In 2008 Barack Obama soared to victory on the promise of change, and experts declared that a new era of Democratic dominance had begun. Now, only two years later, it looks as though voters want change again. On Nov. 2, Republicans are likely to regain control of the House and come close to winning back the Senate. But while conservatives are already trumpeting the 2010 midterms as a historic validation of their agenda, the truth, as in 2008, is considerably more nuanced. An in-depth report on what a resurgent Republican Party will—and won’t—be able to accomplish over the next two years.
The first issue Republicans will face after November’s midterms: the Bush tax cuts. So far, the parties have refused to budge, with the GOP aiming to maintain the status quo and Democrats seeking to limit any extension to incomes under $250,000 a year. The problem is that if nothing happens by Dec. 31, the cuts will simply expire—a risky outcome for both sides in the midst of a recession.
As a result, look for Congress to strike a deal during the upcoming lame-duck session. While partisan passions will run high, there are signs that a compromise might be in the offing. Obama has argued that extending tax cuts designed to be temporary will severely add to the deficit, but when pressed last month on whether he’d veto an across-the-board extension, he demurred.
That’s the GOP’s opening. The sooner the tax issue is solved, Republican thinking goes, the sooner the party can tackle its own agenda. One option involves redefining what “high income” means. Extending the cap upward to $500,000 or even $1 million—a move that would preserve the current rates for 99 percent of taxpayers—might appease GOP leaders, especially if it’s combined with a patch for the alternative minimum tax and a freeze on current capital-gains and dividends rates. “If they were looking for a way to compromise that would last one or two years, this would not be complicated,” says Alice Rivlin, a fellow at the Brookings Institution and former head of the Congressional Budget Office.
Ever since Obama’s health-insurance law passed Congress in March, Republicans have been swearing that they’ll “repeal and replace” it with their own legislation after the midterms. They won’t. Even if the GOP regains control of the House and the Senate, it’s unlikely the party will hold enough seats to override Obama’s veto.
Instead of obsessing over repeal, Republicans will focus on gumming up the works. The House Appropriations Committee, which greenlights all federal spending, could withhold money from the IRS and the Department of Health and Human Services. That would undercut the government’s ability to implement the least popular part of the law: the individual mandate. The GOP could also slash health-care funding by attaching a stealth sidecar amendment to an otherwise agreeable bill, like defense appropriations, that Obama could feel pressured to sign.
Still, a White House official assures NEWSWEEK that the president won’t approve legislation that undermines his signature policy achievement. In the end, Republicans may simply have to settle for the political satisfaction of calling a futile vote on repeal and forcing Democrats to spend a few (more) days defending the controversial package to a skeptical public. As one senior GOP staffer acknowledges, “Most of our efforts will be symbolic.”
When Democrats failed this year to pass legislation limiting greenhouse gases, Republicans claimed victory. But the Dems still have the upper hand. Unless a bill passes soon, Obama’s Environmental Protection Agency will start phasing in stricter regulations on power plants, the country’s top polluters.
In response, Republicans plan to go on offense—even if only for show. First, say two senior members who did not want to be named discussing strategy, they’ll call a vote to strip authority from the EPA, a measure sure to provoke a presidential veto. Rep. Joe Barton, the current ranking member on the energy committee, has also promised to regularly subpoena EPA Administrator Lisa Jackson and force her to defend the agency’s plans. The goal: to paint Democrats as antibusiness. “That will really help us going into 2012,” says one Republican staffer, who did not want to run afoul of GOP leadership by speaking on the record.
Compromise isn’t off the table. While still skeptical of climate change, Republicans have been warming to the idea of energy independence in recent years. Several senior members, including Sen. Lamar Alexander, may continue to call for an expansion of nuclear power, and Democrats, lacking the votes to act alone on anything stronger, will be inclined to play along. Would-be House Speaker John Boehner may also put together a package that couples subsidies for solar and wind development and funding for electric cars with new drilling in Alaska and the gulf. Several energy analysts say they expect Democrats to push back with demands for new regulations on oil companies—then ultimately strike a deal.
Obama has largely embraced what used to be called the Republican reform agenda (accountability, higher standards, choice) and the GOP has largely (if quietly) applauded his efforts. So while a full overhaul of George W. Bush’s No Child Left Behind (NCLB) initiative will probably be delayed for a few years if Republicans take the House, bipartisan agreement may be reached soon on smaller fixes aimed at making NCLB more flexible and less punitive, says Frederick Hess of the American Enterprise Institute. This is true especially if Nancy Pelosi passes her gavel (as expected) to Boehner, who played a key role in crafting the original bill and continues to promote it as one of his proudest legislative victories.
Still, compromise is far from a sure thing. The next Congress will likely include a sizable caucus of Tea Party Republicans who see schools as a local issue and oppose federal “interference” (like NCLB), as well as a larger proportion of liberal Democrats who owe their jobs to the teachers’ unions, which oppose many of Obama’s policies. As a result, an unlikely coalition of the far left and the far right could wind up stymieing Obama’s aggressive, moderate-approved reform agenda. “One side is antigovernment, and the other will do what the teachers’ unions tell them to do,” says Charles Barone of Democrats for Education Reform. “This could really slow down the pace of change.”
