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WashingtonWise Investor: Episode 24


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Voting in the Time of COVID

With four months until Election Day, states are facing real challenges to ensure that everyone who wants to vote can, that they can do it safely, and that the process is secure. Are they up to the challenge?

In this episode of WashingtonWise Investor, Mike is joined by Amy Walter, national editor of The Cook Political Report, to discuss how the pandemic is impacting the 2020 election, from socially distanced campaigns to the tremendous efforts by states to institute voting by mail and keep polling places open where possible. They also consider the security of voting by mail, what it could mean for voter turnout, and the big changes to reporting on results—including the possibility that we won’t know the results until days after the election.

Mike also shares updates on the prospects for an end-of-July scramble to pass the next major coronavirus aid bill in Congress, the last-minute extension of the small-business loan program, and the official launch of the U.S.-Mexico-Canada trade agreement.

WashingtonWise Investor is an original podcast from Charles Schwab. If you enjoy the show, please leave a rating or review on Apple Podcasts.

Click to show the transcript

MIKE TOWNSEND: In just under four months, voters across the country will go to the polls to cast ballots in a highly anticipated election. They will make their choices not just for president of the United States, but in 35 Senate races, 435 House races, 11 gubernatorial races, and countless other races for state and local offices.

But many voters, likely tens of millions of voters, won’t actually “go to the polls.” In the face of the ongoing coronavirus pandemic, and the expectation that it will still be with us this fall, more voters than ever before are expected to vote by mail.

The logistics of that are daunting. The very idea of it is controversial. And the ramifications of it—on voters, on candidates, on campaigns, on election officials, on the entire notion of voting in America—are uncertain.

Welcome to WashingtonWise Investor, an original podcast from Charles Schwab. I’m your host, Mike Townsend, and on this show, our goal is to help investors cut through the noise and the nonsense of the nation’s capital and help them figure out what’s really worth paying attention to.

Coming up, I sit down with a very special guest to talk about what voting in November will look like—how it will impact campaigns from the presidential race down to your local town council election and just how much time it is going take to count all the votes.

But first, let's take a look at three other stories making news right now.

This week and next week, Congress is on recess, and lawmakers left town without making much visible progress on the next coronavirus aid package. Leaders from both parties continue to say that there will be another round of aid coming, that it will be significant, and that it will be done before Congress adjourns in early August for the annual August recess.

President Trump has said he wants a bill. Treasury Secretary Steven Mnuchin, who has been the point person for the White House on negotiations throughout the pandemic crisis, has said there will be a deal. Senate Majority Leader Mitch McConnell talked about a bill on July 6, saying, “I think we will do something again. I think the country needs one last boost.” And House Democrats passed the $3 trillion HEROES Act back on May 15—so there’s no question they support another round of aid.

But if actions speak louder than words, then there’s been a deafening silence on the action front. In the Republican-controlled Senate, the HEROES Act has sat untouched for almost two months—there’s no plan to take up that bill. But there’s also been no alternative bill proposed by Senate Republicans yet. Members of the party are still discussing their approach. But there still is not consensus among Republicans about what should be in that bill, and that means negotiations with Democrats have not really even begun. And the clock is ticking.

Congress is not planning to return to Washington until July 20. That will leave just 11 days until a key deadline of July 31. That’s when the enhanced unemployment benefits—an extra $600 per week—that Congress approved as part of the CARES Act back in March are set to expire.

For Democrats, extending those benefits is the highest priority in the next bill—that was one of the cornerstones of the HEROES Act. But many Republicans think the extra money incents people not to return to work if they can earn more via unemployment benefits than they can by going back to their job or taking a new job. Republicans are considering replacing the enhanced benefits with a return-to-work bonus, something that gives additional money to people who return to their jobs.

That is likely to be the most contentious issue in the negotiations, but hardly the only one. Republicans would like to see liability protections for businesses, health care providers, universities, and schools to protect them against lawsuits as long as they have acted in good faith during the process of reopening the country. McConnell said earlier this week that he favored a five-year liability protection proposal. Democrats are highly skeptical.

There’s also the issue of aid to state and local governments—the House-passed HEROES Act had nearly $900 billion for that purpose. While many Senate Republicans have acknowledged the need for aid to states and municipalities, they are unlikely to support that large number.

