March 12, 2010

The Issues Facing Us - National Level

Being a student of history, this past year has been one fraught with huge national issues for President Obama and 111th Congress. From tackling a financial crisis (that President Bush and the 110th Congress started battling) to healthcare and global warming to unemployment, it has not been an easy term.

The "mood" of the nation has changed somewhat over the past year as well. The promise of change and excitement of the first minority President has given way to more partisan politics from both sides. The Republicans stand to gain numerous seats in the House and Senate based on the current polls, so there is a "push" to get various bills through Congress and on the President's desk. No matter which party you are for, the stalemate in Congress has both good and bad consequences.

Honestly, there does need to be a reform of the healthcare and financial systems. On healthcare, costs are spiraling out of control for numerous reasons, and the drug companies, insurance companies, legal system, and uninsured are all to blame in some part. Does a fix exist? I personally fail to see how a government run healthcare system can be any more efficient due to the layers of bureaucracy that are sure to follow, but I also understand the notion that insurance companies are out to make a profit. As with various industries though, who is to say what margin is out of line?

On the financial front, there is much needed reform. Previous administrations and Congresses urged home ownership for all, and with that, safeguards were lowered to allow those with riskier credit to own homes. Home ownership boomed and was lauded by politicians, but it was eating away at the credit worthiness of consumers and banks. When it crashed, it took numerous industries and jobs along with it. Over regulation will stifle growth, but deregulation will sometimes exaggerate it. There needs to be a good mix to allow risks to be taken, but risks that are minimal and do not threaten the system as a whole.

Unemployment stands at 9.7%, but there is no "quick fix." What most Americans do not realize is that it is the economic cycle that will drive unemployment. As the economy starts to grow, employers continue to be slow to hire new staff, but as the current staff gets overworked and starts to fall behind on productivity, employers will start hiring again. The same is true in downturns. Employers hold on to employees longer than they should thinking things will change until they finally have to lay people off. We are currently in the beginning of the growing economic cycle, but it could still be another six months before employers really start to rehire employees. Not great news, but it is better than still being in the downturn.

On the Social Security front, I continue to receive emails regarding WEP/GPO reform. Unfortunately, I can almost 100% guarantee that Congress will NOT tackle this issue prior to the elections in November which means it will be pushed on to the 112th Congress (starting next January). We all know that Social Security needs to be reformed, but with other pressing issues on President Obama's plate, I do not see a way that this issue moves to the forefront. Healthcare, financial reform, and the economy are too large to bring up another large issue - Social Security.

Finally, I had a good discussion with an old college professor a few weeks back. While I was in college and grad school, we would frequently discussed politics, so this was a trip down memory lane for me.

Anyway, one of the points that both of us came to was that when you have one party controlling both the Executive and Legislative branches, it is not always a good thing.

Numerous commentators have pointed to Obama as being very liberal, but if you will look at some of the things that he has said recently, you will notice he has started to try to move a bit more towards the middle. The current problem though is a super majority in the House headed by Speaker Nancy Pelosi, and a majority in Senate headed by Majority Leader Harry Reid. The House generally puts forward much more liberal bills that cannot pass through the Senate, so you run into a wall.

Our discussion focused more on former President Clinton and Newt Gingrich though. They were "adversaries," but they needed to come together to get items through Congress and to be signed by the President Clinton. Clinton and Gingrich could both stand their ground, but when push came to shove (like the budget) the two had to come together to make things work. I know it is a strange concept nowadays.

As we look at a potential change in the structure of Congress next term, will it actually be a positive? Would the need to make things more bipartisan help Obama and Congress? Time will tell, but history tells us it may be so.

Next up... State level issues...

No comments: