Buoyed by the surge of public support for his policies on Iraq, the most controversial issue of the campaign, George W. Bush will continue his strategy there with renewed vigor. He is pressing ahead with plans for the Iraqi election in January, and for a huge assault on the key town of Fallujah, which the Americans see as the main stronghold of the insurgency. Although the decision rests formally with the Iraqi government, there was little doubt that it was being held back because of the U.S. election.
Now there is no electoral need for restraint. The attack will be bloody and could cause even more U.S. casualties (65 died in October), but the larger death toll will be on the Iraqi side. That these casualties only fuel Iraqi nationalism, anger with the Americans and a desire for revenge, seems not to be understood in Washington. Ghazi al-Yawer, the Iraqi president, made this point last weekend. But the U.S.-appointed prime minister, Ayad Allawi, supports the attack on Fallujah.
Bush's victory may quiet some of the discontent over Iraq internationally. At least, it may hold foreign governments back from public criticism now that they realize they have to live with Bush for another four years. Bush has in any case been trying to project a more multilateral approach.
In Egypt on Nov. 22 and 23, Secretary of State Colin Powell is due to meet foreign ministers from the G-8 countries (including France and Germany) as well as Arab and regional powers to give support to the Iraq elections and discuss ways of reinforcing regional stability. Some analysts have speculated whether Bush in a second term might want to end the Iraq debacle relatively quickly so that his entire legacy is not tainted by it -- a kind of disguised "cut and run."
Until it's clear who will be on his security team (Donald Rumsfeld in or out, Paul Wolfowitz in or out, who replaces Powell if he goes), it's hard to know if Bush's hawkish crusade in Iraq and to change other regimes in the region, by force or by pressure, will intensify or slacken. Inasmuch as Bush will feel vindicated by his surge in U.S. popular support, it is more likely to intensify.
Issues that were in the background during Bush's first term are likely to occupy more of his time over the next four years.
Nuclear proliferation: Iran and North Korea
After Iraq, Iran presents Bush with his biggest challenge. Decisions postponed in the first term will have to be taken soon. The U.S., along with Israel and Europe, is confident that Iran, in spite of denials, is intent on securing the capability of producing a nuclear weapon within the next three years. In the Middle East, only Israel has a nuclear weapon at present.
The U.S. is pushing for the International Atomic Energy Authority, the U.N. watchdog, to refer Iran to the U.N. Security Council on Nov. 25, which would then have to decide on whether to impose sanctions. The U.S. and Israel seem hell-bent on preventing Iran from acquiring a bomb and the only way of stopping Tehran could be to launch a preemptive strike against its nuclear facilities. The U.S. is scheduled to have rare face-to-face talks with Iran at a conference on Iraq being held in Egypt on Nov. 23.
Washington has shown less concern about North Korea, whose threat to expand its nuclear arsenal is seen as aimed at securing economic concessions rather than presenting a serious security risk.
Bush has told European leaders that he will make a serious effort to try to resolve the conflict. Bush's father helped set up the Madrid conference that eventually led to the Oslo peace agreement in 1993 between Israel and the Palestinians. That produced a seven-year lull of sorts in the conflict.
In theory, Bush could emulate his father. But his ambition so far is limited to the plan by Israeli Prime Minister Ariel Sharon to withdraw from Gaza next year. Bush will try to put pressure on the Israelis to give as much slack as possible to the Palestinians to ensure that Gaza does not end up as an open prison, as the Palestinians claim. He will press the Israelis to allow the Palestinians to have their own airport and seaport and to have freedom of movement to the outside world through Egypt.
In return, Bush will push the Palestinian Authority to try to ensure that the Palestinians do not use Gaza as a launchpad for rocket or other attacks on Israel. That will require help for the Palestinians in improving security. He will then try to tie the Gaza pullout to the road map, a step-by-step peace plan agreed to by the United Nations, the European Union, the U.S. and Russia. The road map would require Israel to sit down to negotiate with the Palestinians provided the latter stop attacks on Israel.
Rebuilding relations between the U.S. and Europe
There are differences between the U.S. and the leading countries in Europe over Iraq, Israel and the Palestinians, Iran, the Kyoto agreement, the International Criminal Court and other issues. The relationship between the White House and Europe is likely to become more rather than less fraught in the second term.
