Will Obama's victory change Washington?
MSN Money readers see more gridlock ahead, but an economist says it's no longer an option.
Moreover, the Republicans can continue to obstruct Obama from the House of Representatives, where they retain control.
Many voters are justifiably cynical that much if anything will change in Washington, D.C., even though both parties have vowed to work together to solve the serious issues affecting the economy. It's no wonder the stock market has plunged in the first trading day after the election.
"After $6 billion+ spent on campaign b.s. we are back where we started: Republicans control the House and Democrats control the Senate and the White House," wrote reader Shawn L. on the MSN Money Facebook page last night. "Welcome to 4 more years of getting nothing done in Washington."
Another reader, Karla L., questioned whether the "Republican House will acknowledge or accept that Obama won."
That's a fair point. But if there is one lesson that can be drawn from the 2012 presidential election, it's that the nation may not be as divided as many people think. Obama's victory, though not a landslide, was certainly decisive. The former community organizer had bigger victories in both the electoral college and the popular vote than John F. Kennedy (1960), Richard Nixon (1968), Jimmy Carter (1976) and George W. Bush (2000), according to The Nation. House Speaker John Boehner (R-OH), however, can also point to the fact that voters decided to keep the GOP in control of the House as evidence that voters are not enthused about Democrats' efforts to raise taxes on the wealthy and to carry out health care reform.
"The result is that gridlock will continue, that businesses and consumers will have to cope with a great deal of uncertainty in terms of the availability of essential government services, the level of taxes they will be expected to pay and even whether or not their government will default on its debt obligations," Scott Lilly, a senior fellow at the Center for American Progress, wrote in an email.
Fitch Ratings on Wednesday warned the U.S. government that it faces a credit downgrade unless Congress and the White House address spending cuts and tax increases that would likely send the economy back into a recession. Then there's the pesky issue of the debt ceiling, which enables the government to borrow money from China and other sources to fund its daily operations. Arguments over the debt ceiling almost led to the U.S. government's defaulting on its obligations for the first time in its history.
"Unfortunately, gridlock is no longer an option," Nigel Gault, a chief economist at IHS Global Insight, said in an interview. "Will the Republicans in Congress continue to oppose any policy that includes an increase in taxes?"
Gault expects that attitude to change, given the results of the election. They have little choice.
It seems likely that Obama and the Republicans will come to a temporary agreement on the fiscal cliff and debt ceiling before the end of the year and push off a grand bargain until the new Congress convenes in 2013.
Follow Jonathan Berr on Twitter@jdberr.
In Bizzarro world, up is down, in is out, bad is good. You enter a room and say "Goodbye" and leave while saying "Hello".
Thus, the negative, vicious, hateful comments you will read on this blog are really terms of admiration and endearment. After all, it's the way many of the posters talk regularly to their loved ones.
Have a good one, I mean, have a bad one.
I agree with Nigel Gault; the House Republicans will have to deal to avoid the fiscal cliff. Washington will not change but go back to making deals that more or less get the country running. The big corporate money will demand that at least a deal is made.
The drop of f over 300 points in the Dow stock index on the day after the Election is a wake up call to all Washington pols to make a deal.
I may be wrong.
he is the welfare foodstamp president! 4 more years will destroy this country!
how more than 1/2 the country gave this clown another 4 years is what's wrong with americans!
it's obvious he's a liar! he's corrupt! he has no experience! he's anti capitalism! big govt and union!
he's taking over healthcare and he can't even help the people on the east coast! he's doing nothing!
if i was republicans i would just vote present on all bills! let the country go to crap! then the left
bias media can't blame them for anything in 4 years! where' sthe media on the incompetence
of the govt with the hurricane rescue? they blasted Bush and he did a great job! F the media!
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Breaking up big banks is an untested solution to the too big to fail problem that attempts to isolate and dismantle large, troubled institutions while protecting the rest of the economy.
VIDEO ON MSN MONEY
[BRIEFING.COM] The major averages have dropped to fresh lows with the Dow Jones Industrial Average (-0.4%) pacing the retreat. Large components like Visa (V 203.39, -2.27) and Nike (NKE 75.81, -0.79) are pressuring the index, trading lower by 1.0% apiece.
Just reported, October business inventories rose 0.7%, which was above the 0.3% increase expected by the Briefing.com consensus. This follows the prior month's revised increase of 0.5%. Nasdaq -0.68 at 4003.13... ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|