Obama’s final year — and what comes after

by Colin Robertson

iPolitics
January 11, 2016

On Tuesday night, President Barack Obama goes to Capitol Hill to deliver his seventh State of the Union (SOTU) address. It’s going to be an important speech, because it’ll give us insight into the president’s thinking, his priorities and his plans for his final year in office.

Look for him to defend his emphasis on diplomacy and multilateralism in dealing with ISIS and hot spots in the Middle East, as well as American relationships with China and Russia. Expect him to again reassure Americans on their domestic security in the aftermath of the Paris and San Bernardino terror attacks, and to press home the argument he made in his recent Town Hall — that his use of executive authority to strengthen background checks on gun purchases will make Americans safer.

President Obama can look back on a year of major foreign policy achievements: the Iran nuclear deal; curbing the Ebola epidemic in Africa; renewed relations with Cuba; achieving congressional ‘fast-track’ and a negotiated Trans Pacific Partnership to complement the security ‘pivot’ to Asia; and the multi-nation climate deal out of Paris.

Imperfect as it may be, the Affordable Care Act (or ‘Obamacare’) is in place and is working. Despite continuing Republican efforts to scuttle it, it will be part of the Obama legacy and eventually it might bring down health costs. The OECD says the U.S. currently spends 16.4 per cent of GDP on health care, compared to 10.2 per cent in Canada.

President Obama will point to economic conditions that are now the best they’ve been since he took office; he can argue, in other words, that the first term stimulus intervention worked. The U.S. unemployment rate has dropped to 5 per cent (versus 7 per cent in Canada). Applications for unemployment benefits are at a four-decade low.

The U.S. also is expected to lead the G7 in growth next year (2.8 per cent, compared to 1.7 per cent in Canada). Supply chain integration should boost Canadian production as long as our goods and people can easily cross the border. This means Prime Minister Trudeau’s main ask of President Obama should be more efficient border access, including for business travel.

While the U.S. economic picture is good, the distribution of rewards continues to be skewed to the top of the ladder. Those with only a high school education are the worst-off, while university-educated millienials, with more debt, are also making less compared with their parents and older siblings.

A growing sense of inequality is exacerbating political discontent. Here the divide between those on one side of the 49th parallel and those on the other is profound.

Over 60 per cent of Canadians think the country is heading in the right direction and support the Trudeau government. In the United States, meanwhile, the mood is gloomy: 65 per cent of Americans think their country is headed in the wrong direction and only 44.5 per cent say they approve of President Obama’s performance. It’s even worse for Congress, which has only a 13.4 per cent approval rating.

These numbers go some distance in explaining the appeal of Bernie Sanders on the left and Donald Trump and Ted Cruz on the right. The Feb. 1 Iowa caucus and Feb. 9 New Hampshire primary will give hard evidence of how far Americans will go in expressing their frustration.

To explain what’s happening in American politics, The Atlantic recently featured essays by conservative David Frum and liberal Peter Beinart. The Canadian-born Frum writes that the “angriest and most pessimistic people in America are the people we used to call Middle Americans.” Their economic insecurity and economic nationalism sets them apart from traditional Republicans. The GOP, says Frum, is split between its base and its elite. Where Mitt Romney ran on “tax cuts, budget cuts, deregulation, free trade”, this time the Republican base wants its social security entitlements, opposes free trade and would tax the rich more.

The Trump phenomenon, writes Peter Beinart, is partly a backlash against the Occupy Movement’s left-wing militancy and the racial strife symbolized by the ‘Black Lives Matter’ movement. But the Trump noise, says Mr. Beinart, “is louder than it is strong. Instead of turning right, the country” — and the Democratic party — “is still moving to the left.” The Democratic elite has moved leftwards, notably on climate change and sexual rights, and he notes presumptive nominee Hillary Clinton’s criticism of the Trans-Pacific Partnership and her promise of tougher financial industry regulation.

This year’s unconventional U.S. presidential race is entertaining — but it should not divert our attention from what are likely to be some significant policy shifts with the next administration, whether it’s Democrat or Republican.

Different approaches on trade, security, immigration and financial regulation will affect Canadian interests. Wisconsin Governor and one-time GOP presidential aspirant Scott Walker wanted to build a wall across the Canada-U.S. border. There will be more dumb ideas coming — ideas that we’ll need to monitor and address.

We also need to pay attention to those contesting Congress and states’ gubernatorial and legislative contests. A third of the Senate is up for re-election, along with the 435 members of the House of the Representatives.

We should meet regularly with Mexico (they have over 50 offices in the U.S., compared to our 15) to share intelligence and planning. U.S. politicians have a tendency to take a ‘one-size-fits-all’ approach to both borders and we need to work with Mexico to combat silly and ill-conceived policy ideas. Strengthening North American competitiveness should be a trilateral ambition.

Meanwhile, we need to carefully listen what Obama has to say in the SOTU. There are opportunities — notably around the March State dinner and the North American Leaders’ summit — to advance our interests. We have many shared interests on issues like trade and climate. Now we need to develop harmonized or compatible policy regimes. President Obama is not taking his foot off the gas and there’s still much we can accomplish together before he leaves office next January.

Colin Robertson is a former Canadian diplomat now working as a senior advisor for Dentons LLP and with the Canadian Council of Chief Executives. He is vice president and Fellow at the Canadian Global Affairs Institute (CDFAI) and a Distinguished Senior Fellow at the Norman Paterson School of International Affairs at Carleton University.