Knowing American citizens willbe highly engaged in the next election, is it possible to predictwhat the impact could be on policy issues?

As we turn the page on 2019 and look forward to the start of thesecond decade in the 21st century, the country's focus will turn topolitics, specifically the always-heated presidential election.

It appears that every four years as the country "ramps up" itsenergy, rhetoric, and attacks on one another as one of the partiesasserts its claim of its candidate's right to be president, thereis consistently a message that this is "the most important electionin our lifetime."

Related: Who's doing better, who isn't ahead of 2020election

Hyperbole aside for a moment, the forethought of the framers ofthe constitution is quite impressive. They really thought throughall scenarios and created a system of checks and balances so thatthe federal government would neither be a tyrannical or monarchistgovernment nor would it become a government of representatives ofideological clones moving in choreographed synchronicity to anideological goal without consideration of the local constituents'needs.

With these checks and balances in mind, the ability to radicallychange the direction of the country and its citizens is a challengefor lawmakers. Further, citizens are very well informed and, inmany respects, more and more engaged in the process. Activists areanother cause that is often cited to describe the current state ofthe engaged citizenship. Politicians often lapse into thinking thattheir viewpoint is most important when in reality they would dowell to remember Michael Douglas' movie, "The American President"which states, "the American people have a funny way of deciding ontheir own what is and what is not their business."

Knowing American citizens will be highly engaged in the nextelection–and throughout 2020–is it possible to forecast or predictwhat the impact could be on policy issues, both foreign anddomestic, monetary policy, interest rate policy, national security,and the labor market including wages and unemployment?

Possible scenarios resulting from the federal election

With that back story, here are various scenarios that may happendepending upon the outcome of the election with the focus onbusinesses and advisors.

One scenario is that the current configuration remainsin place. Republicans remain in place in both the WhiteHouse and Senate while Democrats continue to hold the majority inthe House of Representatives. Business investment, which is on holdat the present and through much of the early part of 2020, willreturn with the confidence that policies will remain as they aretoday. Advisors will still see that "chaos" is still the new normas the consolidation of advisors and carriers creates larger,scalable, and very competitive entities.

A second scenario is the Senate flipping to Democrat andthe White House remains Republican. Policies that impactbusiness and advisors would be stagnant as the division ofgovernment will turn into a legalistic environment with impeachmentand obstructionist behavior exhibited by all in government.

Another scenario could be that Republicans retain theWhite House and Senate and flip the House ofRepresentatives. The business community would see this asa shift to pro-business environment except is areas where theirbusiness is tied to foreign countries where trade policy would bethe focus – specifically looking to achieve greater fairness andequity in trade. Advisors would be focused on bringing HumanCapital Management solutions to their clients faster as well asinvestments in technology that streamlines information theirclients need to run their businesses.

Another outcome could be Democrats claim a sweep of theSenate and White House to go along with the House ofRepresentatives. The business community would pull backtheir investment and adopt for a wait-and-see attitude. In thisscenario, the policies would not roll back as far as the currentAdministration rolled back the Obama Administration policies givencurrent reports that unemployment, wages and other key economicindicators appear to be trending in a positive direction.

Democrats would be careful not to disrupt the momentum, sinceelections are historically won or loss based on the economy'sperformance and whether the voter better off today than four yearsago. Advisors would remain in a state of chaos waiting to see howFederal Policies affect their business. In this outcome, advisorsshould prepare for an increase in audits and penalties that have –for the most part – been suspended with the currentadministration.

The last possible scenario is the White House flips toDemocrat, joining the House of Representatives while the Senateremains Republican. Domestic policy making and budget andspending will most likely shift to infrastructure and socialprograms while judicial appointments, trade policy, and foreignaffairs will be challenged by the ideological divide. Advisorsshould prepare themselves and their clients for more audits,penalties, and fines. Again, chaos will continue to be theirnormal.

While the focus of this article is on the impact at the federallevel, with the growing confidence of states to implement policiesthat go beyond federal guidelines, the information advisors willneed to know at both a federal and state level will make their jobmuch more challenging. Advisors will need to know labor and wage laws as well as unique benefitlaws in every state where their client has employees. Toeffectively do their jobs, advisors will need additional resources,or be at a competitive disadvantage.

Which scenario is most likely?

There are four "big" factors that will influence theoutcome.

First, and most obvious, is focused on evaluating the currentpresident's performance, the polarizing rhetoric, and the policiescoming out of the Administration. Interestingly, this draws eerilysimilar parallels to Winston Churchill's time as Prime Minister inthe early 1940's.

As World War II was nearing its conclusion between 1944 and1945, the citizens of the United Kingdom grew tired of war andassociated rhetoric and voted Churchill out of office in 1945 infavor of a moderate who was significantly less bombastic and morequiet, thoughtful, and intellectual.

Given history, our current president is vulnerable to lose theelection.

Secondly, if the Democrats put forth a moderate centristcandidate, who has the economic credentials to continue to steerthe economy in a positive direction, it is likely they will win theelection, providing no other significant world event occurs, suchas war, recession, or trade policy that severely damages the U.S.economy. These events have a chance to change the calculus forpredicting an event or outcome.

If the Democratic party puts forth a candidate that ispolarizing, and their platform is built around raising taxeswithout a clear argument as to where the dollars are being investedand how it will impact the citizens then the election will be theRepublicans to lose–-assuming the economy and current tax policyperformance remains unchanged.

The fourth factor that can influence the election is thedeficit. If something is not done to correct its direction, thecountry will be forced to address it within the next five to 10years, or face making very hard choices that other countries likeGreece and Italy are making. The current Administration has notchanged the direction of the deficit and in fact, is compoundingits growth with its tax and trade policies.

What to conclude?

With the president's disapproval rating hovering near70 percent at the time of writing, the general public hasa very unfavorable opinion of the current president. This is a realchallenge to any in this position.

It seems the citizens of the United States prefer a moderateapproach to policy making with long term views driving the outcomesso there is predictability and stability in their lives. Wildswings in policymaking may last one term but, then citizens seem tofind a way to course-correct to the middle so there is a return to"normalcy."

Citizens also want greater civility and discourse in thediscussion around policy development and policy making. Therepresentatives from the extreme edges of both parties may lastshort term but they tend to be voted out in favor of more moderateswho are interested in getting things done.

What does this all mean? Without question, we are in for a verywild rhetorical ride over the next 12 months, and cutting throughall of the white noise and promises, the basic question that themajority of the voters will land on is–is the economy in a positionthat allows me to prosper? Whichever candidate can address thisquestion wins.

A very wise person once said to win or lose an election is based"on the economy, stupid." Now where did we hear that before?

Perry Braun([email protected]) is the executive director ofBenefit Advisors Network (BAN) – an exclusive, national network ofindependent employee benefit brokerage and consultingcompanies. 

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