An issue that has seen a lot of diplomatic traffic but only surfaced intermittently is France's push to lift a European Union embargo on China. The U.S. is totally opposed to this, claiming that European weapons could be used against U.S. forces in the Taiwan Strait. The controversy will come to a head either later this year or early next.
An early indication of Bush's commitment to unilateralism rather than multilateralism came when he refused to implement the Kyoto agreement on gas emissions. He is unlikely to do so in a second term, claiming the economic and social cost to the U.S. is too high. The Europeans can find some solace in the decision of California and New York State to act on their own to cut emissions.
Bush faces pressing economic concerns as he enters a second term in office. High on the agenda will be the creation of jobs, the huge federal budget deficits, the threat of China to the American manufacturing base and the looming crises in healthcare and Social Security.
During his first term, Bush became the first president since Herbert Hoover to lose more jobs than he created, an illustration of how little the economy figured in this election. The number of Americans living below the poverty line grew by 4.3 million, to 35.9 million, in Bush's first four years. Social programs are likely to be cut further as the president seeks ways to pay for his tax giveaways to the wealthy and close the budget deficit.
The manufacturing base has been hit especially hard, and China with its lower labor costs is widely blamed. The president will remain under pressure to encourage Beijing to float its currency, currently pegged to the dollar, which experts argue makes imports artificially cheap.
The issue most unsettling to economists has been the budget deficit, falling from a surplus of $236 billion in 2000 to $413 billion in the red this year. Bush's administration claims he will cut the deficit in half by the time he leaves office, through cutting spending and higher revenues flowing into government coffers from an improving economy. That plan already appears to be faltering, as company profits have failed to keep any sustained momentum in the second half of the year. Federal spending has increased by 15 percent during Bush's first term, and it is unclear where the cuts will be made.
Bush will press to make his first-term cuts in income, capital gains and dividend tax permanent, as well as eliminating the estate tax.
Historically, the stock market tends to do better under Democrats than Republicans. The average under Democrats is an increase in the Dow Jones index of 7.2 percent, compared to 3.7 percent for Republicans. Stock pickers are likely to plump for drug companies, defense firms and oil firms.
Bush handed out another $145 billion in corporate tax breaks shortly before the election. But there are other reasons for big business to favor the Republicans. Bush is in favor of light-touch regulation. Under his watch, the media ownership rules were weakened and it is likely he will continue to slacken regulation. He is also promising to cap lawsuit damages.
In the final presidential debate, Bush said: "I believe the role of government is to stand side by side with our citizens to help them realize their dreams, not tell citizens how to live their lives." Accordingly, domestic policy will be shaped by his desire to promote what he has termed an "ownership society." But in September the White House said his 2006 budget may include $2.3 billion in cuts from domestic programs.
At the top of the Bush II agenda will be Social Security reform. In 2001 Bush created a Social Security commission, but its recommendations were set aside. "He wouldn't want to leave the record that for eight years he completely ignored Social Security," says Eric Engen, an economist with the American Enterprise Institute.
To address a likely shortfall in pension funds as people live longer and baby boomers start to retire, Bush has proposed permitting workers to put some of their taxes into individual accounts. This raises the criticism that he is privatizing Social Security, forcing people to gamble their pensions on the stock market. Less money will be paid into the system, which means less money for those drawing their pensions now. This likely shortfall is estimated at $1 trillion over 10 years.
On healthcare, Bush proposes using tax credits to move the burden of insurance away from the current employer-based system toward individuals. Bush also intends to extend tax deductions for individual health savings accounts to free the individual to decide how to spend money on healthcare. These new measures would provide health insurance coverage for between 2 million and 17 million of the 45 million Americans currently uninsured. The cost has been estimated at anywhere between $90 billion and $130 billion over 10 years. "I don't think healthcare is going to get a whole lot of attention," says Henry Aaron of the Brookings Institution. "I don't get the feeling that this is way up there on his list of priorities."
No Child Left Behind was trumpeted as the biggest domestic achievement of Bush's first term. But it has come under attack for its rigidity in setting standards and for the paucity of its funding. A key test will be whether the second Bush term addresses these criticisms, while attempting to adhere to its target of making every student in the country proficient in math and science by 2014.
