Obama's Holding the Cards

At first glance, the results of the 2012 election look like a return to the status quo: President Obama was reelected, Democrats retained the Senate, and Republicans held on to the House. But don’t be fooled. The political dynamic of the next four years will be almost exactly the opposite of the last four.

Sure, partisan bickering will endure. There will still be Red America and Blue America, Fox News and MSNBC. But with one big difference: During Obama’s first term, and particularly in the last two years, the Republican Party had most of the leverage. The GOP’s willingness to reject stimulus, default on the debt, and sabotage the nation’s credit rating—threats that shook financial markets—often put the White House at the mercy of the opposition.