Obama's Mandate

President Barack Obama has two major domestic policy initiatives to his name after his first three years in office:  the American Recovery and Reinvestment Act of 2009 (the stimulus), and the Patient Protection and Affordable Care Act (Obamacare).

Neither of these policies are particularly popular, and this presents a significant obstacle to Mr. Obama's re-election.  Polls have consistently shown lukewarm support at best for the stimulus package, with a clear minority of Americans believing that Mr. Obama's policies have actually helped the job situation.

Similarly, Americans have consistently favoured the repeal of Obamacare by a significant majority. The individual mandate in particular is dangerously unpopular from a political perspective:

Americans overwhelmingly believe the "individual mandate", as it is often called, is unconstitutional, by a margin of 72% to 20%.

Even a majority of Democrats, and a majority of those who think the healthcare law is a good thing, believe that provision is unconstitutional.

The Supreme Court this week heard oral arguments over the constitutionality of the health care law, with a decision to be handed down by the nine justices prior to the presidential election in November.

Day two of arguments was concerned solely with the individual mandate, and by all accounts proceedings went horribly wrong for the law's defenders.  Solicitor General Donald Verrilli was peppered with questions by the justices, and he often lacked satisfactory answers.

Importantly, Justice Anthony Kennedy, the so called 'swing voter' of the court, seemed to be disposed against the government's arguments.

It is almost certain that Justices Ruth Bader Ginsberg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan will rule that the mandate is constitutional.

Meanwhile, Justices Samuel Alito, Clarence Thomas, Antonin Scalia and John Roberts are equally likely to side with the challengers.  This leaves Justice Kennedy with the deciding vote.

Thus there does seem to be a tangible risk that the individual mandate, if not the entire law, will be deemed unconstitutional by the Supreme Court.  What would this mean for the President and his chances of re-election?

Wall Street Journal columnist Peggy Noonan captures what the sentiments of the American people would likely be, given a hostile decision by the court:

The constitutional law professor from the University of Chicago didn't notice the centrepiece of his agenda was not constitutional?  How did that happen?

Maybe a stinging decision is coming, maybe not, but in a purely political sense this is how it looks:  We were in crisis in 2009 - we still are - and instead of doing something strong and pertinent about our economic woes, the president wasted history's time.

With Americans largely believing that his stimulus package was ineffective, President Obama needs his healthcare law to be upheld, even if it remains unpopular.  Otherwise he will be left broken, embarrassed, and without any record of significance after a full term in office.

Swan's Surplus

Wayne Swan has been more prominent in the media lately, as he has begun to lay the rhetorical groundwork for his fifth budget, to be delivered on May 8.  The Treasurer is talking a tough game:

Yesterday, Treasurer Wayne Swan told a Sydney business breakfast that Australia should expect a tough budget in the face of lower-than-expected tax revenues and the need to reach a surplus.

"We will need to cut and cancel existing programs if we are to meet our targets and we'll need to redirect some spending to where it is needed most," he said.

This all seems a little too familiar to me.  Every year, Mr. Swan spends the month in the lead-up to his budget emphasising the need to engage in fiscal restraint.  In the past he has inevitably failed to cut spending in any truly significant way - and any cuts at all in recent years have been entirely neutralised by new expenditures.

The 'lower-than-expected tax revenues' to which Mr. Swan referred yesterday are also a recurring theme, and there is a very simple explanation as to why.  The government has staked so much of its economic credibility on a 2012-13 budget surplus that it has been forced, each year, to manipulate Treasury's forecasts in order to make the promise seem attainable.

Thus we saw some ridiculous assumptions in last year's budget.  Mr. Swan then promised that 500,000 new jobs would be created by mid-2013, yet in the last twelve months we have witnessed the Australian economy add just 10,000 net jobs.

Last year's rosy prediction of GDP growth reaching 4% over 2011-12 has been replaced by actual growth of just 2.5%.

The forecast 2011-12 budget deficit of $22.6 billion has already ballooned out to nearly $40 billion.

Mr. Swan last year predicted that the unemployment rate would drop to under 5% during 2012, and fall further in the following year, but it remains above 5% and is assuming an upward trajectory.

And of course, last year's budget predicted that tax revenue would shoot through the roof just in time to deliver a 2012-13 surplus.

The Treasurer can use 'lower-than-expected tax revenues' as an excuse if he likes, but he and his department must have known, even at the time, that last year's assumptions were wholly unrealistic.

