President Obama seems like a near lock for re-election... Or so it would seem given that potential Republican candidates are dropping out of the race quicker than they can say "Reagan".
An often cited reason for Obama's great chances is that first term Presidents for a given party's term (so George H.W. Bush was actually the third term of a Republican administration) almost always win re-election. But is this true? Is another factor helping him?
The best way to understand whether or not Obama is aided by being a first-term President is to model past election results.
Alan Abramowitz's "Time for Change" model attempts to achieve this task. Utilizing second-quarter GDP growth in the Presidential election year, Presidential approval in the second quarter of the election year, and a dummy variable (1 or 0) for whether the party in the White House has completed 1 or more terms, he finds that the term variable is very important.
In fact, President Obama is estimated to garner 4.4% more of the popular vote than he would if his party were in its second term in the White House for a projected percentage between 53-54%.
Abramowitz's model, however, as good as it is at predicting, is not a straight fundamental model. The Presidential approval term can encompass many variables (wartime fatalities for instance) and does not explain the "fundamental" cause of disapproval of the President's job.
To test whether Abramowitz's results on term of the party in the White House hold true in a totally fundamental model, I turn to Douglas Hibbs' well-respected fundamental model based off of 15 elections worth of weighted real disposable income growth per capita (DPI) and fatalities in aggressive foreign wars* over the Presidential term. We find that the addition of the variable for term of the party controlling the Presidency (0 for 1st, 1 for 2nd or later) does have a statistically significant impact (at the 90% confidence interval) on Hibbs' model. Given the current and projected state of DPI for a weighted value of 1.18 (see this post for more on economic projections), Obama is estimated to receive 51.6% of the two-party vote.
If 2012 was the end of the second or later term of a Democratic administration, Obama's estimated vote percentage would be 49.3%. The effect of the term variable seems less than the Abramowitz model, but enough to turn Obama from an underdog to a favorite.
One other factor that some argue is helping Obama's re-election chances is the Republican House. Regardless of the ideology of this Republican House, the center of the American electorate seems to like divided government.
Plugging an ordinal variable (0 for no, 1 for half, 2 for yes) into our reformed Hibbs' model (with term of the President taken into account), we can reestimate our model to test whether or not Congressional control by the President's party adds to our ability to explain past Presidential election results.
It turns out that when President's party controls Congress, it hurts the incumbent's party chance of re-election to the White House. This effect is statistically significant at the 95% confidence level and makes the term variable have a greater affect and is more significant. This new model has an in-dataset margin of error at 95% confidence of 3.3% and explains 92.9% of the past 15 Presidential elections.
Our re-estimated model controlling for Congress projects Obama to win 51.8% of the two-party vote (little different from 51.6% for the model without a variable for Congressional control).
If, however, the Democrats controlled all of Congress (2 for yes) instead of half of it (1), Obama's predicted percentage would drop to a calculated 50.2%. As the table below illustrates, his projected vote would drop to 46.1% if this control of Congress were combined with a second (or later) White House term.
As it is, Obama looks to be a favorite, but his election is not assured even given his term and split control of Congress. The few Republican challengers left in the race have a decent shot of winning and even better chance if the economy does worse than forecasted.
*The variable takes on a value of 0 in 2012 because the war must be started by the current President's party.