Senate Fight Tilts to GOP, Lowering Chance of Corporate Tax Hike

(Bloomberg) -- Republicans’ chances of taking control of the US Senate are rising, with the GOP now favored to gain the two seats the party needs to secure a majority and with it a formidable role shaping the outcome of a highly anticipated fight over tax policy.

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Democrats enjoy an advantage in fundraising and enthusiasm following Kamala Harris’ nomination, and down-ballot Republicans have struggled to match Donald Trump’s level of support. But Senate Democrats have a potentially insurmountable strategic disadvantage: the election map.

The party is defending three seats in states Trump won in both 2016 and 2020 and several additional Senate seats in states Trump carried in 2016. No Republicans are up for reelection in states Biden carried.

Even if Harris wins the presidency and Democrats take control of the House, a Senate majority gives Republicans the power to block a corporate tax increase Harris seeks and negotiating leverage to protect or expand Trump’s expiring tax cuts for individuals and large estates. Republicans also could block Harris’ political and judicial nominations with a simple majority.

Should Trump win the White House and Republicans retain their House majority, Senate control would complete the party’s hold on all of the elected parts of the national government. The last time the GOP held that unified control, early in Trump’s presidency, the party used it to slash the corporate tax rate from 35% to 21% and install three conservative judges on the US Supreme Court who provided the margin to end federal abortion rights.

Since the vice president breaks a tie in the Senate, Republicans need a net gain of one seat for a majority under Trump and two for a majority under Harris. Republican Jim Justice is overwhelmingly favored to win a seat in West Virginia currently held by the retiring Joe Manchin, an independent allied with Democrats.

Here are the key races to watch:

Montana

Montana is the most likely tipping point.

Polling and non-partisan election analysts suggest that Republicans are narrowly favored to pick up this Mountain West state.

Democrat Jon Tester, a three-term-incumbent and third-generation farmer, casts himself the defender of Montana values against transplant Tim Sheehy, a Republican businessman and former Navy seal who moved to the state in 2014. But Trump’s brand of Republican populism has strong appeal in the state, and Sheehy has consistently led recent polls.

Democrats caution that Montana is hard to poll, and many millions of dollars still remain to be spent in the home stretch of what will likely be the most expensive political race per voter in American history. Tester’s chances could also be boosted by an abortion rights ballot question — Democrats’ best issue this year.

Wild Cards

If Tester loses, Democrats would need a victory in novel territory. Florida, Texas and Nebraska are emerging as possibilities.

Nebraska’s Deb Fischer, a Republican incumbent who hadn’t spend much on her reelection, has received an abrupt wake-up from recent polls. She is neck-and-neck against independent Dan Osborn, a union leader and political outsider who is running an unconventional and relatively low-budget campaign. An abortion rights referendum is energizing Democrats. So is the Harris campaign’s efforts to rally supporters in the “Blue Dot” congressional district surrounding Omaha, since under an unusual Nebraska law the state awards one of its electoral votes to the winner of each House district.

In Texas, former National Football League linebacker Colin Allred, a Democratic congressman, is posing a strong challenge to Republican Senator Ted Cruz. While Cruz has generally led by several points in most polls, a recent Morning Consult poll had Allred up 1 point — within the margin of error.

Florida Republican Senator Rick Scott, a wealthy former health care executive and two-term governor who narrowly won his seat six years ago, has struggled to pull away from Democratic former Representative Debbie Mucarsel-Powell despite having a fundraising advantage. Another statewide abortion rights referendum — as well as one legalizing marijuana — also may galvanize Democrats there.

Republicans have a stretch race as well in Maryland, but popular former Governor Larry Hogan has been fading against Prince George’s County Executive Angela Alsobrooks in a state where Trump is getting walloped. A Washington Post-University of Maryland poll found Alsobrooks with a double-digit lead.

Other Battlegrounds

Democrats’ hopes also hinge on running the table in all other major battlegrounds, where they generally have been holding on to leads in the polls and in fundraising.

That includes Ohio, where Senate Banking Chairman Sherrod Brown faces former car dealer and blockchain entrepreneur Bernie Moreno in a state Trump is expected to win easily. Brown is the last Democrat elected statewide in Ohio and relies on a crossover appeal with Trump voters based in part on the Democrat’s long history of fighting the kind of free trade deals populists blame for the loss of US manufacturing jobs. Moreno, an ally of Senator JD Vance, has benefited from massive spending on his behalf by a crypto industry political action committee.

Democratic incumbents have also narrowly led in most polls in Pennsylvania, where Senator Bob Casey faces former Bridgewater CEO David McCormick in a state that is also a pivotal presidential battleground; Nevada, where Senator Jacky Rosen has been outpacing Army veteran Sam Brown; and Wisconsin, where Senator Tammy Baldwin faces bank CEO Eric Hovde.

Two other open seats also are competitive: Arizona, where progressive Representative Ruben Gallego has been leading against television personality, Trump acolyte and prominent election denier Kari Lake, and Michigan, where Democratic Representative Elissa Slotkin and former Republican Representative Mike Rogers are dueling.

--With assistance from Zach C. Cohen and Jonathan Tamari.

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