August 10, 2011
WASHINGTON'S GRIDLOCK CAN ONLY BE SOLVED BY ROSS PEROT-TYPE PRESIDENT

ANALYSIS & OPINION BY RUSS STEWART

The worst is yet to come. President Barack Obama's 2012 reelection prospects diminish with every seemingly insoluble economic glitch, but the Republican presidential field is so insipid that a second Obama term is still a possibility.

This much is clear: There has been no Obama-led "post partisanship" in Washington . The president has governed as a predictable liberal, and the Republicans have responded as predictable conservatives. In the debt-ceiling crisis, the Democrats insisted on "revenue enhancements" -- meaning tax increases -- and no cutbacks in entitlements (Medicare and Social Security). The Republicans were implacably opposed to tax hikes and defense spending reductions.

The Joint Committee on Deficit Reduction is a farce. It must slash the existing $15.2 trillion national debt by $1.2 trillion over 10 years, or $600 billion annually. The interest on the debt is more than $1.6 trillion a year, and that will increase due to the downgrade in the country's credit rating. Already, Obama is blaming the Republicans.

In 2012 the Republicans will retain control of the U.S. House, in which they have a 241-194 majority, and gain at least seven seats for a 54-46 majority in the U.S. Senate. Gridlock will ensue. The 2016 presidential campaign will commence in 2013. Partisanship will run rampant. For Obama's next term, the two parties' preoccupation will be about positioning themselves for 2016, not solving any problems. America will endure 4 years of, to use a military colloquialism,  SNAFU -- Situation Normal: All Fouled Up.

In the 1992 presidential election, as the country emerged from a modest recession, billionaire Ross Perot's "reform" rhetoric garnered 19,741,048 votes (19.0 percent of the total cast), in a turnout of 103,751,563. Given the intractability of the current situation and the existing establishment's refusal to compromise, why is there no Ross Perot in 2012? The next term demands a president with the guts to make serious cuts in entitlements, to extricate America from at least two of three wars, and to rejuvenate the economy by lowering taxes. It can't be either a Republican or a Democrat. It can't be somebody who expects to be reelected.

It must be a personage such as Bill Gates, Steve Jobs or New York Mayor Mike Bloomberg, billionaires who can self-fund their own campaign, promise to make the hard decisions, take the heat, and do what must be done in one term.

If Obama is reelected and the Republicans control Congress, then the Paul Ryan fiasco will not be repeated. The Wisconsin congressman's plan was to cut the budget by $6.2 trillion over time, lower the corporate tax rate to 25 percent, repeal the Obama's health-care initiative, reduce the cost of government to below 20 percent of the gross domestic product, and bring the federal deficit, which is $4.4 trillion under Obama, to under $1 trillion.

The Democrats, predictably, excoriated the Republicans for catering to millionaires and billionaires, balancing the budget "on the backs of seniors and the poor," and promptly won a special New York congressional election. Ryan's idea has not been heard since, and a lesson was learned: Voters are eager for "reform," but not if it takes money or benefits out of their pocket. According to the 2010 census, Americans age 45 and older are now a majority of U.S. voters, and with 78 million "Baby Boomers" (born from 1946 to 1965) heading into retirement, it is political suicide to even talk of entitlement cuts.

This much is certain: Since about $1.8 trillion of the $3.6 trillion annual budget is allocated to Medicare, Social Security and defense, and $1.6 trillion is allocated to paying interest on the national debt, there is only about $200 billion in "discretionary" spending. Congress slashed $3.8 billion in April, and it is supposed to cut $90 billion a year over 10 years in the deficit reduction package. Under the plan, if Congress doesn't make the cuts, a $120 billion cut will result in 2011, half from entitlements and half from defense.

Here are the possible scenarios:

First, Obama wins in 2012 and the Republicans control Congress. Utter gridlock. The Republicans, seeking to augment their majorities in 2014 and win the presidency in 2016, will be obstructive and exhibit a tax-cut fervor, but they won't let themselves be painted into an anti-entitlement corner. Obama and the Democrats in Congress, seeking to solidify their liberal base, will maintain the status quo, namely, no entitlement reforms. The economy won't rebound, the Democrats will suffer more losses in 2014, and a Republican will replace Obama in 2016.

