@RobertBarnes I work for a large global financial firm that have a lobbying arm entrenched in DC. The “Public Affairs” team sent us this private note on their view of the upcoming US election. It’s a long read. Enjoy.

U.S. Elections Previews

U.S. Midterm Elections are on Tuesday, November 3 for Congressional, State and Local races. Midterms are historically backlash elections for the party in power. This year looks like it may be no different. Democrats are expected to win the House and are slight favorites to win the Senate, albeit within the margin of error. Democrats are favored to win control of more governorships and state legislatures.

Here are three things to know:
1. Margins - not just control - will matter for both the intra-party dynamics in the next Congress and the framing for what's possible in the 2028 presidential election cycle.

2. The economy and low trust in our institutions are the two biggest driving factors for voters, with the Iran conflict serving as a potential catalyst for shifting the political environment further in Democrats' favor.

3. Despite potential election-related controversies in the headlines, the elections will be secure. We should know who controls Congress by late Election Night or the next day. If control hinges on a handful of very close races, the outcome could take a few days to determine, but there is a well-established process for resolving those contests.

Here are three things we'll be watching:
1. Does the Trump coalition hold? This year, the battleground races are in places President Trump has won since his first election in 2016. Do these voters continue to stick with Republicans or is this the beginning of a change in our political coalitions?

2. Is there a progressive penalty on the far-left candidates? Democratic Socialists of America and far-left candidates are running in races beyond just deep blue cities. Will they underperform and lose what should be winnable races for Democrats or show that a new type of candidate can win?

3. Does populism move the needle? The fast rise of populism is playing out in a few marquee races, especially with regards to sentiment against Al and data centers. At the same time, voters in the tech-centric West Coast will decide on wealth tax and corporate ballot measures. Is populism just a campaign slogan or does it move voters – and policymakers - to act?

A more robust run-down is below, and we will send a post-election outlook as the races get called.

The Election Environment - An Unstoppable Force Meets an Immovable Object

Midterm backlashes are one of the most durable trends in American politics.
• Over the last 80 years, the party out of power has gained vote share in all but one midterm election (2002) compared to the presidential election two years before. In politics, this is called the "thermostat trend"- midterm voters turn down the temperature after the ruling party runs too hot.

• This year, Democrats are up 8 points on the generic congressional ballot (RealClearPolling).
When compared to 2024, that's an 11-point shift to the left - an above average swing but within historical trends (see chart below).

• In an era of narrow margins and unstable governing majorities, a midterm backlash results in the president's party losing control of the House and/or Senate. This has been the case in the last five midterms.

The Iran conflict - and its economic impact - turned a typical backlash year into a potential blue wave.
• The president's net approval rating is the single most important factor of the midterm environment. Before the conflict, President Trump's net approval rating matched his first term, and Democrats had a modest 4-point lead on the generic congressional ballot. Now, President Trump is tied with President George W. Bush's approval rating in his second term, and the Democratic advantage has more than doubled (see chart below).

• The economy - primarily cost-of-living - and government leadership are the two biggest issues for voters (Gallup). In 2024, Trump won the economy vote by over 60 points and the Iran conflict - and its economic impact - turned a typical backlash year into a potential change vote by 50points (CNN exit polls). Today, Democrats are ahead of Republicans by 8 points on handling the economy and 11 points on handling perceived corruption (NYT).

• The biggest swings towards Democrats are among young, Latino and independent voters who are most concerned by affordability (Cook Political Report). White working-class voters - the President's base - has seen a double-digit swing to the left as well.

A blue wave environment faces a red wall.
• The national environment isn't the only factor determining who wins, rather it's also the structural makeup of the 435 House districts and 35 Senate seats up this cycle. The median House district is between 3-4 points more Republican leaning than the national average with fewer competitive seats in play. Control of the Senate will be determined by states that President Trump won by double digits in 2024.

• The Democratic brand remains unpopular in these competitive races. The party has a net negative rating of -15 points (RealClearPolling), compared to a positive rating of +1 point in the 2018 midterms (CNN). Many of the undecided voters in competitive races are "double disenchanted"- disapproving of President Trump and Republicans but haven't voted for a Democrat in over 10 years.

• The 2026 midterms is now the most expensive U.S. election ever, with Republicans holding a total dollar advantage. Democratic candidates have outraised Republican candidates in competitive races almost two-to-one ($681mm vs. $326mm) but outside Republican spending from party-aligned super PACs is nearly doubled that of Democrats ($1.6b vs. $877mm) (NYT). The Republican outside spending edge is most prevalent in competitive Senate races.

Congress - The Three Scenarios

There are about 50 competitive House races and 11 competitive Senate races (see chart 3) that will determine control of Congress. The Senate chart includes how the states voted in the 2024 presidential election, the natural partisan lean of the state this year, the latest polling, the median qualitative and quantitative ratings, and if any incumbents are on relevant committees (e.g. the Senate Banking Committee).

