Obama’s odds just improved And it has nothing to do with healthcare

As important as yesterday’s Supreme Court ruling was to the future of healthcare policy in the United States, it probably won’t have much, if any, impact on the November election.

Each side can make a decent case for why the verdict is a political winner (Republicans: Now the only recourse for voters who want to get rid of the law is to vote for Romney; Democrats: It’s a high-profile validation of the law that will lessen the fears of swing voters), so it probably won’t lead to a big boost for either candidate. More important is the likelihood that healthcare itself just won’t be a major factor in swing voters’ minds this fall.

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But the state of the economy will, which makes a surprise overnight development from thousands of miles away potentially more significant to the Obama-Romney race than what happened in Washington.

Meeting in Brussels, European leaders reached two tentative agreements that could provide crucial aid to some of the continent’s most debt-ridden countries. One involves using Europe’s bailout fund to directly recapitalize banks – as opposed to forcing national governments to act as middlemen and subjecting them to harsh terms and conditions. Spain and Italy had been pushing for this provision, though there was little expectation they would prevail when the summit convened.

The other agreement calls for countries to be given access to rescue funds to shore up their bond markets without being subjected to the sorts of austerity demands that, for instance, Ireland and Greece were burdened with.

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It’s still possible that both agreements could blow up. The direct aid to banks, for instance, will only come about if and when a new oversight panel is established by the European Central Bank, something that will take months. And there would still be conditions placed on nations receiving aid for their bond markets – they just won’t be as severe as before. Still, both agreements represent surprise concessions by Germany, which has been resistant to taking new steps to aid its beleaguered EU counterparts.

From the standpoint of domestic U.S. politics, the significance of this is obvious: It makes stability in Europe more likely and decreases the immediate prospects of a new wave of economic catastrophe on the continent, something that could have a devastating spillover effect on the American economy.

That’s why, at least potentially, this is such good news for Obama. There are still no signs that the economy will roar to life between now and November. After dropping in the late months of 2011 and the early months of this year, the jobless rate has stalled at just over 8 percent, and isn’t expected to fall significantly in the months ahead. This might be enough to cost Obama a second term, but it's not impossible he could overcome it; there’s some solid evidence that he’s actually performing better than he should be given the current economic conditions and that some swing voters are giving him the benefit of the doubt because they remember what he inherited.

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What he’d have more trouble overcoming is a sudden and serious dip in the economy in the next few months, something that fresh turmoil in Europe could set off. What happened in Brussels overnight hardly solves Europe’s problems, but it makes it less likely that Obama will end up losing his job because of events playing out on another continent.