A Chastened Obama Faces the World

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Pete Souza / The White House

President Barack Obama meets with his national security team for his regular monthly meeting on Afghanistan and Pakistan in the Situation Room of the White House.

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Iran: Spinning Wheels and Ticking Clocks
Despite winning a new round of U.N. sanctions and unprecedented extra European measures to pressure Iran over its nuclear program, a diplomatic solution remains as elusive as ever. Last year, Iran's internal power struggles put the kibosh on a confidence-building deal to exchange uranium, but the election result may bring U.S. internal politics into play as a further complicating factor. The U.S. and its allies have not formulated their position on the terms of an acceptable compromise with Iran, and doing so just became a lot harder. President Obama will face pressure from a hawkish legislature to get more confrontational with Iran, even if that threatens to destroy the carefully crafted international consensus. Sanctions are not changing the game, and pressure is mounting on Obama as Iran draws closer to being able to build a bomb, yet he knows that military action could carry consequences more dangerous than any current threat from Iran's nuclear program. Iran, too, is less likely to offer an opportunity for Obama than to present him with a headache.

Who Lost Afghanistan?
Obama has been trying to extricate the U.S. from an unwinnable war in Afghanistan since he took office, although he was boxed in by his generals into escalating U.S. involvement via a troop surge. The President hopes to begin drawing down by next summer, but military commanders believe that would be ill-advised. Now, they'll have a powerful ally in the new Congress, where the specter of U.S. defeat will be used to paint Obama as weak on national security, which will also raise the domestic political cost of progress toward the inevitable political settlement with the Taliban.

Who Lost Iraq?
Obama has declared the Iraq war over, and is sticking to the timetable negotiated by the Bush Administration to withdraw all U.S. forces by the end of next year. The fact that the Iraqis are largely ignoring Washington's efforts to break their political stalemate through a power-sharing arrangement between incumbent prime minister Nouri al-Maliki and his top rival, Iyad Allawi, demonstrates just how little influence the U.S. now wields in Baghdad. Former U.S. Ambassador Ryan Crocker predicted last week that a new Iraqi government would ask Obama to extend the stay of U.S. troops beyond the agreed deadline. Perhaps, but only if Iran is agreeable.

Not For All the Tea in China...
Beijing was the bogeyman of a lot of anti-Democrat campaign advertising in the midterm election, and President Obama is certainly under pressure to get tough on Beijing. But global economic power has shifted in ways that make it difficult for the U.S. to pick fights with its most important creditor without putting the prospects for America's own economy at risk. As for military posturing to contain China's regional muscle flexing, the wars in Iraq and Afghanistan may have revived a belief in Beijing in Mao Zedong's dictum that the United States "in appearance... is very powerful but in reality it is nothing to be afraid of, it is a paper tiger." Difficulties elsewhere will prompt the Administration to strengthen ties with China's regional rivals ranging from India and Japan to Vietnam. But mindful of the stakes, neither Washington nor Beijing is likely to make moves that disrupt the stability of their relationship — and that means more business as usual rather than any game changer for Obama.

It's the Economy, Stupid
President Obama has been struggling against the austerity tide among Western nations to caution about the danger of a premature curtailing of economic stimulus amid a tepid global recovery. But the U.S. election has effectively ended any possibility of further stimulus spending by Washington, too. The global financial management mechanisms put in place in response to the 2008 financial meltdown — particularly the upgrading of the G20 forum — will be tested by tensions over currency and balances of trade in the coming months, while U.S. leadership has been undercut by the view that Washington's regulatory failures helped cause the crisis. The most immediate challenge facing the new Congress will be whether to raise the U.S. debt ceiling early next year, because the Treasury is a few months away from reaching the limits of its permitted borrowing. Expanding a national debt already equivalent to more than 90% of GDP will go against every instinct of the Republican majority in the House, but declining to do so would risk potentially cataclysmic consequences in the global financial system.

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