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2012 Elections: Fiscal Cliff Looms Large, Senate Shuffles

Posted by Colin Clark on



UPDATED: Added Comment By GOP Strategist John Ullyot About Obama Being In Strong Spot To Negotiate End of Sequestration If Reelected.

WASHINGTON: All eyes are on the presidential vote tomorrow, with the country seeming to thrum with anticipation, fear and relief. What will all this sturm und drang mean for defense?

Before we reveal our wisdom for the ages (or at least til tomorrow) let’s make it clear we are operating on several basic assumptions, all of which could be proven wildly wrong by the wisdom of the American voter. But here they are.

Obama wins.

The House remains Republican.

The Senate remains Democratic.

After conversations with half a dozen defense experts who watch all this election stuff really closely, and combining it with my own analysis, our consensus is that, overall, not a great deal will change much in the defense world — at least not for a while.

Congress will not act before Christmas to stop us from falling off the fiscal cliff. Our fiscal future was most eloquently summarized by Mackenzie Eaglen at the American Enterprise Institute:

“Any grand bargain would have required some groundwork to be laid by now among senior members and staff. That has not happened. So that means, by default, a mini-bargain would be the best case scenario to address the cliff,” she said in an email. “And that is in question if this election is close, which it looks to be (e.g., no side has a clear ‘mandate’). That means we’re looking at more of the same and a frantic race to the deadline with a patchy fix that pleases few and probably prolongs the pain and/or uncertainty.”

A longtime watcher of things congressional offered this glum assessment:

Based on the leadership we’ve had….which we’ll still have after tomorrow….and their track record, you really have to believe in Santa Claus to see a solution before Christmas.

Why the long face? He offers a cogent assessment of things even if Romney is elected and can — presumably — work more closely with the House GOP. “Republican leadership (and the House will remain in Republican control) will want to address all the issues with the new Administration and the new Congress. Certainly the Speaker will not want to work with a lame duck President. Ergo, we go over the cliff but have a path to retroactively solve the issues later/early next year.”

With an Obama win, he thinks, “there is a better chance that the R’s and D’s solve some of the challenges before the end of the year. Still challenging, if not unlikely, but a slightly better chance. R’s know that if the economy goes south with another recession, many will not be reelected in ’14 and they could very well lose control of the one body they lead. Of course if they can’t solve (Sequestration, expiring tax cuts, Medicare payments, the debt ceiling etc etc) by Christmas, they’ll revisit when the new Congress is sworn in in January.”

Another seasoned expert on Congress — a Republican strategist who used to be Sen. John Warner’s spokesman when he was chairman of the Armed Services Committee — thought an Obama win would actually place the president in a tantalizingly powerful position when it comes to negotiating our way toward the fiscal cliff.

“If Obama wins, he will really be in the driver’s seat to strike a grand bargain on the debt along the lines of Simpson-Bowles, using the twin levers of sequestration and the expiration of the Bush tax cuts,” John Ullyot told me. “Because legislation repealing sequestration and extending the tax cuts for the middle class will both need his signature, he will be in a position to press Republicans to accept terms — especially on revenue — that will go far beyond what they would agree to under a President Romney.” Remember, this is a Republican talking.

In the Senate defense world, some change certainly is afoot. Three of six subcommittee chairs are retiring from the Senate Armed Services Committee: Lieberman from Air Land; Ben Nelson from Strategic Forces; and Jim Webb from Personnel. Sen. Daniel Akaka is stepping down. GOP Sen. Scott Brown, the ranking member of Air Land, faces a tough reelection race against liberal darling Elizabeth Warren in Massachussets. Three more defense-minded senators are retiring, all of them Republicans: Sens. Kay Bailey Hutchison (who sits on the powerful Senate Appropriations defense subcommittee), Olympia Snowe, and Jon Kyl. But much of this change will be mitigated by the fact that Carl Levin is likely to remain chairman but not with his GOP wingman, John McCain. The Arizona senator is limited by GOP rules limiting the number of terms he can serve. Sen. James Inhofe of Oklahoma is widely assumed to slip into the post.

In the House, Rep. Todd Akin — he of the now infamous rape remarks — is leaving the House Armed Services seapower and projection subcommittee chair vacant. But Rep. Buck McKeon is almost certain to remain committee chairman, making much policy change unlikely.

Back in the executive branch, there will be some changes even if Obama is reelected. “Hillary may leave State and there may be other changes, but fundamentally the Administration players continue,” our congressional watcher believes.

However, Leon Panetta, not exactly a spring chicken, is widely expected to leave relatively soon after the election. Michele Flournoy, former undersecretary of defense for policy, is widely bruited as a candidate, as is Ash Carter, Panetta’s deputy.

Now, should Romney win, no one really knows whom he might pick as defense secretary. Former Navy Secretary John Lehman and former Senator Jim Talent have served as advisors but prominent campaign advisors have a relatively lousy record of rising to office. And we hear both men “have served their purpose.”

Robbin Laird, one of the defense world’s more interesting iconoclasts, notes that — regardless of who wins — America faces a very challenging world, one that will require agility and courage to manage.

“The U.S. will face more challenges than we’ve faced in a long, long time. How capable will the policy system be at responding to these?” he wonders, ticking off a “nuclear Iran, increasingly nuclear China and North Korea… The Middle East is blowing up, big time. A number of countries are becoming more assertive. The Russians are becoming more assertive. The Chinese are becoming much more assertive.

“Then you add to the fact we are transitioning in Afghanistan and you have this huge problem of our adjusting US force structure to cope with the future,” says Laird, a member of the Breaking Defense Board of Contributors. Then he asks the big question whoever wins the White House must answer: “Are these guys going to put together teams who can deal with it?

What do you think?