By Jamal Abdulahi
This is part one of two part article that reviews the 2012 elections in America. Part one focuses on what transpired in the presidential election and some of the potential ramification. Part two reviews election results from Minnesota and identifies significant issues that could bring positive impact if legislation is enacted.

The 2012 American presidential election will go down as the most expensive in history. More than $2.6 billion were spent between the two presidential campaigns and citizen groups. The votes have been counted. President Obama has been re-elected. Democrats have increased their numbers in the United States Senate and made inroads in the House of Representative.

Elections have consequences. The 2012 presidential election had three consequences: First, arguments have been settled. Second, new relationships will be formed. Third, new legislations will be enacted.

The key arguments were how to manage the economy, reform federally funded programs Social Security, Medicare and Medicaid. Candidates proposed solutions aligned with their perspective political parties.

On the economic argument President Obama advocated Keynesian approach. That’s government intervening markets when necessary. No place was government intervention more obvious than the bailout of the American car industry. That proved to be critical. It became a lynching pin for President Obama winning Ohio.

Romney, on the other hand, advocated ultra orthodox market solution. Romney wrote a famous essay in 2009 for the Wall Street Journal in which he argued against government intervention and essentially endorsed liquidating Chrysler and General Motors (GM). Romney attempted to wiggle himself out of this position in the last days of the election once it became clear that he must win Ohio, a state with large number of car manufacturer employees. Unfortunately, the damage had been done. The unequivocal approval of the car bailout was reflective in the exit polls that showed six in 10 voters in Ohio approved the intervention.

President Obama also called raising additional funds to sustain social security, Medicare and Medicaid. President Obama was clear where he believed the additional funds should be coming from. He made abundantly clear that he intends to allow Bush tax cuts to expire for those earning $250,000 a year. Obama’s virtual sweep of competitive states in the Midwest with large working voters and small marching victory in Florida due to large senior citizen voting bloc is clear endorsement of his position.

Romney’s proposal of reforming Social Security, Medicare and Medicaid was largely left to Paul Ryan, his running mate. Paul Ryan refused to back down from the budget he proposed as a Chair of the House Budget Committee.

Paul Ryan proposed to transform Medicare into voucher program instead of government guaranteed program. The idea was to leave the benefits of those 55 years and older unchanged and provide a government voucher for those younger than 55 years to buy healthcare in the private market.

Social Security would have become essentially a program similar to 401K. The ability of seniors to receive monthly checks grantee by the federal government would have been replaced with checks supported by Wall Street investment schemes including securitized debt and risky derivatives that led to 2008 market crises.

The solution to Medicaid was to take it off the federal government balance sheet by making states responsible for the program. America’s working voters got the message and voted in big numbers for President Obama in key swing states.

It is easy to dismiss this analysis as fear mongering and class warfare as most but exit polls show people truly care about these programs. They are real programs that have real impact in the lives of millions of families in America. They are not academic nor are they handouts.

Now that economic arguments have been settled and Keynesian approach has prevailed over ultra orthodox market approach at least at the time being; the question is what’s next?

The next thing after the inaugural balls is that new relationships will be formed. The Speaker of the House John Boehner and President Obama will form new working relationship. President Obama will represent the Democrats that control the White House and U.S. Senate while Speaker Boehner will represent the Republicans that control the House of Representatives. Each man is expected to put forward an agenda and negotiations will ensue.

President Obama having reached the pinnacle of American politics will be aiming for big accomplishments in his second term. It is reasonable to expect resurrection of the grand bargaining budget deal to address the deficit that was torpedoed by the Tea Party members of the House in 2011. The center of that plan was to raise $1 of revenue for every $2 of spending cuts.

It is also reasonable to expect President Obama re-invigorate the implementation of the Patient Protection and Affordable Healthcare Act often abbreviated as Obama Care. One of the big remaining items is the requirements of states to create Insurance Health Care Exchange markets. Some states with Republican governors have refused to participate in which the federal government will create one for them.

President Obama will also certainly bring up immigration reform depending on how the budget and healthcare implementation proceed. President Obama promised to reform immigration policy in his first term but was derailed by severe economic recession and two wars. Now that the economy is in the upswing and he has successfully ended one war and is working to adjourn the second, he will have more headroom to address immigration. It is important for the Hispanic heritage constituency that voted for him 3-to-1 margin in the general election.

Immigration reform will probably be the most challenging issue to address as it virtually sunk Obama’s predecessor’s second term. Immigration is hyper emotionally charged. It is also complicated for historical reasons too many to numerate here but most contentious point has been a path to citizenship for the estimated 11 million undocumented already present in the United States.

Speaker Boehner will certainly push his party’s priorities. Opposition to tax increase on those earning $250,000 a year has been corner stone for Republicans. There is no reason to expect Speaker Boehner will abandon this position.

Speaker Boehner will probably suggest more modest approach in order to bring additional revenues. Closing corporate tax loopholes and eliminating some tax deductions such as mortgage interest for the middle class seems to be palpable to the Republicans but might not be sufficient to have dent on deficit approaching $16 Trillion.

Policies are clear and common grounds can be found. What’s not clear is whether new politics will emerge or the country is going to relive the bitter battles of the last four years.

Speaker Boehner could choose one of two approaches. One approach is to continue the intransigent approach that he took in the first term of Obama’s presidency. Boehner withdrew from the budget negotiations in 2011 to resolve the debt ceiling because he thought a deal would help Obama win re-election.

Speaker Boehner was also pushed to take more conservative position by recalcitrant members of his caucus. Boehner was challenged by ultra conservative members of the House including Jim DeMint of South Carolina. DeMint led freshmen Team Party members who refused to support the debt ceiling agreement that almost caused the country to default on its debt obligation.

Due to pressures from the far rightwing of the Republican party, Boehner refused to bring up for vote President Obama job’s bill that called for more investment for community colleges to retrain laid-off workers and invest more on improving national infrastructure. Speaker Boehner made clear his top priority was to make sure Obama was defeated in the November 6th election.

President Obama re-election presents Speaker Boehner another opportunity to change course. A model for the President and the Speaker is the well documented working relationship between former speaker Tip O’neill and former President Ronald Reagan in their tenure. Tip O’neill and Ronald Reagan worked out a deal to reform the tax code and revamp social security relative to their time. Time will tell which approach Speaker Boehner adopts.

There will also be two other less prominent stakeholders. Both agree with President Obama on policy issues but have different politics to pursue.

Harry Reid, the Senate Majority Leader, will most likely continue to support President Obama’s agenda while keeping on-eye-on the midterm elections in 2014.Almost 33 percent of the senate will be up for election in just two years time. A loss of few senators could have dramatic impact of Reid’s influence in Washington. Reid’s influence is already limited by the supermajority requirements to break filibustering. Reid will probably not be in a position to strive for big and bold agenda.

The other stakeholder is Nancy Pelosi, the Democratic minority leader at the House. Nancy will probably have minor role in any big deal that could emerge. One role is to fill the gaps by finding votes where Speaker Boehner falls short on bipartisan agreements. Another possible role but less likely is to antagonize the legislator process with procedural maneuvering in attempt to gain control of the House in 2014.

Harry Reid and Nancy Pelosi are not the only politicians already thinking about future elections. Some of the politicians contemplating to run for president in 2016 have already made plans to visit Iowa, the state always kicks off the presidential campaign.

Jamal Abdulahi