Obama wins decisive victory

Shortly before Midnight, eastern time, president Barack Obama was declared the winner in the long and often divisive U.S. election. Challenger Mitt Romney conceded just after 1 a.m.

Watch Obama’s victory speech here

With 49 U.S. states decided, Obama pulled 303 electoral votes to Romney’s 206. The state of Florida is still deemed too close to call, but only 270 votes from the electoral college are necessary to win.

Obama will start his second term facing significant fiscal challenges and will have to reach across the aisle to Republicans who still control the House of Representatives. That body left debt ceiling, taxation and entitlement spending issues unresolved prior to the pre-election adjournment.

Read: Obama faces slow but steady economy

Among the congressmen who will pose challenges to Obama is Paul Ryan, vice presidential running mate to Mitt Romney. In an act of political bet hedging, Ryan ran for and won a House seat in his Wisconsin home district. Ryan’s budget slashing proposals were expected to become a centrepiece of a Romney fiscal plan had the GOP won the White House.

Democrats do control the Senate, but in the U.S. system legislation is typically proposed and then redrafted in the House before moving to the higher chamber.

Obama’s single greatest advantage will be a looming economic recovery, which was already showing signs of gelling in the waning days of the nearly year-long presidential campaign. Unemployment rates in the U.S. are starting to trend down, retail sales are showing new signs of life, and the housing market is picking up.

A recovery will reduce pressure to raise taxes for deficit reduction as workers returning to payrolls will add new monies to federal coffers through generation of new income tax receipts.

In an odd twist of fate, the aftermath of Hurricane Sandy will also boost the economy as the rebuilding efforts will lead to massive investments in construction, and new systems to flood-proof low lying areas will require large-scale research and development spending.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.