Wednesday, November 7, 2012
With the national elections over, Republicans now find themselves now having to compromise with President Obama to find a better way to move forward. Republicans now did find out the hard way with the defeat of Romney that in order for this country to move forward that they must cooperate in a bi-partisan fashion or things like the fiscal cliff will become reality. But unfortunately, the hard right wing conservatives will continue to be selfish in their thinking, and not be willing to compromise. even with the idea that in fewer than 60 days for now, arbitrary spending cuts and tax increases will begin to kick in unless the president and the Congress can find a better way to manage debt reduction. If the Bush tax cuts expire, there will be an average tax increase of almost $2,000 for middle-class Americans and possibly raising the unemployment again up above 9%. The stick in the mud here is that the President will extend the tax cuts for the middle class but he will veto any bill that extends the cuts for households with incomes over $250,000. Not passing the tax cuts would be good for the government, as it would bring in some 500 billion in revenues, but bad for the middle class.
So there is really no break for the President, even though he should celebrate that he won re-election. The fiscal cliff now hanging over his head and of Congress needs to take immediate precedence and dealt with swiftly. President Obama needs to continue to try and find a way to get the divided Congress to work together to get things done. House Speaker John Boehner says that he is up to the task to work with the President, but that was his initial statement after the election. When legislation is presented in Congress, he most likely will not work with the President. But he and other Republicans in Congress now realize that Barack Obama is in this for the long haul. Now, the President doesn't have much to loose, and will show his veto power in many instances in the future when needed, and the Congress will now have to step up to get things done. The Republicans now know that trying to defeat Obamacare is a lost cause. Prior to the end of Obama's second term in 2016, Obamacare will be in full force. It will be between now and then for the people to either accept or not accept the plan, and the success will have allot to do if a Democrat will have a chance to win and election in 2016, as President Obama will not be allowed to run again. The President knew ahead of time if he were to win re-election at continuing as President would be no easy task.
The world economy which is very fragile at the moment is highly dependent on how the United States can handle their immediate crisis. Most of Europe is now in a recession, and Japan is also facing their version of a fiscal cliff.
Will the Congress get the tax issue done before the end of the year. They only have 16 more days in session before the end of the year, so they only have that long to get it done. Most likely like other bills passed in a rush, they will pass a law to band-aid the issue instead of creating a long term solution. It is extremely critical for the U.S. to get a tax reduction bill passed, as the markets closed today some 300 points down in the first day after the election, so things need to turn around fast or there may not be any way to come back. Also looming is the idea of the U.S. sovereign rating may drop again from 'AAA' to just 'AA'. It was downgraded the first time when the Congress couldn't come up with answers to address the debt ceiling, now may happen again because of the fiscal cliff issue.
Another issue facing the President is what is considered his greatest foreign policy headache, and that is Iran's nuclear program. Obama stated repeatedly that Iran would not be allowed to obtain or build a nuclear weapon on his watch. Likewise Netanyahu of Israel also pledged that Iran will not have a nuclear weapon on his watch. The United States favors sanctions against Iran that should eventually force the Iranian leadership to come to the table for productive talks on its nuclear program. Also, the current president in Iran, Mahmoud Ahmadinejad is in his final term in office, so an outcome for a future nuclear program is undecided.
Then there are the revolts in Syria, and the United States is expected to take a more muscular approach now since the election is out of the way. Also looming is the military drawdown in Afghanistan, which will be a challenge, but is obtainable.
So there is allot at stake for the President right now, but if Obama can control things on the international front and the Obama administration can reach a deal with the Republican congressional leadership to reduce the federal deficit and head towards a balanced budget, then the U.S. should be well on it's way to prosperity.