Debt and Deficits
From its leaders in Washington to its Tea Party base, the GOP tends to talk a big game on federal spending. But the party’s math rarely adds up. Activists who accuse Obama of overspending on health care also rail against Medicare reductions; congressmen who call themselves fiscal conservatives suggest only the most marginal of cuts. Enacting the party’s “Pledge to America”—repeal health-care reform, fully extend the Bush tax cuts, and limit nondefense discretionary spending—would add more than $700 billion to the debt, according to estimates from the Congressional Budget Office.
So the real action on federal spending won’t come from the Republican-controlled House. Instead, it will start with Obama’s bipartisan fiscal commission, which has been meeting weekly since February and will report its findings on Dec. 1. “We’re all in a room and we’re still talking,” says former Republican senator Alan Simpson, one of the commission’s two chairmen, “but it’s a tough go. It’s taken this long to establish trust.”
If 14 of the group’s 18 members—12 of whom are in Congress—can agree on a proposal to rein in the debt, it will likely go to the Senate for an up-or-down vote, and then to the House. At that point, the Tea Party–fueled Republican majority will have to decide whether it’s willing to countenance a compromise plan that’s likely to combine tax increases with spending cuts (Medicare, Social Security, and/or defense), or if the price of debt reduction is simply too steep.
Newly elected members may be inclined to accept some tough medicine, but they’ll likely run into a wall of opposition from establishment Republicans—i.e., the kind who’ve been around long enough to understand the political peril of doing what it takes to actually slash the deficit.
Much of the GOP’s “pledge to America” focuses on congressional reform—and with good reason. It’s perhaps the only policy area where a Republican House will largely be able to do what it pleases.
Boehner has already declared that the House is in a “state of emergency,” and his wish list of reforms is lengthy. All legislation will appear online 72 hours before a vote so that members (and voters) have enough time to fully consider its contents. In addition, every bill will include a section explaining why it’s constitutional (a provision that’s drawn fire from Democrats, who say it’s up to the courts, not Congress, to determine constitutionality). Aside from these symbolic changes, Boehner says he will replace the Democrats’ “Paygo” scheme, which once ensured that every program was paid for prior to passage, with “Cutgo,” which would require Congress to cut spending for a program of equal or greater value before approving a new program.
On the 2008 campaign trail, Obama made a “guarantee” to voters that Democrats would introduce a comprehensive immigration-reform bill “in the first year” of his administration. They didn’t—and it’s unlikely that Republicans will be eager to pick up the slack in 2011 or 2012. Even a former supporter like John McCain would have difficulty pursuing a compromise after tacking right in this year’s primaries to fend off a Tea Party challenge.
But while the sweeping, comprehensive legislation once backed by George W. Bush may be dead, some lawmakers are still holding out hope for a piecemeal approach: start with increased border security, then follow up with a pathway to citizenship. The business community supports such a strategy, and given that it’s underwriting many of this year’s likely Republican winners, it should have some sway with the next Congress.
The problem, however, is that the Senate will be so closely divided that it’s hard to see where the necessary supermajority of 60 votes would come from. As the GOP absorbs its Tea Party rookies, moderates like Olympia Snowe and Richard Lugar will be further marginalized. And both sides may have more incentive to demagogue immigration—Democrats to rile up Latino voters; Republicans to motivate their white, working-class base—than to actually solve the problem.
Right now, Republicans largely approve of the way Obama has executed the war in Afghanistan. But that could change in July 2011. In his new book, Obama’s Wars, Bob Woodward reports that the president was reluctant to send 30,000 additional troops to Afghanistan, telling his generals that he wouldn’t “stay the course” indefinitely. If Afghanistan doesn’t show significant improvement by Obama’s July deadline—translation: a more stable government, fewer American deaths—he will likely call for a withdrawal. Many Republicans on Capitol Hill, meanwhile, will reject “surrender.”
Expect fireworks. Afghanistan is “the one [foreign policy] issue that could be quite contentious,” says James Carafano of the Heritage Foundation. “If Obama opts for a cut-and-run strategy in Afghanistan, deciding to withdraw American forces whatever the conditions on the ground,” that would, he thinks, provoke a big debate. And not just between the two parties. “The Republicans could fracture,” Carafano says—some in favor of staying the course, some in favor of getting out. “I don’t think the GOP has had its come-to-Jesus moment on Afghanistan yet.”
As the so-called Age of Austerity begins, some observers have speculated that Tea Partiers and antiwar Democrats could make common cause by calling for withdrawal as a way to cut the deficit. But only the most libertarian of the Tea Partiers put fiscal responsibility before national defense. So the chances that the House’s new red-meat caucus will completely break with party elders on the war still seem slim.
With John Barry and Pat Wingert in Washington