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Diane Francis

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Will the Fiscal Cliff Unite Romney and Obama?

Posted: 11/07/2012 2:39 pm

President Obama made history again as the first incumbent since 1936 to be re-elected even though unemployment exceeded 7.2 per cent.

His victory was critical because it's the only way the Congressional gridlock regarding the deficit can be overcome. That is because Obama belled the cat in 2011 with his eleventh hour deal that imposed a deadline now nicknamed the "fiscal cliff."

This is how it works: The deadline of Dec. 31, 2012 is when Bush tax cuts end and when $500 billion in automatic tax hikes and spending cuts begin annually -- $100 million a year in Medicare cuts and $100 million in Pentagon cuts. This was agreed to by Congress and Obama in August 2011 to try and force an end to the logjam.

It didn't work and Republicans became intractable in the year leading up to the election.

So the "fiscal cliff" looms, forcing both parties back to the table. The President proposes a mix of spending cuts and higher taxes on the privileged, a principle of "shared responsibility" toward deficit fighting.

This election is not more of the same but makes resolution more possible for two reasons. The popular vote was won narrowly by Obama, which gives him some moral authority, but not enough to allow him to radicalize his policies. And the electorate rejected dozens of Tea Party candidates, which should make Republicans shift away from extremes.

Besides the "fiscal cliff" issue, there are other interesting takeaways from this vote:

-- Excessive campaign spending and inaccurate, unethical advertising -- such as Romney's Jeep scaremongering in Ohio -- backfired.

-- Stock markets rose on election day but fell yesterday adjusting to the fact that the Obama victory means capital gains taxes will increase, and loopholes will close for high-income earners and for private equity types like Mitt Romney and others who pay 14 per cent tax rates on gigantic incomes of $40 million plus. Europe's problems also lowered markets globally. Athens is burning.

-- Military spending will abate in the United States, and the Obama shift toward cyber security, multilateralism and robotized armies/air forces will accelerate. The US military budget is a bloated US$700 billion or equal to the next 20 biggest spending nations combined.

-- America will embed universal healthcare, joining the ranks of civilized and developed nations. This will lead to cost-cutting reforms, already begun, as a result of more government oversight.

-- A new War on Drugs will launch now that voters have legalized marijuana in Colorado and Washington. This pits the wishes of their electorates against federal law, and will lead to both states mounting a court challenge to gain states' rights over drug prohibition or, alternatively, to a national movement to legalize.

-- Two more states also made social history by legalizing same-sex marriage -- Maine and Maryland. Some 16 states recognize such marriages already but will likely move toward outright legalization.

-- Financial markets will be bridled because Dodds-Frank will remain. Wall Street and US banks will look like Canada's with solvency and good governance as goals.

-- The Republicans will soul search and have to mute or reject right-wing extremists (religious, racist, misogynist or homophobic), split into two parties or face years in the political wilderness.

-- The Hispanic voting bloc has firmly established itself as the most powerful in the country. Any serious federal candidate must now take Spanish lessons. And the youth vote was a record one.

-- This guarantees Jeb Bush the Republican nomination for President in 2016 because he speaks Spanish and has a Mexican wife. He is also a moderate, not Tea Partier, which will be another essential for the Republicans if they ever want to contend nationally.

-- A vote in Michigan will cost Canadian taxpayers $500 million. This was promised by Ottawa to the state to help defray the cost of building a second bridge between Windsor and Detroit. Manny Moroun, owner of the current bridge, spent millions on a referendum on the ballot to scuttle the second bridge but Michigan voters rejected his referendum.

-- The Keystone XL Pipeline from the oil sands to Texas will likely proceed, in some guise, now that Obama has won. He postponed the project only because of the election and has changed its route. It should be remembered that in 2009 Obama approved the Alberta Clipper, an oil sands pipeline to Chicago even bigger than Keystone.

-- Worrisome identity politics (voting by race or ethnic group) contributed to this outcome, but fortunately Obama garnered nearly 40% of the white vote, an indication that the racial divide is not growing.

-- The "Divided America" theme is irrelevant: Since 1972, the two-party system has turned into a two-coalition system. Only two out of nine Presidents have captured 53% or more of votes.

