At first blush, it may seem like nothing much changed in the election. President Obama will continue in office another four years. The Senate will remain Democratic and the House Republican. So it would appear we are back at square one -- acrimonious legislative gridlock as the fiscal cliff looms.
But I believe the voters did send a mandate -- a mandate for bi-partisanship. For the most part, extremists were rejected, particularly in Senate races. The voters made it clear in their votes as they have in an array of public opinion polls, that they want their legislators to put aside partisan differences and take action on the nation's problems.
President Obama now enjoys a rare, once-in-a-lifetime opportunity to make a real mark on history. For example, he has said some persuasive things about the importance of manufacturing to the economy. Now he can follow through with a coherent manufacturing strategy. A manufacturing renewal focused on investment, technology, skills training and exports offers the best chance to get the economy growing again.
But the more immediate task, and the biggest problem facing our country, was and remains the federal debt. We are spending $1 trillion more a year than we take in. A certain amount of red ink is to be expected, but deficits of this level are simply unsustainable. Obama's legacy will depend on his ability to bring everyone together behind a balanced strategy to boost growth in the near term while embracing a long term plan to balance the books. House Speaker John Boehner has extended an olive branch on this. Obama should accept it and work with the House majority leadership in quest of a balanced solution.
There is no great mystery about what that solution will look like. The Simpson-Bowles commission appointed by President Obama showed the way. Republicans must concede that higher taxes will be part of the solution because that is a key aspect of President Obama's agenda and, after all, he did win the election.
But Obama and the Democrats must acknowledge that higher taxes will not begin to make a serious dent in a deficit of this magnitude. We must deal with spending, and I am not talking about Amtrak or the National Endowment for the Arts. The real problem is entitlement spending primarily on Social Security, Medicare and Medicaid because our population is rapidly aging.
To date, Obama has shied away from entitlement reform. His party is as committed to defending entitlements as the opposition is to opposing tax increases. But entitlements are the core problem and we can make no significant progress against the deficit until we deal with them. The President must first rally support within his own party which will prove a greater obstacle than the opposition. For example, Senator Majority Leader Harry Reid said yesterday, "We'll be happy to deal with entitlements, but we're not messing with Social Security." First President Obama must get Democrats on board and then he can forge a bipartisan consensus to deal with entitlements. If he succeeds, his place in history will be assured.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.