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Although seats occasionally change parties between elections, the Georgia runoffs are likely to determine partisan control of the Senate for the next two years. To get a sense of how much these elections matter, we posed four “conditional” questions on economic policy to the Superforecasters.
Bottom line up front: The Superforecasters see control of the Senate as having a large impact on the economic policies that the new administration will adopt, especially with respect to the top brackets for the long-term capital gains and corporate income taxes.
We’ll get to the detailed results shortly, after presenting some background on conditional questions.
Conditional questions present alternative scenarios. In this case, the two scenarios are:
Forecasters estimate the probability that a given outcome will occur under each of the possible scenarios. For example, we posed the question “Before 1 January 2023, will legislation creating a ‘public option’ health insurance plan administered by the federal government become law?” and asked the Superforecasters to provide two different estimates of the likelihood that this outcome would occur: one if the Republicans control the Senate and the other if the Democrats regain control of the Senate.
Important to know: The probability estimates for the two scenarios do not have to add to 100%. In effect, each scenario is a stand-alone forecasting question, and the probabilities for each scenario can range from 0 to 100%.
If the Senate passes legislation relating to any of the policies, we will only score the branch of the conditional question that reflects which party was in power at that time. We will “void” (cancel) the other branch because that scenario would no longer apply.
In addition to the public-option question, we asked Superforecasters about three other economic policies:
In each case, the Superforecasters are providing separate probability estimates for the Republican- and Democrat-controlled Senate scenarios.
The Superforecasters see a Democrat-controlled Senate as crucial to the success of the two tax policies and the public option. Even under those “best of circumstances,” as of December 10th, Superforecasters rated all three policies as having lower odds than a coin toss. Raising the top corporate tax rate above 21% is estimated to be the most likely of these policies to be enacted, but the Superforecasters assign only a 46% probability to that outcome under a Democrat-controlled Senate.
In contrast, the Superforecasters see little chance that the US will join either the TPP or the CPTPP before 2023, regardless of who controls the Senate. If anything, they see a Republican-controlled Senate as slightly more likely to bring this outcome to pass.
Put another way, the Superforecasters currently do not expect the Biden administration to get signature economic policy initiatives through the next Congress unless the Democrats win both Georgia runoff elections. Increases to the top corporate tax rate is 46 times more likely if the Democrats control the Senate; increases to the top long-term capital gains tax rate and enactment of a public option for health care are each 11 times more likely if the Democrats win the Georgia runoffs. The stakes are genuinely high. One Superforecaster® stated,
If someone from two years in the future came back to Dec. 2020 and told me these [tax] hikes didn’t happen, my first thought would be that Biden must be a failed president.
Bookmark these questions on our public Superforecasts dashboard to stay current with the latest probability forecasts. If there are other policy forecasts you’d like to see, please contact us to explore ways in which we can make that information available.
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