Obama’s second term – defining the legacy

On Tuesday night, President Obama was able to take a firm lead in the electoral college and take a larger share of the popular vote than challenger Mitt Romney. The question remains, what will the President want as his legacy after two full terms as the leader of free world?

Bill Clinton became known as a uniting force for his move-to-the-middle just prior to his re-election, George Bush was awarded a war monger label and Reagan will be remembered for the collapse of the Soviet Union. How will Obama shape his second term in order to salvage his legacy?

He could move to the center on the issues of federal spending, government regulation, education and taxation while bringing both houses of Congress together to solve critical issues – a move almost all Americans would appreciate.

On tax reform, the President could push to end deductions for the wealthy and accept the same change for the rest of the tax base as a compromise. It would broaden the tax base, increase revenue and would give on things that leaders of both parties want.

Federal spending will be challenging. The President’s past budgets have failed to garner acceptance from either party in either chamber. The President should at least demand a budget from Congress – it would be the first one in almost four years. The budgeting process will hammer out federal spending and with a divided government, compromises will have to be made. Unwillingness to compromise is the primary reason Senate Majority Leader Harry Reid has avoided the process during Obama’s term.

Government regulation will be more difficult for the ideologue-in-chief. Allowing the free-market the space to run has not been the mainstay of the Obama presidency. Obamacare, coal regulations, gifts to solar and wind companies and government intervention in the bankruptcy of GM and Chrysler were some of what was done in the first four years. There is little hope that Obama will go centrist when he doesn’t have to. The current administration has shown a penchant for legislating from the executive and it is likely to continue. There are several regulatory moves that are near sure bets:

• The EPA has already started work on a set of oppressive regulations on the coal industry expected to come out at the end of November
• Obamacare will go into full effect in 2014
• During the debates, Obama threatened another gun ban – some form of stricter regulations on firearms is expected
• Student loan reform

The chilling effect on American business could be catastrophic. Between healthcare and rising fuel/energy prices, it will become even harder to hire additional employees than it currently is. Applebees and other huge job creators have already announced plans to cut employee hours in order to avoid costly government rules. With Obamacare repeal a near impossibility now, businesses will start to re-organize for the new reality of America’s economy.

Foreign policy will be tougher for the President. The Middle-East is on fire and getting hotter with Syria and Iran at the center of a downward spiral. Should Israel decide to attack Iran’s nuclear facilities, it is unlikely that Obama would back the U.S. allie. If Iran closes the Straight of Hormuz in response, the U.S. would probably request more sanctions. The Russians can expect Obama to live up to his promise to former President Medvedev to be more flexible.

Despite being re-elected to their positions in the house, many are calling for Republicans to give concessions to the President and Senate. Compromise isn’t about one side giving everything while the other stonewalls. The President will need to work out a grand bargain on the budget or face the fiscal cliff that he set in motion by pushing for sequestration. Harry Reid will need to come to the table ready to compromise every bit as much as John Boehner. If either side goes all-or-nothing, they should expect to get nothing.

Ultimately, President Obama’s legacy is not set-in-stone. How he is written into history is largely up to him. Will he pull both sides together and hammer out real solutions to real problems or will this be another four years of partisan politics and demagoguery? Barack Obama will either be known as the most divisive president in history, the most vacationed president in history or the president that united both parties and got things done – which one is up to him.