Shift to the Economy

Both sides are dug in on the health care debate, which reaches its climax this weekend. This highly partisan, highly divisive debate parallels the Washington atmosphere in 2003, when Bush’s prescription drug program passed the House on a 220-215 partisan (16 Democrats did join the Republicans) vote, but only after the speaker held the vote open for hours while he searched for more support. It's also like 1993, when Clinton’s tax hikes passed the House 218-216, then the Senate 51-50 with Vice President Gore breaking the tie. No Republicans in either house supported the 1993 Clinton tax increases.

Under these crisis-like conditions, the party in power generally prevails, as leadership makes margins appear even tighter than they actually are by allowing its most vulnerable members to side with their districts rather than the party. Right now, Speaker Pelosi is sorting out who gets to vote with the district, and who must, MUST, vote with the party.

Still, polls show hardened opinion against ObamaCare. One survey, conducted by OnMessage Inc., has Republicans leading a ballot test for the fall election by 37% to 36%, with 27% undecided. It's the first time since 2004--the year Republicans last won control of congress--that the GOP polls ahead of Democrats. Of the 27% who say they're undecided, only 30% favor ObamaCare, with 60% opposed. Such results indicate ObamaCare’s a loser for Democrats.

In another survey, jointly managed by a Republican and a Democratic pollster for NBC News and the Wall Street Journal, 48% called ObamaCare a "bad idea" and 36% viewed it as a "good idea"—a 12% gap.

The same survey found that by a 10% margin, registered voters most likely to vote in November believe the GOP is better than Democrats at dealing with the economy. If the polls are real, Democrats have to move past ObamaCare, where opinions are hardened, and concentrate on the economy, where though Democrats trail, voters go by actual results and so are more flexible.

Here are two reasons the economy may in fact start helping Democrats:

1. The stock market reached new highs today on the road to recovery. The S&P 500 rose to 1,159, the Dow cleared 10,725, and the NASDAQ 2,378—all new highs since the market crashed in Fall 2008. As a consequence, my FOX INDEX has reached another post-crash high [chart]. The INDEX measures as a percentage the distance traveled from the market’s March 9, 2009 bottom, while also marking the distance remaining to its pre-crash healthy level (12,000 Dow, 1,300 S&P, 2,500 NASDAQ). As of today, the distance traveled from the bottom to healthy is close to 80% of the path to full recovery.

2. The March jobs report will show a big improvement when it's released April 2. After years of monthly declines, we may see jobs jump by 300,000 this month, a big number the media will trumpet as fantastic news. Of course, 100,000 of these are temporary census workers, who only hold their jobs until summer. And the balance will come mostly from workers who were laid off during 2010’s terrible winter and are now able to work again. Still, the country may be ready to respond to good news—however soft and squishy—by increasing spending. Then the economy could truly begin to hum.