During the midterm elections, personal finances were on the ballot.
Voters went to the polls thinking about how four-decade high inflation rates had scorched their wallets.
In addition to considering what the array of candidates could do to bring relief to high prices, voters considered ballot measures on everything from millionaire taxes to minimum wage and rent control.
The patterns on those ballot results are not consistent across states. For example, the vote for a millionaire tax prevailed in one heavily Democratic state, but not another. The fights on mandated wage increased achieved split results.
That reflects the uncertainty in the races for Congressional majorities. Tight elections are still making it too close to determine if Democrats can maintain control of the House of Representatives and the Senate.
On Wednesday, President Joe Biden acknowledged that the Democrats took losses — just not as many as pollsters predicted. He also noted that inflation weighed heavily on voters. “There are still a lot of people hurting that are very concerned,” he said.
“But the voters were also clear that they’re still frustrated,” Biden added. “I get it. I understand it’s been a really tough few years in this country for so many people.”
Investors and consumers will get another remainder of the rise in the cost of living when the federal government releases October inflation data on Thursday.
Here’s a look at what midterm elections might usher in for people’s wallets:
Markets do not like uncertainty — in other words, the Congressional toss-up happening now. On Wednesday, the Dow Jones Industrial Average,
the S&P 500
and the Nasdaq Composite
all closed lower.
Beyond the realm of the midterm-election results, other persistent headwinds have been dragging down portfolios: high inflation, rising interest rates and recession worries. Where the market bottom comes is still a guessing game.
Markets generally react well to a split Congress, experts note. When one party controls Congress and the other controls the White House, that can slow down — or outright neutralize — the chance of laws changing federal regulations, tax provisions and, ultimately, corporate bottom lines.
There’s still room to fall, according to Arend Kapteyn, an economist at UBS Group AG
In the face of weak corporate earnings and even more Federal Reserve interest-rate hikes, the S&P 500
could shed another 16% by the middle of next year.
More healthcare coverage
South Dakota voters elected to make their home the latest red state to expand Medicaid, a government health-insurance program that covers low-income people, people with disabilities, and more.
The Affordable Care Act originally intended for people with incomes 138% below the federal poverty level — which, today, is about $38,000 a year for a family of four — to qualify for Medicaid. But in 2012, the Supreme Court voted to let states determine whether they wanted to participate in the expansion.
So far, 40 states, and D.C., have gone along with Medicaid expansion, according to the Kaiser Family Foundation. Meanwhile, 11 states, almost all in the South, have resisted expansion, including the nation’s most uninsured state: Texas, where 18% of people lack health coverage, according to U.S. Census Bureau data.
South Dakota’s Medicaid expansion measure, which passed with 56% of the vote on Tuesday, could cover more than 40,000 people, according to Politico. The state’s Republican governor, Kristi Noem, had opposed the program, but said she would implement the measure if it passed.
Voters fought back against pandemic-era rent increases Tuesday after facing sky-high price hikes earlier in the year, even as the market shows signs of cooling: Rent-control ballot measures passed in Orange County, Fla., and Portland, Maine, and a third rent-control measure may squeak out a narrow win in Pasadena, Calif.
The most contested local proposal, however, was likely in Orange County. Though nearly 60% of Orange County voters approved an ordinance that would limit rent increases to 9.8% for one year, a Florida court said the ordinance was unconstitutional and that its ballot summary was misleading after a lawsuit from industry groups. Unless the county wins a legal appeal, the ordinance can’t become law despite voters’ wishes, according to the Orlando Sentinel.
Orlando, Orange County’s largest city, was in the depths of an affordable-housing shortage even before the pandemic. Earlier this year, Walt Disney World
said it would set aside 80 acres of its land for affordable housing development.
Rental increases there have slowed, but the county’s median rental prices are at $2,122 this month, up from the $1,500 median price seen in January 2021 — a more than 41% increase, according to data from Zillow
“ If Democrats did manage to hold the House and Senate, there’s a chance they’d continue pressing for higher taxes on rich households.”
The ballot measure’s opponents argue Lyft was trying to electrify its cars via tax money. The company said there was nothing in the ballot that would have given special treatment to Lyft or any ride-share company. “The election results are an unfortunate setback for the climate movement,” the company said.
Beyond the state measures, there are open questions about what’s next for federal income taxes. If Democrats did somehow manage to hold the House and Senate, there’s a chance they would continue pressing for higher taxes on rich households, one expert said. If it’s divided government, then the chances of tax changes narrow to a possibility of a tax cuts — if a recession comes and proves to be severe.
The most immediate tax question is whether Democrats and Republicans can work out a deal by the end of 2022 that might yield another round of child tax credit payments. Many businesses want corporate tax-code changes before less favorable rules kick in for 2023. Democrats and child tax credit supporters are trying to get more child tax credit payment in any deal.