President Barack Obama and congressional Republicans agree on the broad message from Tuesday's election: Americans are deeply concerned about the anemic economy and frustrated by the lack of progress toward creating more jobs and a stronger recovery. Beyond that, there is little indication from a subdued president and emboldened Republicans that there will be a sudden outbreak of bipartisanship in Washington. There is too much at stake in households across the nation to remain gridlocked until the 2012 elections.
The day after Republicans took control of the House and gained seats in the Senate, the GOP's leaders signaled they expect Obama to be the one who gives ground. Senate Republican Leader Mitch McConnell said his party's large gains mean voters appreciated Republicans acting as the Party of No. Incoming House Speaker John Boehner said Republicans still want all of the Bush tax cuts to be extended and health care reform to be repealed. That hardly suggests an opening for consensus.
Obama accurately described the Democrats' midterm losses as a "shellacking." He accepted responsibility for the slow pace of the economic recovery and left the door open for compromise on issues such as the extension of the Bush tax cuts and clean energy. But he was short on specifics and appropriately defended health care reform and measures such as the federal stimulus to limit the damage of the economic collapse. The challenge for the administration now is to accept that the political landscape has shifted, preserve the achievements of the last two years and find ways to move forward in smaller bites.
There are some immediate opportunities. First, the president and Congress must reach an agreement on the Bush tax cuts, which expire at the end of the year. Obama should negotiate extending the cuts to households above the $250,000 income limit that he proposed. Republicans should not continue to insist the tax cuts be extended for all. It is hypocritical to harp on reducing the federal deficit but promote $700 billion in deficit spending to pay for extending the tax cuts for the top 2 percent of household incomes. What is a reasonable income limit? $500,000? $1 million?
Second, Obama's bipartisan commission on deficit reduction is expected to make its recommendations by Dec. 1. With any luck, there should be suggestions from that panel that both the administration and congressional Republicans can embrace as a starting point.
Don't expect Tuesday's results to trigger a bold plan to immediately create more jobs. The quickest way would be more federal stimulus, and Obama's pitch to invest more in new infrastructure is all but dead. Tax cuts alone are not going to encourage employers to hire. And the Federal Reserve's bold move on Wednesday to buy another $600 billion in treasury bonds should keep interest rates low — but mortgage rates already are low and the housing market in Florida and elsewhere has yet to rebound.
The next election campaigns start now. Obama has to better explain his vision and defend his approach, and Republicans have the responsibility to be more than obstructionists in Congress. If Washington remains in a partisan stalemate for the next two years, expect voters to be just as frustrated in 2012 as they were this week.