Summary of JIIA Forum Presentation
February 3, 2011
Venue: Japan Institute of International Affairs

Sheila A. Smith
Senior Fellow for Japan Studies, Council on Foreign Relations (CFR) (US)The 2010 US Midterm Elections and Their Implications
for Domestic and Foreign Policy
Introduction
I am very happy today to have the opportunity once again to make a presentation at theJapan Institute of International Affairs, with which I was once affiliated as a research fellow.
I would like to use this “home coming” to speak about US domestic and foreign policy trends
arising out of the midterm elections last November, touching on US-China and Japan-US
relations, topics of particular interest to Japan.

My basic contention is that underestimating

the impact of domestic politics on foreign policy can at times be spark serious crises.
Accordingly, this presentation will differ somewhat from the conventional narrative in that it
will look at foreign policy and Japan-US relations through the lens of domestic politics.
What happened in the 2010 midterm elections?
As you know, midterm elections are quite often used to cast a punitive vote against the party
in power at the time, but the results of these last elections were a “shellacking” in the wordsof President Obama, with the Democratic Party losing 64 seats and its majority in the Houseof Representatives (D: 193, R:242) and six seats in the Senate, giving it only a four-seatlead over the Republican Party (D: 51, R: 47, I: 2 [caucus with the Democrats]). The
Obama administration thus found its ability to garner Congressional support for its policies
greatly restricted. President Obama and the Democratic Party no longer had any choice
but to acknowledge that the Republican Party held the initiative in setting the agenda in theHouse and that more meticulous measures were needed to deal with the opposition party in
the Senate, which has particular influence in setting foreign policy.

This “huge turnover,”as the now-hackneyed phrase goes, is quite important when one considers its impact on thepolicy making process.
Another aspect of this election was the Tea Party movement, which grabbed considerable
attention during the course of the campaign. This movement cannot really be termed aunited one, as is evident from the lineup of Republican Congressmen seen as affiliated withthe Tea Party (in terms of roots, beliefs and policy interests).

Consequently, it is too early tomake an accurate assessment of the movement’s meaning and significance – including thequestion of whether it is in fact a movement in the strict sense of the word – but at the very
least it must be borne in mind that the Tea Party has taken the form of a “grassroots1

movement” active in all electoral districts and that it is even more “anti-federal government”
and “anti-Washington” than it is “anti-Obama” and “anti-current administration.”

That is tosay, the Tea Party’s condemnation of the Obama administration’s health care reform andfiscal policies in the midterm elections simultaneously poses a potential threat to theRepublican Party’s traditional leadership.

I should add that the hard-line “anti-China”

discourse that became a prominent part of the Tea Party’s election campaign, though it
ultimately went no further than to point out the negative impact of China’s economic rise on
the US employment situation, raised concerns among the Republican mainstream of anexcessive emphasis on the Chinese threat, and that the Tea Party still has no clear-cut
foreign policy stance.
The results of elections for state governors and state legislators conducted at the same timeas the US House and Senate elections also have important implications for divining future
political trends. Not only did the Democratic Party lose six of 37 governorships up for
re-election, greatly upsetting the balance (D: 13, R: 23, I: 1/overall, D: 20, R: 29, I:1), but theRepublican Party gained an even greater advantage by controlling such states as Florida,Arizona, Nevada, Georgia and Texas with notable population increases due to adjustmentsin the distribution of House seats and the resetting of voting districts for state legislatures
based on the findings (population distribution) of the once-a-decade national census
conducted in 2010.

The Republican Party has the initiative in the gerrymandering (or bugsplats) that will likely continue over the next year, and it is inevitable that it will seek tosolidify its foothold further.

These circumstances are already having an impact, above all inthe energetic efforts seen in the Republican camp toward the next presidential election, thecampaign for which began in earnest after the midterm elections.
President Obama’s political setbacks
How are these circumstances affecting actual policy decision making processes?
Recollecting that the key points of contention and discussion in the midterm elections were
the US economy (and employment in particular) and the role of government spending, theactions of the Obama administration after the election, such as its shift in tone from
improving the unemployment rate and providing social welfare through fiscal expenditures tobringing about economic recovery through improvements to the treasury budget illustrate itstraightforwardly.

