The Next Four Years

There will be no honeymoon for President Obama as he prepares for his second term. Too many big challenges face him and Congress, and the country is watching closely.

The president and Congressional leaders  have made the right noises about working together to deal with the upcoming “fiscal cliff,” when the Bush tax cuts and other tax reductions expire and automatic spending cuts go into effect. That could mean a $500-billion hit to the economy in January—and a new recession—if it all goes through.

I don’t think it will. As I wrote in a recent column, I think the president and Congress will extend the Bush tax cuts and postpone spending reductions until spring, giving them time to work on a package that also includes, yes, the debt limit. (Talk about déjà vu all over again!)  

Both  sides have more incentive to make a deal this time, but who knows how Tea Party House members might vote? Still, I think there’s an outside chance there could be  a “grand bargain” on taxes and spending, and if there is, it would be a major accomplishment.

The president and his new secretary of state will also have to deal with two big foreign policy issues immediately. The FBI and State Department are both investigating what happened at the US Consulate in Benghazi, Libya, when Ambassador Chris Stevens and three Americans were killed. When their findings are published, it could be a big problem for the Obama administration.

And then there’s Iran. As its economy reels under crippling sanctions, Iran has made some noises about one-on-one diplomacy with the US. I don’t know if that will pan out, but the pressure will to stop the Islamic Republic from moving step by step toward getting a nuclear weapon no matter what else happens.

After the Israeli election next January, I expect Prime Minister Benjamin Netanyahu to push harder for military action, barring a big diplomatic breakthrough. If he decided to attack, I don’t think the US would join in—we haven’t done that in the 64 years of Israel’s existence.

But we would provide ample logistical support and may suffer retaliation from Iran, anyway. So, President Obama could face his first major international crisis early in his second term.

President Obama and his family celebrating his reelection in Chicago. YouTube/ObamaBiden2012.

On the domestic front, look for him to make a big push for immigration reform next year. He almost has to, given the massive support he got from the Hispanic and Asian communities. And with the recent soul searching in the Republican Party, he might be able to peel off enough moderate and retiring Republicans to get it through the Senate. All bets are off, however, in the Tea Party-dominated House. Do we really expect House Republicans to pass immigration reform and a grand bargain in the same term?

Besides that, I don’t see him getting any more major domestic legislative initiatives through Congress, so the president will use executive power to enforce the legislation that’s already passed—for instance, expediting rule making for the Dodd-Frank financial reform, with the goal of squeezing Wall Street without depressing lending to small businesses.

He also will use the Environmental Protection Agency to promulgate stricter measures on carbon emissions—which the Supreme Court blessed in 2007—and squeeze the coal industry. The EPA also will enforce higher mileage standards, which quietly phase in over the next few years.

And then, of course, there’s health care reform, which is now a fact of life and which, again, the administration will focus on implementing properly.

The economy is improving and, barring a sudden crisis in Europe or a bad outcome on the fiscal cliff, things may even pick up as housing recovers. If President Obama can get some immigration reform and strike even a small bargain with the GOP over the budget and taxes, his presidency will be viewed as consequential indeed, whether you agree with him or not.

But he’ll need to reach out to Republicans in a way he hasn’t before—and they will have to reciprocate. It’s a high-risk strategy for both sides. But the rewards would be high, too.

Also Read:  Four Reasons Why Obama Won


By the way, my picks for the presidential and US Senate races were on target, but I underestimated Democratic strength. I predicted President Obama would win with 281 electoral votes; he got more than 300. And I said the Democrats would win 53 Senate seats; they will actually have 55, including independents who caucus with them.


3 Responses to The Next Four Years

  1. Chris November 9, 2012 at 6:21 pm #

    Howard I’m curious as to your thoughts on the leadership of Boehner & Obama on the fiscal cliff & what impact they can have on their respective parties. Obama set the tone on the campaign trail around eliminating the Bush tax cuts for the 250k+ earners but also seemed to be surprisingly candid (although not specific) about the need to overhaul Medicare. Boehner has been almost conciliatory in his post election comments & genuinely seems to want to lead House Republicans back to a more moderate stance. I think Obama ultimately will compromise on the Bush tax cuts (maybe a cap at 1MM?) & use his political capital for the good of the nation to align his party with a pragmatic position but I’m not as convinced that Boehner can pull of the same movement with the Tea Party. Any thoughts?

    • HowardRGold November 11, 2012 at 8:09 pm #

      Chris: This will be the subject of many future posts, I suspect. But right now there are some hopeful signs. The NY Times reported today that Boehner told the GOP caucus to be be prepared to compromise, and he didn\’t get much pushback. And on Fox News Sunday, none other than Bill Kristol said \”it won\’t kill the country to raise taxes on millionaires.\” Here\’s the link:….

      So I think there\’s some chance of a deal–my hope is that both sides learned from their mistakes the last time.


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