The Third Year of the Obama Administration: Facts, Opinions and Discussions

I know we are still in year two until mid-January, but now seems as good a time as any to start talking about the Obama administration's third year. This will be the first year in which President Obama will have to govern with Republicans in control of the House, and he will have to contend with a diminished Democratic majority in the Senate. The night of the 2010 midterms, when analysts saw things going south for the Democrats, predictions of legislative gridlock abounded.

Yet yesterday we saw a major compromise between Republicans and Democrats:

I think this is a terrific compromise in which both parties gave up something for which they had publicly advocated. Obama has made a point of opposing tax cuts for the wealthiest Americans, Republicans in the past have stalled votes on the extension of unemployment benefits. Yet now people without work have an extra year of support while they search, meanwhile the nascent recovery has two years to find firmer footing. It may worsen our long term budget outlook, but not drastically so. Given America's past experience in the 1930s, and what happened to Japan in the 1990s, it is better to err on the side of caution and avoid increasing tax hikes before the recovery has gained steam. Plunging the economy back into recession from a pre-mature tax hike would surely do more damage to the country's long term outlook. Obama and the GOP have wisely compromised here.

This may be telling for the trajectory of his third year. Analysts have doubted whether the administration has the ability to "pivot" from its ambitious reformist agenda to a small-ball, incremental one rooted in the principles of triangulation. Others have questioned whether the president even has the ability to work with Republicans at all, and vice versa. Today's events show that things can still get done.

While today's vote set an encouraging tone, more pitfalls await that could fray ties between the two parties.

How is the START treaty going to fare? Dick Lugar hasn't been effective at rallying other Republicans to support it, and now there is talk that the Tea Party may challenge him in a primary. Other moderate Republican senators are up for re-election in 2012 as well. Are they going to take a hard turn to the right to stave off a Tea Party challenger, like McCain against Hayworth? What is that going to mean for bipartisan solution-seeking?

What about health reform? Repealing it has been a Republican goal since the bill was signed. How is this going to work? I expect this battle to dominate much of Obama's third year.

As the opening poster, I will offer my opinions: the START treaty is going to stagnate in the Senate or be voted down. I just don't see a road to 67 votes, even if it is passed during the lame-duck session. Obama will compromise further with Republicans on ways to "retool" the health care bill. It will still exist a year from now. Perhaps Obama could cut a deal with the Republicans offering promises to rework the health law with them in exchange for passing the START treaty.

What are you all anticipating in year three?

 

The government can't run on continuance bills forever. The new congress is going to have to deal with the budget, and I imagine that will be a difficult process, the sky is more or less the limit as to how contentious it can get.

We may see Republicans chipping away at healthcare reform a bit in the appropriations process and democrats in the Senate caving a bit, but I don't predict large scale repeal.

To me, there's a real possibility that the U.S. will have an unemployment set back in the new year. I don't think seasonal hiring will have brought it back to 9.6%, and I see a consumer deep freeze possible for the first part of the year. 10% unemployment is a real possibility. And I'd hope to see the democrat minority in the house working with Obama on a major jobs initiative, which will be beat back easily by the Republicans, but possibly setting up future problems for them.

For me, the Republican tagline is "We will kill as many jobs as it takes to get Obama out of power." Their biggest hope, and to their credit they actually keep saying this out loud, is to extend America's recession mentality out to 2012. The more Americans suffer in 2011, the bigger their election gains in 2012.

I also believe that bankrupt states are going to come begging in ever increasing numbers in 2011, and Republicans are going to have to decide what to do about whether to let Illinois or New York go belly up. That should be interesting.

 

I agree that eventually the country will need to tackle its deficit problem, and raising taxes is going to have to be part of a serious attempt at doing so, but that day should wait until the economy has strengthened.