One place where there seems to be growing consensus is that lower-income Americans could get another round of stimulus checks. But the details on who gets a check and for how much still need to be ironed out.

So will there be a bill? I think it will happen, and I think it gets done before lawmakers leave town in early August. But it’s going to be a crazy road getting there, and the possibility of it all going sideways seems very high. Get ready for a wild couple of weeks at the end of this month.

Second, last week the House passed a $1.5 trillion infrastructure spending bill. The bill includes more than $300 billion for highways, more than $100 billion for public transit, $100 billion for affordable housing, another $100 billion for schools, $100 billion for broadband expansion, $70 billion for clean energy projects, and much more. It would also revive Build America Bonds.

I’ve said before that infrastructure is one of the few issues on which there is widespread consensus—pretty much everyone agrees that we need to spend lots of money on roads and bridges and such. But consensus on a concept is one thing; consensus on a specific legislative proposal is another thing entirely.

The House bill was not a product of consensus—Democrats passed the bill along largely party lines, and as with so many things, it’s a non-starter in the Republican-controlled Senate.

But that doesn’t mean that’s the end of this topic. Expect infrastructure to be back on the agenda in September. That’s because the law authorizing federal spending on highways expires on September 30. Neither side wants to let that lapse, so Congress will need to revisit the issue before the deadline. It won’t be a $1.5 trillion package; in fact, it’s likely to be nothing more than a temporary agreement to extend the expiring law for a couple of months until after the election. But it could lay the groundwork for another stab at a more bipartisan approach to infrastructure spending in 2021.

Finally, last week marked the official launch of the U.S.-Mexico-Canada trade agreement, which replaces the 25-year-old North American Free Trade Agreement, or NAFTA. Mexican President Andrés Manuel López Obrador is in Washington this week for meetings and a celebratory dinner. But Canadian Prime Minister Justin Trudeau declined to join President Trump and President López Obrador at the meeting. Trudeau cited issues at home and the risks of traveling during the pandemic for his decision. But it’s hard not to think that recent White House threats to impose new tariffs on Canadian aluminum played a factor in that decision as well.

Still, the July 1 start of the new trade deal is a significant occasion. While analysts will continue to debate whether the deal will have much impact on the U.S. economy, most experts agree that the modernization of rules that have been on the books since the 1990s will have benefits. Expect the president to talk a lot about the deal during the fall campaign because he sees it as one of the most significant accomplishments of his first term.

With less than four months to go until Election Day, there are a lot of unanswered questions, not just about who will win, but about how the election will unfold in the midst of the uncertainty of the pandemic. To help me explore those challenges on this week’s Deeper Dive, I’m thrilled to be joined by Amy Walter, national editor of The Cook Political Report, a non-partisan newsletter and website that analyzes political campaigns and elections. Amy hosts her own podcast, and the name is easy to remember, Politics with Amy Walter. She’s also a regular contributor to the PBS News Hour and the former political director at ABC News. Amy, thanks so much for joining me.

AMY: You’re welcome, Michael.

MIKE: Well, I’ve been really excited about having you on this show, mostly because you were one of the first people to recognize just how profound the changes to voting in 2020 will be and the ramifications those changes will have on campaigns, on how the media covers the campaign, and on the election itself. The pandemic is going to mean that this fall more Americans will cast their ballots by mail than have ever done so before. So let’s begin with this: What is the state of the states when it comes to voting by mail?

AMY: Well, that’s a very good question, and the answer is it’s a patchwork. Each state has its own rules and bylaws, and those are actually changing, in some cases, by the day or the week. Some can be changed by what the secretary of state decides to do. Some need legislative approval. And so here are some basic things we know, though. Almost all of the states that are going to be the most competitive in this election … so when we talk about battleground states, like Michigan, and Pennsylvania, and Wisconsin, or states in the Southwest, like Arizona, or the South, like Florida and North Carolina … all of those states have no-excuse absentee voting. In other words, you do not have to prove you have some sort of condition, physical or otherwise, or you’re traveling, that prevents you from going to the polls. Only one state in our battleground states still has that rule, and that’s Texas. So it is not enough to tell the registrar, the secretary of state, that you need to vote by mail because you’re worried about COVID. You have to have some other disability, or be a senior citizen, or traveling in order to get an absentee ballot.

