Perhaps we should have warned the candidates at the beginning of the 2012 presidential election: Be careful what you wish for.
Congratulations are in order to President Obama, who ran a tactically effective campaign to hold the White House. After a bruising campaign, he and his supporters are understandably cheered by Tuesday’s result. But there’s not going to be much of a honeymoon period, due to the depth and seriousness of our nation’s long-term challenges.
At the top of that list: restoring the battered economy, which continues to struggle more than three years after the official end of the 2008-2009 recession. After four years of misguided policy, aimless dithering, government-growth, and gridlock, the economy must be the top priority for the next administration and the next Congress.
The most recent unemployment figures, released just days before the election, illustrate what can only be described as stagnation: at 7.9 percent, the jobless rate remains essentially unchanged from when Obama was first elected in 2008. Worse, the actually unemployment rate—which includes those who have stopped looking for a job all-together—hovers at 14.6 percent.
Labor force participation is significantly lower than it was four years ago—which is why real unemployment is much higher than the reported statistics. Those Americans who are fortunate enough to still be working have seen little improvement in their own incomes and financial well-being.
The grim statistics portend a worrisome trend: the decline of the United States as a leading global power. In September, the World Economic Forum issued its 2012 report on global competitiveness, in which the U.S. ranked seventh. That marked the fourth straight year that the U.S. dropped in the rankings.
But numbers and rankings don’t fully capture the reality that things haven’t gotten better; most Americans can look around and see the evidence for themselves. They see friends and family members out of work, or underemployed in part-time positions with no chance for advancement; they notice businesses in their communities that have closed or are struggling; they have a sense of general anxiety that our proud nation has gone off-course.
According to a recent poll from ABC News and the Washington Post, 54 percent of Americans say that the nation is on the wrong track; only 43 percent believe things are headed in the right direction. That 11-point spread stands in stark counterpoint to the gauzy campaign ads boasting of “how far we’ve come.”
Surely one contributing factor in American’s declining confidence is the unchecked growth in government that has taken place under the last two presidential administrations. Today, our nation struggles with a historically high national debt of $16 trillion. For the last four years, our annual budget deficit has topped $1 trillion, with further deficits forecast well into the future.
Is there any way to right the ship? Since the president was so unwilling in the campaign to share details about his second-term agenda, here’s the starting point I’d suggest: actually work with Congress to meaningfully tackle the looming threat of the “fiscal cliff.” That refers to the dangerous combination of tax hikes and indiscriminate spending cuts slated to take effect in January—a combination many economists have warned will likely spark a recession.
The tax hikes in this scenario would imperil an already fragile economic recovery. Meanwhile, the across-the-board spending cuts, which would take $500 billion out of the defense budget over the next decade while leaving our costly entitlement programs virtually untouched, will reduce force readiness and compromise our national security. And the cuts would do little to address the long-term spending trends that have brought us to this impasse.
The president and Congress should work together to resolve the fiscal cliff—and then get to work on spending reforms that reduce the deficit and the debt while protecting our nation’s security. Moreover, we need a tax code and regulatory environment that makes America an attractive place to do business again. These would go a long way toward restoring confidence among both business leaders and working families.
In late October, I spent 10 days on a multi-state bus tour through states along the eastern seaboard on behalf of Concerned Veterans for America. In Virginia, South Carolina, Florida, Ohio and elsewhere, I heard a familiar refrain from voters of all partisan stripes: they want to see real leadership from Washington to restore the economy to health.
Our elected officials in Washington work for us, and we should demand more from them in terms of the mature leadership, sound policy and good governance our nation needs. Those qualities have been strikingly absent in the last four years.
Now there’s a chance for the president to change the tone by offering the leadership we need to avert the fiscal cliff, and then get to work bringing smart spending restraint to Washington. Those won’t be easy goals to achieve. But this is the job you asked for, so prove to us you’re up to the task.