The Context of the 1998 Midterm Elections

The Economy

The 1998 midterm elections were placed against the backdrop of a strong economy. An ABC News/Money magazine poll of October 2 1, 1998 had shown that consumer confidence in the economy was at its second highest level since the inception of the survey twelve years ago, with 65 percent rating their personal financial situation positively. With a low unemployment rate and inflation hovering around 2 percent, the outlook for most American families was bright. Furthermore, interest rates were low, enabling Americans to buy durable goods such as cars, homes and appliances.[1]

Both Democrats and Republicans could claim success in helping to propel the United States' economy to its best performance since the early 1960s. Unlike the 1970s, characterized by high inflation and high unemployment and, the 1980s known for record budget deficits, the 1990s were an era of low unemployment, low inflation and low interest rates which created a boom in the stock market, resulting in record highs.

The Clinton deficit reduction package of 1993, which passed by one vote in both the House and Senate, cut $250 billion in the budget and raised $250 billion in revenue through taxes to help reduce the deficit over a period of five years. Congressional Republicans cut government expenditures further in 1995 and 1996, restraining any tendency to increase overall domestic or foreign policy spending. When Clinton became President on January 20, 1993, the budget deficit was $290 billion. By September 30, 1998, the United States had produced a budget surplus for the first time since 1969. This was a remarkable turnaround for the economy in just five years. Going into the election, 7 1 percent of Americans gave the economy a positive rating. Research has shown that when the economy is strong, incumbents well electorally. However, it should also be noted that during midterm elections, presidential job approval ratings are often lower because they have coincided with an economic recession. That was not the case in this year's campaign. [2]

The Impact of the Clinton/Lewinsky Scandal

The President's relationship with a former White House intern exploded onto the front pages and television screens in January of 1998. Monica Lewinsky, an intern in the office of the Chief-of-Staff, and the President of the United States had an illicit relationship during 1996 and the early part of 1997. The fact that both Mr. Clinton and Ms. Lewinsky had failed to tell the truth about their relationship in separate depositions involving a civil law suit brought by Paula Jones, raised the issue of possible perjury. The fact that the President did not admit to the relationship until August of 1998 raised questions by Independent Counsel Kenneth Starr whether the President had not only lied, but attempted to cover-up his activities from investigators. Mr. Starr, who was the Independent Counsel for the Whitewater investigation, had been given additional authority to investigate the President's alleged affair with Monica Lewinsky to determine if any laws were broken.

Mr. Starr's report on the Clinton/Lewinsky matter was delivered to the House Judiciary Committee on September 9, 1998 detailing eleven possible impeachable offenses by the President. The allegations included perjury, obstruction of Justice and the possible intimidation of witnesses. Within two weeks, the House Judiciary Committee had voted to release the Clinton videotape deposition to the public and on the morning of September 21 st, the deposition was played on television, lasting over four hours. The fact that the deposition contained no new revelations and that the President maintained his composure throughout the testimony resulted in a rise in his job approval ratings. [3]

With the imperative of passing spending bills to fund the government for the next fiscal year before Congress adjourned in the middle of October, the impeachment juggernaut had ground to a temporary halt awaiting the outcome of the 1998 elections. If Republicans made significant representational gains in the fall elections, then impeachment hearings would begin in earnest since they would win an electoral mandate. If Democrats held Republicans to modest gains, then the calls for an expanded impeachment inquiry would be quieted. The Republican leadership calculated these possibilities by downplaying any discussion of Clinton's character in the election until the last week, when the Republican Party took a gamble by spending $10 million in limited media markets around the country to enhance the chances for Republican House candidates struggling in tough races.

A "do nothing Congress?"

