President Barack Obama will be a vulnerable incumbent in 2012. But he should win re-election.
His accomplishments at home and abroad are enduring, his economic priorities are on the mark, and his poll numbers, while currently weak, can see Obama through to a second term.
Accomplishments. In 2008, Obama said he was running for president because of the “fierce urgency of now.” America was involved in two wars and a financial crisis, and 46 million Americans were without health insurance. Since inauguration, Obama has significantly withdrawn troops from Iraq, responsibly managed the surge in Afghanistan, sensibly intervened in Libya, and killed Osama bin Laden.
The consensus among nonpartisan economic sources is that our economic nadir would have been much worse without the stimulus package. Health care reform will help to achieve near-universal coverage in this decade. Wall Street reform will help to ensure that taxpayers do not bear the losses when big financial institutions fail. Obama has reignited the auto industry, expanded access to college for millions of Americans, and repealed Don’t Ask, Don’t Tell. In his first term, Obama has enacted promised changes in public policy. His supporters will not forget this.
Economic priorities. Our budget problem is currently surpassed by our jobs problem. We should be adding to fiscal stimulus now, when unemployment is high and growth is slowing, and imposing fiscal restraint later, when employment and output are closer to their full potential. Christina Romer, former chair of the Council of Economic Advisers, and other leading economists have argued for just this: short-term spending and long-term deficit reduction.
Yet top Obama political advisors worry that deficit reduction now is "an economic and political imperative." First, deficit reduction is not a short-term economic imperative. Second, if deficit reduction is a short-term political occupation, Obama needs to draw attention to the dangers of fiscal austerity. Obama needs to emphasize that cutting government spending means that fewer dollars will be going into the pockets of ordinary Americans, which will worsen the economy. Obama needs to point out that a focus on short-term deficit reduction at the expense of economic recovery will hurt the country’s chances at improving its long-term fiscal health.
Obama did not make this argument during the debt-ceiling debate because he was outflanked by the Tea Party. But he is beginning to make this argument now. Three weeks ago, he sent to Congress the $447 billion American Jobs Act, which will boost the economy and spur hiring. Americans support the plan. Economists support the plan, predicting a 1-2% GDP increase if the plan passes. Obama will receive credit in 2012 for lowering the unemployment rate. Republicans simply wish to prevent this. Their top political priority, according to Senate Minority Leader Mitch McConnell (R-Ky.), is to deny Obama a second term. And Republican economic plans, which include reducing government spending, ending the payroll-tax holiday, and cutting unemployment benefits, would induce a 1.7% cut to GDP, according to JPMorgan chief U.S. economist Michael Feroli.
Approval ratings. Obama’s current approval rating stands at 41%. The only modern president with a worse approval rating at this point in his presidency was Jimmy Carter. Where does Obama go from here? Let’s consider the last three presidents to win a second term: George W. Bush, Bill Clinton, and Ronald Reagan. In the fall of their respective re-elections: Bush had an approval rating of ~50%; Clinton, ~57%; and Reagan, ~58%. This must be worrying for Team Obama. The good news is that Clinton and Reagan both came in from behind: in August of Year 3, Clinton stood at 46% and Reagan, 43%. The difficult news is that their comebacks resulted from economic expansion. And Obama, with his hands tied by Tea Party Republicans, recently signed into law contractionary economic policy. Now, then, is the time to stop compromising with the most extreme Republicans, whose policies will not lift America out of the jobs crisis. The Tea Party, which is viewed favorably by only 20% of Americans, has injected “chaos” into the public debate, as Speaker John Boehner (R-Ohio) himself has acknowledged. In response, Obama needs to shame them. And, fortunately, he started to do this immediately after the debt-ceiling theatrics. In the weeks ahead, I will look to Obama to continue this and to consolidate his political strength to underwrite continued stimulus and economic recovery, both for the country's and his own sake.
In the end, I do not believe a Republican challenger will unseat Obama. Political gamesmanship has demoralized the American public, which accounts for especially low approval of Washington politicians. (Congress’ disapproval rate is at 88%.) However, Obama has time to communicate the wisdom of his progressive policies and the perniciousness of his political enemies.
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