As for the November jobs report, The Economist has pondered whether or not a measly gain of 49,000 jobs was the exception rather than the rule:

I am hoping that the October jobs surge of 172,000 was more than just "seasonal employment", but we will have to wait until December to see. A good jobs report in December may mean that we see unemployment fall back towards 9%. Still dismal, but better than 10%. I ca

 

Well at first glance, the tax compromise looks promising. But then it sinks in: who is going to pay for all this? I understand that we have to do what we can to avoid a recession, but at what long term cost?

I'm afraid there might be long term damage done with this and all the spending and bailouts over the last few years.

 

Politically, some commentators have pointed out that Obama has to pick which model to follow after a devastating mid-term election--(1) Clintonian triangulation or (2) Truman's rallying of the base. The Tax deal compromise indicates some triangulation which is going to be necessary--but I'd predict Obama charts his own course on an ad hoc basis. At his press conference today, he announced that ultimately he is guided by the north star of what is good for the American people, for bolstering the economy, and for supporting the Middle Class and lower income Americans. That means he will compromise when necessary to advance their interests and not harm them--and in other instances he will draw the line in the sand and have a more protracted political fight.

-The Debt ceiling is going to be a major issue
-START will pass. Common sense and national security has to eventually trump short-term political score sheets. Kyl is going to have to bow down and hopfully the Lugers will prevail.
-DADT repeal in the lame-duck session? Possible. Gates and Admiral Mullen along with the report have been compelling for just about everyone except McCain.
-The President suggested tax reform and overall budget evaluation as a long-term goal--this is an area where there could be common ground with the Republicans
-Largely, the GOP will not touch Health Care nor would they be able to do much to it
-Foreign Policy successes? Obama could use some. We might see more Commander in Chief and head of state issues on the forefront especially if Republicans hijack the domestic agenda.
-Staff shuffle: Gates, Axelrod out, Gibbs? Plouffe in? Permanent Chief of Staff? If so who?
-SCOTUS Watch: Will there be any vacancies--not likely but you never know.

 

I know this is looking a year ahead, but these pieces are relevant to Obama's third year as well.

Murmurs of Primary Challenge to Obama

Save Obama's Presidency by Challenging Him on the Left


What Now for the Democrats?

Time to Think the Unthinkable: A Democratic Primary Challenge To Obama's Reelection

As if Obama's political problems weren't daunting enough, he may get caught between moving to the left and becoming more confrontational with Republicans to boost his liberal credentials and head off a primary challenge, and working with Republicans to move centrist policy items forward, not that Republicans can even tell a centrist policy item from a liberal one if it is being promoted by Obama.

Obama can't win. He can't win by becoming the most conservative democrat to hold office in our lifetime, and he can't win by taking a confrontational stand with his liberal base. He will need a miracle to win a second term. Either the Republicans have to nominate Sarah Palin, or unemployment has to be trending down toward 7% within 24 months, or maybe both. I'd imagine that if the economy is steadily improving in 2012, Sarah Palin won't be able to win a nomination if she runs. She is, insanely enough, the embodiment of middle class discontent. The problem with the Lyndon Johnson, 1968 template is that it helped put Richard Nixon in office.

 

I was thinking about this as well. That is definitely going to be a huge question for the third year: how are Democrats going to be able to handle Obama navigating a more centrist way forward?

Immediately after the midterms, Politico's Roger Simon floated the idea of Howard Dean challenging Obama in a primary. Howard Dean is a base favorite, with his catchy zinger of a quote, "I represent the Democratic wing of the Democratic party", and his steadfast opposition to George Bush. He has never been close with Obama and is distrusted by most of Obama's top aides. This is despite the fact that Obama's actions to pursue purple states in a general election was Dean's idea in the first place. Thus far, Dean has vehemently denied that he is considering a primary challenge to Obama. If not Dean or Clinton, then who?

Frankly, liberals are going to have to suck it up. They are only fooling themselves if they think they can challenge Obama to a primary and then go on to win the 2012 election with a new nominee. All that is going to do is bring another Republican into the White House, and the thought of the GOP controlling the White House and Congress again will surely give most pause.