What that means is pretty much everybody else in those battleground states has the opportunity to vote by mail. Some states are actually sending out applications to every voter. A place like Michigan is doing that, an absentee ballot application. Some localities are doing this. So for example, in Iowa, the legislature said no, the secretary of state cannot send applications out to every single voter, but localities can. So De Moines can send out applications to everybody, but let’s say, another town decides they don’t want to do that. So really, a lot of this is going to depend where you live, not just which state you live in, but which part of the state you live in.

Finally, there are some states that are used to doing absentee or vote-by-mail at a really high volume. Arizona, California, most of the states west of the Mississippi have been doing basically a hybrid vote-by-mail and regular Election Day voting for years. So they’re pretty comfortable with this. Other states, especially those in the Midwest, like Pennsylvania, and Wisconsin, and Michigan, they don’t have a very long history or relationship with absentee voting. If you live in Pennsylvania, and you’re used to kind of seeing absentee ballots trickle in every election year—versus this year, where they’re going to come flooding in, that is going to put incredible strain on the people and on the process.

MIKE: Well, I want to come back to that counting process in just a minute, but we’ve had some test runs of voting by mail in primaries in some states, and the results have been … I guess you would characterize them as mixed? What have been some of the issues?

AMY: Yeah. Mixed is a very nice way of putting it. I think you’ve had everything from it worked out well—so we’ll put Kentucky in that category. Kentucky was a state, like many others, that had a spring primary scheduled that was delayed until June. Remarkably, I know this seems crazy in this day and age, but the Democratic governor and the Republican legislature and secretary of state worked together to create a program and policies that were implemented quite well. It included absentee, or vote-by-mail, as well as consolidated voting centers.

What we know is it is hard to get a lot of poll workers to come out and staff the polls. Many of these people are older. They’re obviously, and understandably, nervous about sitting in an enclosed space for eight hours helping to hand out ballots. So that meant that a lot of polling places were closed. The way they solved this was to take over a big, like, auditorium—I think it’s where they play college basketball in Louisville and in Lexington—and to basically break it up into multiple polling locations. And that seemed to go very smoothly. There were not long lines. There weren’t people who were standing outside in the heat. And while the actual tabulating of the votes took some time—it took about five days to finalize the Senate primary—there were no complaints about the process.

Now, you compare that to Wisconsin, which was the first state, really, to try to vote during this pandemic, and it was kind of a disaster. The Democratic governor, the Republican legislature were at loggerheads. There were mixed messages going out to voters. You had some voters who tried to vote by mail but never got their ballots. And then, of course, there were those infamous pictures of folks, especially in big cities like Milwaukee, standing outside in the rain with masks on waiting for hours to get into one of just a handful of polling places that were open.

So theoretically, between Wisconsin and Kentucky, folks kind of learned some lessons. Here’s what works. Here’s what doesn’t. Mostly what works is if everybody is singing from the same page.

But I think what you are seeing, overall, are two important things. The first is election night is no longer election night. It can be election nights. It can be election week. It could be election days. But it will take a while for all of the votes to be tabulated. Not just because you have so many that are coming in in the mail that have to be opened and counted, but in many states, the last day to vote, you may need ... it can be on Election Day, as long as it’s postmarked on Election Day. Well, if you live in a rural part of the state and you get that in that mailbox on the day of the election, it still may take some time to actually get it to the place where they’re counting those ballots. And so what we’re seeing in a place like New York, for example, it’s been two weeks since that election happened, and the votes are still being counted.

So to me, what that says is people better be really realistic about this election night in November, that we may not be able to call races for the Senate, for the House, and even the president on election night. That really does change so much of what our modern election process is. Most folks expect that they’re going to sit in front of the television starting at about 7:00 Eastern Time, and you know, usually by midnight or sometimes a little time after that, we have a pretty good idea of what’s going on and who won and who lost. This year, that may not be the case at all.

The second thing that we have learned is just how unprepared the states are for the process of vote-by-mail, just the processing of those ballots. In many states, in most states actually, you can’t start tabulating those ballots until the day of the election. Now, that didn’t matter much when you were gettinglet’s say you get a thousand absentee ballots, you start tabulating those the day of the election. That doesn’t take you very long. But what if you have 200,000, and you have to tabulate those? That’s an entirely different process.