Lastly, President Obama is lucky too because he has a new opportunity to fix fiscal problems and, at the same time, preside over an anticipated economic expansion. A forecasted by the majority of economists, the US economy is expected create 12 million jobs by 2016.

The electorate in 2012 certainly spoke loudly and now that the smoke and noise clears it's obvious that the United States is evolving into a more socially liberal, and economically conservative, country.

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  • Barack Obama accompanied by First Lady Michelle and daughters Sasha and Malia appears on stage on election night in Chicago. JEWEL SAMAD/AFP/Getty Images

  • Barack Obama

    President Barack Obama, with his daughter Malia wave toward the crowd at his election night party Wednesday, Nov. 7, 2012, in Chicago. President Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Charles Rex Arbogast)

  • Barack Obama

    President Barack Obama walks out of the stage with his wife Michelle and daughters Sasha and Malia at his election night party Wednesday, Nov. 7, 2012, in Chicago. President Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Pablo Martinez Monsivais)

  • Barack Obama, Michelle Obama, Sasha Obama, Malia Obama

    President Barack Obama waves as he walks on stage with first lady Michelle Obama and daughters Malia and Sasha at his election night party Wednesday, Nov. 7, 2012, in Chicago. Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Carolyn Kaster)

  • Barack Obama

    President Barack Obama addresses the crowd at his election night party Wednesday, Nov. 7, 2012, in Chicago. President Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/M. Spencer Green)

  • Barack Obama

    President Barack Obama speaks at his election night party Wednesday, Nov. 7, 2012, in Chicago. President Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Pablo Martinez Monsivais)

  • Barack Obama

    President Barack Obama speaks at his election night party Wednesday, Nov. 7, 2012, in Chicago. President Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Chris Carlson)

  • Barack Obama

    President Barack Obama smiles during his speech at his election night party Wednesday, Nov. 7, 2012, in Chicago. President Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Charles Rex Arbogast)

  • Barack Obama

    President Barack Obama acknowledges the crowd at his election night party Wednesday, Nov. 7, 2012, in Chicago. President Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/M. Spencer Green)

  • US-VOTE-2012-ELECTION-OBAMA

    US President Barack Obama arriveS on stage after winning the 2012 US presidential election November 7, 2012 in Chicago, Illinois. Obama swept to re-election, forging history again by defying the dragging economic recovery and high unemployment which haunted his first term to beat Republican Mitt Romney. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

  • US-VOTE-2012-ELECTION-OBAMA

    US President Barack Obama and family arrive on stage after winning the 2012 US presidential election November 7, 2012 in Chicago, Illinois. Obama swept to re-election, forging history again by defying the dragging economic recovery and high unemployment which haunted his first term to beat Republican Mitt Romney. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

  • US-VOTE-2012-ELECTION-OBAMA

    US President Barack Obama and family arrive on stage after winning the 2012 US presidential election November 7, 2012 in Chicago, Illinois. Obama swept to re-election, forging history again by defying the dragging economic recovery and high unemployment which haunted his first term to beat Republican Mitt Romney. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

  • President Barack Obama accompanied First Lady Michelle and daughters Sasha and Malia waves to supporters on stage on election night in Chicago. President Barack Obama swept to re-election Tuesday, forging history again by transcending a slow economic recovery and the high unemployment which haunted his first term to beat Republican Mitt Romney. JEWEL SAMAD/AFP/Getty Images

  • US President Barack Obama waves to supporters as he arrives accompanied by (from L-R ) First Lady Michelle and daughters Malia and Sasha on election night in Chicago. JEWEL SAMAD/AFP/Getty Images

  • US President Barack Obama and family arrive on stage after winning the 2012 US presidential election. SAUL LOEB/AFP/Getty Images

  • Republican presidential candidate Mitt Romney concedes defeat November 6, 2012 in Boston, Massachusetts, telling supporters that he had called US President Barack Obama to congratulate him on his victory. (DON EMMERT/AFP/Getty Images)

  • Republican Presidential Candidate Mitt Romney Holds Election Night Gathering In Boston

    BOSTON, MA - NOVEMBER 07: Republican presidential candidate, Mitt Romney, waves to the crowd while speaking at the podium as he concedes the presidency during Mitt Romney's campaign election night event at the Boston Convention & Exhibition Center on November 7, 2012 in Boston, Massachusetts. After voters went to the polls in the heavily contested presidential race, networks projected incumbent U.S. President Barack Obama has won re-election against Republican candidate, former Massachusetts Gov. Mitt Romney. (Photo by Justin Sullivan/Getty Images)

