow the House to vote on offshore drilling because he was convinced not doing so could have dire consequences for Democrats at the ballot box. It will be fascinating to see how this issue plays out with voters during the next few weeks.

Other issues

Tax issues always are important in a presidential campaign, and, as usual, the candidates differ in their philosophies and proposals.

Obama's tax plan would make permanent select provisions of President Bush's 2001 and 2003 tax cuts, including 10, 15, 25 and 28 percent individual rates; child-credit expansion; and "marriage-penalty" relief. And he would make permanent the estate tax in its 2009 form with a $3.5 million exemption and 45 percent rate. Obama also has pledged to increase capital gains and dividend tax rates to at least 20 percent and raise corporate tax rates and income taxes on the "wealthiest."

McCain favors extending the Bush tax cuts and maintaining the current capital gains rate (generally 15 percent). He would reduce the maximum corporate income tax rate from 35 to 25 percent and make permanent the estate tax with a $5 million exemption and 15 percent rate. And he would allow businesses to immediately deduct the full cost of equipment with a life span of three to five years.

One of the biggest costs to businesses is health care, and Obama's and McCain's respective plans regarding this issue are quite different.

Obama would require parents to insure their children with the goal of universal coverage by 2012. To do so, he would consider expanding eligibility for Medicaid and the State Children's Health Insurance Program. Adult individuals and businesses could purchase public or private health care coverage through a national health insurance exchange. Most employers would have to cover employees, make a substantial contribution to their coverage or contribute to a public health care plan; however, some small businesses would be exempt.

Obama would pay for his plan (estimated to cost between $50 billion and $60 billion per year) by allowing the Bush tax cuts to expire in 2010 for individuals with annual incomes of more than $250,000.

Under McCain's plan, the federal government would provide tax incentives for people to buy health insurance. His plan focuses less on maintaining the employer-based heath care system than on giving individuals incentives to buy health insurance. However, as a supporter of association health plan legislation, his plan would allow small businesses, as well as the self-employed, to buy health insurance through any organization or association. All individuals could get a refundable $2,500 tax credit as an incentive to buy a policy, and if it cost less than the amount of the credit, the consumer could deposit the remainder into a health care savings account. People would be allowed to purchase out-of-state health insurance at cheaper rates, and workers could carry policies from job to job.

McCain's plan would reduce health care costs through tort reform to eliminate frivolous lawsuits and excessive damage awards against health care providers. Also, there would be national standards for electronic health care systems, and medical providers would be required to disclose to the public information about outcomes, quality and costs.

Both candidates generally favor comprehensive immigration reform and voted for a 2006 bill, which McCain sponsored, that proposed a conditional path to citizenship for illegal immigrants. But they vary widely on the trade issue.

McCain is an ardent free trade advocate while Obama has hedged on free trade, saying he would reopen the North American Free Trade Agreement to strengthen enforcement of labor standards. This reflects organized labor's clout with Obama and congressional Democrats, and Obama has signaled his intent to support organized labor's agenda should he be elected in November.

Organized labor's influence

On June 26, the AFL-CIO endorsed Obama's bid for president and launched a massive grassroots effort to mobilize "working families" throughout the U.S.

AFL-CIO President John Sweeney stated: "In so many ways—on jobs, health care, gas prices and the war in Iraq—our country is headed in the wrong direction. Barack Obama has proven from his days as an organizer to his time in the Senate and his historic run for the presidency that he's leading the fight to turn around America."

Obama has declared his support for organized labor's top legislative priority, the Employee Free Choice Act (EFCA), which would allow the National Labor Relations Board (NLRB) to certify a union without requiring a secret-ballot election when a simple majority of bargaining unit employees has signed union authorization cards ("card checks").

Under current law, NLRB conducts a secret-ballot election for union representation when a union, employer or employee files a petition requesting a secret-ballot election based on at least 30 percent of employees signing a petition or union authorization cards. Therefore, EFCA would replace federally supervised secret-ballot elections for deciding whether to organize a union with a process that would make workers' votes public.

The House voted 241-185 in favor of EFCA March 1, well short of the two-thirds majority needed to override the president's veto. But EFCA did not get to the president's desk because it lacked the 60 votes needed to end debate in the Senate.

The AFL-CIO and its political affiliates are expected to spend more than $200 million to mobilize union voters not only to elect Obama but also to elect sympathetic congressional candidates, particularly to the Senate. The AFL-CIO's main goals are to win the White House and create a filibuster-proof Senate.

The Senate and House

Senate Republicans currently have 49 votes, but because Senate rules require 60 affirmative votes to move legislation, the Republican minority has been able to stop EFCA and other controversial bills, such as climate-change legislation and legislation that would raise taxes. Technically, Democrats hold 49 seats, too, but Independent Sens. Joe Lieberman (Conn.) and Bernard Sanders (Vt.) caucus with the Democrats to give them control of the chamber with 51 votes.

With about one-third of the Senate's 100 seats up for election every two years, the dilemma for Senate Republicans this year basically is one of numbers—they must defend 23 seats while Democrats must defend only 12.

Further diminishing Republican prospects is that five of the seats they must defend are open because their incumbents have retired. In these open-seat races, it appears Democrats will take Virginia and are positioned to pick up New Mexico and perhaps Colorado though that race has gotten closer.

Democrats also are mounting serious challenges to Republican incumbents in Alaska, Minnesota, New Hampshire, Oregon and, incredibly, Mississippi, where the winner will fill the final four years of the term to which former Sen. Trent Lott (R) was elected. The only seat in jeopardy for the Democrats is that of Sen. Mary Landrieu (D-La.).

In the House, which has 435 members, Democrats have a 236-199 majority over Republicans. Although some Republican-leaning seats that were swept by the Democrats in their 2006 tidal wave victory likely will be taken back by the Republicans, there is virtually no chance Democrats will lose their majority in 2008. In fact, the retirement "bug" that has afflicted Senate Republicans also is hampering House Republicans, and they, too, have a significant number of vulnerable incumbents to defend.

An unstable race

Since the 2006 midterm election, the Republican "brand" has been in tatters. Polls have shown voters are demanding change and would prefer Democrats in charge of both the White House and Congress. But Obama routinely underperforms generic numbers for Democrats and McCain outperforms Republican numbers. The result has been a close race for the White House that has defied election forecasts using conventional variables. Obama has not built an insurmountable lead, as would be expected, and this "unstable" race for president is being affected by energy issues that are working in McCain's favor.

The public's demand for domestic drilling also has enabled Republicans to gain traction with voters in a way that has eluded them for years. It is unlikely to cause Democrats to lose their Senate and House majorities but could help Republicans staunch their political hemorrhaging and rehabilitate their brand.

The bottom line is Republican strategists would be ecstatic to limit Senate losses to three or four seats, thus maintaining the ability to filibuster, and House losses to single digits. But they believe there is a real chance to win the White House because the presidency is not determined by one national election but 50 separate state elections to win at least 270 electoral college votes. With that in mind, perhaps the best prediction for the election's outcome comes from Yogi Berra, who offers this indisputable statement: "It ain't over till it's over."

Craig S. Brightup is NRCA's vice president of government relations.

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