Barack Obama Wins a Second Term. Now What?

At the end of election day 2012, here's the situation in Washington, D.C.: President Barack Obama has won a second term as president. Democrats will remain in control of the Senate. Republicans will stay in control of the House. So where does that leave us? 

The fiscal cliff looms: At the beginning of next year, a slew of temporary tax cuts and spending measures will expire. If we allow this to happen as currently scheduled, the budget deficit will close significantly. But according to the Congressional Budget Office, allowing all the temporary measures to expire at once would also send the country into a second recession. Doing nothing, in other words, isn't really an option. Yet postponing all the elements of the fiscal cliff risks perpetuating the nation's unsustainable deficits. So far, however, legislators have deferred most discussion, preferring to wait until after the election to start figuring out what to do. Delay is no longer an option.

Entitlement spending remains unsustainable: In the long term, the biggest driver of  federal debt is the entitlements, with Medicare topping the list. Yet aside from minor payment tweaks, President Obama has proven unwilling to fundamentally rethink or reform the way the program works. Will he cut a deal with Republicans to overhaul Medicare and/or Social Security? He's said he won't unless Republicans agree to raise taxes on top earners — something they've so far refused to even consider. Which brings us to the next point…

The tax system remains a mess: Politicians in both parties pay lip service to the basic idea of tax reform, which usually involves simplifying the tax code, ditching loopholes, and reducing personal and corporate rates. Yet detailed proposals to reform the tax system are few and far between, and both campaigns have been clearer about the loopholes and deductions they wouldn't get rid of than the ones they'd nix.

ObamaCare stays the law of the land: Whether Mitt Romney's commitment to repealing the health care overhaul was real or not is no longer a question. Barack Obama is sure to defend his signature achievement, and so are Democrats in the Senate. The Supreme Court, meanwhile, has rules its individual mandate constitutional. So is the law here to stay? Not necessarily. A handful of legal challenges, including at least one that could unravel most of the law, remain. And even if the law survives legal challenge, the practical challenges of implementation, especially in resistant red states, will be a huge challenge.

The GOP will have an internal battle for direction — and possibly a civil war: Screenplay formula requires that late in every story, protagonists hit their lowest points, and then spend a few minutes in what's known as a "long dark night of the soul," where the protagonist ponders what he's learned and comes to grip with who he really is. After its second successive presidential loss, the Republican party is likely to perform a similar public soul searching, perhaps with a long-simmering public battle.

And then there's the budget: Senate Democrats haven't passed a real budget in over three years. They should probably get around to that.

Also on the coming (s)hit list: immigration reform, another debt ceiling fight, death by drones, and the unended wars. Four more beers years!