  • Republican Presidential Candidate Mitt Romney Holds Election Night Gathering In Boston

    BOSTON, MA - NOVEMBER 07: Republican presidential candidate, Mitt Romney greets supporters as he concedes the presidency during his campaign election night event at the Boston Convention & Exhibition Center on November 7, 2012 in Boston, Massachusetts. After voters went to the polls in the heavily contested presidential race, networks projected incumbent U.S. President Barack Obama has won re-election against Republican candidate, former Massachusetts Gov. Mitt Romney. (Photo by Rick Wilking-Pool/Getty Images)

  • Mitt Romney, Ann Romney, Paul Ryan

    Republican presidential candidate and former Massachusetts Gov. Mitt Romney, left, wife Ann Romney, center, and Republican vice presidential candidate, Rep. Paul Ryan, R-Wis., stand on stage after Romney conceded the race during his election night rally, Wednesday, Nov. 7, 2012, in Boston. (AP Photo/Stephan Savoia)

  • Mitt Romney, Ann Romney, Paul Ryan, Janna Ryan

    Republican presidential candidate and former Massachusetts Gov. Mitt Romney and his wife Ann, left, and Republican vice presidential candidate, Rep. Paul Ryan, R-Wis., and his wife Janna, right, are joined by their families on stage after Romney conceded the race during his election night rally, Wednesday, Nov. 7, 2012, in Boston. (AP Photo/David Goldman)

  • Mitt Romney, Ann Romney, Paul Ryan, Janna Ryan

    Republican presidential candidate and former Massachusetts Gov. Mitt Romney and his wife Ann stand on the stage with Republican vice presidential candidate, Rep. Paul Ryan, R-Wis., and his wife Janna after Mitt Romney conceded the race during his election night rally, Wednesday, Nov. 7, 2012, in Boston. (AP Photo/David Goldman)

  • Mitt Romney, Ann Romney, Paul Ryan, Janna Ryan

    Republican presidential candidate and former Massachusetts Gov. Mitt Romney and his wife Ann are joined by their son Craig Romney, right, and other family members on stage after Romney conceded the race during his election night rally, Wednesday, Nov. 7, 2012, in Boston. (AP Photo/Elise Amendola)

  • Republican Presidential Candidate Mitt Romney Holds Election Night Gathering In Boston

    BOSTON, MA - NOVEMBER 07: Republican presidential candidate, Mitt Romney, speaks at the podium as he concedes the presidency during Mitt Romney's campaign election night event at the Boston Convention & Exhibition Center on November 7, 2012 in Boston, Massachusetts. After voters went to the polls in the heavily contested presidential race, networks projected incumbent U.S. President Barack Obama has won re-election against Republican candidate, former Massachusetts Gov. Mitt Romney. (Photo by Alex Wong/Getty Images)

  • Republican Presidential Candidate Mitt Romney Holds Election Night Gathering In Boston

    BOSTON, MA - NOVEMBER 07: Republican presidential candidate, Mitt Romney, waves to the crowd while standing at the podium before conceding the presidency during Mitt Romney's campaign election night event at the Boston Convention & Exhibition Center on November 7, 2012 in Boston, Massachusetts. After voters went to the polls in the heavily contested presidential race, networks projected incumbent U.S. President Barack Obama has won re-election against Republican candidate, former Massachusetts Gov. Mitt Romney. (Photo by Justin Sullivan/Getty Images)

  • Republican Presidential Candidate Mitt Romney Holds Election Night Gathering In Boston

    BOSTON, MA - NOVEMBER 07: Republican presidential candidate, Mitt Romney, waves to the crowd before conceding the presidency during Mitt Romney's campaign election night event at the Boston Convention & Exhibition Center on November 7, 2012 in Boston, Massachusetts. After voters went to the polls in the heavily contested presidential race, networks projected incumbent U.S. President Barack Obama has won re-election against Republican candidate, former Massachusetts Gov. Mitt Romney. (Photo by Joe Raedle/Getty Images)

  • Republican Presidential Candidate Mitt Romney Holds Election Night Gathering In Boston

