Inside Story

By Lesley Russell

This week's midterm elections did not deliver a brand new political world; in fact, the results followed recent trends. President Obama is the third consecutive president to have the Congress change complexion during his term of office, and in twenty-eight of the past forty years at least one house of the Congress has been led by a different party from that of the president. Under such circumstances there are just two courses of political action available to lawmakers: compromise or gridlock.At this point, early in the process, the latter seems inevitable. The Republicans of the 112th Congress will be more right-leaning, and the Democrats will be more left-leaning, and this will keep the Republican leadership and the White House squared off rather than squarely facing the issues together. The added factor is the Tea Party, whose candidates must learn how to make the transition from a protest movement to government. The Tea Partiers have no agreed policy agenda, a distaste for the inevitable compromises of legislating and a wary relationship with the Republicans leaders.

The president has appealed for civility in discourse and a healthy legislative process that will lead to the progress needed on the issues voters care about – jobs and the budget deficit. But getting such legislation through the next Congress will be an uphill battle.

As first orders of business in 2011, Republicans have pledged to slash taxes and spending, cut down on government regulations, repeal portions of President Obama's healthcare law and end his stimulus program. "There's nothing more urgent than stopping the tax hikes, cutting spending and repealing Obamacare," a spokesman for House speaker-elect John Boehner said before the elections. Boehner has made it clear that Republicans are not in the mood for compromising on the repeal of healthcare reform. "We're going to do everything – and I mean everything we can do – to kill it, stop it, slow it down, whatever we can," he told one interviewer.

There is little in the Republican agenda that will help create jobs. Any hard evidence to suggest that extending the Bush tax cuts will contribute to employment growth is sadly lacking. And where will the spending cuts (purportedly the Republicans want to slash US$100 billion right away) come from? The deficit will be hit further as a consequence of the repeal of healthcare reforms and the entrenching of tax cuts for the rich.

This agenda is on a direct collision course with that of the Democrats. They want to encourage the creation of manufacturing jobs using the "Make it in America" legislation, which ends outsourcing, while tackling the deficit, and then move on to immigration and energy reforms.

The gridlock will begin early, in the lame duck session, when the parties will try to reach agreement over extending (and paying for) the Bush tax cuts that are due to expire on 31 December.

Senate Republican leader Mitch McConnell has publicly allowed that he frets over how to control expectations among Tea Party members and their supporters, who will demand that bigger Republican numbers in Congress produce big things without acknowledging how these will be achieved. They want a massive u-turn on federal spending, for example, but refuse to tackle the most costly areas of the budget, including Social Security and Medicare.

The Tea Party members will face their first test as legislators early, and it's not clear how they will respond. The current Congress did not act on the budget appropriations bills, and the Continuing Resolution that keeps the federal government money flowing expires on 3 December. The lame duck session could just kick the CR forward into early 2011, but this will force Congress back into debating spending measures immediately in the new year. That debate will encompass all discretionary spending for the 2011 financial year and all of Obama's proposed 2012 budget and will be a prelude to the federal debt-limit debate next spring.

Ultimately the debt limit is the centre of the fiscal battlefield. The current level of debt, $13.5 trillion, is expected to reach the $14.3 trillion ceiling, passed by Congress in January 2010, in mid 2011. A failure to enact legislation to lift the ceiling could tip the United States into bankruptcy, with international ramifications. It would only take a filibuster from one senator – and Rand Paul looks set to take it on. This could easily lead to a government shutdown, as happened in 1995. The Republicans are rubbing their hands together at this prospect, despite the cost and the impact on federal workers.

The other important area for negotiation is between Congress and the White House. After two years of using the sixty-vote filibuster to stall the Obama agenda, Senate Republicans must now look to securing sixty-seven votes – the number needed to override a presidential veto. While some pundits point to the fact that President Clinton had to deal with the Republicans for the last six years of his presidency, and that he got quite a deal accomplished, times are different now. As the Republicans' McConnell said recently, "The single most important thing we want to achieve is for President Obama to be a one-term president."

McConnell will look to pursue an agenda designed "to give our nominee for president the maximum opportunity to be successful" in 2012. "We need to work smarter than we did [in 1995], and not become the foil off which [President Obama] pivots." The key point here is that the presidential election campaign is already under way, not just for the Republicans but also in the White House.

It's hard to predict where common interests can be found to enable Republicans and Democrats to become partners in governing the nation. There has been a complete absence of serious legislative proposals from Republican leaders to match the serious problems the country faces.

One possible opportunity for comity will arise in the first quarter of 2011 when the National Commission on Fiscal Responsibility and Reform is expected to present its report. The bipartisan commission is charged with identifying policies to balance the budget by 2015 and to achieve fiscal sustainability over the long run, including measures to rein in the growth of entitlement spending and close the gap between projected government revenues and expenditures.

Even if the worst-case scenarios of gridlock and a government shutdown are avoided, America still faces a difficult future, one that threatens its status as a world power. The financial crisis continues to play out on multiple fronts, with slow growth, high unemployment and record foreclosures. The country is engaged in two wars that have cost more than $1.1 trillion to date. The pleas for business certainty relate not just to tax policy and the impact of healthcare reform, but also to energy policy and a broken immigration system. American infrastructure is crumbling, the nation lags in education and innovation, and the underfunding of federal agencies that supervise worker and food safety has led to many unnecessary deaths.

These problems did not arrive overnight and they will not be resolved quickly. Delivering sustainable solutions will require the best efforts of the Congress and the administration and realistic expectations from the people. Together they must search for the common ground and the shared wisdom that will provide these solutions, or run the risk of another backlash from angry, impatient voters in 2012. •

Lesley Russell is a Senior Fellow at the Center for American Progress in Washington DC. She is a Research Associate at both the Menzies Centre for Health Policy and the US Studies Centre at the University of Sydney.