Mr. Swan now finds himself facing a monumental task - a required turnaround of roughly $40 billion in the nation's fiscal condition within a twelve month period.

This is a problem of the Treasurer's own creation - he has consistently put off the tough decisions, choosing instead to manipulate the figures and hope for an unrealistically optimistic scenario.

When he hands down his fifth budget, Mr. Swan will undoubtedly again find a way to predict a razor-thin surplus for the coming financial year.  New taxes, with surprisingly high revenue streams, will be implemented to boost the bottom line.  Revenues will be moved into 2012-13, and expenditures shifted into the forward estimates.  Certain spending will remain off the books - the NBN being the most prominent example - and some programs will need to be cut, if belatedly.

Of course, we can also expect to see one or two overly optimistic assumptions.  The final fiscal outcome for 2012-13 may not be revealed until after the next election - so Mr. Swan's true day of reckoning may never come.

The Queensland Conundrum

Labor's recent annihilation in Queensland has led to much back-and-forth over any potential implications for the federal government.

It would be fair to say that federal issues played a backseat role in the state campaign.  Opposition Leader Campbell Newman did talk about the carbon tax, but it was a peripheral point, lagging behind traditional state problems such as service delivery and general competency in importance.

The wider issue associated with the carbon tax, namely the cost of living, was of course much more prevalent.  But it is worth noting that Queensland Labor was on the path to political annihilation even before Prime Minister Gillard announced that there would be a carbon tax.

We can thus discount the tax as a central source of Queensland Labor's electoral woes.  But this should be of little comfort to the federal party.  The straw that broke Premier Bligh's back is a familiar one in Canberra - the question of trust.

Anna Bligh made no mention of asset sales prior to the 2009 state election, but within months of her success at the polls she had sprung the surprise on her constituents.  She promised that fuel subsidies would remain untouched during the campaign, and then abolished them after the election. These twin betrayals of the voters' trust set her on the path to electoral oblivion long before Campbell Newman came along.

Clearly, Queensland voters do not take kindly to such surprises from their political leaders.  When it comes to her broken pledge on the carbon tax, they will have about as much sympathy for the Prime Minister as they had for Premier Bligh.

Strategically, this is an urgent problem for the federal government.  Labor currently holds eight Queensland seats in the parliament, and seven of them are marginal.  If the state election's vote were to be replicated federally next year, only Kevin Rudd would stand a better-than-even chance of survival.

Remember, in order to reattain majority government, Julia Gillard will be required to gain seats at the next election.  Losing two or three seats in Queensland alone would all but guarantee a Liberal victory.

Labor, if it is to retain power, must resurrect its vote in the sunshine state.  There is no alternative. But Queensland voters have just shown us all how they react to a political leader breaking their trust.  Having witnessed Premier Bligh's demise, how does Julia Gillard now escape Queensland's wrath?

The Shackles of Re-election

The President of the United States participates in many international meetings, and chances are that throughout a term in office he will be caught out by an open mic at least once or twice.  President Obama was in open mic strife once again several days ago, during a meeting with Russian President Dmitry Medvedev:

In comments that were not intended to be broadcast publicly, Mr. Obama candidly assures the Russian President (and by proxy his successor, Vladimir Putin) that he will be able to negotiate over the issue of missile defense with more flexibility following his 'last election' in November.

The President's assurances are certainly correct.  But they are also problematic from a political perspective, because the implications set forth in that statement are unlikely to be well received back in the United States.

Mr. Obama is essentially saying this:  'After the November elections, I will never have to face the American people again.  It will no longer matter whether or not my decisions have popular support. So I will be able to make a deal with you then.'

These implications are clear because the President explicitly mentions that November is his last election.  George W. Bush was phenomenally unpopular throughout much of his second term - but it mattered very little, because he was not anchored by the political accountability that comes with the spectre of re-election.

Republicans will argue that the same applies for President Obama.  They will assert that unfettered by any accountability to the American public, Mr. Obama will be free to do as he likes, no matter how radical or unpopular his policies may be.

You can expect this argument to be completely overblown by Mr. Obama's political opposition, but there is an incontrovertible truth at its heart.

Of course, this would be the case for any two term President - one could argue that it is a glaring flaw in the case for term limits.  But Mr. Obama needs to be more discreet in front of microphones from now on - because that 'flexibility' of which he spoke will apply to much more than missile defence, and Republicans will make sure that every single voter knows it.

