– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –
Barack Obama looked like the walking dead after his party’s midterm wipeout. But he revived during the lame-duck Congress and closed important deals on trade, taxes and arms control. The president will need the rest this holiday season should bring, however. His “to do” list remains hearty and lengthy. The following are some of the 2011 biggies that will require the head of steam he built up this year-end.
The budget. The numbers aren’t getting any better. Federal scorekeepers had been forecasting a 2011 gap of $1.1 trillion, or 7 percent of GDP. But the $858 billion stimulus package over three years could boost those totals to $1.4 trillion and 9.5 percent. And that’s running the books on a cash-in, cash-out basis more befitting a hot-dog stand than an economic superpower. Corporate-style accrual accounting methods, which factor in future pension and healthcare costs, show 2010 liabilities exceeded assets by $13.5 trillion, according to a new Treasury Department report.
Obama’s debt commission reported in early December, but its creator has yet to say which elements he supports. That time is coming. A bipartisan group of senators will introduce the panel’s recommendations early next year.
Taxes. There’s precious little time for back-slapping on the successful extension of the Bush-era tax cuts. A good chunk of America’s tax architecture is due to expire in two years. But the code’s temporary nature may not be its worst feature. U.S. individual income and corporate taxes will raise about $1.1 trillion in revenue this year. The debt panel has identified about $1.1 trillion in revenue-losing tax breaks. If Obama wants to get rid of these myriad holes, raise revenue and cut rates, Republicans may play ball.
Trade. Now that Washington and Seoul have tweaked their deal, the U.S.-Korea trade agreement should easily pass Congress. But the White House is showing little interest in submitting treaties with Colombia and Panama for legislative approval. To boost exports and reward U.S. allies, Obama should persuade or ignore his union backers and send the pacts to Capitol Hill.
Even if the president can somehow strike all those important items from his list, there will still be a host of battles to be waged over financial, healthcare and energy regulation. And before Obama knows it, campaign season will be here.