MIKE: Amy, it strikes me that, and you touched on this a little bit, this will take a massive voter education effort just to explain all the different options available to voters, the rules about voting by mail, and you raised this just a moment ago, the timing of when you can vote and when your ballot has to be returned. So who’s responsible for all that voter education, and do you think it will happen?

AMY: I’m hoping it will. You have your secretaries of state that can do this. You have boards of elections. You also could put PSAs together. The governors and the state legislatures could say, “We’re going to spend X amount of money on public service announcements to make sure that people know how and when to vote.”

What is more likely to happen, though, is that the parties themselves are going to be the ones that are responsible for doing this. And they will be sending information out to people they know are their voters, going into different communities and educating them. Again, it’s like another kind of patchwork process.

There was money in that CARES Act that went to the states to help with voting during the pandemic. I’ve talked to some Secretaries of state and listened to some interviews with them. And they’ve used a lot of that money already just to get through their primaries. So I don’t know how much of it they actually have left over for things like educating voters. So a lot of this is going to have to come really through the parties and through the candidates and those campaigns.

MIKE: What impact do you think all of this will have on turnout? I mean, in some ways, you know, it may be easier or more convenient to vote at your kitchen table at the time that’s most convenient for you than it is to get to your polling place, but on the other hand, we’ve been hearing mixed messages about whether voting by mail is more susceptible to fraud or even ballots just getting lost in the mail and never being counted. So how can you make accurate projections about turnout?

AMY: Right. I mean, it’s a really good question, and it is something that the campaigns are thinking a lot about, even just in modeling what the electorate is going to look like. I think we are going to have just record turnout. We saw record turnout in 2018. Now, a pandemic certainly adds a big wrench into this.

To me, it’s a question of, you know, how much of that vote will be coming before Election Day versus the day of the election. But I think if you are a campaign and you’re processing through this, the first thing you’ve got to make sure to do is that the voters that you know are your voters, your sort of loyal, committed base voters, that they are already set up with vote-by-mail, and you get those in the bank, so to speak.

MIKE: Amy, let me follow up on that because I think this is something I’ve been thinking a lot about, which is the impact this is going to have on candidates and how they run campaigns. I mean, when you think of a traditional campaign, certainly at the presidential level, you think of big rallies, you think of candidates, you know, taking those stops at a diner to talk to voters, you know, barnstorming the country, hitting multiple cities, multiple states a day, and then at the local level you think of candidates knocking on doors and handing out fliers at subway stations. And all of that seems very unlikely now, or at least very difficult. The other thing I’ve been thinking about is that sometimes news comes out at the very end of a campaign that could sway last-minute voters. You know, if you voted a month ahead of Election Day, you can’t change your mind. And we actually saw this play out in the Kentucky Democratic Senate primary last month, where the late momentum of a candidate wasn’t enough to overcome the advantage of a candidate whose supporters voted … or more of her supporters voted early. So when you think about how this is going to affect candidates and campaigns, and how they behave this fall, what do you think are the implications?

AMY: Yeah, it’s a really good point, and I’m glad you brought up Kentucky, because that was a real life example of, you know, what happens when a candidate gets momentum in the last 10 days, but when 80% of the vote comes in by mail, well, you know what, that 20%, even if you’re crushing it among that 20%, just isn’t enough to win an election.

So as you’re planning your campaign, you have to be budgeting for a campaign that is reaching voters earlier in the year. You can’t afford to wait for the last two weeks of October to really drive home your message.

And this is, I think, even more important if you’re a down-ballot candidate. Look, the presidential campaigns, they have billions of dollars, the media is covering them every minute of the day. They aren’t going to lack for attention. It’s if you’re a congressional candidate, even a state legislative candidate or a senate candidate, who’s not getting a ton of attention right now, you don’t have as much money as the presidential candidates, you’re trying to break through, and you are trying to figure out how to budget your very limited budget. Do you go on in and think, “Well, man, 75% of the people voted early in the primary. So I’m going to guess 75% of the people are going to vote early in the general election. They start getting their ballots October 5. All right, let’s move up our media schedule. Let’s make sure that we’re on TV early on. Even if it means that we might not have enough money to stay on TV through the end of October.” These are the kinds of decisions you’re going to have to make as a candidate.

MIKE: Well, Amy, you’ve given us a ton to think about here. Let’s wrap up this way. I guess my question is, will this work? How worried are you about the system melting down? You know, you touched on the possibility of not knowing who won races for days or even weeks. But what if the winner of a various race is in dispute, whether it’s a presidency, or a senate race, or a congressional race, even a local race, are we going to be litigating election 2020 for months?