A typical example of this was the December 6 “trade-off” with theRepublican leadership on an extension of the Bush tax cuts for an extension ofunemployment benefits (by two years and by 13 months respectively).

This was theproduct of an extreme “inside-the-Beltway sensibility” between the Republican leadershipthreatening to shelf the abolition of the Bush tax cuts, and the president faced with a cutoff inunemployment benefits of more than a million recipients just before the Christmas break. It
was the aforementioned structural change that brought about President Obama’s almost
unimaginable “change of heart” prior to the election.
frequently in future.

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Similar compromises could appear

The State of the Union address on January 25 and the Republican Party’s response thereto
highlighted a gap between the two parties difficult to bridge in such circumstances. The
address had advocated for a five-year extension of the freeze on discretionary spending andinvestment in priority sectors (infrastructure, clean energy, education) deemed key toimproving the US’ competitiveness, but Paul Ryan, Chairman of the House Budget
Committee, voiced his party’s opposition to intrusive and profligate big government andfirmly demanded cuts in discretionary spending to 2008 levels.

In other words, traditional

disputes over big government versus small government once again surfaced in the form of
debates over budgets and fiscal soundness.

The provisional budget at 2010 levels is set to

expire on March 4, and the period from the end of March to May – during which the debt
ceiling of $14.3 trillion is expected to be broken – will mark a watershed in these discussions.
Attention is now focused on the compromises that will be reached beforehand among theDemocratic Party, the Republican Party, the Congress and the White House.
However, a considerable portion of the expanded debt stems from the structural problem of
ever-increasing Social Security-, Medicare- and Medicaid-related expenditures, and thepursuit of fiscal soundness will likely continue to be an issue over the longer term. As you
know, a battle is being waged over Obamacare – marked by multiple federal district court
rulings on its unconstitutionality and a battle of nerves over using the veto– and an essential
element in analyzing US domestic politics and foreign policy is disregarding neither thedegree of impact that the healthcare system issue has on American politics, an issue thatmight seem unremarkable to non-Americans, nor the Tea Party at the forefront in criticizing
Obamacare and the broad-based sentiment that brought the Tea Party to prominence.
Having said that, the vast majority of the American people are interested primarily in jobs,
economic recovery and the Obama administration’s economic policies, and the fact that thenext presidential election will focus on how the Democratic and Republican parties will
pursue dialogue and compromise on these issues (centered on the budget and sound fiscalpolicy) is certainly characteristic of US politics at present.
Impact on foreign policy as a wholeWell, what about foreign policy?
Many regard it as strange that an election conducted with two wars underway would see
these wars excluded almost entirely from discussion, but one possible explanation is that asubstantive consensus on withdrawal from Iraq and Afghanistan had already been formed.
Such cooperation between the two major parties and between the president and theCongress can also be seen in the ratification process for the new Strategic Arms Reduction
Treaty (START) – although there are twists and turns such as the opposition of andconciliation with hard-line Republican Senator Kyle and others.

Given that support forarms control is growing even within the Republican Party, greater cooperation from Senate
Republicans on this matter would seem possible in future.
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Considerable progress is also expected in the debates over trade agreements, in view of theRepublican lead in the Senate and the expectations that such agreements will boost theeconomy.

My own view is that efforts toward a US-South Korea FTA will pick up, and thatstagnated talks on FTAs with Colombia and Panama, the TPP, and the WTO Doha Roundwill resume (the House Budget Committee’s public hearing scheduled for February 9 willserve as a precursor).
One issue that has been forced to the back burner, however, is that of climate change policy.
As illustrated by the inclusion of reduced energy consumption and the development ofalternative energy as policy objectives in the State of the Union address and the end ofcap-and-trade (emissions trading) that had been introduced on a trial basis, the Democratic
Party’s defeat in the midterm elections reduced its ability to actively push for reductions ingreenhouse gas emissions through legislative means.
On Middle East policy, too, President Obama has found it difficult to avoid taking a passive
stance in the face of the immense influence of supporters of Israel in the House ofRepresentatives.

