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First glance

From Elizabeth Wilner, Mark Murray, Huma Zaidi, and Jennifer Colby.
Eighteen days out... As Republican leaders welcomed a 12,000+ Dow, it occurred to us that the upcoming midterms could mark the fourth consecutive election in which the economy isn't the predominant factor.  In 2000, despite having overseen perhaps the greatest economic expansion in US history, the party occupying the White House lost it.  The elections during George W. Bush's presidency have centered on national and homeland security: In 2002, during a recession and other economic problems caused by the September 11 attacks, Bush's party gained seats, and in 2004, Bush won re-election despite the fact that there was no real net job creation during his first term in office. 

In 2006, if Democrats sweep Republicans from power in one or both chambers of Congress, it will happen at a time when the Dow is near or at a record high; when gas prices have dropped; and when the unemployment rate is a fairly low 4.6%.  CNBC's Patti Domm advises that the next milestone is the intraday high of 12,049. 

The prevailing issue of national security worked in the GOP's favor in the two previous elections.  But a series of negative developments -- the National Intelligence Estimate, the Woodward book, escalating violence against US troops, and now the Caldwell comments (below) -- have focused that debate not on the broader war against terrorism as the party would prefer, but on the unpopular conflict in Iraq.  And the Iraq war has consistently beaten "jobs and the economy" as voters' top issue in recent NBC/Wall Street Journal surveys.

Bush and Republicans are doing their best to turn voters' focus away from events abroad and onto recent positive developments in the economy, including the Dow, the price of gas, and Bush's success in halving the deficit -- based on inflated projections -- ahead of a schedule.  These efforts may have reaped some success.  Amid mostly ominous results for the GOP in the latest NBC/Wall Street Journal poll is one positive note for Bush: a three-point uptick in his job approval rating on handling the economy. 

But as one NBC/Journal pollster, Bill McInturff (R), said of our latest survey, "Americans sometimes don't pause to give you credit.  They move on to what they're concerned about."  Another reason why the GOP's efforts may find only limited success is because many Americans continue to base their views of the economy not on the Dow, but on wages that aren't keeping up with inflation, on the cost of health care, and/or on the value of their homes -- indicators that aren't faring as well these days.

So Republicans are reinforcing their platform of favorable stats with efforts to draw contrasts with Democrats on taxes, making the Bush tax cuts, and key Democrats' opposition to extending them, a primary talking point of these final weeks of the cycle.  House Majority Leader John Boehner recently fired off a press release noting, "Dem tax hikes dangerous for American families and the US economy."  And, in what seems like a pretty big stretch, they're also trying to create an issue by accusing House Minority Leader (and possible incoming Speaker) Nancy Pelosi of having a secret plan to raise gas prices. 

As NBC's Mike Viqueira points out, that was a question posed by Speaker Dennis Hastert in a press release yesterday: "...Democrat (sic) Leader Nancy Pelosi voted for higher gas taxes at least five times.  Does Democrat Leader Nancy Pelosi have a secret plan to raise gas prices on hardworking American families should Democrats take the majority?"  The release, which cites five previous Pelosi votes, is part of the new Republican PR campaign in which House GOP leaders are citing a litany of what they consider to be all the horrors that will perpetrated under a Pelosi-run House. 

Bush today headlines a luncheon fundraiser for his party's Senate campaign committee at a hotel in Washington.  He also has another domestic policy event, a roundtable on his Medicare prescription-drug law, and an event with representatives of groups that support the troops in Iraq and Afghanistan.

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