AMY: Yes. So I think we have to be prepared for that. We’re litigating it right now. I mean, there are multiple cases now in multiple states being litigated just about how and when people can vote. And hopefully, those will be decided before Election Day, but they could still go on post-election and continue to have appeals through that.

My advice would be to these secretaries of state, especially, to be as public and as transparent as possible. I’ve interviewed a number of them, and they are doing that to the best of their ability, to say, “Here’s what we’re doing. Here’s how we do it.” Their websites are very helpful. “Here’s how you get a ballot.” “Here’s what you need to know.” “Here’s what you need to put in to, you know, get your ... these are all the rules for getting your ballot and getting it in on time,” etc. They’ve been very good at that. But to be as transparent as they possibly can about how this process is going to work and how long it may take.

I do believe that at the end of the day, the folks who are conducting these elections are doing the absolute best that they can, and to give them that benefit of the doubt as they are processing them. Each side is going to be very lawyered-up, and they will have their lawyers sitting in when these absentee ballots are counted. And if there are any discrepancies, they will be sitting there to work through those. But this is going to look like a very, very different election night than those of us who have been doing this for a long time are used to watching.

MIKE: Well, Amy, this has been a fascinating discussion. I’m really so grateful for your time today. Thanks very much for joining me.

AMY: You’re really welcome. Thanks for having me.

MIKE: That’s Amy Walter, national editor of the non-partisan Cook Political Report.

In my Why It Matters segment, I like to take a look at a story you might have missed and tell you why I think it’s important that investors keep an eye on it. Over the last couple of months, staff and members of the House Judiciary Committee have been trying to get the CEOs of the nation’s largest tech companies to testify at a public hearing as part of the committee’s investigation into anti-trust and competition issues in the so-called “big tech” space.

Last week, the committee announced that it will happen. And it’s going to be a blockbuster. Four CEOs will testify: Jeff Bezos, of Amazon; Tim Cook, of Apple; Mark Zuckerberg, of Facebook; and Sundar Pichai, of Google. All four will testify at a hearing scheduled for July 27. It’s not clear whether the CEOs will testify remotely or whether they will testify from within the Judiciary Committee’s hearing room.

But this is a big deal. Not only is the first time all four CEOs of these tech giants will be testifying together, but Amazon founder Jeff Bezos has never appeared before Congress.

Ostensibly, the focus of the hearing is on the anti-trust and competition issues—a capstone to the year-long investigation by the committee that is expected to yield legislative and regulatory proposals to address some of the issues. But expect it to be a free-for-all in terms of the topics that will be raised by lawmakers on the committee. These are some 40 members from both parties on the committee, many of whom will undoubtedly be looking to ask tough questions in the hopes of landing that viral moment.

For investors, this is one that will be worth watching. The committee can’t hand down any fines or enforcement actions—that’s the job of regulatory agencies, several of which have ongoing investigations of the big tech companies themselves—but it will provide a window into the thinking of members of Congress about whether attempts to change laws will be made to rein in these companies.

Finally, just a quick reminder: Tax Day is next week. While there had been rumors, stoked by the Treasury secretary himself, that a further extension of the July 15 tax deadline to September or October could happen, it’s not happening. The IRS announced last week that tax filings and payments will be due on July 15. So get your tax forms in by then. If you need more time to file, you can still file for an extension. See the IRS website for details on how to do that.

Well, that’s all for this episode of WashingtonWise Investor. We’ll be back with a new episode in two weeks.

Please take a moment to subscribe so you don’t miss an episode. And if you like what you’ve heard, leave us a rating or a review on Apple Podcasts or your favorite listening app—those ratings and reviews really do matter.

For important disclosures, see the show notes or, where you can also find a transcript.

I’m Mike Townsend, and this has been WashingtonWise Investor. Wherever you are, stay safe, stay healthy, and keep investing wisely.

Important Disclosures

Amy Walter is not affiliated with or an employee of Schwab. The comments, views, and opinions expressed in this podcast are those of the guest speaker and do not necessarily represent the views of Schwab.

The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Investing involves risk including loss of principal.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

This information does not constitute and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager.

All corporate names mentioned are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, geopolitical risk, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.


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