    BOSTON, MA - NOVEMBER 07: Republican presidential candidate, Mitt Romney, kisses his wife, Ann Romney, after conceding the presidency during Mitt Romney's campaign election night event at the Boston Convention & Exhibition Center on November 7, 2012 in Boston, Massachusetts. After voters went to the polls in the heavily contested presidential race, networks projected incumbent U.S. President Barack Obama has won re-election against Republican candidate, former Massachusetts Gov. Mitt Romney. (Photo by Matthew Cavanaugh/Getty Images)

  • Barack Obama, Michelle Obama

    President Barack Obama and first lady Michelle Obama walk off Air Force One after arriving at O'Hare International Airport in Chicago, Tuesday, Nov. 6, 2012. (AP Photo/Paul Beaty)

  • Barack Obama

    President Barack Obama greets first lady Michelle Obama on the tarmac as she arrives at Des Moines International Airport on Air Force One, Monday, Nov. 5, 2012, in Des Moines, Iowa, en route to a campaign event. (AP Photo/Carolyn Kaster)

  • Joe Biden

    Vice President Joe Biden hugs Anne Holton, wife of Democratic U.S. Senate candidate Tim Kaine on the tarmac of the Roanoke Virginia Airport in Roanoke, Va., Monday, Nov. 5, 2012. Biden made a surprise visit to Roanoke arriving via Air Force Two with Democratic U.S. Senate candidate Tim Kaine and U.S. Sen. Mark Warner. (AP Photo/The Roanoke Times, Kyle Green, Pool)

  • Mitt Romney

    Republican presidential candidate and former Massachusetts Gov. Mitt Romney waves to reporters after he took questions on his campaign plane en route from Pittsburgh to Boston, Tuesday, Nov. 6, 2012. At right is senior adviser Kevin Madden. (AP Photo/Charles Dharapak)

  • Mitt Romney

    Republican presidential candidate and former Massachusetts Gov. Mitt Romney arrives on his campaign plane at Boston's Logan Airport, Tuesday, Nov. 6, 2012. (AP Photo/Charles Dharapak)

  • Republican

    A spectator reacts to a change in the Florida early projections sen on a television during Republican presidential candidate and former Massachusetts Gov. Mitt Romney's election night rally, Tuesday, Nov. 6, 2012, in Boston. (AP Photo/David Goldman)

  • Cean Orrett, 45, center, and Gareth Edmondson-Jones, 46, of San Diago, both recently married in New York, react to positive predictions for President Barack Obama as crowds watch election results in Times Square, Tuesday, Nov. 6, 2012, in New York. After a year of campaigning, polls have begun to close after Americans across the United States headed to the polls to decide the winner of the tight presidential race between President Barack Obama and Republican presidential candidate, former Massachusetts Gov. Mitt Romney. (AP Photo/ John Minchillo)

  • Nancy French, from Columbia, Tenn., watches vote results displayed on a television screen during Republican presidential candidate and former Massachusetts Gov. Mitt Romney's election night rally, Tuesday, Nov. 6, 2012, in Boston. (AP Photo/David Goldman)

  • Spencer Siady, left, and Vinay Cardwell, of Salt Lake CIty, react as disappointing numbers dis come in for Republican Presidential candidate Mitt Romney during election night party for the Republicans at the Hilton Hotel in Salt Lake City, Utah Tuesday, Nov. 6, 2012. (AP Photo/The Salt Lake Tribune, Steve Griffin) DESERET NEWS OUT; LOCAL TV OUT; MAGS OUT

  • A supporter reacts to voting results displayed on a television screen during Republican presidential candidate and former Massachusetts Gov. Mitt Romney's election night rally, Tuesday, Nov. 6, 2012, in Boston. (AP Photo/David Goldman)

  • Mitt Romney supporters watch presidential returns during a GOP watch party, Tuesday, Nov. 6, 2012, in Las Vegas. (AP Photo/Julie Jacobson)

  • The Democratic party faithful gathered at the Minnesota DFL Party headquarters at the Crowne Plaza Hotel in downtown St. Paul, Minn. to hear election results Tuesday night, Nov. 6, 2012. Minneapolis Mayor R.T. Rybak went crowd surfing, with his mother Loraine, after it was announced that Pres. Barack Obama had won re-election. (AP Photo/David Joles/ Star Tribune)

