08 November 2012

What next, Mr. President?

The President waves to the crowd before his 2012 acceptance speech.

    On Nov. 6, Barack Obama secured a second term as President of the United States of America. While I congratulate Obama on his victory, I must ask: what exactly, Mr. President, will you do in the next four years?
    The focus of Obama’s reelection campaign was the economy, so it is reasonable to assume that he will make strengthening the economy his top priority. The centerpiece of the President’s first-term economic policy was the American Recovery and Reinvestment Act (i.e. the stimulus), which made long-term investments in infrastructure, green energy, education and manufacturing. Obama plans to enact another, smaller stimulus in his second term, named the American Jobs Act, which will cut income and payroll taxes and increase infrastructure and education spending. The rest of his economic plan consists of an overhaul of the tax code and investments in energy. Obama promises to raise the capital gains tax (a tax on investments and stocks held for more than one year that primarily affects the wealthy) from 15 to 20 percent and to raise taxes on the top two tax brackets from 33 and 35 percent to 36 and 39.6 percent, respectively. His tax plan also includes promises to eliminate loopholes and to streamline the tax code for businesses and individuals. The plan specifies to phase out loopholes for those with incomes over $200,000 and to eliminate several loopholes for large companies, although how it plans to streamline the tax code remains unclear. He also aims to create or extend numerous tax credits for individuals and businesses, such as a $3,000 credit per each worker hired for businesses, cut the corporate tax rate, eliminate the current tax credit for outsourcing and extend the Bush tax cuts and other tax cuts and credits for individuals making less than $200,000 per year.