Ultimately, though liberals are likely disappointed by Obama making deals and bending over backwards for the GOP, they are too pragmatic to really consider supporting a primary challenger.

Edit Jabba, you can't really compare Palin and Nixon in that sense. Nixon was VP in the Eisenhower administration for eight years and nearly won the presidency in 1960. The popular vote difference was .01%. Sure, he appealed to many Americans in the "silent majority" who had had it with liberal excess, hippies and the Vietnam war - but more importantly, he was seen as a credible alternative. Palin still isn't.

 

What?

Obama's going to win in 2012. All this "miracle" talk is nonsense.

 

I actually agree with most of the liberal discontent with Obama, but a primary challenge is worse than useless.

The main problem as I see it is that he keeps telling us that this was the best deal he could get for the American people, but he didn't fight it out in public which is why everyone thinks he caved. He is too reasonable, the house gave him a perfect opportunity to fight back against the Republicans with them holding up tax cuts for the middle class for tax cuts for millionaires. He really is not able to forcefully advocate his position and when dealing with unreasonable people calm decision making that just tries to do the best you can do just won't cut it.

KW, do you not read election results? This strategy wasn't working out so well before and no reason to think it will work now. If he had made a very public fight and then found a compromise that would be one thing, but he didn't.

 

I'm a simple guy capable of only rudimentary thinking, and I stated my basic formula for the midterms more than a year ago: if unemployment remains high, there will be a Republican landslide at the midterms.

I don't see any reason to change that for 2012. If unemployment remains high and the trends don't look and feel favorable when people go to the polls, Obama will be a one termer. The chances of him being replaced as president by democratic primary challenger are zero. The Republicans have some real opportunities to completely **** it up, but all they basically have to do is nominate a Mitt Romney or someone exactly like him who isn't a Mormon.

 

I disagree. When it comes to tax hikes of any kind, Democrats are extremely vulnerable. Having a prolonged fight about tax cuts, even if its for the wealthy, just adds to the country's perception that Democrats are reckless tax raisers. Letting the Republicans paint him as one, when he was intending on cutting a bargain anyway, doesn't really help his situation. Plus dragging this on for too long would not leave enough time for repealing DADT or forcing through the DREAM act.

You would have been spot on if this was about the stimulus bill. By throwing in tax cuts into the bill early, Obama left himself without a bargaining chip. But in this case, I'm glad he cut a quick deal.

I agree. If your predictions of a second recession or a new Great Depression come true, Obama's goose is cooked. But if we're still seeing growth and a gradually raising employment rate, all bets are off.

 

Since the 1980s, the U.S. economy has been on a collision course with its own growing trade deficits. We built up a massive credit economy and sported the worst savings rates (often negative) in the industrialized world, just to give ourselves a few extra years of illusory wealth.

Our economic future is not viable until we reach something approximating a balance of trade with the rest of the world. Despite desperate pleading from the president and largely successful attempts to engineer a weak dollar, we cannot simply conjure up exports through government decree.

What we can do though is continue to contract domestic consumption until we get reasonably close to a trade surplus. To me high unemployment despite some domestic economic growth is a sign of this process really starting to take root. We will need another recessionary wave to beat down domestic consumption to even lower levels, and high oil and commodity prices will give us what we need. The markets are finding a solution when our politicians lack the courage for a national austerity program like the one being undertaken now in the UK. It may take five years for the U.S. consumer economy to find its real bottom. Obama will be destroyed by this necessary process, as will the next president after him. Our only real job in the world economy right now is to free up resources to satisfy Chinese demand.

The housing and retail sectors are the industries that represent middle class prosperity. You'll find that both these sectors will remain stagnant for years to come. Eventually the culture will change and we'll learn to define our sense of economic well-being through our ability to save rather than our ability to consume, but the path that takes us to that better future is awful. The U.S. is like the Donnor party trying to get to California. For thirty years, we followed some blowhard idiot who pretended to have a better route to where we wanted to go. But in the end, we just got stuck and had to resort to cannibalism.