There are three ways the outlook could play out.
1. The polls and analysts are largely accurate.
a. House: 233 D - 202 R; Senate: 52 D - 48 R
b. Recent polling errors have been greater in the presidential elections while midterms - on the whole - have been more accurate (Silver Bulletin). If largely accurate, Democrats would win a majority of similar size to the 2018 and 2006 midterms and gain a narrow Senate majority.
2. The polls and analysts underestimate Republicans by a normal polling error.
a. House: 221 D - 214 R; Senate: 51 R - 49 D
b. Some of the biggest polling errors this century occurred in reliably red states and districts that underestimate Republican support (The Economist). Given where the competitive races are located this year, another underestimation would be enough to keep Republicans in control of the Senate and to have Democratic House margins in the single digits.
3. The polls and analysts underestimate Democrats by a normal polling error.
a. House: 238 D - 197 R; Senate: 54 D - 46 R
b. Democrats overperformed their polls in statewide elections in New Jersey and Virginia last year. If Republicans cannot turn out their once reliable voters, Democrats could overperform again this year.

What races to watch on the key questions:
1. When will we know the outcomes? Kentucky's sixth congressional district will be the first competitive race to report results on election night and an early bellwether. Florida, Georgia and North Carolina will also be early reporting states for the Sun Belt and Ohio will be the first of the Midwest to get results. If Republicans only win FL -09 (R+8) seat, that indicates a significant wave. If Republicans are winning most of FL-14 (R+4), FL-22 (R+4), FL-25 (R+3), FL-27 (R+6) then that suggests a lean Democrat election. Expect vote counting to take longer in Maine and Alaska due to rank-choice voting and California for its mail-in voting.

2. The durability of the Trump coalition? Alaska, lowa and Kansas all have large white working-class populations that have supported the President by double digits since 2016. They are also states with outsized impact from rising costs and where Democratic candidates are polling above the fundamentals.

3. How do progressives perform in purple states? Democrats nominated candidates further to the left in Michigan, Minnesota and Maine and where they are currently underperforming the partisan fundamentals of the state. The Michigan race with progressive nominee Abdul El-Sayed has received the most national attention and will be closely followed for impact on the ideological and tactical direction of the Democratic Party.

4. The impact of populism? Ohio and Texas are at the center of the data center boom, and some campaigns are beginning to tap into local concerns about infrastructure demands, electricity usage, land use and who benefits from these investments - issues and arguments that are often tied to populist sentiment. These races may provide an early indication of whether data center development and technology-related growth are emerging as politically salient issues or remain secondary concerns for most voters.

The States

Trifecta Balance at Stake and DSA Penetration: The 2026 state election cycle is defined by high- stakes battles for unified state control. Across 40 states currently operating under single-party rule, narrow legislative margins and competitive gubernatorial seats put multiple existing trifectas at immediate risk of dissolving, while opening viable paths for new unified governments in key battleground states. We also are monitoring how much penetration far left (DSA or DSA adjacent) candidates have in legislatures and local races. Outcomes will dictate state-level regulatory velocity on critical policy priorities. The following are competitive races as determined by the Cook Political Report.
Toss Up Governor
• Georgia: Republicans currently hold a trifecta. A Democratic gubernatorial win would break unified Republican control.
• Kansas: A Democrat currently holds the seat while Republicans control the legislature. A Republican gubernatorial pickup would establish a new Republican trifecta.
• Nevada: Democrats control both legislative chambers. A Democratic gubernatorial pickup would establish a unified Democratic trifecta.
• Wisconsin: Both the governorship and legislature are highly competitive. Both parties have a chance to establish a trifecta.

Lean D
• Alaska: Democrats are favored in this open Republican-held seat. Both legislative chambers are governed through bipartisan coalitions that are favored to continue.
• Arizona: While leaning Democratic for Governor, both chambers of the legislature are considered highly competitive.
• Ohio: Republicans are expected to retain both legislative chambers, but a Democratic gubernatorial victory would break the existing Republican trifecta.
• lowa: A Democratic gubernatorial pickup would break the existing Republican trifecta.

Lean R
• Florida: A Republican victory preserves the existing GOP trifecta; a Democratic upset would break it.
• Texas: A Republican win preserves the existing trifecta, while a Democratic upset would break unified control. Both chambers are expected to remain Republican with potentially narrower margins.

Competitive State Chambers
• In Arizona, Michigan and Minnesota, both chambers of the legislature are considered competitive and could have implications for creating or breaking up trifectas.
• In the Pennsylvania State Senate, the Republicans hold a slim majority. If they were to lose that majority, a Democratic trifecta would be established.
• In Wisconsin, the Republicans hold the Assembly, but it is considered a toss-up. If Democrats were to take Assembly a trifecta could be established depending on Governor race outcome.
• In New Hampshire, a Democratic flip of the house would break up a Republican held trifecta.

Competitive AGs
• Michigan and Minnesota AG races are considered toss ups.