Finance minister says he will review tax measures

KINGSTON, Jamaica -- Minister of Finance Peter Phillips, while addressing a meeting with a number of trade union leaders Thursday morning, indicated that he will be "conducting a review of the announced revenue measures and will shortly announce if any adjustments will be made". A release from the ... Read more

Columns

Foreign affairs, not domestic policy will define Obama's second term

BY ANDREW HAMMOND

Saturday, January 05, 2013    

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FOLLOWING weeks of partisan bickering, a limited deal that allows the United States to climb back up the 'fiscal cliff' has been belatedly approved by Congress. The manoeuvring follows last-minute, intense negotiations between Vice-President Joe Biden and Mitch McConnell, the top Republican in the US Senate.

The legislative agreement rolls back much of the US tax rises, and delays cutbacks to US government agencies and departments such as the Pentagon, scheduled from this week. It is a partial victory for President Barack Obama, but the tortuous nature of the negotiations has already served an early warning to him. That is, despite his re-election victory in November, political polarisation and gridlock in Washington look set to only intensify during his second term of office.

To be sure, Obama will still achieve some further domestic policy success in the next four years, but the chances of securing a series of major legislative victories are not strong. Republicans (including the sizeable Tea Party caucus), who were so at odds with the president's first-term agenda, maintain their firm grip on the House of Representatives, and hold a sizeable minority in the Senate. Obama's opponents in Congress are keenly aware that his narrower margin of victory in November than in 2008 equates to a more fragile electoral mandate.

The fact that Obama's second term will probably not, from the vantage point of domestic policy, be a highly productive one is not unusual for re-elected incumbents. During their first four years in the White House, presidents usually succeed in enacting several core priorities (in Obama's case, including health care reform, and the 2009 fiscal stimulus bill), while key items that fail to secure a critical mass of support are rarely resurrected.

There are several key reasons why presidents find it difficult to secure legislative approval for significant new measures in second terms. Firstly, the party which controls the White House, as with Democrats now, often hold a weaker position in Congress in second presidential terms. Thus Dwight Eisenhower in 1956, Richard Nixon in 1972, and Bill Clinton in 1996 were all re-elected alongside Congresses where both the House and Senate were controlled by their partisan opponents.

The productiveness of second terms can also be stymied by turnover of senior personnel. For instance, several members of the Cabinet, including Treasury Secretary Tim Geithner, Environmental Protection Agency Administrator Lisa Jackson, and Secretary of State Hillary Clinton have said they are departing. The problem for Obama is that it is not always easy to recruit figures of the same status and calibre as those that leave, and, even when this happens, new staff can take considerable time to hit the ground running, and, where necessary, be confirmed by Congress.

Thirdly, re-elected administrations in recent decades have often been impacted by scandals (although the events that trigger the scandals can happen during first terms). Thus, Watergate ended the Nixon administration in 1974; Iran-Contra badly damaged the Reagan presidency; while the Lewinsky scandal led to Bill Clinton's impeachment in 1998.

It remains to be seen if any major scandals will impact the Obama administration. However, some Republicans in Congress are already pressuring Obama on what they perceive as his team's 'cover-up' of events surrounding the killing of four US citizens in Libya, including the US ambassador, in September.

Even if Obama and his administration escape significant scandal, he will not be able to avoid the 'lame-duck' factor. That is, as presidents cannot seek more than two terms, political focus will inevitably refocus beyond them, particularly after the 2014 congressional elections when the 2016 presidential campaign kicks into gear.

This overall domestic policy context means Obama, like other second term presidents in the post-war era, is likely to increasing turn his focus towards foreign policy. This is especially likely if the US economic recovery builds up pace in coming months.

Foreign policy could become an especially strong point of focus for the president, following the Israeli election on January 22, if Benjamin Netanyahu is re-elected prime minister and ups the ante with Iran on the latter's nuclear programme. A missile strike by Tel Aviv, with or without the support of Washington, is a real possibility. This issue thus has potential to pose major headaches for Obama, and will require skilled statesmanship, especially given his strained relationship with Netanyahu.

The probable emphasis by Obama on foreign policy will be reinforced by a desire to establish a significant legacy. Previous re-elected presidents have often seen international initiatives as key to the legacy they wish to build, including Clinton, who attempted to secure a Palestinian-Israeli peace deal.

Almost two decades later, with a significant breakthrough between the Israelis and Palestinians still log-jammed, other areas of the world are potentially more important to any Obama legacy. In particular, following withdrawal of US troops from Iraq, and the intended drawdown in Afghanistan, the president is continuing his post-9/11 re-orientation of policy towards Asia-Pacific. This was symbolised, within days of his re-election, by his trip to Burma, Cambodia and Thailand.

Key threats on the horizon to securing this re-direction of policy include the possibility of further terrorist attacks on the US homeland from al-QaEda; and a major upsurge of tension in the Middle East, perhaps emanating from Israeli-Iranian conflict, or the implosion of Syria. However, should any of these scenarios arise, it will only reinforce Obama's broader focus on foreign policy in coming years.

Andrew Hammond is an Associate Partner at ReputationInc. He is a former United States Editor at Oxford Analytica, and Special Adviser in the Government of Tony Blair.

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