The preoccupation with scandal and the performance of a sound economy contributed to an unproductive second session of the 105th Congress. Substantive legislation such as cutting taxes, campaign finance and health care reform were ultimately swept under the rug because they were too controversial to undertake in an election year. With a watchful eye on the electorate, members of both parties were chastened during the final days of Congress to produce legislation to fund the government for the next year. The final product combined eight spending bills for the next fiscal year which members of Congress overwhelmingly supported, but few had read because of its imposing length of thousands of pages.

The Republican leadership was particularly anxious to pass the spending bill for two important electoral reasons in early October. First, Speaker Newt Gingrich and Senate Majority Leader Trent Lott did not want Republicans to be blamed again, fairly or unfairly, for shutting down the government as they had in the winter of 1995-1996. Second, time was running short before the November election and members were anxious about returning to their districts to campaign for reelection. Since most of the members defending seats in the House of Representatives were Republican, there was an urgency to complete the legislative task.

When the task was completed, both the White House and Republican leaders claimed victory for the Fiscal 1999 spending bill. The President could boast that the budget provided $1 billion for school districts to hire tens of thousands of teachers and $6 billion for aid to economically depressed farmers. Republicans could brag that spending was increased for the military and that more money would be appropriated for the war on drugs. The spending cap that had been agreed to in the previous year had been substantially violated by both the President and Congress resulting in spending an additional $30 billion. The legislation was loaded with "pork barrel" projects that members could bring home to curry favor with voters. [4]

The White House claimed victory. Democrats, in a slump since the Monica Lewinsky scandal resurfaced in August were ecstatic" that the focus was no longer on the President's personal troubles, but rather on issues such as education and agriculture. Democratic minority leaders of the House and Senate rejoiced and claimed victory. [5]

Many conservative Republicans in the House, on the other hand, were quite upset with their leadership believing that they had caved in to Democrats and not preserved the integrity of the Republican "revolution" of 1994; a revolution which restored the Republican party to majority status for the first time in 40 years, and whose goals were to achieve a smaller federal government and return more power to the states. The final spending bill achieved anything, but a smaller federal government. In fact, conservatives feared that the Republican "revolution" was over and that rank- and-file members lacked a coherent message to present to voters heading into the election. House Republican leaders could never have anticipated the backlash that would await them from their rank-and-file members less than a week after the election. [6]

The Power of Incumbency

Rationally, an incumbent's primary goal is to win reelection. Without winning reelection, an incumbent cannot achieve any goals for their own constituency. Whether the member is Maxine Waters (D-CA) who represents the inner-city of Los Angeles or Harold Rogers (R-KY) who represents a tobacco-growing, district in southeastern Kentucky, members do not last long in Congress if they fail to represent the interests of their districts or states.

Members heed the concerns of their constituencies very carefully. The appropriations bill discussed above and the multi-year $200 billion highway bill passed earlier in the year were clearly attempts to pass legislation that would placate voters in states and congressional districts. As political scientist David Mayhew says, it gives members of Congress an opportunity to "advertise" and "claim credit" for bringing projects home to the district. These opportunities are more likely to proliferate in an election year when members are more insecure and less likely to take chances on substantive, yet controversial, legislation such as campaign finance reform. [7]

The table on the following page shows how astute members of Congress have become in winning reelection. While campaigns have become more "candidate-centered" as Martin Wattenberg has argued, members have spent an increasing amount of time on election activities. In fact, the going rate of, approximately, $15-20 million for a California senatorial seat means that a candidate must raise nearly $200,000 a week for two years in order to be competitive. In the last twenty years, rising advertising rates have driven up campaign costs and curtailed the ability of members to spend time on legislation. [8]

While research has shown that incumbent advantages of name recognition, a solid fund raising base and the ability to bring projects back to the district or state are formidable, challenger spending has a greater impact on the outcome of House and Senate races. However, when an incumbent has acquired a war chest so considerable, parties have much more difficulty finding individuals willing to challenge them. [9]

Senate challengers have greater success upending incumbents than their House counterparts because Senate races have greater public exposure through the media and fundraising is easier statewide than in a single congressional district. One of the reasons that Representative Charles Schumer (D-NY) was able to defeat incumbent Senator Al D'Amato (R-NY) for the New York Senate seat this year was that Schumer in excess of $12 million, which was enough to buy him substantial exposure on television, raising his name recognition statewide.