Rick's Rage

Rick Santorum's early forays in the Republican primary season went largely unnoticed, save for several somewhat petulant moments during the debates.  Mr. Santorum was displeased with a perceived lack of attention - he did not receive as much time to answer questions as the frontrunners.

Now, one could argue that Mr. Santorum had every right to feel aggrieved during the debates, as he really was treated quite peripherally at times.  But his campaign has since been characterised by an almost permanent sense of aggrievement - particularly towards the media.

Here is the latest example:

There are several points to make here.  Firstly, someone like Mr. Santorum, who spends much of his political life talking about family values, should not be caught on camera swearing at reporters.

Secondly, Mr. Santorum has a habit of attacking the media for asking perfectly valid questions.  He makes social issues a central theme of his campaign, and then complains when interviewers focus on social issues.  In this instance, he attacks a NY Times reporter merely for asking him about a comment that he had made earlier.

In a wider sense, the above altercation calls Mr. Santorum's temperament into question.  Can you imagine President Obama reacting to a question in this manner?  How about Mitt Romney?  

A presidential figure maintains his calm, no matter how unreasonable any given line of questioning may be.

Many Republicans appreciate attacks on the 'mainstream' media, and would interpret Mr. Santorum's performance as a display of passion and conviction.  It is, in actual fact, a display of petulance and resentment.  It is unbecoming, and it is certainly not presidential.

Lobbying the Tories

"It's an issue that crosses party lines and has tainted our politics for too long... an issue that exposes the far-too-cosy relationship between politics, government, business and money.  I'm talking about lobbying - and we all know how it works.  The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisors for hire, helping big business find the right way to get its way.  In this party, we believe in competition, not cronyism.  We believe in market economics, not crony capitalism.  So we must be the party that sorts all this out."

These words were spoken by British Prime Minister David Cameron two years ago.  Let's compare them with the words of (now former) Tory party co-treasurer Peter Cruddas, speaking to undercover journalists who were posing as potential donors:

"Two hundred grand to two hundred and fifty is Premier League... what you would get is, when we talk about your donations the first thing we want to do is get you at the Cameron/Osborne dinners."

"You really do pick up a lot of information and when you see the Prime Minister, you're seeing David Cameron, not the Prime Minister.  But within that room everything is confidential - you can ask him practically any question you want."

"If you're unhappy about something, we will listen to you and put it into the policy committee at No 10 - we feed all feedback to the policy committee."

Aside from the passing football reference, there is not very much to like about Mr. Cruddas' assurances.  Nor, for the Tories, is there much to like about this exchange being aired in the public arena.  If there is one thing that any democratic electorate cannot abide, it is that politically deadly combination of dishonesty and hypocrisy.

The culprit did of course attempt to backtrack as he offered his inevitable resignation:

"Clearly there is no question of donors being able to influence policy or gain undue access to politicians."

Clearly.

Peter Cruddas was not simply making this stuff up on the spot, as many conservatives would apparently have us believe.  He was explicitly offering access to the Prime Minister and to the policy committee at No 10.  Nobody in their right mind would make such extensive promises to potential donors if they could not follow through.

Mr. Cameron had warned mere months before being sworn in that corporate lobbying was the "next big scandal waiting to happen" in Britain.  How very prescient of him.  He should have told his party.

Who do you trust?

Whoever advises our Prime Minister on her daily media lines needs to be fired.  Immediately.

Because today, in yet another display of amazingly weak political judgement, Ms. Gillard through her own rhetoric fed the Liberal Party exactly the lines it will need to manufacture the next election's most potent advertisements:

"Who do you trust to manage the economy in the interests of working people? Who do you trust to understand the needs of the future and the building of that future economy? Who do you trust to spread the benefits of the mining boom to make sure they are shared by all Australians?"

Rest assured, the Liberals will not be playing the entirety of that quote in their election ads.  Just four words will do.  They would even make a good bumper sticker.

"Who do you trust?"

The ad that could propel Tony Abbott's party onto the Treasury Benches will be beautifully simple.  It will open with the Prime Minister asking over and over:  "Who do you trust?"

It will then cut to the following:

The ad will then finish by silently asking the viewer:  "Who do you trust?"

Julia Gillard can hardly complain.  Her political death warrant will be served using her very own words.