The President’s energy policy in his next term will be similar to his first term’s energy policy. Obama plans to focus primarily on funding alternative energy while also expanding access to cheap hydrocarbons. He aims to raise fuel efficiency requirements for vehicles, set a requirement that all utilities must produce 80 percent of their electricity by 2035, continue funding and supporting the alternative energy industry and increase gas, oil and coal production by opening up some public lands to drilling and encouraging hydraulic fracking (a new, controversial type of natural gas extraction) while insisting on higher environmental safeguards for drilling and fracking.
    For the President, economic policy and fiscal policy dovetail, which is why he has proposed a plan for cutting the deficit. His plan for reducing the deficit centers around an 80-page deficit reduction plan that he drafted in 2011. Obama calls for raising taxes on the wealthy by eliminating the capital gains tax, raising marginal income tax rates and eliminating loopholes for the wealthy. The plan also incorporates spending cuts. Obama plans to cut $257 billion from discretionary spending, primary by cutting subsidies to agriculture and the oil industry. He will also cut $450 billion from the defense budget, try to cut Medicare’s budget by negotiating with pharmaceutical companies to lower drug prices and to levy an additional Social Security tax of 2-4 percent on those with incomes over $200,000 to try to make Social Security solvent, among other things. According to the nonpartisan Congressional Budget Office (CBO), this budget will cut the debt by $2 trillion and increase GDP growth by 0.6 percent, although the President’s opponents point out that his budget adds $4 trillion to the deficit when compared to the CBO’s baseline budget, which includes the expiration of the Bush tax cuts and sequestration (an imminent series of spending cuts). Despite his willingness to cut the deficit, Obama has stated that he will try to prevent the impending “fiscal cliff” (i.e. the impending combination of the expiration of the Bush tax cuts and sequestration), which is projected by the CBO to put the economy back into recession. Like much of Obama’s economic policy, however, his deficit plan is unlikely to pass through the Republican-controlled House.
Indeed, because the Democrats do not control Congress, the only thing that Obama can be guaranteed to do in his second term is to cement the achievements of his first term. Two of his main accomplishments, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), a banking and financial sector reform law and the Affordable Care Act, still have major provisions that need to be implemented. The main achievement of Dodd-Frank was to require regulatory agencies and new committees set up by the law to draft and enact certain regulations of the financial sector. Only one-half of these rules have been drafted however, so Obama will have to fight to get the rest of the regulations drafted. Similarly, most of the important provisions of the Affordable Care Act, including the individual mandate and the ban on gender discrimination by insurance companies, will be enacted in 2014. Since several states are already trying to fight these provisions through both legislation and governor decree, Obama will have to fight, using the courts, personal influence over state governments and possibly legislation, to ensure that the main provisions of healthcare reform get enacted.
On social policy, Obama supports gay rights, gender equality and immigration reform. The most important social policy for Obama is women’s rights, judging by the amount of focus he placed on it in his first term. The President aims to expand free contraceptive access to women, pass the Paycheck Fairness Act, which aims to make it easier for victims of wage discrimination to discover if they are being discriminated against and to seek justice and to try to pass other bills that combat sexual violence and wage discrimination. The President believes that women should be allowed to get abortions, so he will likely oppose potential legislation that restricts access to abortions, both in Congress and at the state level. In terms of gay rights issues, Obama supports legalization of same-sex marriage, although how he plans to achieve this is unclear, as it can only be accomplished by amending the Constitution. He also plans to enact the Employment Non-Discrimination Act (which bans hiring discrimination based on sexual orientation and gender identity) and repeal the Defense of Marriage Act, which defines marriage as between a man and a woman for federal purposes. On the issue of immigration, the President’s platform notes his support for reforming and streamlining the immigration process, although his platform lists no explicit reforms. He is a noted supporter of the DREAM Act, which would provide illegal immigrants who are students or soldiers in America with permanent residency status, and he would probably make trying to pass the DREAM Act his biggest goal as far as immigration is concerned. Since he has described his failure to pass the the DREAM Act as the biggest failure of his first term, it is reasonable to expect that he will make pushing for the DREAM Act one of his top priorities in his second term.
Although Obama fought for all of these issues in his first term, the extent to which he would be able to achieve them in his second term is limited due to both the limited Constitutional role of the President and the fact that the House is controlled by Republicans. The most important way that Obama can influence social policy is through whom he appoints to the Supreme Court. Four justices are in their late 70s and are thus likely to retire. The Court, which is split 5-4, is set to rule on cases concerning the constitutionality of the 1968 Civil Rights Act, the Defense of Marriage Act, the constitutionality of affirmative action and California’s Proposition 8, among other important social issues, so who Obama appoints to the Court will have long-lasting effects on social issues.
The foreign policy of Obama’s second term, like his first term, will be centered on slowly ending the War on Terror while preparing to face other, more long-term threats. Obama’s primary foreign policy challenge in his next term will be to ensure that the 2014 withdrawal from Afghanistan goes well. The success of the withdrawal will be contingent on whether Afghan security forces are able to fight terrorism on their own in 2014 and whether the Afghan government will be able to become functioning, strong and non-corrupt, so the President will likely focus on making these things happen in his second term. Even after the Afghanistan withdrawal, Obama will have to continue to fight terrorism. He will probably continue his policy of drone strikes in Pakistan and Yemen, and will have to manage the backlash and opposition that they generate, although he has offered no specifics.
The President’s primary foreign policy plan is to shift American power away from the Middle East and towards Asia. The centerpiece of this effort will be to continue the “pivot” to Asia, which is the rebalancing of American power (especially military power) towards East Asia and especially China. The President promises to shift 60 percent of our military strength to Asia by 2020, an effort that is already underway, and to attack China’s allegedly unfair trade policies, although he probably will not do so due to the risk of starting a trade war. He also will likely reach out to American allies in East Asia, especially India, and continue to invest in military hardware for South Korea and Japan. Unfortunately, he has offered few specifics on other major foreign policy issues, including Iran, the rise of the BRICs (Brazil, Russia, India and China) and the economic crisis in Europe. Judging from his first-term’s record, Obama will likely try to reach out to Brazil and India, increase sanctions on Iran while continuing both covert military actions against Iran and create efforts to find a diplomatic way to remove Iran’s nuclear weapons and ignore the crisis in Europe.
Barack Obama has a difficult four years ahead of him. He will have to fix the economy, prevent the deficit from spiraling further out of control, protect the rights of minorities and refocus our foreign policy towards long-term threats, all while having to battle strong Republican opposition in Congress. I wish him good luck. He’ll need it.

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