Second, a Republican wins the presidency in 2012 and the Republicans control Congress. The "Ryan reforms" materialize. The Democrats, seeking to retake Congress in 2014, feebly obstruct the inevitable, polarize seniors with mendacious rhetoric, and win back the House in 2014. The Republicans learn that no good deed goes unpunished, and the Republican president is a one-termer. A Democrat is back in the White House in 2016.

Third, an independent wins the presidency in 2012, chaos ensues, both parties obstruct, the two-party system self-destructs, and a new party emerges in 2014 in support of the president.

Given the economic situation, the second scenario is most likely. An Obama win in 2012 looks less and less likely. Here's why:

*The stock market's value has collapsed by $1 trillion in 2011, mostly in the last week. All of the market gains in 2011 have been erased.

*Economic growth will not exceed 3 percent this year. The GDP grew by 1.7 percent during the first half of the year. Mexico had a GDP growth rate of 5.5 percent in 2010, and Canada 's GDP grew 3.9 percent. America is eating their dust. A "no growth" economy means negligible new revenue.

*Unemployment, which was 7.8 percent when Obama took office in January of 2009, was 9.2 percent in June. Job creation was 117,000 in July, with 150,000 new jobs needed monthly to sustain population growth.

There were 139 million Americans employed in June of 2009, and that number is unchanged. The percentage of employed has declined from 49.3 percent in 2000 to 45.4 percent in 2010.

*The premise that government is the answer has become increasingly dubious. The "stimulus" pumped $787 billion into the economy, the automotive bailout $80 billion, the Hire Act $17.6 billion, and the Small Business Jobs Act $30 billion. Now Obama and the Democrats want to spend billions more on infrastructure, adding to the deficit for road repair and construction.

*The total debt of America , including future entitlement payments and existing credit card and mortgage debt, is reported as a staggering $77 trillion. The debt ceiling was $9 trillion in March of 2006, and it has soared by more than $5 trillion in 5 years.

While Obama wants to "tax the billionaires," some of whom donated $35,000 per plate at his recent Chicago fund-raiser and who probably will enable him to raise $200 million for his reelection campaign, the fact is that the top 1 percent of earners pay 40 percent of all individual income taxes collected and the top 10 percent pay 70 percent of all taxes collected. Roughly 46 percent of Americans pay no taxes at all. The so-called Middle Class, earning $33,000 to $163,000, pay the rest.

*Another government "shutdown" looms for September, when Congress' continuing resolution expires; another $28 billion must be appropriated. Expect the usual rhetoric and gridlock.

Going into 2012, sizable Republican gains in the Senate are inevitable. Of the 33 seats that are up for election, 23 are held by Democrats, of which five ( North Dakota , Wisconsin , Virginia , New Mexico and Hawaii ) are open, and six incumbents ( Missouri , Nebraska , Montana , Florida , Michigan and Ohio ) are vulnerable. Of the Republicans, incumbents are at risk in Massachusetts and Nevada , and maybe in Arizona if Gabrielle Giffords runs. In all likelihood, Republicans will have 54 to 56 Senate seats and 245 House seats going into 2013.

And, the 2016 presidential campaign begins in 2013. Presuming Obama wins in 2012, there is no obvious heir apparent. Vice President Joe Biden would be age 73 in 2016, and Secretary of State Hillary Clinton would be age 69. Both are tied to Obama's administration. Potential Democratic candidates include Governors Andrew Cuomo of New York , Deval Patrick of Massachusetts , John Hickenlooper of Colorado and Mike O'Malley of Maryland , and Senator Mark Warner of West Virginia .

The Republican field includes a slew of tax-cutting, budget-balancing governors: Chris Christie of New Jersey, Bobby Jindal of Louisiana, John Kasich of Ohio, Bob McDonnell of Virginia, Susana Martinez of New Mexico and Sam Brownback of Kansas, along with Senators Tom Coburn of Oklahoma, Rand Paul of Kentucky, Marco Rubio of Florida, Scott Brown of Massachusetts and John Thune of South Dakota.

Should the economy not rebound, and should gridlock persist, the parties' strongest nominees would be governors, not senators -- somebody not tied to Washington .