January 21, 2013
With everything he needs to accomplish in the next four years, President Obama could use the deft touch of a magician.
Stuck with a resistant GOP House majority, the two-term Democrat must basically pull a rabbit out of a hat on the budget. Then do it again with the debt ceiling. And again with immigration. And again with gun control.
The president takes his public second oath of office on Monday with an intimidating host of items to address. Besides the urgent need to hash-out a deal with Congress that reduces spending and raises the $16.4 trillion debt ceiling for longer than a couple of months, Obama still has to end a war in Afghanistan, implement a health care law that reshapes one-fifth of the economy, and complete an overhaul of Wall Street regulation.
“It is going to be hard to make progress on all these topics,” said Darrell West, director of governance studies at the Brookings Institution. “Most presidents are successful on a handful of issues and are not able to do much on everything else.”
Princeton University historian Julian Zelizer noted that most presidents have a full plate after their first four years. For example, Franklin D. Roosevelt still had to pull the nation of the Great Depression, launch Social Security, and keep a suspicious eye on the violent rumblings in Europe. His third term wasn’t any easier with World War II.
“The successful ones figure out where to take a bite and what to leave on the plate,” Zelizer told The Fiscal Times.
Here are the big choices on Obama’s To-Do List:
* Deficit – Before he can do anything, Obama has to ensure the government is financed. Not that easy.
The government hit its $16.4 trillion borrowing authority at the end of last year. House Republicans proposed increasing the debt ceiling for three months, saying the Democratic Senate must in turn pass a budget with substantial spending cuts. Unless Obama gets a longer budgetary leash, his agenda can’t roam too far.
What Republicans seek are measures to curb spending growth in entitlement programs such as Medicare, which is a driver of the government’s national debt. The budget deficit is projected to be just shy of the $1 trillion mark—for the first time in four years—but getting debt stabilized requires Obama to weigh substantial cuts to the social programs that Democrats have vowed to protect.
The president’s 2013 budget proposal relied on spending reductions and tax hikes to tame the national debt. But even then, publicly-held debt as a percentage of Gross Domestic Product would go from 74.2 percent last year to 76.5 percent in 2022.
* Immigration – The White House plans to revamp immigration policies, so that roughly 11 million undocumented immigrants have a pathway to legal residence. With support for Latino voters becoming a must-have in order to win national elections, there appears to be a hunger for reforms in this area with work being done by a group of 8 senators and policies also getting floated by Sen. Marco Rubio, R-Fl.
* Gun Control – Obama took 23 executive actions last week to curb gun violence in response to the December massacre at a Connecticut elementary school. He also proposed a $500 million package that includes criminal background checks for gun sales, limiting ammunition magazines to 10 rounds, renewing the assault weapons ban that lapsed in 2004.
His $500 million proposal needs to get through the legislative branch—and that’s uncertain. The National Rifle Association already unleashed a torrent of criticism, including a nasty ad attacking Obama and using his two daughters who receive Secret Service protection. Senate Majority Leader Harry Reid, D-Nev., offered lukewarm support in a statement saying that he is “committed to ensuring that the Senate will consider legislation that addresses gun violence.”
* Afghanistan – It’s easy to forget that Obama plans to wrap-up the longest war in U.S. history by 2014. U.S. troops are supposed to shift into a supporting mission this spring in Afghanistan, with the country’s own forces—trained and equipped at taxpayer expense—taking the lead. U.S. troops will then start returning in a drawdown that will continue through the end of next year.
“This war will come to a responsible end,” Obama said this month at a White House press briefing with Afghan President Hamid Karzai. “Responsible” might be too tough a bar to reach in Afghanistan. Riddled with corruption, Karzai’s government still needs to fend off a dangerous Taliban insurgency as Americans depart. And the Afghan military seems out of control, having killed more than 60 troops last year—about a fifth of all fatalities—in the U.S.-led coalition.
* Fannie Mae and Freddie Mac – The government took control of these two troubled mortgage industry giants in September, 2008. More than four years later, no end is in sight as taxpayers devoted $187.5 billion to keep these companies afloat. The Treasury Department released a white paper on potential options in February, 2011. But the fate of these two companies and the government’s role in securing mortgages is still unknown.
* ObamaCare – The Supreme Court cleared the Affordable Care Act for duty. Now Obama’s legacy of moving the country toward mandatory health care builds steam.
New payroll taxes started this year on incomes above $200,000. The religious organization exemption on providing contraception stops in August. And in 2014, the government starts charging a tax penalty on people without acceptable health insurance, while states establish health insurance exchanges to provide subsidized coverage. The changes continue through 2020.
All told, it’s a massive rehab that affects about 18 percent of GDP.
* Dodd-Frank – Obama signed Dodd-Frank into law back in 2010, but Wall Street reform isn’t close to being done yet. Federal regulators are still writing most of the 398 new rules stemming from the law. Just 95 of them—less than 25 percent—have been finalized so far, according to a report card this month by the law firm Davis Polk & Wardwell.
SEC Commissioner David Gallagher declared in a Wednesday speech that there is “no end in sight” to wrapping up the controversial Volcker Rule, which curbs the ability of banks to trade for their own accounts. Gallagher said that agency officials are just “spinning their wheels.”
* Energy – Remember the Keystone XL oil pipeline? After blocking the $7 billion project last year, Obama again faces a choice on a new route. The president has repeatedly pledged to end our dependence on foreign oil, while pursuing an “all of the above” strategy that promotes renewable wind and solar energy designed to reduce the country’s carbon footprint.
But at the same time, Obama will also need to choose on whether to ride the oil and natural gas boom made possible by fracking. Interior Department regulations for fracking, technically known as hydraulic fracturing, on public lands are expected to be finalized this year.
*Jobs -- And oh, bring down unemployment too.
Obama doesn't have any specifics on job creation other than stimulus measures the GOP already rejected. That might change, but for the moment there isn't much new there.