If the Donald loses, GOP still faces a Trump problem

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The GOP presidential primary contest is about to enter crunch time with just two months left until the voting begins with the Iowa caucuses followed a week later by the New Hampshire primary.

We are about to find out if the Donald Trump phenomena is a mirage that will evaporate when things get serious or a lasting movement that could deliver the nomination to the bellicose billionaire. The betting here remains that Trump will not win the nomination and may not even win in Iowa, where he has held the lead for months. But even if Trump goes down, his success thus far will still present a significant problem for the Republican Party.

The latest polling shows Trump still leads in Iowa but with U.S. Sen. Ted Cruz of Texas close on his heels. Nothing Trump has said or done in recent weeks — from clinging to a debunked story about Muslims celebrating in New Jersey after 9/11 to mocking a reporter's handicap to canceling a press conference with black ministers — seems to be hurting him too badly.

But as the negative stories pile up, Trump's hold on Iowa seems less secure. And Cruz has done a very deft job of first cozying up to Trump supporters and then presenting himself as the natural heir to the billionaire's followers, a maverick who has consistently battled the establishment in Washington to champion conservative causes from spending restraint to abortion.

Republican presidential candidate Donald Trump (L) and Ben Carson (C) looks on as U.S. Sen. Ted Cruz (R-TX) speaks during the Republican Presidential Debate sponsored by Fox Business and the Wall Street Journal at the Milwaukee Theatre on November 10, 2015 in Milwaukee, Wisconsin.
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Cruz appears to be gathering momentum at the right time in Iowa and could be positioned to out-organize Trump and get his supporters to caucus locations to cast their votes. Trump has many fervid supporters in the Hawkeye State but it is not at all clear that they will actually show up to caucus for him.

If Trump goes down in Iowa — still a big if — it would represent a massive shift in the dynamics of the race. How will the real estate mogul, who cannot stand even the slightest criticism, deal with an actual loss? Will he lose his cool and go on an epic rant that drives him from the race? Or will he take it in stride and try and recover in New Hampshire?

If Cruz does win Iowa, he will likely emerge as the leading candidate for the conservative, evangelical wing of the GOP. That will leave open the question of who becomes the establishment favorite, the answer to which will begin to emerge in New Hampshire. Marco Rubio remains the favorite for this title and the Florida senator continues to poll second to Trump in the Granite State.

But New Jersey Gov. Chris Christie, fresh off his endorsement from the New Hampshire Union Leader over the Thanksgiving holiday weekend, is getting a little bit of traction as the race shifts to a focus on terrorism after the Paris attacks.

Still, it's a long climb for Christie. Former Florida Gov. Jeb Bush is still hoping for a strong finish in New Hampshire, if not a win, that could put him into a showdown with Rubio in the establishment lane as the race heads to South Carolina and Nevada in late February and then goes national with a dozen Super Tuesday contests on March 1.

The GOP race remains incredibly fluid and could turn into a complex delegate accumulation slog that lasts well into the spring. This could both deplete resources of the eventual GOP nominee — while Hillary Clinton waltzes to the Democratic nomination — and leave the Republican standard-bearer bloodied by rivals' attacks.

This is a scenario the GOP establishment and party leadership would like to avoid. But the only candidate at the moment who appears dominant enough to close things out early — Donald Trump — is the last person the party actually wants to win the nomination. If it comes down to Rubio, Cruz, Christie, Bush and possibly others duking it out, the party will have to just stand by and wait for a winner to emerge.

Democratic U.S. presidential candidate and former Secretary of State Hillary Clinton speaks during the second official 2016 U.S. Democratic presidential candidates debate in Des Moines, Iowa, November 14, 2015.
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Rubio still seems like the most likely winner of the GOP contest. But whoever eventually vanquishes Trump will still have to address the Trump phenomena.

The billionaire has energized a large block of disaffected white voters who feel betrayed by the establishment of both parties and lost in an increasingly globalized economy. But he has also alienated huge swaths of the electorate with his angry rhetoric about immigrants and Muslims.

Whoever gets the GOP nomination will have to figure out how to keep Trump's supporters in the fold and get them out on Election Day to defeat Clinton in key swing states where the Democratic nominee is likely to dominate among women and other key demographic groups.

A menu of supply side tax cuts that deliver huge benefits to the wealthy and big corporations won't do it. It's not clear what will. Even if Trump falls, Republicans will still have a big Trump problem.

—Ben White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.