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Obama's Grand Plans Face<br>Troubled Times

GOP-led House will put the president on defense.

Voters have presented a major test for President Obama and his agenda — a hostile Republican-led House swept in by anger at the establishment.

The Republican election sweep turns over power to a party that ran on promises to slash the size of government and repeal Obama's signature legislative accomplishment: health care reform.

"There's a high probability of gridlock," said John Rother, AARP executive vice president for political strategy and international affairs.

Many of the issues on the table are critical to older Americans, such as health care, taxes, Medicare, jobs and Social Security.

The new House lineup — the largest upheaval since Newt Gingrich's GOP revolution in 1994 — means Republicans will also wield the legislative branch's investigative powers, which could be used to probe inside the Obama administration.

In the Senate, Republicans couldn't muster the seats needed to clinch a majority, but they gained enough to have a major impact in a chamber where the rules give great power to every single senator. Republicans will have enough votes to filibuster and block votes on legislation.

"The Senate is going to be a legislative killing field under any scenario," said Michael Franc, vice president of government relations at the conservative Heritage Foundation.

Obama also must face the reality of a public angry at everyone in government. Obama's approval rating is just 46 percent among voters 50 and older, according to Gallup. If there's any consolation for him, it might be in the fact that the public thinks even less of Congress — only 14 percent of those 50 and older approve of Congress.

The combination of voter rage and the newly invigorated Republican House majority means that many of the grand plans Obama had for the second half of his term likely will be unrealized. Instead, he will spend time defending existing programs like health care reform, and finding areas where he can work with Republicans.

"We're going to need to work together — Democrats and Republicans and independents — to get it all done. But, you know what, so far we're not seeing that from the other party," Obama said on Sunday in Cleveland.

The two parties may never reach agreement on the hottest topics of the day, but some smaller issues might be ripe for bipartisan accord. White House press secretary Robert Gibbs, for instance, in recent weeks talked about working with Congress on tax cuts for businesses to encourage investment and purchasing.

Stephen Hess, a senior fellow emeritus at the left-leaning Brookings Institution, said he doubts Republicans will succeed in rolling back the parts of Obama's agenda that already have passed because the president, after all, still carries veto power in his back pocket.

"The question is, is there any forward thrust in the next two years?" Hess said.

Obama will have a few options for how to approach life with a new Republican partner in Congress. Political experts say he can push some ideas through regulation and executive orders; he can try to work with Republicans as President Clinton did after the 1994 election; or he can lie low and hope the Republicans shoot themselves in the foot and suffer in the 2012 election.

"I think he might just find a bomb shelter, [and] use the veto where he has to use the veto," said Hess, who served in the White House under Presidents Eisenhower and Nixon.

Obama is unlikely to work with Republicans as much as Clinton did. Obama showed that he is less willing to jettison issues that are important to him when he stuck by his ambitious health care overhaul in the face of Republican opposition, Hess said. Clinton, in contrast, jettisoned his own health care plan when he ran into gale-force GOP resistance.

Obama may search for lower-profile issues, like trade pacts and education policy changes, where Republicans are likely to work with him, Hess said.

That approach, like relying on executive powers, will lead Obama to stick to measures that are less sweeping.

"The executive branch can do a lot on its own through rule-making and executive orders," Rother said. "But not the big stuff."

Here are some of the major issues and how they are likely to fare in the world of divided government:

Taxes. Bush-era tax cuts expire at the end of the year. The lame-duck Congress soon will try to find a compromise to extend the tax breaks. Republicans want all of them to stay in place, while Obama would like to keep the tax cuts in place for the middle class but let them expire for the wealthiest Americans. Many analysts expect Obama will agree to extend all of them for a year or so.

The estate tax also might get a short reprieve. Because of disagreements in Congress, the tax on inheritance expired this year. Starting next year, it is scheduled to go into effect at high rates on estates valued at more than $1 million. Congress is likely to push the issue off until next year and then reinstitute the tax, but with a larger exemption than in recent years — such as no tax on the first $3.5 million per person, said David Gergen, an adviser to Clinton and several GOP presidents and director of the Center for Public Leadership at the Harvard Kennedy School. The uncertainty has been hard on many senior citizens, Gergen said.

Deficit, Social Security, spending and jobs. A bipartisan presidential commission is expected to report by year's end on how to tackle the ballooning deficit. Both Obama and Republican leaders have said the issue is crucial. Public opinion polls show voters agree.

But actually getting anything done is difficult. Republicans generally refuse tax increases as part of the solution, and Democrats usually fight against benefits and spending cuts.

"If you're going to get a change on this, someone is going to have to take a big political risk," said Al From, who created the centrist Democratic Leadership Council.

Republicans have vowed to cut spending to reduce the size of government, starting with a rollback to 2008 levels. That makes it unlikely that Obama will have a chance to pass another large-scale stimulus package to try to create jobs.

Many of the most-talked-about proposals for dealing with the deficit would have an impact on Social Security, such as raising the retirement age or changing Social Security tax rates.

"It means we'll be under the gun much more than we have been," said Barbara B. Kennelly, president and CEO of the National Committee to Preserve Social Security and Medicare.

Kennelly noted that the probable new chairman of the House Budget Committee, Wisconsin Republican Paul Ryan, favors private accounts for Social Security and vouchers for Medicare.

Health care and Medicare. Republicans minced no words on the campaign trail about how they felt about "Obamacare," the health care reform that broadens the number of people covered by insurance by putting new requirements on businesses, insurance companies and individuals. Many of the people elected Tuesday want the plan repealed.

Rother and others don't expect Republicans to have the votes to override a presidential veto. But they could try to slow down funding for health care reform or pick off small provisions, said James Thurber, director of the Center for Presidential and Congressional Studies at American University.

One piece of health legislation that will come up quickly is the formula used to calculate reimbursement for doctors who treat Medicare patients. If Congress does not act, reimbursement rates for doctors will automatically be cut by 23 percent at the end of the year, according to Rother. That could make it harder for seniors to find available doctors. Rother expects the lame-duck Congress to put the matter off until next year, which would raise the price tag of an eventual solution.

Energy and the environment. Sweeping plans to tackle global warming issues and energy policy are on ice. Obama's so-called cap-and-trade legislation to regulate the greenhouse gases that create climate change was wildly unpopular with the business community.

"Cap and trade is dead for a generation, if not forever in America," said Thurber.

Some environmental measures could be approached through regulatory policy, which Obama still controls. Franc, of the Heritage Foundation, said Democratic efforts to regulate carbon dioxide would have to be done through executive branch rules if Obama wants to have a chance of seeing them happen.

Tamara Lytle is a veteran Washington-based political correspondent.

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