[link|http://www.economist.com/World/na/displayStory.cfm?story_id=3309115|Here] - you'll need a subscription.

IS THE most desirable outcome of the election a draw? Not a draw in the sense of a perpetual Florida recount (though fears are growing that America could face not one hung state but five or six). But a draw in the sense of a divided government, with one party in charge of the White House and another in charge of at least one chamber of Congress.

[...]

Conservatives-for-gridlock point to 1995-2000, when Bill Clinton sat in the White House and the Republicans held the House: a time of spending restraint, soaring surpluses and prudent welfare reform. Contrast that with the splurging of the past two years under all-Republican rule. They conclude that gridlock imposes discipline by reinforcing the most important principle in the American constitution\ufffdfrustrating legislative zealots. Gridlock forces both parties to compromise. And compromise brings two wonderful things in its wake: it reduces the quantity of legislation that can grind its way through the legislative mill, and it improves the quality. The parties eliminate each other's worst excesses while compromising on sensible centrist legislation. Mr Niskanen points out that the biggest increases in spending over the past half-century have occurred under unified government (under Lyndon Johnson and the current Mr Bush) while the smallest increases have occurred under divided government (under Eisenhower and Mr Clinton).

An open-and-shut case? Not quite. It is true that a Kerry victory has the biggest chance of producing gridlock: the Republicans stand little chance of losing the House, thanks to gerrymandering, and they have a better than even chance of keeping control of the Senate, where the Democrats have more vulnerable seats to defend. But they may be wrong to think that gridlock will necessarily produce more prudent lawmaking.

[...]

Nor is the pre-Clinton history quite as clear-cut as the advocates of gridlock suggest. Some of the worst deficits (ie, of more than 3% of GDP) occurred during periods of divided government\ufffdunder Harry Truman in 1948, Gerald Ford in 1975-76 and Ronald Reagan in 1982-89. Divided government can sometimes stimulate rather than depress lawmaking. The Clean Air Act of 1970 was strengthened by competition between Richard Nixon and the Democratic Congress (where a presidential aspirant, Edmund Muskie, controlled the relevant Senate committee). Divided government can also produce bad laws by obscuring accountability and encouraging each side to demand its own share of the pork. The Economic Recovery Tax Act of 1981 was so stuffed with giveaways for both Republicans and Democrats that it inspired such classic phrases as \ufffdGucci Gulch\ufffd and \ufffdChristmas-tree legislation\ufffd.

None of this should automatically damn either Mr Kerry or gridlock. After all, it is possible that Mr Kerry will be true to his word and put deficit-reduction at the heart of his administration. He has a decent record as a fiscal hawk in the Senate. He has also promised to re-introduce pay-go rules (stopping the government spending money it does not have) and spending caps. But he has also promised all sorts of things to all sorts of people. As for gridlock, there are plenty of non-fiscal reasons to hope for divided government. It would make it harder for the president to trample over the interests of the \ufffdout\ufffd party, and it would bring the balance of power in Washington into line with the balance of power in a 50:50 nation. But it will not automatically increase the chances of balancing the budget or passing sensible laws.

Cheers,
Scott.

I can't see Congress refusing to pay for troops overseas no matter which party is in the WH - not when it can be argued that we were attacked on 9/11 (unlike, say, the Nicaragua situation). I think he would have more trouble if he tried to declare victory and pull out prematurely (but, of course, it depends on the situation on the ground).

I am more concerned about things like what happened with Reagan's 1981 tax package or the 160-some-odd billion dollar tax package that Bush just signed. In order to get anything passed, there will have to be compromises between the Senate and House versions of funding bills. The conference comittees will - yet again - have have tremendous power to write what they want into the bills. Pork will be farmed like never before. Fiscal restraint will go out the window, there will be no "pay as you go" rules passed, until someone like Perot gets enough people riled about the situation (something that would take several years). Congress does not like any restraint on spending - they get reelected by pointing to things they've done for their districts. I fear that things will have to get very dire again for spending restraint to be written into law again - no matter what Kerry says he'll do. :-(

Another concern is that Kerry would either be forced to nominate right-leaning judges that would be passed by a partisan Senate or he would feel that he had to make a stand and nominate judges that his supporters would like. Either way, one can envision tremendous battles over judges. Another huge backlog of unfilled judges could develop, leading to even longer delays in the courts and even less of a counterweight to presidential and congressional power.

I can also see lots of battles over budget priorities.

Divided government works well when the branches have definite majorities. It can lead to a mess when the houses are ~ 50:50 and the President doesn't have a clear mandate (as we've seen in the last 3+ years). A lot of these concerns would go out the window if Kerry won by 55:44 and won 40+ states (and took the Senate with him). But that supposedly is not in the cards (though I'm reminded that few expected Reagan to beat Carter as badly as he did and even fewer expected him to take the Senate too).

On another related topic:
Has anyone else noticed that the [link|http://www.conference-board.org/economics/press.cfm?press_id=2503|Index of Leading Economic Indicators] has fallen for the last 4 months? While the press release says it's not a concern, IIRC, usually 3 months in a row is taken to forecast a recession in the next 6-9 months. Oil prices are still at very high levels and show no sign of falling soon. I'm not as sanguine as Greenspan in thinking that we can keep chugging along at 3-4% real GDP growth with oil prices so high. If the US does fall into recession in the next year, there will be even more pressure for increased social spending and even less fiscal restraint - no matter who controls the WH or the Senate.

I fear things are going to get a lot more complicated in the next 6-9 months - whether we have a divided governement or not. :-(

Cheers,
Scott.