Obama at threshold of fiscal crisis

President Obama and Speaker Boehner have agreed to put partisanship aside to deal with the looming fiscal crisis. Courtesy of MCT.

 

Newly re-elected President Barack Obama is back to work tying up the loose ends that left Capitol Hill frayed in the months leading up to last Tuesday’s decisive win for Democrats in the Oval Office and the U.S. Senate.

The looming fiscal crisis, skyrocketing national debt, immigration reform, health care and a stagnant job market face Washington, D.C. at a time when Millennials are looking for jobs and a future after college.

During the second presidential debate, Obama and Gov. Mitt Romney fielded numerous questions by citizens who wanted to directly interact with the presidential candidates.

When asked about student debt and the swelling cost of higher education, Obama promised to make college more affordable in an economy that has been improving at a moderate pace since its plummet three years ago.

Until Tuesday, Obama has had his hands tied with a staunch GOP-controlled House of Representatives that attempted to block any bill that would increase taxes, business regulation or universalize healthcare.

Obama supporters have branded him as a president who has made college more inexpensive with standardized loan programs, increased pell grants and pell grant qualifications for students.

College affordability has been a top priority for Obama, which is a major contributing factor to the number of votes he received by nearly a “two-to-one margin,” said Abraham White, communications associate for the Center for American Progress, an openly liberal think tank in Washington, D.C. that has championed Democrats in the political arena for years.

“Fighting student debt and ensuring that financial aid is available to every student who needs it is critical to our generation’s success and the President has already shown his commitment to those goals by doubling investments in Pell Grants and keeping interest rates low on federal student loans,” White said.

But skeptics from the middle and the right have called Obama’s education policy somewhat idealistic and unrepeatable from the last time he had an opportunity to do so in the form of monetary stimulus packages handed out to states for their public educational networks.

Michael McShane, M.Ed., a research fellow for the American Enterprise Institute in Washington, D.C., recently authored a book titled President Obama and Education Reform: The Personal and the Political, in which he describes Obama’s educational policy in more depth than his presidency. He said Obama will likely have to herald more reforms from the bully pulpit instead of pumping money directly into the system, which he had the luxury of doing in his first term.

“In his first term, he had the advantage of stimulus package, so the types of reforms, things he was pushing, he was able to tie billions of dollars of spending along with him,” said McShane. “It doesn’t look like, in his second term, he’s going to have that same luxury.”

“There’s probably not going to be another stimulus—there’s not going to be another wholesale kind of bailout for the states,” he said.

McShane added that Obama will probably be limited when it comes to his educational policy due to the lack of funds he had on hand last time.

Cliffhanging

Both sides of the party-split aisle decreed days after the election that a pact is necessary to parry the impending fiscal crisis when the Bush-era tax cuts expire Jan. 1.

In a major speech, Speaker of the House John Boehner called for collaboration between the embittered sides to come to an agreement before the ticking halts at the end of the year, which will shoulder the U.S. over what has been called the “fiscal cliff.”

The fiscal cliff is dismally described as an estimated $3,500 per household increase in taxes, in addition to the first $110 billion of $1.2 trillion in spending cuts set to occur over 10 years.

“Let’s challenge ourselves to find the common ground that has eluded us,” said Boehner to the nation. Wall Street was unimpressed—the Dow Jones took a 313-point nosedive in the wake of an uneasy market on the edge of its seat to see what lawmakers will do.

On Monday, a White House official told Politico that this week the president will conduct a series of meetings with leaders from the labor, business, Congress leader and civic organizational communities to draw a plan to avoid the fiscal cliff.

In a show of good faith, Obama said he hopes to curb the predicament by limiting an extension of the tax breaks to the most wealthy, or earners who make $250,000 or more a year.

However, Romney aggressively centered on his campaign on deregulation and lower taxes for all in order for businesses to have more spending capital to hire more workers and produce more.

Congressional Republicans are likely to uphold this principle as they always have.

A sullen and bruised job market

The job market, especially in Orange County, has been on the uptick in the last quarter and will likely continue to improve, according to the 2013 Economic Forecast by Cal State Fullerton’s Institute for Economic and Environmental Studies research and report released in October.

White noted that in spite of the fact taxation and how it leads to job creation is a major divider between the two parties and reducing the deficit is a priority for Republicans, they must find a balance before the American people lose out.

“While fiscal sustainability is a critical ingredient in building a strong economy and better future for the generations to come, it is just as important to maintain investments in the current generation and ensure that everyone has the opportunity to succeed,” White said.

“Finding the balance between these two will be essential to if Congress is serious about healing the economy and putting America on the right path,” he said.

McShane said although there have been indications of private sector job growth in the last few months, it has not overcome the threshold that would demonstrate a large-scale comeback that is badly needed.

“I think the message to students at Cal State is to not hold their breath on the government solving this,” McShane said. “I think their best hope for employment after graduation will be for the economy to do better.”

About David Hood

David Hood is a newspaper and print design enthusiast. He is proud to be the co-winner of the National Scholastic Press Association’s 2008 Design of the Year Award for Newspaper Design for his high school newspaper, Crimson, in Paso Robles, Calif. After serving the Daily Titan as a Layout Editor, he traveled to Washington, D.C. to the Washington Journalism Center where he interned as a business reporter at The Washington Times and garnered 20 bylines, four on its front page. He hopes to rekindle people’s interest in news for better public discourse and understanding.