President Obama and the 112th Congress:

Divided They Stand?

Artemus WardDept. of Political Science Clare Oaks

Northern Illinois University January 26, 2011aeward@niu.edu

2010 Mid-term Elections• The Republicans gained control

of the House in 2010 and gained more seats in the Senate, enough to filibuster any Democratic bill.

• House: Republicans (242), Democrats (193).

• Senate: Democrats (51), Republicans (47), 1 Independent; 1 Independent Democrat.

• Speaker John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY) will have a great deal of leverage with the White House to shape the national agenda during the next two years.

Obama to Press His Centrist Agenda• In his Jan 25, 2011 State of the Union

address, Obama targeted his remarks toward the political center, to independent voters and business owners and executives alienated by the expansion of government and the partisan legislative fights of the past two years.

• With the official unemployment rate above 9%, Obama said: “My No. 1 focus is going to be making sure that we are competitive, and we are creating jobs not just now but well into the future.” For example, he mentioned overhauling the corporate tax code and encouraging exports.

The “New” Obama?

• In his speeches, policy choices and personnel appointments, Obama has signaled that after two years in which his response to the economic crisis and his push for passage of the health care bill defined him to many voters as a big-government liberal, he is seeking to recast himself as a more business-friendly, pragmatic progressive.

• That means emphasizing job creation, deficit reduction and a willingness to compromise in a new period of divided government.

• But it also means a willingness to make the case for spending — or investment, as many in his party would prefer to call it — in areas like education, transportation and technological innovation when it can be justified as essential to the nation’s long-term prosperity.

GOP Response• Republicans have said that they would oppose

any new spending initiatives and press ahead with their plans for budget cuts in every realm of government, including the military.

• “With all due respect to our Democratic friends, any time they want to spend, they call it investment, so I think you will hear the president talk about investing a lot,” Senator Mitch McConnell, the Republican leader, said. “This is not a time to be looking at pumping up government spending in very many areas.”

Budget Deficits

Budget Deficit as % of GDP

National Debt• The National debt is over $14 Trillion:

$14,071,814,402,934.91.• The estimated population of the United States is

309,904,872-- so each citizen's share of this debt is $45,406.87.

• The National Debt has continued to increase an average of$4.17 billion per day since September 28, 2007!

• Is this a problem? Is the solution to pay down the debt, grow the economy, or both?

Biggest Holders of U.S. Debt1. Federal Reserve system of banks and Intragovernmental Holdings: $5.4 trillion.2. Other Investors/Savings Bonds (individuals, government-sponsored

enterprises, brokers and dealers, bank personal trusts, estates, savings bonds, corporate and non-corporate businesses): $1.5 trillion.

3. China: $896 billion.4. Japan: $877 billion.5. Pension Funds (private and local): $706 billion.6. Mutual Funds: $638 billion.7. State and Local Governments: $512 billion.8. United Kingdom: $512 billion.9. Depository Institutions (commercial banks, savings banks, credit unions): $270

billion.10. Insurance Companies (property-casualty/life insurance): $262 billion.11. Oil Exporters (Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait,

Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria): $210 billion.

12. Brazil: $184 billion.13. Caribbean Banking Centers (Bahamas, Bermuda, the Cayman Islands,

Netherlands Antilles, Panama and the British Virgin Islands): $146 billion.14. Hong Kong: $140 billion.*** As of Jan. 2011.

Debt Reduction Commission

• Obama created a bipartisan debt reduction commission and they proposed slashing projected annual deficits through 2020 with deep cuts in domestic and military spending, changes to Social Security and Medicare, and an overhaul of the individual and corporate tax codes to simplify them and to raise additional revenues.

• Obama is unlikely to embrace the recommendations and will instead focus on a middle course of spending “investments” and “responsible” budget cutting.

Other Issues• The expansion of health

insurance coverage remains unpopular with nearly half the country. Though the GOP House has passed a repeal of the law, it is unlikely to pass the Senate.

• Prospects for withdrawing many troops from Afghanistan later this year (July?) remain uncertain at best.

Conclusion• Like Bill Clinton before him, President Obama finds

himself confronting an opposition Congress. And like Clinton he is moving toward the center in order to govern during the last two years of his first term in office.

• Will the Republicans compromise with the President – and perhaps therefore help him win reelection – or will they block his agenda, pass bills that he will veto, and work to make it difficult for him to win a second term?

• Tea Party conservatives, led by Michele Bachmann (R-MN) will undoubtedly make it difficult for the GOP House leadership to compromise with Obama.