Table 1. Incumbent Reelection Rates to the House and Senate 1978-1979*

SOURCE:The Cook Political Report, October 3, 1998: citing Vital Statistics on Congress 1997-1998 and author's own compilations.

The awesome advantages of incumbency make the task difficult for challengers to win. Only when seats are "open," meaning that no incumbent is running for reelection, do candidates start at greater parity when running for office. In fact, the vast majority of House seats that have switched from Democrat to Republican or Republican to Democrat in the 1990s, are not due to the defeat of incumbents, but rather to the opposition party winning an "open" seat.

Midterm Elections and Presidential Popularity

Normally, the party that controls the White House has a difficult time in midterm elections. Midterm elections are often seen as a correction to the "status quo" particularly if the economy is in poor shape or an unpopular war is being fought. Since the Second World War (1946-1998), the party controlling the White House has averaged losing 25 House seats and 4 Senate seats in midterm elections. The biggest losses were in 1946, 1958, 1966, 1974, 1986 and 1994 seeming to have followed either an eight or twelve-year cycle.

What each of those elections have in common is declining Presidential popularity for the incumbent. What makes the 1998 midterm election so unusual is that Clinton's popularity has actually increased in his second term in office which is quite rare. He is the only President besides John Kennedy to have an approval rating of over 60 percent since 1960 going into a midterm election. In 1962, Kennedy's Democrats lost only 2 seats in the House but gained 4 seats in the Senate. Would the 1998 midterm election follow the same pattern as that of 1962? Might presidential popularity be able to mute losses in the Senate and House for Democrats despite the Clinton/Lewinsky matter?

Devolution of Power from Washington to the States

The devolution of power from the federal government to the states began with the election of Ronald Reagan in 1980. Reagan had argued that the domestic side of the federal government had become bloated and inefficient, perpetuating welfare and failing to effectively deliver services. Reagan's budget cutting package of 1981 severely cutback many domestic programs, particularly federal housing to the poor, but not entitlement programs such as Social Security, Medicare and Medicaid.

By the late 1980s, a group of younger conservatives had argued that simply cutting programs was not enough. Instead, the money that the federal government spent on programs should be given back to the states in the form of block grants, which are large sums of money sent back to the states which might be used for a purpose such as job training or housing. However, there are few other strings attached in determining how that money should be spent.

When Republicans took control of the Congress in January of 1995, they sped up the devolution of power to the states. First, they passed a bill, signed by the President, requiring the federal government not to put unfunded mandates on the states. In 1996, the Congress passed the Personal Responsibility Act of 1996, better known as welfare reform. The welfare block grant of cash assistance would now be distributed by the states rather than the federal government.

A group of Republican pragmatists emerged on the state level as popular and powerful governors promising that states could do more than the federal government to reduce crime and welfare rolls in their states. They included Tommy Thompson of Wisconsin, John Engler of Michigan, Pete Wilson of California, Christine Todd Whitman of New Jersey, George Pataki of New York and George Bush, Jr. of Texas.

The 1994 elections had not only thrown the Democrats out as the majority party of both the United States House and Senate, but also reduced the number of governorships they controlled nationally from a large majority to just one-third. Record numbers of Republicans were also elected to state legislatures. After forty years of dominating federal and state politics, the Democratic party's message that government can produce results had been rejected in favor of the Republican message of self -reliance and smaller government. While the subsequent 1996 elections did not significantly alter the balance between Democrats and Republicans on the federal and state level, it marked a continuation of the slow movement of turning programs back to state level control. For some Republicans in Congress, the pace had slowed too much, and their party lacked a coherent message heading into the election--an election they believed would have great ramifications for the year 2000.