Americans will be heading for the ballot box on Tuesday to elect a new President. They will also be voting to elect one third of the Senate and the entire House of Representatives. Opinion polls place Barack Obama firmly ahead, with 49.8% of the vote compared to John McCain’s 43.9%. Some commentators are even beginning to speak of a Democratic landslide, as the party looks set to win even bigger majorities in both chambers of Congress than it already has.
This means that Obama – if he wins – will have a golden political opportunity to push through his reforms. In contrast, a McCain-led government could be struggling to implement its policies in the face of a Democratic Congress. That said, whoever wins will have limited economic room to manoeuvre given the deteriorating government budget that is suffering from falling incomes and rising expenses to pay for the financial rescue packages and international military engagements.
The first thing the new president – irrespective of who wins – will presumably focus on will be the economy. Congress is already discussing yet another fiscal stimulus package of tax cuts – and this will probably be the first item of business for the new president. So there is a good chance of tax cuts early next year.
As well as the economy, the coming president will face enormous challenges that include the war in Iraq, the war on terror in Afghanistan, a financial system in need of reform and long-term financial problems in connection with rising expenses in the social and health sectors.
