The Morning After

Well, with the elections over I wanted to take a moment to discuss the new Congress and what we can all expect. However, I want to mention that I predicted a narrow hold for Republicans in both Houses and I was clearly wrong (with the Democrats winning the House and the jury out at this time on the Senate). For those, however, who are wanting to speak in "historic terms," this election was anything, but. The number of seats lost in this 6th year of an incumbent are actually lower than historic averages. The only thing that is historic is that a President's party did so poorly in a year when the economy was performing so well. I hate to say it, but this has largely become a referendum on Iraq.

The Democrats, to this point, have had no plan when it comes to Iraq. So I have no idea how things will be done differently. Some, like Charles Rangel of New York has called for a draft, others like John Murtha of Pennsylvania has said it is time to cut and run. There is no Democratic strategy and it is easy to criticize anyone else's plans when you have none of your own. I predict a lot of talk on this subject to continue by Democrats, but I don't expect a cohesive strategy.

There has, it appears, to be immediate results on the part of the President to the election. CNBC is reporting, even as I write this blog entry, that Secretary of Defense Donald Rumsfeld is resigning and he will be Replaced by Robert Gates (former CIA Director). If the President wanted Rumsfield to stay, there would be no resignation. That's my opinion at least.

So what can we expect over the next two years?

• Taxes will go up. Some items require both an act of Congress and the signing into law by the President. Since the tax cuts require an act of Congress each year to continue and the Democratic leadership has pledged their opposition to them, Congress simply has to fail to act for the tax cuts in order for them to go away. When we don't have tax cuts, we have tax increases for all practical purposes.
• There will be an immigration bill passed. There will largely be a stalemate in virtually every area of government with this new, divided, situation. However, the President's controversial bill to make a visiting workers program will likely easily fly through this House and has already received a positive nod from the Senate.
• Minimum wage will go up. Bush will likely sign this for appearances sake alone. It will do nothing to help employment, however.
• The world will become less safe. We have sent mixed messages to our enemies and I believe the Democrats will do all they can to hamper our ability to project a strong image to the rest of the world through investigations, attempted budget cuts, and other actions.
• The Democrats will likely actually suffer under their own rule. I know that sounds strange, but the Democrats are not likely to be able to hold up well under the pressure of saying they can do better than Republicans. The 12,000 mark Republicans achieved on the Stock exchange (the numbers are dropping even as I write), the record low 4.4 percent unemployment, and the continued expansion of the economy will not likely hold up, in my opinion, if the Democrats have their way. If we do not have comparable numbers in '08, Democrats are going to find themselves in a very difficult situation because the only thing that will be different -- between then and now -- will be their control of the House.

The up-side of this election is the likely stalemate factor. I always feel a little better about my wallet when it is unlikely government isn't going to get things accomplished.