 

I'd agree there.... if they put forward someone who has credibilitty for having a good fiscal mind, not someone who headlines as a social conservative, then if the economy isn't doing well there's a huge potential there for the Republicans to take the White House.


KW, your gut instinct tactic towards elections doesn't seem to get results, if the midterms are an indication.

 

I think the only way Obama will be defeated is if he's challenged by someone besides the Republican nominee. If he faces a strong primary challenge (not sure who could do this), or if he faces a strong third party or independent in the general election (ex: Bloomberg).

 

There is also the possibility of a third party preventing Obama from winning, but leading to a GOP defeat, although I'm not sure what political angle it would take to do so.

 

It is impossible to predict what will happen because he's still got 2 years left. As important as health care was, it wasn't the most important thing for the country. It was always about the economy, and it was when the private sector was demanding massive bailouts that he should have taken action against their excesses. He's given away all the treats in the candy store and now the children don't have any incentive to take their medicine.

In a way it is too bad Obama won, because if he had lost or the economy tanked just a few months later, then McCain would be the one at fault, the Democrats could have gained supermajorities in Congress.

I don't understand why Congress waited so long to raise the tax on the rich in the first place.

 

Salon published a pretty good article detailing why Obama is unlikely to face a primary challenge on the left. The main thrust of their argument is that most Democrats, the ones who aren't being paid to project false outrage on television, are too pragmatic to challenge him. They are also "endeared" to Obama, much in the same way that most conservatives were endeared to Reagan.

The article also included some pretty interesting statistics:

83% of liberals support Obama
75% of moderate Democrats support Obama
69% of conservative Democrats support Obama

The article also debunks the connection between Obama's tax cut and George H.W. Bush's tax hike, stating that while liberals have accepted Obama as "one of them" despite his dealmaking, most conservatives were lukewarm on Bush from the beginning.

Source: Obama's Silent Majority

 

What's funny(sad) about those stats is that they're completely backwards from the way they should be based on how he's actually governed.

It's really depressing that center-right politics are so easily labeled as "extreme liberalism"...

 

You seem to be a pretty liberal person, JKH. Would you support someone running a primary challenge against Obama?

 

It would have to be someone like Kucinich.

Even then, the pragmatist in me knows how stupid/brainwashed the majority in this country are, and that Kucinich would have probably no chance in the general election.

Then again, if Obama can win despite most people thinking he's as liberal as Kucinich actually is, maybe...nah. The trick this election is that the "first black president" boost won't be there anymore.

Ultimately (and once again), the only real choice will be between:
-Someone who promises some of the right things, but won't really get them done, and
-Someone who promises almost ALL wrong things, and WILL get most of them done.

 

Let me say something. I'm no fan of Barack. I'm also not excited about compromise. I love the sport of politics and the fight for every inch of ground.

But the talk around the country seems to disagree with me. So why can't Barack cut a break? He broke through the partisian gridlock and got a deal. He got what he wanted with unemployment. The Republicans get the tax cuts. Everyone wins...something. Nobody wins everything. Isn't that what the country has been clammering for?

So guys, give the man a break. He showed some guts this week.

 

J-Rod

Agreed. I'm not excited about compromise just for compromise's sake either, but for probably different reasons.

I do think that if DADT isn't repealed, then Obama should issue an executive order to stop all discharges of gays in the military. This notion has been put forth, and I don't know the legal aspect to it, but I think it's time he used all the tools at his disposal to overcome such obstructionism. 57-40 should at least sometimes mean that legislation passes.

 

Agreed, and I doubt there'd even be much public backlash. Something like 67% of Americans support repealing DADT.

 

The Navy, Marines, Army, and Air Force have all expressed reservations about repeal, yet there seems to be no stopping to deal with those issues.

 

Now there's a reliable source: A newspaper owned by an affiliate of the Unification Church. Also, your link is screwed at that.