The 2024 presidential election is shaping up like no other before, and the outcome will have lasting effects on businesses.
Among the issues at stake this year is whether the 2017 tax cuts will be extended. An estimated $4.5 trillion in individual, business and state tax provisions are scheduled to expire at the end of 2025, and a failure to renew them would risk stunting business investment across all industries. It’s not just taxes, the next administration is expected to play a significant role in shaping legislation and policy around several issues important to FEDA members, including trade and tariffs, immigration, business regulation, and labor.
Regardless of which party controls the executive branch, enacting policy that supports businesses may prove difficult unless there is a shake up in the legislature. The number of bills enacted by each Congress has steadily fallen since the 1980s. The 100th Congress (1987-1988) passed 761 bills while the two most recent Congresses, the 116th and 117th, passed only 344 and 365 bills respectively. The current Congress is tracking even lower, having enacted only 65 pieces of legislation a year-and-a-half into its two-year term (as of late June).
The difficulty in passing legislation in recent years at least somewhat correlates to the narrow majorities in each chamber of Congress and the extreme divisiveness between the political parties. According to research from American National Election Studies, the percentage of people who have strong partisan feelings has grown from only 22.7 percent in the 1978 election to a record high of 44.2 percent in 2020. Meanwhile, a Pew Research Center study in 2023 found that 28 percent of U.S. adults express unfavorable views of both parties — the highest level in three decades of polling. In short, voters aren’t happy and that dissatisfaction makes this pivotal election even more difficult to predict.
“This is only the second election in American history where two presidents faced each other in a rematch,” notes Karl Rove, an electoral analyst and keynote speaker at the 2024 FEDA Executive Leadership Conference. “There have never been two candidates this old, nor since we began polling in the 1930s, so unpopular a pair. The election is taking place in a time of extreme political polarization and of rough parity between the two parties and after two elections which were both settled by a relatively small number of votes in a handful of battleground states.”
From Family Distribution Business to Election Mastermind
With a family history entwined with the foodservice equipment and supplies industry, Rove shares an appreciation for the value of distributors. In the 1930s, his grandfather founded Robert G. Wood & Company in Denver, an equipment supplier that sold quality butcher supplies to grocery stores and restaurants. Rove himself swept floors at the company when he was younger — an experience that will be familiar to many conference attendees who now lead their family businesses.
From those early experiences, Rove went on to become an iconic political strategist and pundit best known as the architect of George W. Bush’s 2000 and 2004 presidential victories. His work earned him a spot as a senior adviser in the Bush administration from 2000 to 2007 and he served as the White House deputy chief of staff from 2004 to 2007. During that time, he oversaw the Office of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs. He also coordinated the White House-policy making process.
Today, Rove remains an election mastermind, writing a weekly op-ed for the Wall Street Journal and appearing frequently on CNN, Fox News Channel and C-SPAN. His decades of election involvement and continued observance of the political scene give him an unmatched perspective on the current electoral map that FEDA members are sure to find valuable.
Broken Polling
Even with all that experience, Rove acknowledges the difficulty in forecasting how the 2024 presidential race will shake out. One of the fundamental issues is the increasing unreliability of polling. In 2016, polls famously under-estimated Donald Trump’s support in the Upper Midwest and failed to anticipate his upset victories in the presumed Democratic strongholds of Pennsylvania, Michigan and Wisconsin. It wasn’t just a one-time oversight. Pre-election polling has underestimated Republican votes in three of the past four elections, according to the American Association for Public Opinion Research. Likewise, polls inflated Joe Biden’s margin of victory by an average of 3.9 percent in 2020.
“Polling is broken because most Americans don’t have landlines and if we do, we don’t answer them just as we tend not to answer cell calls from numbers we don’t recognize,” Rove says. “There are ways to deal with all that but polling is more costly, more difficult and perhaps more inaccurate.”
Still, despite their increasing fallibility, polls can provide some indication of how the race is going when taken as a whole. When evaluating the election, Rove relies on an average of recent polls, with those taken in the last few weeks providing more confidence than polls taken over a longer period. “I’II also look for similar patterns among sub-groups in many polls over different states. Then I try to gauge the relative weight of each campaign’s activity in any given state with a special emphasis on appearances, messaging and organization, all of which are subjective measures,” he says.
As of the end of June, the average among polls indicated the gap between Biden and Trump had closed to a dead heat. Election data analytics website 538 forecasted only a one-to-three electoral vote difference between Biden and Trump through most of June, with either candidate holding a small lead on any given day.
As with the last several elections, the race to 270 electoral votes (of 538 available) is likely to come down to a handful of battleground states. For Democrats, holding Pennsylvania, Wisconsin and Michigan — which swung back to Biden in the 2020 election — will be key to the incumbent’s reelection. For Trump to win, he will need to peel off one of those states and hold on to polling leads in Nevada, Arizona and Georgia, all of which went to Biden in 2020.
Congressional Outlooks
Control of the Senate and House is also expected to be fiercely contested. Both chambers already are evenly divided, with Democrats holding a 51-49 advantage in the Senate (thanks to four independent senators that caucus with the Democrats) and Republicans have a narrow 219-213 lead in the House of Representatives. The outcome of the 2024 election could see those tight margins remain or see one of the parties take a larger control of Congress.
Thirty-four Senate seats are up for election, 23 of which are held by Democrats or independents and 10 held by Republicans. The remaining seat is a special election to serve out the remaining two years of Sen. Ben Sasse’s term following his resignation in 2023 to become the president of the University of Florida. The key Senate races are expected to be in Arizona, Maryland, Michigan, Montana, Nevada, Ohio, Pennsylvania, and Wisconsin, all of which are currently held by Democrats or independents, increasing the likelihood that the Senate majority flips to Republicans.
All 435 House seats are up for reelection. Of that, about 25 seats are considered toss ups, nine lean Democrat and seven lean Republican. The outcomes of those races will decide control of the chamber and the size of the majority will determine how easily legislation is able to make its way through Congress, or whether it will be another term of stalled bills and little progress.
Although the most focus and largest spending is on the presidential race, the results of the Senate and House elections will largely determine the effectiveness of either candidate’s second term. “When was the last time a president had a happy and productive second four years?” Rove asks. “Important decisions face the man who’ll occupy the Oval Office after Jan. 20, 2025, and what is decided will have huge ramifications for our country and the world.”