  • Arizona Democrats celebrate as President Barack Obama is declared the winner of the presidential race at Democratic Party gathering, Tuesday, Nov. 6, 2012, in Tucson, Ariz.(AP Photo/Ross D. Franklin)

  • Supporters of President Barack Obama Shauna Harry, left, and Alana Hearn celebrate by leaping in the air at New York State Democratic Headquarters following Election Day, Tuesday, Nov. 6, 2012. (AP Photo/Kathy Willens)

  • President Obama Holds Election Night Event In Chicago

    CHICAGO, IL - NOVEMBER 06: Supporters of U.S. President Barack Obama attend the Obama Election Night watch party at McCormick Place November 6, 2012 in Chicago, Illinois. Obama is going for reelection against Republican candidate, former Massachusetts Governor Mitt Romney. (Photo by Spencer Platt/Getty Images)

  • American Expats Gather To Watch Coverage Of The U.S. Presidential Elections

    LONDON, ENGLAND - NOVEMBER 06: Supporters of U.S. President Barack Obama cheer while watching coverage of the U.S. Presidential Elections on on November 6, 2012 in London, England. U.S. President Barack Obama and Republican presidential candidate Mitt Romney are in a virtual tie in the national polls. (Photo by Bethany Clarke/Getty Images)

  • President Obama Holds Election Night Event In Chicago

    CHICAGO, IL - NOVEMBER 06: A supporter of U.S. President Barack Obama attends the Obama Election Night watch party at McCormick Place November 6, 2012 in Chicago, Illinois. Obama is going for reelection against Republican candidate, former Massachusetts Governor Mitt Romney. (Photo by Spencer Platt/Getty Images)

  • US-VOTE-2012-ELECTION-OBAMA

    Supporters of US President Barack Obama watch voting results on election night November 6, 2012 in Chicago, Illinois. AFP PHOTO / Robyn Beck (Photo credit should read ROBYN BECK/AFP/Getty Images)

  • President Obama Holds Election Night Event In Chicago

    CHICAGO, IL - NOVEMBER 06: Supporters of U.S. President Barack Obama cheer after networks project Obama as reelected during the Obama Election Night watch party at McCormick Place November 6, 2012 in Chicago, Illinois. Networks project Obama has won reelection against Republican candidate, former Massachusetts Governor Mitt Romney. (Photo by Chip Somodevilla/Getty Images)

  • President Obama Holds Election Night Event In Chicago

    CHICAGO, IL - NOVEMBER 06: Supporters of U.S. President Barack Obama cheer after networks project Obama as reelected during the Obama Election Night watch party at McCormick Place November 6, 2012 in Chicago, Illinois. Networks project Obama has won reelection against Republican candidate, former Massachusetts Governor Mitt Romney. (Photo by Spencer Platt/Getty Images)

  • Republican Presidential Candidate Mitt Romney Holds Election Night Gathering In Boston

    BOSTON, MA - NOVEMBER 06: Spectators react to President Obama's projected re-election displayed on large televisions during Mitt Romney's campaign election night event at the Boston Convention & Exhibition Center on November 6, 2012 in Boston, Massachusetts. Voters went to polls in the heavily contested presidential race between incumbent U.S. President Barack Obama and Republican challenger Mitt Romney. (Photo by Joe Raedle/Getty Images)

  • US-VOTE-2012-ELECTION-OBAMA

    Supporters of US President Barack Obama celebrate as CNN projects victory for Obama on election night November 6, 2012 in Chicago, Illinois. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

  • US-VOTE-2012-ELECTION-OBAMA

    Supporters of US President Barack Obama celebrate as CNN projects victory for Obama on election night November 6, 2012 in Chicago, Illinois. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

  • US-VOTE-2012-ELECTION-ROMNEY

    Supporters of US Presidential candidate Mitt Romney watch as Fox News projects US President Barack Obama is re-elected on election night November 6, 2012 in Boston Massachusetts. AFP PHOTO/ TIMOTHY A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)

  • US-VOTE-2012-ELECTION-OBAMA

    US President Barack Obama supporters celebrate as CNN projected The President re-elected on election night November 6, 2012 in Chicago, Illinois. AFP PHOTO / Robyn Beck (Photo credit should read ROBYN BECK/AFP/Getty Images)

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