Republicans need new economic ideas if they want to win in 2016

For the last six years, Republicans have hammered President Obama for a slow-motion economic recovery that left the middle-class winded and anxious. But that strategy seems likely to flop just when Republicans need it most: in the crucial months and weeks before the 2016 elections.

Obama won’t be running in 2016, of course, but his record will be a proxy for Democrats who are -- most notably, the likely Democratic presidential nominee, Hillary Clinton. And with the economy sharply improving, Obamanomics could leave Democrats with a significant advantage over Republicans come Election Day.

The unemployment rate has fallen from 10% in 2009 to 5.5% today, which is far lower than it was when Obama was elected in 2008. Moody’s Analytics predicts that by the time of the 2016 elections, it will be close to 5%, a level consistent with widespread prosperity. There are still problems with depressed wages, the quality of new jobs and a high portion of people who seem to have dropped out of the labor force. But if job growth continues at the blistering pace of the last year, improvements ought to be tangible to many ordinary people as November 2016 approaches.

That will neutralize a weapon Republicans have wielded effectively during much of Obama’s term in the White House. “If you’re a Republican who thinks you’re going to be running in 2016 by talking down the economy, you’re not going to be in a great place,” says Tony Fratto, a partner at public-policy consulting firm Hamilton Place Strategies. “Trying to market-time the economy is not a winning strategy.”

Plenty of economic issues will still resonate with voters in 2016: income inequality, healthcare costs that remain too high (even with the Affordable Care Act), a technology revolution that’s killing off middle-income jobs, the ginormous federal debt. Except for the debt, however, Republicans have not yet crafted a compelling message likely to click with a majority of voters.

Doing so will first require a candidate who doesn’t seem wedded to Wall Street the way private-equity baron Mitt Romney did when he challenged Obama in 2012. “Republicans need to combat the meme that they’re part of Wall Street,” says Dan Holler of the conservative strategy group Heritage Action for America. Presumed candidates such as former Florida Gov. Jeb Bush and current Wisconsin Gov. Scott Walker, plus Texas Sen. Ted Cruz, can at least claim physical distance from Wall Street. But they also seem sure to get millions in financing from rich financiers, as does Hillary Clinton. So Wall Street may be a backdrop to the whole race, undermining the street cred of candidates who seem likely to bemoan worsening income inequality and claim solidarity with the 99%.

For now, Republican economic priorities are a familiar list of golden oldies. The Senate Republican budget proposal for 2016, for instance, would balance the federal budget within 10 years, raise defense spending, repeal Obamacare and put a lid on taxes. Those priorities appeal to base Republicans, but not necessarily to centrist independents whose votes are required to win national elections these days, since they account for more than 40% of the electorate — a larger slice than either Republicans or Democrats. Besides, the Senate Republican budget doesn’t spell out the deep spending cuts required to balance the budget — the kind of annoying details that tend to be unpopular, since Americans actually like most of the programs that gobble up federal dollars.

Winning over disaffected Americans who feel like they’re falling behind — whether there’s an economic recovery, or not — will probably require new ideas communicated with new rhetoric. “People worry about how we as a country will compete in a world facing global competition,” says Fratto. “How will my kids compete when either the Chinese take over, or the robots do?”

Obama has actually tried to address those types of concerns, by proposing new training for dislocated workers, free community college for students who might otherwise get no higher education, and big new investments in infrastructure. Yet his wan approval rating — which has been below 50% for most of his second term — suggests he’s not connecting with voters much better than Republicans are. Hillary Clinton will need to do better, but come 2016, she seems much more likely to benefit from the status quo than whoever her Republican challenger turns out to be.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.