November 7, 2012
I've been offline for a couple of days in Victor Harbor due to the storm that swept through South Australia. I've just started catching up with the US presidential election since my return to Adelaide. It looks as if the Democrats will hold, and maybe even, increase their majority in the Senate.
According to the pundits and the media the presidential contest is tight. Despite being ahead in the popular vote, the door is closing on Romney in the Electoral College votes with Obama winning in Wisconsin, Pennsylvania and Michigan. Obama's firewall in the Midwest holds up as the rustbelt strategy is working.
Romney's path to victory is narrowing since to win the presidency he has to take all four of Ohio, Florida, Virginia and North Carolina. Then on top of that he needs one further smaller state to take him over the top and there's only three of those left in the pot: Colorado, Iowa and Nevada. There are not a lot of options for Romney if he doesn't win Ohio. Is there another path for Romney.
Fox News is becoming a little glum. In their eyes traditional White America is threatened by nonwhites-- ie., blacks and Hispanics--and Republicans are seeing their electoral map narrow rather than widen. The problem for the Republicans is that their base is shrinking and they struggle to appeal to a broader cross-section of the electorate? How do they do that? They cannot just slag off Obama as Fox News does.
The House of Representatives looks to remain Republican, and so power in Washington looks again likely to be shared between the parties. America remains a sharply divided society and there will be further confrontation, impasse and political dysfunction in Washington.
On December 31, the Bush tax cuts are due to expire and automatic spending cuts are due to begin, as a result of the Congressional deadlock over raising the debt ceiling. These will create problems for an Obama presidency, as President Obama has threatened to veto any legislation that extends the Bush tax cuts for the wealthy. Republicans want to cut spending and avoid raising taxes, while Democrats are looking for a combination of spending cuts and tax increases.
In dealing with the fiscal cliff, U.S. lawmakers have a choice among three options, none of which are particularly attractive:
They can let the current policy scheduled for the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession – go into effect. The plus side: the deficit, as a percentage of GDP, would be cut in half.
They can cancel some or all of the scheduled tax increases and spending cuts, which would add to the deficit and increase the odds that the United States could face a crisis similar to that which is occurring in Europe. The flip side of this, of course, is that the United States' debt will continue to grow.
They could take a middle course, opting for an approach that would address the budget issues to a limited extent, but that would have a more modest impact on growth.
Obama is projected by the networks to win Ohio and so regain the Presidency. The three rustbelt states of the Midwestern firewall (Iowa, Ohio and Wisconsin) held. Was it due to the white working class voters, particularly women being won over by the auto industry rescue? Most blue-collar whites vote Republican while most minorities and affluent suburban whites go with Democrats.
Romney's strategy assumed that the low growth economy with high unemployment would automatically turn voters against the president fell short and that they would vote for the low tax/small government option. No doubt many Republicans will say they would have won with a more conservative candidate. Their future is to go more conservative, even though their social conservatism around women's reproductive health care would have caused many women to vote for Obama.
President Obama won easily. The Senate barely budges. The House stays about the same. It's the status quo. The health care reform--The Affordable Care Act---will remain.