America will become inward-looking

04.11.10 Publication:

So America´s mid-term Congressional elections have, as expected, brought a dramatic defeat for the Democratic Party in general and Barack Obama in particular, with the Republicans taking majority control in the House of Representatives, narrowing the Democrats´ supremacy in the Senate, and sweeping to power in a wide range of state governorships. But what has really changed? The genius of the American constitution, as designed by the Founding Fathers more than two centuries ago, ensures that the immediate answer is: very little. The longer-term answer could, however, be different—depending on how well President Obama reacts to this setback.

Very little will change immediately because the whole American democratic system is designed to prevent dramatic change, through the checks and balances between the Congress, the White House and the judiciary. If the new Republican majority in the House chooses to try to abolish what they see as Obama´s most controversial policy, his health-care reform, then Obama can simply veto the bill. Moreover, for most of this year, ever since health-care was passed and since the financial-regulatory reform bill was also agreed, the White House´s domestic agenda has anyway been stalled. It had no chance of getting major legislation through Congress. So, again, little has changed.

A situation in which one party holds the presidency and the other leads in Congress is anyway the normal state of affairs in US politics. It was true for six years of Ronald Reagan´s term in the 1980s, for six years of Bill Clinton in the 1990s, and for the four final years of George W. Bush. Single-party control is the exception, not the rule.

What President Obama will now have to do is to find a way to work with the Republican-dominated Congress, while seeking to ensure that the Republicans´ come to share responsibility, in the public´s eyes, for any difficulties in governing and, especially, for continued weakness in the economy. The Republicans will probably prefer to be confrontational, especially those (a minority, but a vocal one) who have come to power with support from the highly conservative, some would say fundamentalist, Tea Party movement.

Yet the principal topic on their joint agenda will make this hard: the budget deficit. Most of the arguments will be about which spending to cut, and where the tax burden should fall. The White House´s aim, presumably, will be to make the Republicans look as if they are obstructing the very thing that they, and the Tea Party, supposedly stand for: smaller government, and especially a diminishing deficit. The aim will be to make them look like hypocrites.

This is where health-care will come in. The establishment of universal health-care coverage is President Obama´s proudest achievement, and yet also one for which he is most unpopular. The Republicans will try to blame the budget deficit on his health-care plan, in the hope of making this one of the principal issues in the 2012 presidential election. His task, the one on which he has so far failed, will be to convince a majority of the American public that the health-care plan is not only fair and right, but also affordable.

The battle for 2012 has, in effect, begun today. Budding Republican candidates will be calculating the significance of the mid-term results for their own prospects. Sarah Palin, heroine of the Tea Party and now a TV celebrity, will be calculating about how long to keep on denying that she will be a candidate, in order to maintain her TV career but also to keep on cultivating the image of the outsider. But also, the battle for the long-term preservation of Obama´s health-care reform has begun today, too.

The president´s veto power ensures that it will survive another two years, and be unaffected by the change in Congress. But the reason why yesterday´s results could have a bigger impact in the longer term is that it would be unlikely to survive a Republican victory in 2012. Then, alongside a repeal of health-care would come a wider programme to cut back the size and cost of the federal government.

President Obama has said in the past that it would be better to be a one-term president who achieved great things than a two-term failure. But the truth is that he needs two terms if he is to preserve his achievements. His advisors today will be trying to draw up for him a series of objectives and benchmarks over the next 12 months that he will need to meet if he is to be re-elected.

One of those, as already stated, is to change the opinion-poll ratings for health-care. More important, however, is a decline in unemployment, with some associated credit for the decline going to the White House. America´s economy is growing currently at 2% per year, a rate that would be considered healthy in Europe but which is too slow to reduce unemployment in the US because that country´s population and labour force are both growing. Third on the agenda will be some sort of credible resolution of the situations in Afghanistan and Iraq, so that he can say that America is again on the right track in foreign policy, and no longer sending its sons and daughters to die abroad.

The environment, once a great hope of the Obama administration, can be forgotten, for the time being. Protectionism, always a big fear when American unemployment is high, is going to be a growing danger, especially if China refuses to revalue its currency. Most of all, though, from an international point of view, America will be in a sort of limbo between now and 2012: preoccupied with its internal battles, deeply reluctant to take initiatives abroad—unless events force it to.