Second Term Priorities: Fiscal Cliff, Climate Change, Immigration, and Foreign Policy

Obama returns to the White House on election night. Joshua Roberts / Getty Images-pool

OK—that was a historic win and a great night for Barack Obama and the Democrats. Now the clock starts—indeed, it started Wednesday—on the president’s second term. By tradition, he has until the next midterm elections, about 720 days away, to pass or at least launch the major initiatives that will define both his second four years and his legacy. What should they be?

Here are four issues Obama must or should focus on before the drowsy lame-duckery that inevitably begins to overtake a two-term president’s final two years starts to set in—and before a restive House GOP gins up some shaky grounds for an impeachment proceeding, which is always a possibility with today’s Republican Party, and which could occupy Obama’s final two years as it did Bill Clinton’s.

The looming fiscal cliff; climate change; immigration; and foreign policy. Throw in, although it won’t be exactly a new thing, overseeing the implementation and fine-tuning of the health-care law.
That’s a Caretaker Thing, albeit a vital one; the other four are all Big Things. The odds of Obama notching accomplishments in  all of these areas may be fairly long. But this is the time to think, and aim, big. Here’s a quick rundown of each of the four, with a look at some of the key players Obama needs to try to win over to get his deals.

#1. Fiscal Cliff

You should know the basics by now: as the New Year dawns, two things will happen. First, the Bush tax rates will expire, and the old Clinton-era rates—higher for everyone, but especially at the top end of the scale—will kick in. Second, the deep spending cuts agreed to by Congress last year as part of the debt-ceiling deal will kick in.

No one wants either of these things to happen, but of course this is Washington, so the desire means nothing. The Beltway’s leading beard-scratchers are desperate for Obama and Congress to show America that our government actually can work and reach a “grand bargain” that would include: some tax increases (Republicans giving ground), some reining in of entitlement spending (Democrats doing the same), and budget sanity that would avoid the draconian cuts agreed to last year. Any chance of it?

The most likely outcome—surprise—is that they’ll pass something to delay the tax increases and the cuts for a few months or a year, when they’ll take it all up again. But Obama, on the strength of his larger-than-expected win, will want to aim big. The details are endless and complex, but in broad strokes, this means two things.

First, he’ll have to get some Republicans to agree to a tax increase. But consider this: no Republican in Congress—House or Senate; not one!—has voted for a tax increase of any kind since the 1990 deal under which George H.W. Bush broke his “read my lips” pledge and raised taxes. And Speaker John Boehner has already said no to higher tax rates. But he signaled some flexibility, and Obama does have a little bit of leverage over House Republicans, who don’t want to see deep Pentagon cuts. So that could be grounds for a deal.

Second, he’ll have to get many reluctant Democrats to sign on to some compromises he’ll probably be willing to make, but to which they’ll be very resistant. Example: gradually increasing the eligibility age for Medicare to 67 over the next 15 or so years. To liberals, that’s a benefit cut, and the beginning of a stroll down Paul Ryan’s slippery slope.

Many Democrats will argue, though, that the possibility of getting Republicans to bend on taxes is such a potential game changer in Washington that it might be worth that price. And Obama, if he were to consummate such a deal, would become a postpartisan president overnight—he really would have united Washington, to the extent that it can be.

Friends: Some Republican senators who are conservative but not extreme and maybe willing to play a little ball—Tennessee Republicans Lamar Alexander and Bob Corker, Georgia’s Johnny Isakson, Oklahoma’s Tom Coburn (who is retiring), Illinois’s Mark Kirk, Alaska’s Lisa Murkowski, a few others. On the Democratic side, Obama will need to sell Nancy Pelosi on any compromise. And watch AFL-CIO President Rich Trumka; he signaled before the election that he’d look askance at entitlement cuts. Obama will need his imprimatur, however grudging.


Bob Corker, Junior Tennessee senator

John Boehner, GOP House speaker

Lamar Alexander,  Senior Tennessee senator

Rich Trumka, AFL-CIO president

#2. Climate Change

With Mayor Mike Bloomberg’s endorsement of Obama for his handling of Hurricane Sandy and his (alleged, activists might sniff) commitment to battling climate change, environmental issues will get a strong boost inside the Beltway. The House, under Nancy Pelosi, passed a cap-and-trade bill at Obama’s request in 2009. But instead of revising that complex scheme, how about a straightforward carbon tax?

Yes, it’s a tax. But it’s much simpler. Everyone can understand it. Some experts have estimated that across a range of activities—freight shipping, aviation, electricity use, personal travel—emissions would fall impressively. It could be phased in slowly, and it could be offset by other tax decreases for manufacturers and consumers to soften the blow. Some have floated the idea that part of such a tax could go to deficit reduction, which could broaden bipartisan appeal. If Obama wants to tackle climate change, this may be the better way to go.

Friends: Bloomberg, of course—he’s been on record in support of a carbon tax since a major speech he gave on the topic in Seattle in 2007. He can help build support among the independent voters across the country who respect him.

Conservative economist Greg Mankiw, who headed George W. Bush’s Council of Economic Advisers, is a fan of the tax and an elder statesman who might stand half a chance of getting a few Republican legislators to go along.