The day-to-day events in Egypt are being closely watched in Washington

and, while the fluidity of events makes it extremely difficult to forecast developments, itwould seem necessary at least to bear this structure in mind.
US-China relations – discussing Hu Jintao’s US visit
I have already touched on the fact that voters showed very little interest in foreign policy
during the midterm elections and that remarks about China were limited to economicmatters.

As indicated by the House resolution passed in September 2010 demanding thatthe renminbi be revalued upward – though such resolutions are not binding – China is formany Americans first and foremost a stealer of American jobs.
Nonetheless, the January visit to the US by China’s president Hu Jintao and the consequent
US-China summit meeting served as excellent opportunities for ascertaining matters ofinterest pertaining to China (i.e., policy priorities) among administration officials andCongress. Particular attention should be given to the fact that North Korea’s uranium
enrichment program and China’s response to the UN Security Council’s sanctions resolution
were discussed “behind the scenes,” and it can clearly be deduced from the incorporation of“concerns” about this program in the two leaders’ joint statement.

A view gaining currencyin Washington is that the recommencement of military exchange confirmed during Secretaryof Defense Gates’ visit to China prior to the summit meeting was principally focused on
encouraging Chinese involvement in stabilizing the situation on the Korean Peninsula,making apparent where interest in China lies at the government/military level.
Our attention is also drawn to the mention of pursuing human rights dialogue in the jointstatement.

The human rights situation in China – together with the aforementioned4

currency issue – is a topic frequently taken up by Congress, and there are likely to be morevigorous moves, in particular by the House Foreign Affairs Committee and the House
Military Affairs Committee, to get President Obama to call for dialogue on human rights.
Discussions on China in the short term are likely to focus on Ambassador Huntsman’s(recently announced his intention of resign) stance toward China during the next presidential
election, but more important as keys to analyzing US-China relations are the forms that thedifferences and correlations in matters of interest at the various levels addressed here willtake over the medium to long term, and the nature of policies toward China to be put forth infuture.
Implications for Japan-US relations
Let me close by talking about future relations between Japan and the US, both of which,
oddly enough, have “divided legislatures.”
I think that Japan-US relations are smooth on the whole, making slow but steady progress.
Foreign Minister Maehara reached an agreement on a US visit by the Prime Minister during
his visit to the US extending from the end of last year to the beginning of this one, and thedrafting of new “Common Strategic Objectives” as guidelines for cooperation in the area ofsecurity, too, will likely be completed via the foreign and defense minister talks (2+2 talks)this spring.

Some US government officials anticipate that Japan will announce its

participation in TPP at the November APEC meeting in Honolulu, and interest is growing in
future political developments in Japan.

In any event, the participants in this Forum as wellas government authorities are no doubt equally aware that the strategic policies of bothcountries in Northeast Asia have become the central topic of discussions between the twocountries and that such global issues are important.
problematic, however.

The differences in views could beInterest in Japan is commonly focused on China’s presence,

circumstances on the Korean Peninsula, and ASEAN, with generally little regard paid to thedomestic US context and “inside-the-Beltway sentiment” I have been discussing, while theopposite holds true in the US.

A willingness to understand the broad-ranging trends

surrounding the Asia-Pacific inclusive of these factors is a basic but essential element indeveloping Japan-US alliance relations.
In drawing conclusions from the aforementioned, I believe it important to recognize thateach country’s foreign policies are coupled with its domestic politics and that both Japan andthe US face numerous foreign policy concerns as a matter of fact, and that it is crucial toform common strategic guidelines on this basis.
important period in this regard.

5The next year will be a particularly