The Fiscal Cliff and Foreign Policy

It was increasingly clear as the US election night wore on that Mitt Romney would fall short of his attempt to take over the White House from President Barack Obama. Unable to get out the vote in Florida and Ohio, and perhaps underestimating President Obama’s ground operation in the two critical states, the former governor of Massachusetts would have to shelve his victory speech and work on his concession speech.

With a new lease on life and another four years to work with, Obama has much to be thankful for. Not since Franklin D. Roosevelt in 1936 was a president re-elected in the face of such a high unemployment rate. Although Romney and the Republicans had made every effort to tie the president to the current state of the economy, the electorate ultimately decided to give him another chance, albeit with a slimmer majority than last time.

Nevertheless, it is easy to see where Republicans went wrong or missed out. African-Americans, Latino-Americans, women, and young voters all cast their ballots in support of the president, at times in overwhelming numbers. Ninety-three percent of African-Americans and 71 percent of Latinos supported the president. America’s changing demographics have worked in favor of the Democratic Party at the expense of Republicans, the latter at times seen as old, white, angry and exclusionary. If changes are not made, it may well be that the party of Lincoln is on its way to becoming a permanent minority in American politics.

While the Republican Party soul searches, Obama will now have another four years to set America on a renewed path to recovery, a path not without its hurdles. Republicans maintain control of the House of Representatives, while Democrats control the Senate. It can be expected that the Republicans in Congress will demand certain concessions if they should be asked to compromise, but they alone will not pose a challenge to the president.

Priorities and a crisis of confidence

Within the coalition that helped to re-elect President Obama, each group will want a return on its investment. Environmentalists will want progress on clean, alternative energy. Latino-Americans will likely demand immigration reform. African-Americans continue to suffer disproportionately from high unemployment, with more than a quarter of the population jobless—they will press the president to make inroads on fixing the economy.

Jobs and the economy headlined the election, and it will once against rest upon the shoulders of the president to restore America’s economy. While he has much work to do at home—addressing the fiscal cliff, in which automatic tax increases and spending cuts will be enacted if alternatives are not in place—the president and Congress have their work cut out for them. Despite pressure from interest groups to advance their agenda, the president must focus on the immediate task at hand: creating jobs and restoring the economy.

Should the White House and Congress fail to avoid the cliff, there are fears of a double-dip recession in an already fragile economy. Telling perhaps, Wall Street tumbled the day after the presidential election as investors were fearful of continued gridlock in Washington, in addition to the European economic crisis.

Despite the jubilation of the majority of Americans following President Obama’s re-election on Tuesday night, there is at present a serious crisis of confidence. This lack of confidence comes not only from Americans but nations abroad, as well.

Re-focused commitments abroad

Presently, the Middle East remains in a state of disarray. Bahrain continues to protest, the civil war in Syria remains bloody with no end in sight, and a possible nuclear Iran could provoke an Israeli pre-emptive strike. In Africa, the US must deal with a recovering Libya and Egypt, and al-Qaeda offshoots and other terrorist groups in northern Mali.

And then, of course, there is China and the Western Pacific. Nowhere else is the subject of jobs and economy more relevant in foreign policy than when discussing Asia.

Later this month, the president is expected to attend the East Asia Summit held in Phnom Penh, where, in addition to addressing security concerns in the region (Obama will become the first US president to visit Burma this November), he will also address economic issues such as the Trans-Pacific Partnership, or TPP.

There is also the matter of China. China, whom Obama labeled as an “adversary” during the third presidential debate, was also described as a potential partner in the international community. Besides wrestling with China where jobs are concerned, the US president must also contend with China’s new president, Xi Jinping, and the country’s ambitions in the region.

America’s pivot to Asia has largely been spearheaded by the reallocation of its military resources. From joint military exercises to the establishment of a small Marine contingent in Australia, this pivot has, for obvious reasons, not been met with a smile and a wave from China. Strengthening and developing relationships with partners in the region have also been at the core of this pivot. Although Washington has not described its strategy as a move to contain China, Beijing has viewed it as such.

The US’s pivot to the Western Pacific will be tested if Congress fails to avoid the fiscal crisis, in which spending cuts would also result in deep defense cuts. It will be incumbent upon the president and Congress to ensure spending adjustments regarding the military will not harm its operations abroad. On this matter at least, there may be some bipartisan agreement.

However, the deployment of naval vessels and Marines to Asia will not create jobs in America, and as expressed by both Obama and Romney during the debates, China will play an important role in the US’s future. Whether charging China as a currency manipulator (as Romney had suggested) or otherwise, the White House and Congress, beyond the partisan bickering that may again dominate Washington, will have to find a way to rise above and deal with China, as well as Syria and Iran.

The credibility of America is on the line, not only in terms of financial credit but goodwill. If the US cannot resolve its economic crisis, and if Washington remains gridlocked, its ability to carry out foreign policy will be much reduced. For what reason do Libyans, Syrians, or even Israelis have to trust the word of America if American leaders cannot trust each other? For what reason does Beijing have to trust Washington when Washington cannot compromise?

The cost of failing to avoid the fiscal cliff will not simply be measured in dollars and jobs lost. It will also be measured by lost opportunities abroad.

(Khanh Vu Duc is a Canadian lawyer who researches on Vietnamese politics, international relations and international law. He is a frequent contributor to Asia Sentinel)