Major Shakeup in U.S. Election Diminishes Odds of a Republican Sweep

In one of the wildest plot twists in modern U.S. political history, President Joe Biden made official what had been increasingly speculated over the past few weeks: He withdrew from the 2024 presidential race and endorsed Vice President Kamala Harris.

By Biden dropping out, the race for the presidency – as well as the race for control of the House and Senate – have been upended (once again). While polling and Washington forecasters at this point still favor a victory for former President Donald Trump, his chances – as well as the odds of a Republican sweep in Congress – are now lower than they were just last week. Accordingly, we would expect the market pricing of the supposed “Trump trade” to follow suit. We now view the election as more dynamic, with likely more twists ahead.

What is next for the Democratic party?

While Biden endorsed Harris, his delegates – i.e., the 99% of Democratic delegates that he won over the course of the primaries – could technically support someone else. That is because Democratic delegates are pledged, not bound like they are on the Republican side.

Still, our strong view is that the nominee will be Kamala Harris. An open convention will be in name only, since no credible candidate is likely to run against the sitting vice president (who happens to be a woman of color – arguably the most important demographic in Democratic politics). Indeed, following Biden’s news on Sunday, many high-profile Democrats rushed to endorse Harris, including the Clintons, many key members of Congress, major donors, and several governors – including some individuals who have been seen as potential alternative candidates, such as California Governor Gavin Newsom and Michigan Governor Gretchen Whitmer.

Importantly, the delegates are lining up behind Harris. As of this writing, several state delegations have pledged to support Harris, and we expect more over the coming days. To become the nominee, a candidate needs 1,986 delegates (50% of the total); Harris could potentially lock up the required total this week.

Plus, Harris raised a lot of money immediately following Sunday’s news – nearly $50 million in about 12 hours. This contrasts with the roughly $30 million that Biden had raised to date in the month of July. (Trump has raised about $70 million after the assassination attempt.)

Still, the formal vote will likely be at the Democratic National Convention in Chicago, which starts on 19 August (although Democrats may have a roll call vote earlier to avoid signs of messiness). In any case, we expect Harris to be the nominee.

Potential running mates

We may learn as early as this week who will be the new candidate for vice president. Here are some potential names:

• Senator Mark Kelly (D-AZ) has been rumored for several reasons: He is an astronaut and veteran; his wife, former Rep. Gabby Giffords, was one of the first victims of political violence in the modern era and is beloved; Arizona is a swing state that Biden won (albeit barely) in 2020; and perhaps most importantly, Arizona is a border state, and Kelly has been more moderate on immigration issues than the majority of Democrats (the border will be a big policy liability for Harris).
• North Carolina Governor Roy Cooper: Harris recently campaigned with him, and they have known each other for years. North Carolina, though Republican leaning, is on the cusp of being a swing state, and Cooper’s popularity could put it in play.
• Kentucky Governor Andy Beshear, who was spotted in DC last week (although Kentucky is decidedly not a swing state).
• Pennsylvania Governor Josh Shapiro, who was recently elected and is a popular politician in a must-win state for Democrats.

There will almost certainly be a debate between Trump’s running mate, JD Vance, and Harris’s, but it may now happen after the August convention.

Policy priorities of the Harris campaign

Generally, there is not much daylight between Harris and Biden on most policy issues. However, Harris has been more outspoken on student loan and medical debt forgiveness. She is equally close with organized labor, although closer with SEIU (the healthcare union). Interestingly, she voted against the U.S.-Mexico-Canada Agreement (USMCA) on free trade when it came up for a Senate vote in 2020 – perhaps because she was running for president at the time. Some stances from her 2020 campaign could haunt her this year, even though her views have since moderated: e.g., supporting Medicare for All, abolishing fracking, and defunding the police.

Outlook for November

What does all of this mean for the election odds? Given that we were looking at potentially severe Democratic losses as of last week with Biden on top of the ticket, the chances of a Trump presidency – and a Republican sweep of Washington – have declined.

Odds still favor Trump at this point given his money, organization, and fervent support and enthusiasm among his base, and of course, Harris is untested at the top of the ticket. Her 2020 presidential bid was a failure, and she has had issues with her staff dating to her 2004–2010 tenure as San Francisco district attorney. Polls indicate her favorability ratings are bad – although her net-negatives are better than Biden’s, and comparable to Trump’s. These may, or may not, improve as people are reintroduced to her. As of this writing, she polls behind Trump as she has over the past few months, but we should wait a week or two to reevaluate polling given the recent events.

The odds of a red sweep in Congress have declined. Democrats in down-ballot races have been consistently outpolling Biden (in some cases by a lot), and the generic ballot – a key indicator of the national mood and potential direction of the House – has been slightly favoring Democrats. We note the generic ballot was one indicator back in 2022 that correctly predicted that there would not be a red wave.

Compared with Biden, Harris has several advantages: Harris is younger (obviously) and now age could be used against Trump. Harris is very likely to litigate the case against Trump better, raise more money, and mobilize the energy regarding reproductive rights more effectively than Biden did. All this will likely increase Democratic turnout, particularly among women. As such, we could see the race going back to being a jump ball – similar to pre-debate. Time will tell, but Harris is unlikely to be the same type of headwind that Biden was becoming for down-ballot races.

Bottom line

The past few weeks of the 2024 U.S. presidential race have seemed stranger than fiction, with a disaster of a debate, an assassination attempt of former President Trump, and an incumbent president withdrawing his candidacy. And we still have 3.5 months until Election Day.

With Harris very likely at the top of the Democratic ticket, paired most likely with a white man from a swing state, the odds of a Trump presidency and red wave have both declined, although Trump is still favored to win at this point. But as we have been saying for months: It is still early, and obviously a lot can still happen.