The Department of Homeland Security, most observers agree, has been a lame duck, a victim of the rush of resources to Iraq. Understandably, then, Bush has been quiet about what, if any, reforms he will make.
Both candidates were equally reluctant to discuss immigration. Bush has proposed a guest worker program, allowing undocumented migrants to work legally in the U.S. for a limited period, probably three years, after which they would be expected to return to their home country.
Bush could soon have it within his power to put a conservative imprint on American public life that will endure long beyond the next four years by making the first appointments to the Supreme Court in 10 years. With the Court split three ways between conservatives, moderates and liberals, the results of Tuesday night's election for the White House, Senate and the House of Representatives put Bush in a strong position to effect the realignment that has long been part of the Republican agenda.
The nine Supreme Court judges are appointed for life, and Bush's decisions will endure long after his second term comes to an end. That sets the stage for a rolling back of abortion rights, affirmative action and environmental protection, withholding legal protection for gay rights and eroding America's separation of church and state.
The prospects for imminent change were underlined this week when the chief justice, the conservative William Rehnquist, 80, failed to return to the bench as scheduled following treatment for thyroid cancer. Rehnquist, who was appointed by Richard Nixon, is the longest-serving justice, though not the oldest. That honor goes to John Paul Stevens, a liberal justice, who is 84. Only one of the nine justices, the conservative Clarence Thomas, is below the age of 65.
Bush has given every sign he is aware of the prospects of making generational change, and he has given repeated indications of his judicial preferences. During the 2000 elections, he listed his favorite judges as Justice Thomas and Antonin Scalia, the arch right-winger of the court. Both men opposed the Court's decision last year to strike down anti-sodomy laws in Texas, with Justice Scalia warning of a "homosexual agenda" that could plunge America into a wave of incest and bestiality.
During his first term, Bush worked strenuously to put a conservative cast on the lower federal courts, appointing some 201 judges. Several of his nominations were vigorously opposed by the Democrats and blocked by the Senate. But that did not discourage him. Earlier this year, after Congress blocked one such controversial nomination, of a Mississippi judge, Charles Pickering, who was accused of trying to block prosecution of a man accused of burning a cross outside the home of an interracial couple, Bush simply waited until the congressional recess to put his man on the bench.
Although somewhat bloodied in his battles over judicial nominations, Bush has indicated he has no intention of yielding. In a speech at the Republican Convention, he spoke out against "activist judges" and the legalization of gay marriage. In his second debate against John Kerry, he said: "I wouldn't pick a judge who said that the Pledge of Allegiance couldn't be said in a school because it had the words 'under God' in it. I think that's an example of a judge allowing personal opinion to enter into the decision-making process as opposed to a strict interpretation of the Constitution."
Both candidates vowed to lessen America's reliance on Middle East oil. Economists dismissed this as unrealistic. With oil prices heading toward $60 a barrel and prices at the gas pumps at $2 a gallon, the threat that energy prices could knock the American economy off course is very real.
With turmoil in the Middle East and rising demands from emerging economies like China and India, the pressures on oil prices are intense. Even though business has become broadly more efficient and in many instances has replaced oil in manufacturing, corporate America is beginning to suffer and may not be able to stop passing price rises on to consumers.
The energy task force headed by Vice President Dick Cheney was criticized for conducting policy meetings in secret.
The Bush energy policy has been based on increased oil production at home. Early in his first term, the administration proposed an unpopular measure that appeared to pander to Bush's friends, allowing drilling in the Alaskan wildlife refuge and awarding $100 billion in tax breaks to the oil, gas and nuclear industries. But it failed to make headway in Congress and was blocked last year.
The League of Conservation Voters said Bush had compiled the "worst record on environmental protection in our nation's history." Bush has eased rules forcing companies to modernize anti-pollution equipment. He has introduced a "clean skies" initiative, but that has been criticized as unenforceable. He has, however, called for spending $1.7 billion on hydrogen technology research.
The Bush administration has fought efforts to raise fuel efficiency in the car industry and has cut funding for environmental enforcement agencies.