WI: Washington stands for 3rd Term

I was thinking the other day about what would happen if George Washington had decided to run for a 3rd term in 1796. His relinquishing the presidency after 2 terms when in all likelihood he could have won a 3rd term set a precedent for all future presidents unbroken for almost 150 years and made a statement about democracy. For those of you more learned than myself on such things, if he hadn't set that precedent and been president for another term, how would it have affected things? How might he have handled the XYZ affair and the escalating situation with France? How would his death in 1799 changed things, being the first president to die in office, would John Adams become an acting president or assume the presidency outright? I think it's a very interesting idea and wanted to get some opinions.
 
I don't think the XYZ affair would have been handled too differently. We'd probably see different names involved, but ultimately, Adams himself didn't do much to involve himself in the situation, I think Washington would have done even less. The details of the affair would have been released to Congress, per OTL, and really Congress, the Federalists at least, were already pushing for war at this point. I think Washington would have been quite adamant about avoiding war, but I think we'd still see a quasi-war. Since there's no declaration of war, I think it's a little more agreeable to Washington.

When he dies, Adams does not become president in his own right. People like to think of this time as one of good feelings between all parties involved in the affairs of the nation, but the earliest years were some of our most volatile and had the most potential to see serious damage done to the nation for simple political reasons. The Republicans at this time would have flipped fecal matter at the prospect of Adams becoming President without an election. The matter is unprecedented, but the Constitution is a fresher institution than when this occurred in OTL, so our political culture isn't as developed and people have larger and less tested worries about what the President might be capable of. Also, Madison (the famed author of the Constitution) being a Republican would likely be against Adams becoming more than acting President and he'd probably garner a lot of support in that position.

As for how long future Presidents stay in office, I think it depends on what the next President does. If he defers to two terms and makes a deal about Washington staying for so long because, well, he's friggin Washington, I think we could still end up with an unofficial two-term limit. But the door is definitely open for Presidents to run as often as they like, two, three, however many terms they like, even if they're voted out of office at some point (didn't stop Cleveland, after all).
 
I think his death could easily be butterflied away, since it didn't appear to have been caused by some prolonged illness or injury which he already had. So, if he's not in the same place at the same time, he doesn't get sick and he doesn't die. 67 was getting up there, but others of his time and social class lived until their '80s, so he could have made it. That's not to say some other butterfly doesn't come in and kill him instead.

One speculative possibility: he serves three terms, and then four. Because of his position, people begin to think of him as pre-ordained and candidates don't really try hard to oppose him. A few influential people are starting to worry that they've established for themselves a new king. Especially if he makes some decisions which aren't as popular. The unrest builds... (Okay, that line of thought probably just leads to a term limit amendment)
 
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