Wisconsin Emerges As A Crucial Swing State

When we think of swing states in presidential elections, Florida, with its fast-growing population, quickly comes to mind, followed by fading industrial powerhouses Ohio, Pennsylvania and Michigan.

Wisconsin usually does not make the list. But the Badger State – not particularly big, not particularly influential in national politics – has become a state that President Obama must carry if he is going to have a decent chance at re-election. The president’s own political chiefs have, indirectly, said as much.

The folks at Obama campaign headquarters last month drew up five possible paths to the magic number of 270 Electoral College votes. As a starting point, all five strategies assume that Obama will carry all the states that Sen. John Kerry won in his unsuccessful 2004 effort to unseat President George W. Bush. This would yield 246 electoral votes this year. Then they add and subtract various states in combinations that would give Obama a victory in November.

Winning Florida, with its 29 electoral votes, would be enough. Without Florida, the Obama loyalists are eyeing Vigrinia and North Carolina, which the president captured in 2008, or Southwestern states with fast-growing Hispanic populations. Obama campaign manager Jim Messina explained the strategies in a video seeking to rally supporters. Messina said there are over 40 combinations of states that the campaign believes could win the president a second term. But he only presented five, and all five presume an Obama victory in Wisconsin.

This is curious. Wisconsin seems like anything but a safe bet for Democrats these days.

The state is enmeshed in a set of vicious recall battles. Democrats and organized labor have gathered enough signatures to prompt recall elections against Republican Gov. Scott Walker and Lt. Gov. Rebecca Kleefisch, as well as against four Republican state senators. Petitioners handed over around 1 million signatures, twice as many as required, in their move to oust the governor. Assuming that enough of those signatures are found to be valid, which, given the huge cushion, seems almost certain, elections will be held this spring or summer.

The effort to recall the governor caps a year of political turbulence. It began last winter when Walker proposed a plan to restrict collective bargaining for government workers. The proposal sparked outrage among unions and their allies, and put Wisconsin temporarily in the national spotlight. Over the summer, Democrats tried to win control of the state Senate through a first wave of recall elections. Although Republicans managed to keep a narrow majority in the chamber, two Republican state senators lost their jobs. If they succeed, the next round of recalls would give Democrats control of the Senate and the governor’s mansion.

The seemingly endless battle will have a big impact in November, but nobody knows what that impact will be. Although Wisconsin hasn’t gone Republican in a presidential race since favoring Ronald Reagan in 1984, its electorate is closely divided. “Wisconsin is a deep purple state. We’re about as balanced as can be,” Mordecai Lee, a University of Wisconsin-Milwaukee professor of government affairs, told Milwaukee’s WITI-TV.

It’s possible the recall elections will rally Wisconsin Democrats, spurring them to keep up the fight by heading to the polls in November. However, the recall election will not be cheap. Despite their success in gathering signatures, Democrats are aware the race will be a close one. “If we do win, it will be by a razor-thin margin,” David Obey, a retired Democratic congressman who is considering running against Walker, told the Milwaukee Journal Sentinel.

Democrats outside the state have expressed concern about sinking money into a statewide election so soon before the presidential race. There is also a chance that adding another hot contest to the year’s election calendar will induce voter fatigue, leaving would-be voters unwilling to summon the energy to make their way back to the polls again in November. In a state as evenly divided as Wisconsin, voter turnout is critical.

In the background, Wisconsin is also considering a proposal that would change the way it allots its Electoral College votes from a winner-take-all model to a representative one based on congressional districts. Maine and Nebraska are the only states that currently determine their Electoral College votes this way, although a similar plan was also proposed in Pennsylvania in September. The plan seems unlikely to take off, either there or in Wisconsin. But if the proposal did somehow pass, it could deprive Obama of the last few votes he needs to win a close race, even if he narrowly carries Wisconsin.

We still have some time before the classic blue and red election map starts to fill our television and computer screens. (Those looking for something to watch in the meantime might consider the live feed of Wisconsin workers processing the 1 million recall signatures, a spectacle that has already attracted nearly 30,000 viewers.) When the familiar map does show up, there will still be plenty to watch in Florida, Pennsylvania and Ohio. Pay attention to Wisconsin too.

About Larry M. Elkin 509 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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