And speaking of potential influence, try this one on for size: Rex Tillerson, the CEO of ExxonMobil. Yep—the CEO of ExxonMobil supports a carbon tax. He announced his position in 2009, shortly after taking over from a predecessor who was in denial about climate change, in order to soften the corporation’s rep.

Obama ought to strike up a friendship with Tillerson posthaste. It’s not like Republicans in Congress are ever going to be big fans of a carbon tax, and it’s a heavy lift for Obama under any circumstances. But one thing’s for sure: They’re likely to have a pretty hard time accusing the CEO of ExxonMobil of being some kind of socialist.


Michael Bloomberg, New York mayor

Rex Tillerson, ExxonMobil CEO

#3. Immigration Reform

Obama won the Latino vote last week by 71 to 27 percent—partly, no doubt, a recognition of his policy
opening up college to children of undocumented immigrants. But that was an appetizer. The main dish is comprehensive immigration reform. The Washington liberal establishment wants this to
happen in a big way, because it’s the right policy and, of course, because it would keep Latinos
voting for Democrats in those numbers for a long time to come.

The template exists. It’s the old Kennedy-McCain legislation, which tightens border security, updates the badly outdated visa program—and, yes, provides a path to citizenship (“amnesty!”) for many who came here illegally.

George W. Bush supported and tried to pass this bill before the nativist right wing rose up in fury against it. For the time being, it seems like that faction is on the ropes. Smart Republicans know they can’t keep getting hammered among voters of color, who were 26 percent of the electorate last week and gave Obama roughly 80 percent of their vote.

As with the fiscal cliff and a carbon tax, it’s not as if Obama needs the backing of the Republican Party. But he needs a few to go along.

Friends: John McCain, No. 1 with a bullet. Now that his party failed to make Obama a one-term president, there may be a chance he’ll get over his resentment about having lost in 2008 and return to being the compromiser he once was.

Marco Rubio, the Republican Florida senator, could be a player, too. As someone with presidential aspirations, he’ll want to improve the GOP’s stature among Latinos. But that is not going to happen easily. Puerto Ricans, Mexicans, and Dominicans are Democrats; they won’t vote for a Cuban just because of his name. He has to do something. Immigration reform could be that something.

Finally, there’s one more Hispanic Republican who could play a role in bringing her party in from the xenophobic cold: New Mexico Governor Susana Martinez. Her profile will rise now. We’ll see how she uses it.


John McCain, Arizona senator

Marco Rubio, Florida senator

Susana Martinez, New Mexico governor

#4. Mideast Peace

This is a little murkier. There’s no specific piece of legislation that will remove Assad from Syria, bring Iran to heel, or forge a deal between Israel and the Palestinians.

That said, foreign policy is well established as a venue second-term presidents like to focus on, in large part precisely because they don’t have to muck about with Congress. But what can Obama realistically do here?

Before we look at that question, consider this one: Who’ll be the new secretary of state? Whoever it is will be replacing a titan, a woman who commanded attention everywhere she went in the world. Big shoes to fill.

And lots of work to do. The first order of business is obviously Iran. News leaked before the election of planned direct talks between the United States and Iran, news that the White House denied vehemently. But what if it’s actually true? Could be a huge breakthrough.

That’s the hopeful side of the coin. The other side—well, one shudders to think. The combination of Iran, Syria, and Israel-Palestine makes for quite a powder keg. Unlike Bush and Dick Cheney and Donald Rumsfeld, Obama and his people don’t actively want war. But history is rich in ironies of this sort. It’s not really overstating matters to say that Obama’s biggest second-term job is avoiding World War III. And, of course, Benghazi lingers as an issue, one we can be sure House Republicans have no intention of dropping.

Friends: Will Bibi Netanyahu now come to terms with the fact that he’s going to have to deal with Obama for the next four years (assuming Bibi lasts, which looks plausible right now) and adopt less hard-line positions on Iran and the settlements?

And here’s a name to remember: Mohammad-Bagher Qalibaf. Who he? The favorite to win next year’s presidential elections in Iran (yes, the execrable Mahmoud Ahmadinejad is term-limited). Qalibaf is no pro-Western liberal. But he has spoken somewhat reasonably in interviews—telling The Christian Science Monitor, for example, that with respect to U.S. relations, “competition along with collaboration will take the place of opposition and disagreement.” Hey, it’s not “let’s throw Israel into the sea.”


Benjamin Netanyahu, Israeli Prime Minister

Mohammad- Bagher Qalibaf , Mayor of Tehran


Gay rights: Ted Olson

George W. Bush’s solicitor general stunned the right by challenging California’s ban on gay marriage. Obama endorsed same-sex marriage last spring but said the issue should be up to the states. If the president wants to mount a national push for gay equality in his second term, he could find no better partner than the Republican lawyer who argued Bush v. Gore.

Media: Roger Ailes

Obama will never be a Fox News favorite. But if the network chairman (who just got another four years himself) could be persuaded that Obama is pursuing a more centrist agenda, his pundits might tone things down. Ailes told Obama during a secret 2008 meeting that Fox would be fair but not “in the tank” for him. The president could toss in a Bill O’Reilly interview.