In dawn’s early light on Wednesday – or perhaps in the days that follow, the man whom voters choose to be president may need to take a breath when he remembers that he faces an array of near-term challenges or nightmares, some with deadlines that must be confronted in the seven weeks before New Years’ Eve.
- Automatic spending cuts: Congress passed and President Barack Obama signed into law the 2011 Deficit Control Act which will cut more than $100 billion in outlays in 2013, starting in January. These cuts were intended to be so unpalatable that they’d spur Congress and the president to strike a deficit reduction deal, but the plan seems about to backfire. Congress and whoever is president in 2013 will be getting more deficit reduction than they really want. The director of the Congressional Budget Office, Douglas Elmendorf, said in August that the cuts in spending, combined with scheduled increases in taxes at year end would cause “a significant tightening of fiscal policy” which would “probably lead to a recession early next year.”
- Taxes going up, by a significant amount – and not just on the rich. The current income tax rates expire on Dec. 31. A popular middle-class tax break, the $1,000-per-child tax credit for each child age 17 and younger, will be cut in half unless Congress and the president takes action before the end of the year. The temporary reduction in the Social Security payroll tax is also set to expire. As a result of all this, according to the Tax Policy Center, the average tax burden will increase by almost $3,500 per taxpayer in 2013. In addition, the Affordable Care Act, starting on Jan. 1, imposes a $20 billion tax increase in 2013 on people with incomes above $200,000, or $250,000 for joint filers.
- Debt limit: According to the Bipartisan Policy Center, by sometime in February the federal government will reach its borrowing limit, even with the use of extraordinary stopgap accounting measures by the Treasury Department to push back that date. The House Republicans only very reluctantly voted to raise the debt limit in 2011 after the impasse between Obama and the House GOP over debt had severely shaken the confidence of investors in U.S. financial markets. The new House may be even more resistant to a debt ceiling increase if Obama wins a second term.
- Confirmation of pivotal Cabinet members and regulatory chiefs. If Obama wins a second term he will at a minimum need to nominate a new Treasury Secretary to replace outgoing Tim Geithner and a new secretary of state to replace Hillary Clinton. Depending on the mood and membership of the Senate, the nomination hearings could prove contentious. If Romney wins, of course he will need to appoint an entire Cabinet, as well as dozens of officials to run the regulatory agencies. The president, whether Obama or Romney, will also be facing the need to win Senate confirmation of nominee to fill 82 judicial vacancies.
- Implementing the Affordable Care Act and appointing the members of the cost-cutting Independent Payment Advisory Board. The administrative mechanism to carry out “Obamacare” needs to be designed, refined and run. Romney and congressional Republicans are especially hostile to the Independent Payment Advisory Board, an outside body of experts, picked by the president, which is supposed to propose cuts in Medicare spending, with those cuts getting special fast-track consideration in Congress. So far Obama has appointed none of IPAB’s 15 members. Those nominees will be subject to Senate confirmation. If Romney is elected, whom, if anyone at all, will he appoint to IPAB?
- Chaos in Syria, WMD – and don’t forget Iran: The phrase “weapons of mass destruction” may have gone out of fashion after U.S. forces failed to find any in Iraq after they invaded in 2003, but there’s no dispute that the Syrian regime does possess a large arsenal of chemical weapons, including nerve gas. Some of those weapons and ingredients might go missing as the civil war grinds on. Meanwhile Syria’s ally Iran has carried on work to build nuclear weapons and is not cooperating with the UN’s International Atomic Energy Agency which is trying to find out more about the Iranians’ secret research.